Show Notes
In this episode of Startups For The Rest Of US, Rob does a Founder Hotseat interview with Matt Wensing of SimSaaS. They talk about how to develop a strong cadence of work as a one person company.
Items mentioned in this episode:
One format that we’ve only done a handful of times, and it’s been a few years since we have, is one called the founder hot seat. The founder hot seat is where we bring a founder, live on the show, and we talk through an issue that they’re thinking about or that they’re facing in their business. Sometimes, this is a marketing approach. It’s something they’re wondering, whether they should do this approach or that, whether they should hire this person, this role, or whether they shouldn’t, and to just keep going on their way. There tend to be no easy answers to these questions, and that’s why we can spend 20, 30, 35 minutes talking through the pros and cons of it. Hopefully, the founder leaves with food for thought and perhaps an answer to what they’re looking for; hopefully, you as a listener, just hear two smart people trying to talk through an issue, and troubleshoot it, and think about the best way to proceed.
I’ve long said that being a founder is more than 50% mental. It’s managing your own psychology, and much of this is about making decisions with incomplete information. Today is episode 450 of the podcast. I’m doing a founder hot seat with Matt Wensing of SimSaaS. We’re going to be talking through how to make consistent, needle-moving progress on your startup. Welcome to the show, Matt.
Matt: Thanks, Rob. Great to be here.
Rob: Matt is the founder and former CEO of Riskpulse. Matt, this has the sexiest tagline I think I’ve ever heard for startup, “Multi factor, prescriptive analytics for supply chain performance.” Did you come up with that yourself?
Matt: I did not.
Rob: Some copywriter? No. It totally describes exactly what it does. Anyone who knows that they need it, I bet is like, “Yes, have some.” For someone like me, when I read it, I’m like, “I’m not sure what that actually means.”
Matt: You’re going to qualify out.
Rob: Yeah, no, that’s exactly right, that’s what you want in your subtitle, especially when you’re focused on such a tight niche. In plain English, do you want to describe what Riskpulse does?
Matt: Riskpulse really started out as a forecasting company focused on weather, and really over the last five or six years developed expertise in how trucks, and trains, and even ships, get products from manufacturing sites to market, so supply chain, broadly speaking, but transportation, and logistics more specifically. What we created—right about the same time as data science and machine learning were coming in vogue in the enterprise space—is a way for companies like Unilever, Anheuser-Busch, especially food and beverage, to essentially predict and decide much farther in advance than they used to be able to, how and when they want to ship their products.
If you can imagine manufacturing Hellmann’s Mayonnaise literally by the truckload, then asking yourself the question of, “What’s the best way to ship this from Chicago to Los Angeles?” That’s what Riskpulse helps those companies do now. It’s serving hundreds of companies like that, and actually doing that kind of forecasting days in advance for millions of shipments per year.
Rob: Does it use machine learning, artificial intelligence, whatever the buzz words are these days, you were kind of doing it before was in vogue, it sounded like.
Matt: Yeah, we were doing it before it was in vogue and really didn’t call it those things; we just called it forecasting, and in some cases just bringing two things together. But yes, it does use machine learning. Think of it like, if I go on Google Maps right now as a consumer, and I’m about to actually have a pretty long road trip this summer, if I punched in right now, “How long is it going to take me to get from here to Yellowstone National Park?” It’ll give me a time to get there, but it’s assuming that I never stop, that’s also assuming that it doesn’t really know what the traffic is going to be like a day from now, two days from now.
What Riskpulse does for those companies is that it lets them put in, “I’m shipping Chicago to Los Angeles next week.” It does try to look at all of the external factors like stops, and traffic, and weather, and congestion, and all those things that are outside of people’s control and give them a realistic estimate of when they’re going to arrive.
Rob: Love it. I love these vertical plays where—I guess you’re a horizontal, across industries—but I mean it’s very tight knit shift, it’s a successful SaaS app, and employs, how many folks work there?
Matt: 15 full-time.
Rob: I mean it’s non-trivial, it’s a full-on company at this point, and you actually don’t work there anymore, you found a CEO to take over your duties, is that right?
Matt: I did. I certainly have been thinking about—as I call it succession planning, the grandiose description—had been thinking about that. I have a family, enterprise SaaS is a pretty difficult lifestyle, and I’ve done it for five or six years at that point.
I was looking for a sales leader, ended up being introduced to a very experienced enterprise sales executive, who also had built and scaled companies from kind of the 10-50 headcount range, so very much the same year that we were about to hit. He worked as chief strategy officer with me for almost a year and a half, and then I realized, “This would make a really great opportunity to transition.” I told the board, the board was happy that I had come to that conclusion on my own.
There was no pressure or reason for them to tell me to do anything other than me just saying, “From a lifestyle standpoint, I think this would be best and frankly, for the business.” I really think of myself—in all the businesses that I’ve been a part of—as an owner first, as a shareholder first, and not as a, “I’m the CEO or I’m the CTO,” whatever the role is. That’s not actually what’s going to make you rich, and successful, or whatever your goals are; it’s making sure the right people are in the right places. As a shareholder, I just thought to myself, “Wow. I could have this person take over the CEO role.” I can take more of a sidecar seat which is what I did for about six months, and then ultimately, transitioned out to a board member and adviser at this point.
Rob: Yeah. That’s a mature viewpoint that I think a lot of founders don’t necessarily have naturally. It’s nice that you are able to think about it in that respect and to realize that if your lifestyle goals weren’t meeting up with your company that there’s—I’ve said on the podcast in the past—it’s like, “We started our own company so that we can be in control of that, and so that we can help ensure that we are enjoying what we do on a long term basis.” It’s cool that you’re able to transition away from that, and you started your next effort, which is a SaaS app called SimSaaS, and that’s really what we’re here to talk about today. You and I have gotten to know each other because you’re part of the Tiny Seed batch—the first Tiny Seed batch.
Something that really attracted us to what you were doing is the fact that you’re a repeat founder, that you’ve had success already, that you are a developer so you can build your own software early on; you’re good at product, you are really good at partnerships apparently which is what I discovered recently. Your business development skills, your sales skills, and even copy and positioning, you’re like that triple or quadruple threat, and that’s what attracted us to SimSaaS. SimSaaS, for those who don’t know, again, I just pulled your tagline off your side, but your headline says, “Great teams forecast early and often. Upgrade your gut feelings to forward-looking metrics,” and that is for folks running SaaS apps.
Matt: Yeah, that’s right. SimSaaS is an app that’s built for SaaS founders. What it’s really helping them do is take a forward-looking view of their business. Obviously, there are a lot of tools that are available, ProfitWell, ChartMogul, Baremetrics, etc. A lot of people just use Google Sheets to tally up their Stripe account data and figure out what their current MRR, RPU, and LTV, and all those metrics are.
What SimSaaS does is it takes those historical metrics, also puts them into a simulator, and then generates forward-looking trend of what all those numbers are going to be in the future. I built it, originally, as just a python script prototype a couple of years ago while I was running Riskpulse because I had investors asking me questions that were pretty difficult to answer just using Excel. Things like, “I see your MRR now. I see what your pipeline is but what if your sale cycles get longer? What if your receivables don’t come in when you think they’re going to come in? What if your pricing goes down? What if it goes up? How does your business look then?” Those are very fair questions when you’re going out to raise money, especially or even when you’re making decisions like hiring. It was very difficult to answer those just going back to Excel and saying, “Okay, I’m going to delay our revenue by three months because our sales cycles are longer.” It doesn’t really just work that way. It’s a lot more complicated.
Everything’s connected. We all know all these interdependencies in your business are just very complex. I realized that this is something where software could actually help us, “If I could just punch in six months instead of three months on my sales cycles and have it auto-generate a new forecast, that would be really handy,” that’s what it does. It’s connected to those data sets that the founders have. If you have a Baremetrics account, for example, you can connect that in, and it gives you a fresh and live forecast for all of your metrics as often as you need it.
Rob: Very cool. It sounds like you’re taking a machine learning AI stuff that you did and predictive analytics with Riskpulse and applied it to SaaS metrics. Is that a reasonable summary?
Matt: That is a reasonable summary. I have a friend of mine that’s at Riskpulse that teases me that I’m kind of a one trick pony. You take things, and you forecast. You rinse, wash, and repeat. It was amazing to me when I went out there and looked at the landscape, and I looked at the forecasting components because each of those tools that I mentioned does have some forecasting component to it, but they’re all really simple linear extrapolations of where you’re going to be next month based on this month.
I was kind of surprised that there was nothing more sophisticated than that and just as a quick beside my background, pretty deep involvement with weather forecasting. I actually gave a lightning talk at Business of Software last year, and one of the examples I used was hurricane forecasting. There is a forecast that says, “If the hurricane keeps moving exactly this much North and exactly this much West each day, this is where it will be,” but we all know now based on physics that the real world doesn’t work that way. I think SaaS companies also don’t work that way. There’s all kinds of chaos, and complexities, and sudden changes, that is why so oftentimes, our forecast end-up being wrong which is really frustrating for a founder, that’s what I’m addressing, and you’re right, I took a lot of my domain expertise, and I was able to apply it here.
Rob: Very cool. Today, we’re talking in the Tiny Seed Slack. I was asking, “Are you interested in coming on the show? Is there anything you’re kind of struggling with or really thinking about top-of-mind that we could try to think through to give you some clarity?” In your message, you said, “One thing I could talk about,” with some real conviction, “is how to develop a strong cadence of work as a company of one person managing a huge amount of context switching required to make consistent and needle moving progress on every front over a 12-month period.” In other words, the length of the Tiny Seed Accelerator. “How can I find that groove and sustain it?”
I like a couple of phrases in there, “Consistent needle moving progress,” I think that’s a powerful kind of statement. “On every front,” because we know there’s product, there’s marketing, and there’s sales, and there’s support, and there’s all these things over a 12-month period which is an extended period of time. Do you want to talk a little more about that? That was your summary of it, but what are you thinking about?
Matt: Going back to what you said earlier, which I’m very flattered that I’m capable of making some progress on a lot of different areas whether it’s business development, or marketing, or coding. The double-edged sword of that is that you can end up feeling like, “Am I supposed to just take it as it comes?” Meaning, “This week, these are the urgent and important things. Clearly, that’s the most important box to focus on, and I’m just going to tackle one item from each of those categories of work each week.”
What I’d like to do—I’m leading myself into this—but what I’d love to discover is, “You know what, I’m going to treat weeks or two weeks or months as my unit of work.” I hesitate to say sprint but if you want to think of it that way we can. I’m going to be a little bit more disciplined about, not just my daily routine but maybe even a week over week routine, or maybe even within a month that I set aside a week to work on a product that’s meeting-free because I can’t have that luxury. If I have a week where I know I’m going to have a bunch of meetings anyway, that’s my week to do sales, and business development, or partnerships.
It’s an awesome opportunity to have a year of a fun way to work on your startup, thanks to the Tiny Seed program. Just thinking about as a company of one especially—I can’t parallelize very well, there’s only one of me—How do I sort of acknowledge my own natural rhythms, my own lifestyle, but then also, just kind of the nature of each of these kinds of work and start trying some structures that could help me maybe on a one month view?
Rob: I think that’s important. I like that you’re asking the question of yourself. It shows that you have like an insight into how you work. Obviously, each of us has strengths and weaknesses, and until you identify those strengths, especially when you’re a company of one, I think that you’re at a disadvantage until you know yourself pretty well, until you know yourself as someone who either is that, I’d say, the more impulsive context switching founder who likes to bounce around and get a lot of work and a lot of things all at once.
I’ve worked with founders who do that. I’ve worked with founders who tend to focus too hard on one thing and get stuck on it. Whether it’s a mental perseveration or whether it’s, “I am going to work on this email. I’m going to work on this code until it’s done,” and then like 12 hours later they’re done and they’re like, “That was the whole work day,” and they got stuck on it. You strike me more as someone who moves around a lot; works on a lot of different things as they come up. Do you think that’s an accurate assessment?
Matt: I think that is. I think that’s probably what’s natural for me. People that know me from the Tiny Seed context are probably—I’m in the Slack a lot asking questions. I’m just naturally, a very curious person. I get a lot of enjoyment out of just knowledge; sometimes for knowledge’s sake, sometimes I just want to store it away and say, “That might come in handy later.” I do have a habit—I was about to qualify it as a bad habit—I’m just going to call it a habit for now. A natural habit to want to bounce around, look at a lot of things, have a lot of tabs open at the same time.
I’ve got to write real code. I’ve also got to think deeply about copying it. I think one thing that’s caused me to think about this more is just the deep work, I was going to say mantra, but that theme that’s come up quite a bit lately in the circles. I listen to podcasts, a lot, etc. where it was hard to actually get deep work done in a company of 15 people that were all on Slack at Riskpulse sometimes. Now, I can have this luxury of saying, “Okay, how would I do it differently knowing what I know now? How can I get myself into those groups without ignoring anything that might catch on fire.”
Rob: Yeah, totally. I think you have the luxury right now of, not only being a team of one, but you are still early enough that you don’t have 1000 customers all asking for things, things that are on fire per se. I think there’s a couple of things that come to mind right away. As much as I like Slack for the community, I’m only in may be in two or three Slack groups including that the Tiny Seed one that you and I are in together. I do not disturb Slack multiple times during the day kind of almost premeditated.
I know that my best times of day to work tend to be in the morning until about 11:00 AM or 11:30 PM, then I get really hungry because I don’t tend to eat breakfast. I eat and then I get a little sleepy, so then I will tend to do Slack in the early afternoon, and then I get this second wind. I either do not disturb Slack or I use email a lot more than I think some other people do these days because Slack has given us that. It gives us the instant communication and feedback. I think you could certainly have a team. We had a team at Drip with Slack and it wasn’t super noisy because we only used it for things that needed realtime.
If you didn’t need it realtime, as new people would start I would tell them “Hey, we value maker time,” like that’s a big thing. We’re a software company with three or four engineers out of this full-time team of eight, and then we have a couple of contractors. We were engineer-heavy because the product was such a focus. The way I communicated it was like, “Look, if you need to interrupt a developer, that’s fine. If you need to interrupt someone, that’s okay. But if you don’t need to, if you don’t need an answer within 20 or 30 minutes, send an email.” That was like an intro thing and that was the culture that I had set up at the company. How does that resonate with you? Does that seem crazy or does that seem like something that would be interesting?
Matt: Definitely interesting. I probably over estimate. I’m probably bad at judging whether or not things need to be real time just because of some of those habits. We signed up for HipChat first before Slack was a thing at Riskpulse. It was basically pretty noisy and pretty engaged. We, as a company, culturally had to try to enforce those maker times. Now, I’m self managing. Does that make sense? One crazy admission here is, I don’t think I’ve ever used Do Not Disturb on Slack. I think you’re probably just thinking I’m probably just a bad citizen where I’m ignoring people’s messages and they’re wondering, “You’ve got the green dot.” But certainly, that’s a great little tip.
One thing I wanted to jump off of as well is, I have a similar kind of natural rhythm in terms of my work. I am a very early riser. It’s been tough this Summer since the kids are out of school, everyone is staying up late. Typically, I get up at 4:45 AM or 4:55 AM and I’m at my desk with a cup of coffee after drinking some water by 5:00 AM or 5:15 AM. I have found that my coding abilities and my deep analytical work abilities are really that 5:00-10:00 AM period, which is five hours. It sounds like not much of a work day, but that is one thing I’ve noticed too. I can probably do myself a favor and hide from Slack during those times.
Rob: Yeah, I mean, I can see that five hours of straight work, that sounds like a tremendous amount of time. Think of all the people working at startups or companies, for that matter, that are running Slack and how often developers get interrupted. To have four or five hours of uninterrupted focus time to me, you can get two days of development done in that. Two days compared to just being part of a 20-person development team where stuff is flying all over the place, every minute you’re getting interrupted.
I think that’s plenty of time to get almost a full day’s worth of deep work done from 5:00-10:00 AM. If I were in your shoes, the fact that you’re online at 5:00 AM is awesome. I would say I’m the opposite. I wake up later and I’m tired when I wake up. I’m groggy for 30-40 minutes. I’m typically, at my computer by nine if I’m lucky. This isn’t about my habits, but it’s definitely not—I think you have a distinct advantage is what I’m saying.
One of the things I was going to talk about or wanted to bring up is, when you’re a single-person company or a very small team, I mentioned it earlier, but it’s so important to know your strengths, and to know your weaknesses. One of your strengths is deep work. It sounds like it or being able to write your own code I think is a big deal. Another one is that you’re online at five in the morning. That is a strength whether you realize it or not because I couldn’t do that. I would be trucked, I would get no work done, I would be worthless, I’d just be too tired.
Obviously, I think when you’re this small, you got to focus on strengths and you need to really forget your weaknesses or work around them. Ultimately, you can hire people to take over those or to cover those areas. Again, to come back to me, I don’t enjoy doing demos, I don’t enjoy sales like enterprise sales and all that stuff. It just doesn’t resonate with me and my personality, but it does with you. I would say the fact that you’re a developer who knows how to do sales and how to do these partnerships is another big strength and something that you can leverage over the course of this year.
Matt: Yeah. Two thoughts came to mind. Mikey Trafton, for those who don’t know, he’s one of the founders of Capital Factory here in Austin and he’s a frequent speaker at Business of Software that I’ve gotten to know fairly well. He has these categories of work or strengths and he talks about how you have a super power that is something that you’re insanely good at and for you, it’s kind of effortless. There’s this category of things that everyone has where they are really good at them, but they find it draining. You do it and every else looks at you and says, “Wow, you’re really good at that.” But at the end of the day, or if you do a lot of that, or right after you do that, you’re just kind of exhausted or maybe just worn down.
For me, interestingly enough, I do find that the deep work is that the coding, the design and some of the things I do in isolation are the first kind. They’re the things that I really feel energized afterwards. Enterprise sales, although I’ve done it and I’ve closed 6-figure deals consistently in the past, they are really draining I find. The demos, I can totally relate to that. It’s kind of funny, it’s like one of those things where, “Yes, I can do it, but I do find it to be difficult.” I’ve learned in the past, the one thing I can’t do is I can’t do one of those and then get into any kind of deep work. After I do that, I’m ready to be done.
Rob: That’s really good to know, right? All your demo should be after 10 or 11 in the morning. That’s something so good to know about your daily cadence. That’s what we’re talking about here right? It’s is to bring it back, how do you make consistent needle moving progress on your business, and it’s showing up every day, and having a schedule that is as ideal for you as possible. I feel like if you could not check email—this is very hard to do—but if you could not check email or Slack before you start your 5:00 AM sprint in essence, I’ve never been able to do that I will admit. I always check email first thing in the morning. I always have. I don’t know if I will break that habit.
I think, in a perfect world, you wouldn’t have the distraction, but sometimes you just need to feel—I need to feel okay that nothing’s on fire, or if there’s somebody who needs a quick answer—if they’re relying on me that I get it out to them quickly. But sometimes of course, it takes you off track, you want to do 15-20 minutes of email instead of your deep work. That’s kind of the sacrifice that you have to make if you do that.
Matt: Yeah. I think I’m the same way. I’ll check it first, but I have an incredible ability to unless it’s actually on fire, to just kind of ignore it and wait, but then I get that closure that, “Nah, everything is good.” I think what I would say next is, if we can zoom up one level or going up one level and looking at a week or a month and asking—I’ve got in a program let’s say a 10 months remaining not that anything magical necessarily happens at that time. We’re not working towards a demo day per se, but if those are actually my units, so a daily routine sounds pretty solid. How do you think about juggling or moving between marketing, sales, product development, design, and I can think of one example. You really shouldn’t be building things before you design them. Jumping and writing a bunch of code might not be the best thing to do. If you look at it a week or even a month context, what does that look like?
Rob: Yeah, how do we think through that? It’s fascinating because so many founders at your stage don’t even think about that. I feel like it’s the fact that you have already grown a company to the level of Riskpulse that lead you to think about the longer time frame. I honestly, think it’s less important in these early days, but it will quickly become more important as you get even a couple months down.
Because right now you could literally think just a couple days out or a week out tops and be like, “What are my goals this week? It’s to ship this feature and to get another customer, another five customers,” or whatever the number is, but you’re going to hit a point in the next you know 12 months where you do have to start thinking just a little further. At first, you think two weeks out and then you think four weeks out. Then of course, as you get bigger, you have to think two months out because you have all these people working on things and they need to know where they’re going. When you have 15, 20 people, your horizon has to go out further.
At your stage, I don’t know how much time I would spend thinking about a month out, because it really does feel like a long time given how quickly things are changing right now. I feel like there’s all these friends you can be fighting on, or all these friends you can be switching to and from, there’s development, and there’s design as you said, there’s sales, there’s marketing, there’s kind of internal operations, there’s processes, there’s all this stuff, I feel like right now, just moving the product forward, and doing sales, and/or business development. I almost kind of count that as sales, but I guess technically, it’s more marketing because it’s generating leads that you would sell.
Almost all the other fronts can go by the wayside for the next few months, which is hard to do, but that’s how I would mentally prioritize them right now. Because if you’re not building features, or getting new people using the product, everything else is substantially less important. Does it feel that way?
Matt: It does. If I look back the last few months, in the way that I started SimSaaS, is I really did the new classics soft launch on Twitter, sharing it with all my followers, and it got a good amount of interest. What I ended up doing was having this kind of open season where anybody could sign up, and I learned a lot, and then I essentially shut it back down into a private beta where now I have a handful of folks that I really care what their experiences, they’re definitely my target market, and I’m trying to get them signed up, willingness to pay, that’s the focus.
The lead gen part is kind of just doing its own thing right now, people are opening their email address saying, “I’m interested early access,” sometimes filling out a survey. That feels really good to just be automated. I don’t know if those folks are going to get bored of waiting around for me to get back to them, but I agree, for the next few months, I should just be focusing on a bottoms up acquisition of happiness of these handful of people.
If I do put my second time founder hat back on though, I do have an end-in-view, which is half by the end of third quarter of this year, which is I think a quarter, because of the company enterprise faced. By the end of September, I do want to launch self-service, and I’m not self-service now, so I do think about what do I need to do to get to that point. That is an interesting blend of products, and sales.
Rob: Yeah, for sure. I think to touch on SimSaaS, specifically, you’re in a unique position where you just have incoming interest, and you’re in a unique position that—fairly unique—where you don’t have to do a bunch of marketing right now. Because typically, the advice that I would give right now is, you have to be focused on marketing, and product, those to be the two.
The level of inbound interest you have, and how quickly it spreads, because it is this insular SaaS community, it’s like we all talk to one another, and you appear on one podcasts, and then everybody has heard of you, and then you apply it so well to so many of these companies that I do think, I mean, that’s what I was specifically saying its product, because you’re trying to push more features to keep the customers you have a happy, and its sales to land your inbound prospects as folks who are going to use it. But marketing for now is taking care of itself.
You obviously will hit a point where that changes, but I wouldn’t be thinking out that far right now, because I think that’s 6-2 months out. By the time you get there, you’ll be at such a different place product-wise, and revenue-wise, that you can either decide if you want to go attack marketing, you’d do it if you want to hire it out, you’ll do it because you’ll have the budget. But that’s something as you get closer, I think, you’re going to now. I don’t think you need to be preparing for that yet because it’s a way out.
I even think, what month is it, it’s June, and you want self-serve by September, which is three-ish, three-and-half months out. I mean, I would ask two questions about that, one, why do you want to go self-serve by then? And two, what level of planning does that take, given the fact that you had all the code, and do the design, could you hammer that out, literally in the last two weeks of September. If that still the right decision when you get there? It’s like just in time decision making. It sounds a little flippant, again, if you’ve worked at a 60-person company, it’s like, “You can’t possibly make a decision that close to the wire, because you got to get product marketing on board,” you don’t need to do any of that. I would almost push that absolute decision off until the last moment where it’s like, “Yes, now that’s what I have to do. Now, I’m going to build this.” But tell me if that resonates or if that sounds like, “Nope, I think that’s a bad call and here’s why.”
Matt: This is interesting. I have used SimSaaS to forecast SimSaaS. Self-service, what is it? It’s a way to get more, because I’m going to go with trials with credit cards, and if you think about self-service, it’s really just a way to remove all the friction because I’d love to think it’ll be zero percent friction, but it will remove me as a gatekeeper for people to get on board. Interestingly enough, do I need it by then or is that just kind of artificial? That’s a great question, or am I imposing that on myself, because I think I need it.
One thing that is interesting, I’ll say, is that out of the early adopters I already have, there is a fair amount of investors, or mentors, or even just experienced founders who are already referring other folks to it. Lead volume, again, getting back to marketing is not a problem, do I need to undo myself as gatekeeper? Maybe, what I should be thinking is also taking a bottoms up approach to that and saying, “I am on boarding folks manually right now.” Every time I do that, I just get more efficient at it somehow, and let my own sort of irritation with having to do things manually drive me to make it ultimately self-service, but it doesn’t have to be necessarily.
Rob: There are a number of products now, Superhuman is the example everybody brings up, but there aren’t many products of stay invite only for a very long time. Some do it intentionally for the scarcity, but others don’t. I think, as a single founder, you have a pretty good, almost excuse or a reason to. As long as you’re not finding that more of these leads are waiting so long that they’re degrading, and they’re not converting, because they’ve been set in the queue for too long. I think setting in an arbitrary date for it that’s three and a half months out might be premature.
If you get to the point where it’s like, “No, this is just too much volume,” and you need to automate, then you can do it earlier, or you could do it later. But I don’t feel so strongly about having to have it done by the end of September. I was thinking about it as we’re talking about how the onboarding is somewhat manual, I love the idea of trying to automate a little more each time. Also, hiring a customer success person, if it literally is just light sales, like it’s inbound warm leads who need you to walk them through the product a little bit, give them a little bit of a demo, show them how to use it, get them set up, that’s a customer success role, and that is not that hard to fill, and it’s not that expensive either.
Could that be something that’s a better option, even if it’s a part-time person, you give them 10 or 20 hours a week, starting at a month from now? Does that shape how things happen because now you have someone who’s on your team learning the product, and you’re not in as much of a hurry now to do self-service especially if they’re converting, right?
Matt: Yeah, that’s interesting. I think there’s an open question of how zero-touch any of the stuff can be these days. I mean, I know that there’s 1% say any amount of human touch sales involvement, lifts your ACVs, lift your attention, it’s just a good thing if people want to have a relationship with your company, and that would feed that. I’ve been there, that’s the playbook I’ve run before. I think the other one, which is the company of one, maybe, let’s say to a fault, but even more strict is, now that’s all going to be automated in the product. I don’t know which one’s the right approach.
Rob: I was going to ask you, which one do you want to do? Because the right approach, given that you’re building a company for you, and you want to grow and stuff, but that’s going to come. You have an opportunity here. Does bringing in customer success person on feel like, “No. I’m not interested in it. I’ve already run that playbook. I really do want to try to give it a first crack at spending timing, getting on boarding up, and making it truly self-service.” Is that more interesting to you? Because that certainly could be your first crack at that, and then if it isn’t working out the way you want, you can always backfill it.
Matt: Yeah, I think it’s probably the more, to me, it feels like the more ambitious one. I don’t know that I would say it’s the right one though; I do have my doubts as to whether or not that’s really the right way to do it. I mean, especially when you’re dealing with a financial app, and it’s pretty complex. Having a human there to set you up, and to take you through that, that’s a pretty well-worn path, and we know it works. Maybe that is what I do is, I push as far as I can, and then see if I basically, hit a wall where, “No, there’s that 5% more, but then I can scope that down to exactly what I need.”
Rob: Right, that’s what I was thinking. Because in the early days of Drip, I really want everything to be self-service, and that’s just a lot of apps I had; pretty much all the apps I had before that were almost all self-service, and we built a lot of onboarding, and it worked well, and we had good growth. But I definitely found the people who are willing to pay us more money—the several hundred dollars a month clients—which obviously isn’t even that big. They really wanted to talk to somebody, and that was where I eventually got to a breaking point because I was doing demos, and talking with them.
As I said, I don’t enjoy it, not much like you. I’m good at it, but it wasn’t a thing that gave me life. We eventually did hire someone, and it was the right decision, but I had to give it a shot as the self-service first because we wanted to see if we could truly make that work. Again, it did work, it’s just the larger customers benefited a lot more from having that high touch.
Matt: I think that maybe the reality. I could see self-service, it does work for so many apps, and instances where the product’s a little bit more, category especially, I think that’s actually something I keep coming back to, and that might be just the reality is that this is a new product, metrics is the category. But the idea that you’re connecting all the state, and you’re doing all these forecastings, not having a human at all to explain what this is, how it works, and when to use it, it might not be realistic, and actually might create some glue and loyalty to have that involvement, which is what I’m providing right now. I think this is a good kind of re-scoping of where I want to be by the end of September.
Rob: Yeah, and it’s good to have goals. I know you’re driven and trying to think out a few months because you’re thinking where you want to be, and you don’t want to stand still. Some folks are super goal-oriented and motivated, and then for others, I think it de-motivates them. It sounds like you want to know where the puck is going, and where you’re headed, at your stage, I feel like dates might not be helpful. Unless it really is motivating to you. I should probably state that differently, for me one, when I’m that early in an app, or that early in the company’s development, there are too many variables for me to possibly throw a day out of when something should happen.
Matt: There’s kind of two ways to get to that date: you either change the definition of success or you move the dates, and you know you can timebox things. I’ll change the definition of self-service, not to the point of cheating, but I’ll change it to mean, “They can sell service, but that’s not what I want them to do, maybe there’s a way around that.” But yeah, I think I am pretty driven from the standpoint of reverse engineering, kind of where I want to be.
I think that you’re right. It’s like I’m trying to connect lightning from two sides here, I mean, that’s where I’m at. I think it creates a mental frame for me to just go, “Okay, it’s bottoms up, bottoms up. It’s the people I’m working with right now.” That’s why I knew last week was going to be sales and marketing heavy week. I scheduled a lot of meetings for that, and essentially, knew that I wasn’t going to get a lot of deep work done. But I kept the slate clean for this week and knowing that I needed to shift gears. Then that’s the other skill I want to develop is just getting myself in a mode, and being able to say no to things that are going to knock me off.
Rob: Yeah, I was going to bring that up, maybe as a last point a conversation because we’re running long on time, but I was coming back to cadence, which I believe you mentioned or at least—in your Slack, I was thinking cadence, and I was going to ask, “Do you do better with a one day on one day off cadence?” Or, “Would a one week on, one week off cadence work?” It sounds like that’s what you tried recently is kind of like the BD sales a week, and then a development week. Because I feel like most of us tend to bounce around, and handle whatever is the next thing that we think is most important.
But if you are able to say no, whether it’s just for that one work day, like I’m going to say no to everything that is not pushing the product forward in some form or fashion, and then the next day, “I’m going to push it—I didn’t say no to everything that’s not pushing the sales, like revenue forward in some form or fashion,” whether that’s one day or one week, I think that most of us are helped by that.
I’m surprised that you did it for a whole week, or I’m impressed, I should say, that you were able to do that for a whole week because that would be hard for me to do. Do you feel like that was successful, and that’s something you want to continue to do? Or was it like, “It was too long. I should probably only do three-day sprint,” so to speak?
Matt: Yeah, I think it will shorten naturally to three or four days a week to focus on something, and then you’ve got your bonus day to catch all the stuff where somebody just says, “Look, I can’t meet with you next week.” I think I’d like to keep trying that. That would be a good way to kind of follow up here and see, “This is the product development week for me then I’m going on vacation.” That’ll naturally lend itself to maybe just checking email, and following up on sales related things, and then we’ll have to see which mode I fall into when I get back, or maybe I shouldn’t fall into one, I should pick one.
Rob: YYeah, that’s right. You sent me a tweet from James Clear, and many people may know James Clear as an author, and blogger about kind of forming good habits, and motivation, and stuff. His tweet said, “Most people need consistency more than they need intensity,” and he says, “Intensity is running a marathon, writing a book in 30 days, or a silent meditation retreat. Consistency is not missing workout for two years, writing every week, or daily silence. Intensity makes a good story; consistency makes progress.” I really like that tweet, and I’m glad you sent over.
It reminds me of a quote that I’ve used over and over, I’ve written a blog post on it, there’s an episode of this podcast titled this, but it’s a quote from Steve Martin. He wrote it in his autobiography. The quote is, “It’s easy to be great, it’s hard to be consistent.” He’s a standup comedian, and he said, he would come to the shows, and he would watch a comedian just kill it one night, just blow the doors off, but that comedian couldn’t do it every night and that was the challenge. He said, “It is easy to be good once in awhile,” and that’s what James Clear is talk about with intensity, it’s easy to be great, but how do you show every day, how do not have the splashy tech-crunch launch or this big one time hit, where it’s not a sustainable thing.
We see a lot in the startup space, we see it in pop culture, where things come and go quickly in this place of glory, that’s not what we’re here to build. We’re here to build these longer-term, these sustainable, these 5-year, 10-year, 20-year companies, and whether we run them for 20 years or not, it doesn’t matter. But is it this something that can be around for the long term? I believe that the way that happens is—with what we’re talking about today—it’s this consistent needle moving progress, that you show up every day, or you show up every week for years, and that’s the thing that most people have the hardest time doing. I think it was helpful for me. I hope it was helpful for you to know you as a listener. Thanks so much, Matt, for agreeing to come on the show.
Matt: Thanks a lot, Rob.
Rob: Again, if you want to catch up with what Matt is doing, you can head to simsaas.co. If you have a question for the podcast, call our voice mail number at 888-880-19690, or email us at questions@startupsfortherestofus.com. We’re in iTunes, and all the other places you would imagine, just search for startups. We’ll have a full transcript of this episode on our website startupsfortherestofus.com. Thank you for listening. We’ll see you next time.
Episode 449 | Two-Sided Marketplaces, How Much Testing is Too Much, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob along with co-host Tracy Osborn answer a number of listener questions on topics including two side marketplaces, automated testing, building like-minded relationships and more.
Items mentioned in this episode:
On this show, we’ll talk about building software companies and that can be Software as a Service, WordPress plugins, Shopify add-ons, Photoshop add-ons, even downloadable software, mobile apps, whatever. There are many, many ways just there to step your way to a business that can provide you with a better life and better existence.
A common thread over the past nine years in the show is that your product or your company is built around being a human being and having goals around on what you want to accomplish as a human rather than the business being me and be all of all your achievement.
There are three main things that we’ve espoused for the past 449 episodes of the show. It’s things like freedom. It’s the freedom to work on what you want, when you want, without a boss breathing down your neck, or the freedom to go to your kid’s baseball game on a Thursday afternoon without asking permission.
Its purpose is the ability to work on something that fascinates you and it drives you every day to make it better. The purpose of building something that tens of thousands of people get value out of, that makes you feel great and proud of what you built, and it’s about relationships; deep, meaningful relationships with your family, your significant other, your kids, maybe even have time for friends.
That’s Startups for the Rest of Us is all about. That’s what it’s always been about. It’s the lens through which we view startups and that’s why we say, it’s for the rest of us.
We have a few formats for the show. Sometimes, we talk through a topic in detail, we work through an outline of how to do a particular tactic, sometimes it’s purely for inspiration, sometimes it’s to help you grow your business over the next week or two, something you can implement.
Sometimes more rarely, we do interviews with folks who can offer advice or inspiration. In other times like this week, we answer your questions. What I like about answering questions live on the show is not only can I directly help a founder who has an issue, not only can I directly help a founder who has a question or challenge or something they’re trying to overcome, but you as a listener, can either learn from that thought process, learn from that answer, and hear how someone thinks through hard decisions. Being a founder is about making decisions when we don’t have enough information. Took me a long time to realize that.
Being a founder is 70% mental and so much of it is about doing things that are hard, that are scary, and that you don’t have enough information to make a 100% correct decision. All of that to learning scale and it’s something that I hope you’ll be able to learn from the show over the years.
I’m here today with my co-host, Tracy Osborn. She was the founder of WeddingLovely and now she’s my colleague, friend, and program manager here at TinySeed. Welcome to the show, Tracy.
Tracy: Thanks for having me.
Rob: Excited to have you on. Beyond being a program manager at TinySeed and as I’ve mentioned having run a startup, a two-sided marketplace for wedding services called WeddingLovely, Tracy is a Python developer, she’s a gifted designer, and an author. She’s written several books that help make tech friendly for designers and design friendly for developers. Is that right? Am I saying that right?
Tracy: Pretty much, yeah. Tech is a scary subject and it’s been a fun topic to write on; what can I do to help people jump into it.
Rob: Absolutely. All of that is available, more on Tracy is available at tracyosborn.com and you’ll be hearing more from Tracy in the coming months. We’re working on a lot of fun stuff together.
Tracy: Yeah. The stuff at TinySeed has been so much fun and I’m really happy to be a part of the team.
Rob: Yeah. Us as well. We love having you. Let’s talk through some listener questions today. I know we have some voicemails and we have some text-writing questions. Typically voicemails go right to the top but today, I think we’ll start with some emails.
Tracy: Funny listening to your previous podcast on this. I was like, “Ooh. We’re going to switch up the formats, jump into one of the […] questions.”
Rob: Indeed.
Tracy: Let’s start with this one from Chris Palmer. He got a co-founder that is an experienced software engineer, and his question as a designer/product person, he wonders if there’s too much testing. How much time of the software build should go to things like unit testing, snapshot testing, et cetera, for an early-stage production product. So, he says, “Rob, when you had Drip, what did your engineering team do?”
Rob: This is a good question and what I like about this is, if you’re not technical, if you’re not a developer, it’s easy to discount unit testing. He’s talking about snapshot testing and all the types of automated testing, integration testing. There’s so much you can do and I have seen Software as a Service companies have to rewrite their entire codebase or literally run into major problems scaling because they skipped this in the early days.
Unit testing in particular, I am such a proponent of having 80%, 90%, like really extensive unit test coverage. I think if you’re a non-technical founder working with a technical co-founder who is saying “Hey, it’s going to take longer because I have to write a unit test,” that part, I’m all on board with.
Where it starts to become a gray area for me is when we talk about snapshot testing, which is taking a screenshot and comparing it from one build to the next to make sure that things aren’t going wrong, where we talk about full end-to-end integration testing, actually hitting the UI, hitting a web interface, clicking buttons, and doing all that stuff.
I would love and would have loved to have had all that testing in all of my startups but it’s very, very, time consuming and that has tended to be where I’ve drawn the line, is anything passed unit and some minor integration testing and smoke testing of API endpoints, all that stuff, we would build because it’s code and developers can get in the flow, they can hammer it out, and you get this amazing test coverage.
I used to brag about when we’re going to be acquired and then when we were hiring for new developers, I would say, “We have 2.5 lines of test code for every line of production code.” Some developers realize that’s not actually that outrageous. That’s probably where around where you should be if you really have good test coverage. But it sounds crazy to a non-developer like, “Woah. Haven’t you wasted a bunch of time?” but you haven’t. So, for me, that’s where I draw the line in the startup, where I am trying to move quickly, trying to go for end-to-end UI tests that cascade down through everything, I think is overkill. This is where it can be personal opinion.
Now, if I work for a bank, if I work at a Fortune 500 company, I would probably go to that next level because downtime and failures are catastrophic. You work at Amazon, you work at NASA, there are certain places, medical devices, where you do have to take that testing to the 99.999% non-failure rate. You can’t fail.
When you’re building a startup, you’re trying to grow, you’re trying to move fast. You can fail. You don’t want to, but you can fail a couple percent of the time. 1%, 2% of the time, where one of a hundred deployments has a bug in it. One out of even, frankly, 20 deployments will probably have some type of minor bug in it that you’re not going to catch but it’s going to save you dozens, if not hundreds and hundreds of developer hours along the way. That’s my take.
As a developer yourself, do you have a take on it?
Tracy: Yeah. It’s funny because my background is on design and I picked up Python programming. When I was building my first few web apps, I never did any testing at all, because I was like, “Oh. Why should I do this? I can just poke through the website and figure things out.”
But a little bit of time spent on writing those tests in the beginning, will hopefully prevent any kind of horribly stressful terrible moment later on when things go down, when the bug is found and everything. You don’t want to have that happen in the middle of the night. So, a little bit of time is going to save you a ton of time later. It’s just not going to feel like that in the beginning.
Rob: That’s the way to think about it. At a certain point, when we hit scale, and I believe it was post acquisitions, we had thousands of paying customers and I think, if we have the free plan, it was tens of thousands of people using it. This is Drip, of course.
We did talk about implementing end-to-end, front end snapshot testing in that sense, but it was only going to be for one or two flows. It was going to be the sign-up flow and something else critical, like sending a broadcast email because we knew that those two flows people use all the time, and if one of those failed, then we have a real problem.
Tracy: That’s a good point, actually. If you look at what are the critical flows are, when it comes to payments, or registration, or whatnot because when you’re launching new features later on, you want to make sure when you add those features, you can run those tests and make sure you didn’t inadvertently break those flaws.
Rob: Exactly and that’s the thing. For Chris, the original question asker, the thing to think about is how well do you know your co-founder? Does your co-founder tend to be extremely conservative? Does he or she come from a Fortune 500 company, or a bank, or NASA, or Lockheed, or somewhere where they had to have ridiculous test coverage that can never fail? Or have they worked a lot on startup environments? And what’s their personality like? Did they take it fast and lose? Did they hack stuff together? Their PHP hacker used to do it on the weekend and they never do the official stuff. They’re really tight knit unit testing ideas, or are they somewhere in the middle?
I think that almost counts for a lot and to be honest, I trusted my co-founder, Derek, a lot in the early days. I said, “Look, right unit test. Of course, we need them, we’re absolutely doing it,” but I let him go from there. I didn’t come in and say, “Oh, we should have this tested and that not tested.” I trusted his judgement that he’s conservative enough, that he was stressed that things are going to break about the same amount that I was. He wasn’t overly stressed nor too lax […] to cool with it. So that wound up being a pretty good relationship there.
Tracy: Cool. Should we move on to the next question?
Rob: Indeed.
Tracy: All right. This question comes from Tom, the founder of Tom’s Planner. He started working on this in 2007 and though the current design of the product itself dates back to that year, though it had a significant update years years ago, but starting to feel outdated again. So, he’s looking at doing another redesign.
He says, “Now, I have four designs to choose from. Each has their own strengths and weaknesses. I really like one of them. I decided to be a good idea to pull my most active users about it as well. That’s where the problem started. The users prefer another design than I do. Even worse, they scored the design I like the lowest. So, now what?”
He says, “Going with the majority would make sense but there’s a couple things to consider.” He really likes the other design. The design that the other users scored best, looks most like the current design that we have now and I’m guessing that’s part of the reason why it’s doing so well. People don’t like change. The design that he likes most has a timeless quality to it, which he believes, which is important to hand but the users probably don’t take that into account and the users are quite divided over it. Even though there’s a winner, no design had a bad finished. “Am I inclined to, despite the results of the poll, choose the design I like best and think this most future proof, but since it is the design users like least, I am still in doubt. Any advice?”
Rob: This is a tough situation you’ve gotten yourself into, Tom. I feel bad for you because I feel like asking users their opinion is pretty much not something that I would recommend overall. Tracy, you run a wedding marketplace, for wedding services. You had consumers like brides and grooms who are buying from service providers. Did you ever ask or poll your users for specific opinions like this?
Tracy: I did not for the site itself but there was an aspect of WeddingLovely where people could have their own wedding websites. I let users have the choice of emailing me and asking me for a custom design and that was a terrible, terrible thing to do. I end up ripping that out because I got overwhelmed to feedback and people were choosing and asking for things that I thought were bad design and didn’t reflect the brand. I end up actually removing that feature entirely.
So, I’m very strongly in the camp that I would prefer not to talk to my users about designs because, as Tom mentions, it can make things really complicated and I also worry about what would happen if you launch a design and it’s not the ones that someone wants. What would happen with the person who voted for the design? What would they feel? It’s a very sticky situation.
Ro: Yeah. People can be really opinionated about things that they’re not experts in. That’s an issue. Design is not something that we all have a training in. I don’t hire the person down the street to correct my back or to do surgery on my knee when I had knee surgery. I hire people with expertise. I don’t go down the street and hire a 15-year-old kid to write code for my website, although, he probably could. I hire people who have experience, and expertise, and training, and knowledge in the space. Design is the same thing.
Everybody has opinions but do they have taste? It’s an interesting thing and I don’t want to make it out like being snooty like, “Oh, I have taste because I only drink refined wines and these very pretentious single source origin coffees,” which my brother does and I say, “We’re going to go to the pretentious coffee place or go to the cheap one?” Of course, the pretentious coffee taste better but it’s $15 a cup.
I think if it’s all designers and you really want to get opinions and feedback, then do that. I think it’s more trouble than it’s worth, and I think it will create problems every time because what’s funny, as Tom said, that his users picked the one that’s most similar to what they already have because people don’t really like change and they don’t like using new software.
If you know that in 2007, 12 years ago, that you designed this thing, that design probably isn’t going to last in another 10 years. You want this one to at least another 5 or 10 years. If I had been in Tom shoes, I would not have done this. We would ask for opinions about, “Hey, we have some features. What do you think about this or what feature doesn’t this software do?” Those are interesting things because those are actual things that they’re doing in day-to-day business and they are experts on their own work flow and on their own needs for a product. But asking what color the button should be, or how a page should look, or showing three designs for a page, aside from just pure use ability things, like “Wow. I’m totally lost. I can navigate this,” that makes sense, but there are opinion on whether there should be a drop shadow or not, or a font. That’s why I hire experts or become an expert yourself, I guess.
Tracy: There is another piece of this puzzle that’s missing, which is that in a redesign, […] the user experience, not just the interface. When you’re asking people, it doesn’t really say about how we ask for feedback on the design and presuming it’s screenshots and that’s leaving out how the interaction actually is.
The users might be choosing something that looks like the old design because they don’t want the placement of buttons and how things work underneath the change. The thing that I struggle with new design is I’m trying to figure out how things are going to work and who might be scared about changing the system.
When one is doing a redesign, I think it’s important to include how things work and try to improve those flows about how someone uses the website, how someone signs up, or ask for payment information, whatnot. You don’t get feedback on those things when you’re sharing screenshots. So, that could be another thing for Tom to do, is do another round of feedback but not by users but go cray away of testing out the interactions about how things are working and see if his new design does better on that aspect. Does that make sense?
Rob: Yeah, it does. He did do screenshots. He included a link way at the bottom that has a link to the screenshots. One of them doesn’t work but the other one says he has all four designs and frankly, they’re all pretty similar. I actually don’t think it matters which one he goes with.
Tom, my advice would be don’t do this again because having trying to do it by democracy. If you have a product, you should have a pretty strong opinion and a vision for your product, I think. If you want to do a fun contest or a competition, that’s fine. But if really, it’s something as fundamental as the design of your product, that’s where you have to be.
You’re the founder, you’re in charge. You can certainly ask some opinions with people that you trust. You can get two or three designers together at your company. You can get people who have expertise to weigh in. When I was designing or having the TinySeed website designed, I asked a couple people that I know that are really good designers, that have a really good eye for fonts, and this and that, and I trust their opinions. But I didn’t go post it somewhere and ask for the opinions of everyone on my email list because I just don’t think that’s that productive.
Tracy: It’s just going to be a lot of noise and a lot of confusion, probably a lot of stress. It’s such a qualitative product. You don’t have any numbers to bring it back on to and that could be something. Also, when you’re choosing in a redesign, if you can do A/B testing of some sort, maybe on smaller elements, you’ll be able to say, “Okay, this one definitely works better.” More people are signing up or doing something that you want them to do because you can tie that to numbers but with just asking someone’s opinion about what looks better is not going to give that much useful feedback.
Rob: I hope that was helpful, Tom.
Tracy: Sorry, Tom.
Rob: Good luck. Our next question is a voicemail about which side to focus on when building a two-sided marketplace.
Chris: Hey, Mike and Rob. This is Chris Bowles from Kentucky. One of the […] for TinySeed, first batch. My question is relating to chicken or the egg with SaaS B2C/B2B. Got a startup concept that I’ll actually be providing free trial on the B2C side with a very small revenue figure to help support the B2B side.
Without going into a bunch of detail, basically I’m in stealth mode right now. How do you know whenever you recruit the majority of your revenue through the B2B side or you provide the trials to the B2B side versus beginning free trials on the B2C side? How do you know who to market to first and to who to set up on the website prior to launch to be sure everybody […] on […] day? Thanks for all you do. I’ve learned a lot. Have a good one.
Rob: Okay. It’s an interesting one. I think you’ve gone a little into the wood with the free trial and that kind of stuff. I just think about this as a two-sided marketplace, and there’s a business and a consumer side. My translation of his question is which side do I need to bring to the site first? You’ve built a two-sided marketplace?
Tracy: Yeah. The chicken and egg problem is tough because you need to have enough on both sides of the equation for your website to be useful for both. With WeddingLovely, it was a marketplace for wedding businesses and that was the primary focus. There was a consumer side where there’s a planning application. My recommendation is to focus on the businesses.
My personal experience with WeddingLovely is I actually the site very early on which is a few businesses because I needed to have something online for these businesses to say, “Okay. This is launched.” I’ve seen other people using it and I even told those businesses like, “Hey, this is something that’s going to be a slow growth thing.”
In the beginning we might not be able to send them a bunch of consumers, but I was live and they’re listing to the site for free. By focusing on the businesses, they actually help my marketing a ton because I was able to work directly with the people that were on the website with WeddingLovely. They had their own network, social media, blogs, and whatnot. So, they helped build up that consumer side of the business while I focus most of my effort and intention on the business side.
It was a […]. Market places take a long time to build up both sides but I’m a fan of working, I mean, businesses are also easier to work with, by far. I think there’s going to be a lot more benefit through focusing on the business side. What do you think?
Rob: I would focus on the business side first, in that case. I would basically have a landing page somewhere, or a social media account, an Instagram account, or something that is posting amazing stuff and trying to forget this consumer side. Some type of traction so that I don’t have to start from zero. Once I have 10, 20, 30 businesses lined up, I at least have an email list of a hundred people, or I have a thousand Instagram followers, or something there.
Typically, what I say when people ask about how to setup a market place is focus on one side first and in almost all cases, it’s pretty obvious which side you need. If you had a bunch of consumers with WeddingLovely, and you’re like, “All right. I have 5000 people who wants services,” and you have zero services, you have zero businesses, there’s no business there. So, you have to bring the businesses first.
The challenge is, of course, you have to bring the businesses to a place where you don’t have any consumer audience. You could then step back and say, “Well, should I start a blog, or a podcast, or an Instagram following, or an email list, or something that gets the brides- and grooms-to-be?” then from there, say, “Well now, I have this email list of 20,000. Now, I go recruit businesses?” That could be one way to do it. That’s another way to think about it. But you’re starting on a cold stop on both ends, right?
Tracy: Yeah. Chris mentioned that he was in stealth mode. I think that’s something that should depend on what he’s working on, but I feel it needs to be something that you have to get out of stealth mode so you can start recruiting people on either side of the audience.
Rob: Yeah, I would agree. Everytime I hear stealth mode, there’s certain yellow flags, red flags are probably stronger, but stealth mode is one here, “I want to raise money from you. Sign an NDA. I’m building a startup that targets every small business in the United States. It’s any business and there’s 60 million of them, that’s my target audience.” There’s just certain things that’s like, “Yeah. You’re making a basic mistake,” in almost every case.
Typically, the people who make stealth mode work are these really experienced founders. Ev Williams can do stealth mode. He’s done Blogger, and Twitter, and Medium, and on and on. He can do what he wants and break the rules. Steve Jobs can do stealth mode. There’s a handful of people that can do it, pull it off, and it works. But honestly, if it’s your first one and trying to figure stuff how, don’t do that. Just get out there. You need to start generating interest on both sides of this. I agree. I would start at looking at getting businesses on board and having conversations.
Here’s the thing I would do. Whatever it is, if I can bring you 500 customers a year or 10 inquiries a month, or whatever that number is, is this of interest to you and is this worth $99 a month for you to subscribe? That’s your customer development. You have to do it in theoretical because you don’t have that other side of it yet. If they say yes, then awesome. Get on the waiting list, there’s no commitment now, let me get your info, and then you go to the other side and you either start running ads, or you start SEO, or you start social, or you start whatever it is that’s going to bring that consumer side, and you start funneling them somewhere.
You don’t need to write a bunch of code to do this. You can funnel them to a blog, funnel them to a landing page, you can funnel them to a hacked together WordPress site that has a couple of listings that you literally put together by hand. I mean, all this stuff can be done with just hustle. You don’t need to go pay $50,000 for developers to go build anything. You’re just trying to test it out. You’re trying to push it forward a piece at a time.
Tracy: This is a great place to things that don’t scale. For those businesses, what can you do by hand for each of those businesses in the beginning just to start getting the ball rolling.
Rob: Indeed. Thanks for the question Chris. Hope that was helpful.
Next question is another voicemail. It’s about connecting with other founders to build relationships and he’s referring back to a comment I made a few episodes ago.
Michael: Hey Rob and Mike. This is Mike Whitbeck, one of the co-founders of UberWriter. We worked in the mortgage space and we built some income calculation software. We’re on our 5th year of business and I’ve listened to hundreds of your episodes. One of the co-founders, David Stamm, and myself have used a lot of your advice of the podcast to help reguide and redirect our business in very successful ways. Our website is www.uber-writer.com.
On episode 444, I believe you mentioned that you and your wife, for about the feelings of isolation, have other entrepreneur couples over maybe once a month or have dinner with somebody just to talk to people that you relate with. Though it’s probably a little bit weird and just trying to figure this out is, I know I’ve run in the past where you introduce yourself to another couple, just basically go out to dinner, a movie, or a common event with them, and maybe you just don’t kind of hit it off. I guess the awkward question is, when you meet up with these people, is it generally an expectation that you’re going to meet again or you just let the friendship go or not go where it goes? How do you handle that? Enjoyed the podcast. Please keep it up. Have a great one guys.
Rob: This is an interesting question. I think there’s a couple of things. One for me, when I was younger, I felt like I had the need to be best friends with people or not friends at all. It’s just a very binary thing. I’m talking like junior high and then high school. That’s how I was raised. That’s how my family did stuff. It wasn’t until probably after college where I realized, “Oh, having other friends who you just hang out with and aren’t necessarily your best friend or it’s not this binary thing, but you can hang out with them now and again, once a month, once every other month, you see them. It’s nice, but that’s it,” is a good thing. I think it’s a good thing for all of us to have larger networks than just one or two people. Not a requirement, but it gives me accessibility to more people to go see Avengers: Endgame when I need to and I’m not just relying on one or two people. That’s the first thing.
The second thing is when we invite people over, we literally just say, “Hey, we’re having a couple of people over that we know. We’re all startup founders and we’d love to have you over.” That’s the expectation. In addition, we tend to invite two couples or three couples over. That helps it not be awkward if, for some reason, there is one person in the group can be whatever. Talk too much, not talk enough, be a train wreck, whatever, and that won’t ruin the thing because you have six or eight people there. Whereas, when it’s just a double date, you really are reliant on the personalities of the folks around you, and that, of course, can be a wildcard.
So, there’s strength and numbers there and there’s really no expectations beyond that. We say, “Hey, we do this a few times a year and we have people over blah, blah, blah,” and that winds up being the situation. It worked out well for us. So far, we haven’t had any of those situations where it’s actually been bad or awkward. We haven’t become best friends with everyone, but that’s okay. That wasn’t the expectation up front anyway, neither from us nor the other side. It’s just a natural conversation about random stuff.
What’s been interesting is some of the funniest conversations have not been about our companies, have not been about our businesses. It’s been topics surrounding fact. Just that startup founders tend to be creative, driven, motivated, smart people, who are perpetually learning, and just being in a room with those kinds of people and asking what shows they’re watching, what kombucha you’re drinking, what’s the best coffee place you go to, what conferences you like right now, what books are you interested in, what podcasts do you listen to.
This stuff is all tangentially related to work but we’re not sitting there analyzing each other’s businesses, giving us advice on pay-per-click ads and positioning. It’s much more this almost social conversation. What I find is that when I’m talking to, again, interesting, driven, smart people who are shipping things, it just tends to be better conversation no matter what we’re talking about.
Tracy: This question really resonates with me. I don’t know if you had the same issue when you moved to Minneapolis. I’ve moved to Toronto about three years ago and I left all my old friends behind. When I moved here, I wanted to jump in and make friends that I think also do the same thing I do so we can have conversations. It’s been a hard slog. It’s really hard to make friends as an adult. Tying it to a business is even harder. So, I really like your suggestions and I think I learned something from this. I’m going to try to do a little bit more social stuff.
One thing I wanted to mention was, one of the best parts about just meeting up with people, not having a lot of expectations, and just hanging out, especially if you’re a founder. You’ll probably going to see them at the networking events in your city or around the world, or wherever you go, and just making those small connections. They’re not going to be best friends, like you said, but then making these small connections can be really fun because you’re going to see them later on. You’re in continually reinforces connections overtime and I think it’s really great to have these people.
For me in Toronto, I have people I see. Probably it’s just simply at events and they’ve been over at my house one or two times. It’s been really fun to start making those relationships and for a few people it has. Eventually, it’s going to move into, “Okay. Cool. Let’s talk business. Maybe I can tell you a problem I’m having. Maybe get some advice.” Just starting out and meeting people for the first time, don’t worry about talking business. Just see if they’re a good fit for you and not that everyone’s going to be.
Rob: I completely second the notion of how hard it is to make friends as adults and I don’t know that anyone ever told me that when I was growing up, but it just seems like you made friends in school, then you made friends in college. Shortly after college, if you’re still around those friends it was easy, but moving to a new place or relocating is hard.
I’m actually thankful because Sherry is pretty deliberate about wanting to find a community in various aspects of our lives. That has caused her to essentially just start making lists of people that we meet anywhere. We go to a meet-up, I did a little talk here locally a few weeks ago or any of the mirative startup events. Anybody we find that’s interesting, she’s like, “Get their names, get their email, and we’ll put them on this list.” We have this Google Doc of people now that is literally just a grab bag of some people we know relatively well and others we don’t, but we’re interested in getting together with them. We introduce them to one another often, which is cool. It’s not like our goal is to get everybody to network, but that at least there’s some value to everybody.
Tracy: Yeah. Think about talking to your 15-year-old self, being like, “When you’re an adult, you’re going to have spreadsheet of potential friends.”
Rob: And you’re going to have to invite them over for dinner. That’s just how it goes.
Tracy: I just have one more thing. Another thing when I moved to Toronto is that I insisted on working from a coworking space. That was also to get more business friends by working together and being around these people. There’s a lot of people at this coworking space after the last year, so have I grown into friends, we’re talking of business ethics because we’re there working together. I used to work at home in an office and this has been really great for me socially. It’s been really great for me careerwise, just to be around people while I’m working and then you have that little back-and-forth chit-chat. Then it grows into who am I going to invite over for dinner and doing dinner party or whatnot.
Another option that I usually recommend to a lot of people who are working solely from home is if there is a place so they can also try to make friends through coworking spaces, you might be able to build those relationships.
Rob: Literally, once a month, once every two months, it’s not that big of a burden. Frankly, you can couch it as, “Do you want to come over? We will literally order take out.” You really don’t have to cook for them. There isn’t an excuse. I’m talking to the listeners more than you Tracy.
There’s literally no excuse not to do this because when we brought this up before, I’ve had people say, “Wow. That sounds like a lot of work. I don’t think I have time for that.” We have three kids who go to three different schools. We homeschool one of them. Talk about not having time, my wife and I both work full time and do that. And yet we do this. It’s because we prioritize it. It’s not because it’s easy. Sometimes, we’ll do take out or we did potluck last time, where we provided the main thing that I grilled and people brought a salad, and this and that. It’s very little work for us.
The other thing is everybody brought their kids and they all played in our basement. Nobody needed to get sitters because that’s another hassle and expense. Frankly, it is finding sitters who are reliable and all that. There are ways to do this if it’s something that you’re motivated to do and that you think is valuable.
Tracy: Just like setting up a whole dinner party. Even just being proactive about inviting people to lunch. Maybe you said it personal goal of that twice a week, you invite a person to go on a lunch with you. Maybe you’re already at work, you don’t need to get a sitter for that, it’s a very low stress situation. That’s something my husband does and he does it way better than me. Every week, he has a different person he goes to lunch with. That’s how he creates and also build those connections.
Rob: Yep. So, thanks for the question. I hope that was some helpful food for that.
Thanks for listening to this week’s episode. Hope that was helpful to hear. Tracy and I talking through listener questions. If you have a question for us, you can call it into our voicemail number. It’s 888-801-9690. You can always email us at questions@startupsfortherestofus.com. We’ll talk to you soon. Thanks for listening.
Episode 448 | Let’s Talk About Bluetick
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the current status of Bluetick. They discuss the Google approval process, external/internal motivations, current roadblocks, and Mike’s future with Bluetick.
Items mentioned in this episode:
Mike: I don’t know what.
Rob: Adobe Wan Kenobi.
Mike: Oh God.
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about Bluetick, where he’s at, and maybe where he’s headed. This is Startups for the Rest of Us Episode 448.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve build your first one or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. To where this week, sir?
Mike: I strained my back somehow about a week or so ago, so sleeping the past five or six days has been rather rough. It’s on the left side. When I try to sleep, it gets really, really tight throughout the course of the night and it wakes me up. It’s been rough getting any kind of measurably good sleep for pretty much the entire week.
Rob: That’s a bummer. How did you strained up?
Mike: I have no idea. I think I was just alive and that was it.
Rob: Just. I was just old and I moved.
Mike: That’s a good way to put it. The thing is, I just woke up and it was like that. It got progressively worse over the course of two or three days or something like that. It was bad for about four or five and then it slowly gotten better over the last two or three.
Rob: Strained back is no good and no sleep is no good. You’re going back to your pre-CPAP machine days aren’t you?
Mike: Yeah, pretty much.
Rob: We’ll get into some of that more in this episode. We’re going to talk about, as I said in the intro, what’s going on with Bluetick and you and such. Before that, we have some good comments on recent episodes. In Episode 444, you and I went off on Gmail desktop clients. Carl posted a comment saying, “I switched everyone over to Mailbird last month,” everyone at his company. “We switched away from Office 365, Dropbox, and GoDaddy’s email service, and switched to G Suite Solutions. I needed to find an alternative to Outlook and I found Mailbird. It works great, love the Google integrations. My only complaint, one of my coworker’s complaints is that capability of right-clicking to create new folders does not exist. Not a deal breaker, just a complaint.”
What was the one I was using? I don’t remember now. It was Mailplane, like an airplane. When I right click, I often do right-click, paste as text or paste and match style or whatever, because I’ll be copying something that’s all weirdly formatted and I want it to go in the format of the email. In Mailplane, that’s disabled. Not a deal breaker, but I have to flip over into Atom, your […] text editor, I paste it in there then I Shift Command-A Command-C and then go back and paste it in. It’s this extra step that when you’re in a Chrome browser, you can right click, paste the match style, and then it’ll just go in. How about you? Are you still using the desktop Windows client you were using?
Mike: Yeah, I use it on occasion. I flip-flop back and forth between them because it’s an IMAP client and it’s got all that stuff. It’s nice to be able to use one or the other when I need it. The one that I did find with it was that I use the labels feature. I will take things and put them into, I refer to more folders than anything else, but in Gmail it uses labels for that. The one thing I find is that, if I go to use the shortcuts to move it into a folder or apply a label to it, some of my labels, depending on the folder, overlap.
For example I’ll have a customers label but there’s a customers label underneath a couple of different products. When I started typing it out, it doesn’t show me which customers label it is because it basically drops everything before the slash. I have no idea which customers label it actually is because it just doesn’t show me. I still use it on occasion but once I get into those use cases, it becomes a barrier for me. It makes it more difficult. I don’t know why they don’t show the whole thing, but whatever.
Rob: It’s weird. When we bring these things up, it’s like, “That’s kind of a nitpick. Right click, paste and match style, is that really that big of a deal? Is it the labeling?” It can be. It can become that. For me, it’s not that big of a deal, but label stuff, that gets in the way of your workflow and it can get in the way of the perfect solution unless you get used to the new way they do it.
Mike: Like I said, I flip-flop back and forth between them a little bit. I did notice when I was using it that I could shut it down and I would just have Gmail closed, but I’ve noticed that recently I’ve been having Gmail open again. With that, I know that I’m actually just going to close that tab entirely right this second because I forget to do that. Email can be distracting and disruptive. That’s a problem that I’ve uncovered with my workflow, is that when that is open, I tend to get pulled back into my email quite a bit. When that happens, I’m not as productive.
Rob: For sure. Another comment on Episode 447. Paul Mendoza was commenting on the Google verification stuff that you’ve been struggling with for several weeks. He says, “I’ve been dealing with Google verification stuff for months, you can see my day-by-day interactions with Google here. We just got a response from the security vendors, but our app still isn’t approved but I’m sending them emails almost everyday.” He has a URL. You can come to 447 if you want to check that Google verification status. He feels your pain, apparently. It’s not just something that you have manufactured in order to create drama and good radio on the podcast as you’ve been known to do. You haven’t been on […].
Mike: Sure.
Rob: We got another couple of comments, because 447 we started diving in, we typically do our chit chat at the top end of the episode. When we talked about the Google stuff, we wound up spending 18 minutes just talking about that because I was asking questions and going through it. We’ve got some compliments like, “Do more of that. You guys aren’t digging into Bluetick enough,” was the comments, “or your own projects enough.” Part of the impetus for today’s episode was comments we’ve received but also, I think it’s been something that’s been on our minds for a while.
We have always liked doing updates, sharing what we’re up to, and what we’re working on, but it can be hard when it’s not good news. It’s hard to show up week after week and try to have an update of what you did in the past week if you didn’t get anything done or if things are going backwards. I think we tend to do update episodes every few months and I feel like this one today is really just a conversation about where you are, where Bluetick is, how you’re thinking about things, and try to find out more about what’s going on and even to give advice.
We talked for a while before this episode started and you’re bringing up things that I was telling you how I would approach them. We haven’t necessarily always been a ‘big advice for each other’ podcast. It’s a lot more answering listener questions. I think that can be helpful today, too, for you to hear how I would think of approaching different problems or how I have approached them in the past because I’ve done some of this stuff as well.
Mike: Do you want to relabel this as Mike’s therapy session?
Rob: Yeah, it’s going to be 50 minutes and I’m going to bill you […].
Mike: That’s actually cheaper.
Rob: Cheaper than you thought it would be.
Mike: Cheaper than a regular therapy session with […].
Rob: Indeed. Bluetick today, you’ve been working on it for two or three years, and it’s still not supporting you full time.
Mike: I went back and I started looking at my funnel metrics and stuff where I started tracking some of that stuff. I’ve got data in here from November of 2017 and that’s when I started tracking the numbers that I have here. I think that was shortly before I flipped the switch and said, “I’m just going to start billing people. If you’re not ready, then you can either cancel or that’s the end of the free trial or whatever that we have for you.” Obviously, my memory is kind of fuzzy as to exactly what state those things were at at the time so I don’t remember whether it was November of that year or what have you.
Rob: Was that November 2017?
Mike: Yes, November 2017. The reality is it’s not nearly where I would think that it should be if things were going well, the product had product market fit, and I was actively growing it. It’s just not. It’s not enough to support me full time. I don’t necessarily need it to, but at the same time if it’s going for an extended period of time and it’s not making enough money to do that, then why continue?
Rob: Yeah. It’s a waste of time and effort, opportunity cost, could you be working on something else that would be dramatically more lucrative whether that something else is a different product, or whether that something else is consulting, or heaven forbid a salary job? Not that you’re going to go do that, but you have skills. You’re a developer. You can write code. That’s a very valuable skill. To be wasting, I don’t mean wasting time on a day-to-day basis, but having 18 months, you’ve been charging for it, and to be only ramen profitable and not full time income is a struggle. It’s not just that you don’t have full time income but it’s not headed in the right direction anymore. You basically peaked at some point last year in terms of MRR.
Mike: Yeah and it’s more floundering than anything else. It’s not on a tailspin and I’m not bleeding out customers every single week or anything like that. It’s not tanking quickly, but it’s certainly not growing quickly, either. It’s really just meandering; go up on some months and then go down on some months. I have some customers who’ve been around since the very beginning and there are customers who will stick around for three to six months and then that’s it. I don’t feel like I’ve delve into the numbers of how long people have stuck around for and what the amount of revenue that I’ve gotten from each customer is enough, I just haven’t. It’s because I’ve spent a lot of my time on other things.
I feel like I have a hard time prioritizing where I should spend some of that time. Objectively, I think it’s like, “You should spend all of that time on marketing activities, analyzing what your current customers are doing, and who you should be targeting as those customers. One thing I struggle with is the fact that Bluetick has a very good use case for cold email and I don’t want those customers. I have a hard time justifying adding a lot more customers on there that are using the tool for that.
Rob: Is it an ethical thing? You just don’t like cold email?
Mike: Yeah, mostly.
Rob: Or a moral thing? Wait, what ethical is this? External and moral is internal. You’re internal code is like, “Meh. Not a fan of it.” Is that the idea?
Mike: The problem is that it depends on the customer. There are some customers that I’ll talk to, I’ll do a demo for somebody and I hear what they’re doing and they’re doing cold email. I’m like, “It’s not just a great tool that you have, but it’s also a great service. You’re doing great things with it and you are trying to make the world a better place,” versus some of the people just doing the cold email. They’re really bad at it and they’re doing things that are shady or scammy. I’m like, “Yeah. I don’t want those as customers,” but at the same time the tool works exactly the same for both of them.
How do I filter one out versus the other without having a conversation with every single one of them and how do you do that in the marketing that you put out such that you are catering specifically to a type of person who has a certain mindset?
Rob: I hear you. There are ways around it. You have options. You could, on your homepage, just be like the best tool for warm email interactions and then you could put in the FAQ, “This is not for cold email.” You could put it in your terms of service, “This is not for cold email.” You can have flags if people go in it, you see patterns of people doing cold email type things that you flag and you say, “Hey, this isn’t for cold email.”
We had to do this with Drip. People can’t use Drip for cold email. We had to build things and communicate that along the way. It was a pain. It was a lot of work and some people got really pissed off. Some people came in, signed up, uploaded their cold list and started emailing. Our system would automatically block them or they’d get enough complaints that are email spam. Dude would block them. That’s what you have to do if you really don’t want to do it.
The struggle is, with Drip, it will get you blacklisted. So, it’s a big problem for the business itself. With Bluetick, it’s not because they’re using their own inbox. You’re not going to get Bluetick itself, your IP doesn’t get blasted. You have to decide, “Hey, if ethically or morally or whatever, I only want to service certain type customer,” then you can do that. Just make it clear upfront.
It sounds to me like is it an excuse? If you accepted all the cold email, would Bluetick be where you want it to be? Or if you just focus on the warm email use case and ignore the cold email, would Bluetick be where you want it to be?
Mike: I don’t want to say it’s an unfair question, I think the question is a little bit off because it’s more a matter of holding me back from doing the marketing which would acquire those types of customers. It’s not about accepting them as customers or trying to turn them away or whatever. It’s more about holding me back from doing the marketing. I think it’s a very valid question about is that an excuse? I have a whole load of things I’ve looked at and thought about that comes to mind is, […] every single one of them is like, “Is that just an excuse?”
If you looked back at the stuff I did with AutoShark and then with Bluetick, I’ll […] frankly a lot of excuses along the way with AutoShark. If you think about objectively the stuff I’m going through with Google right now, there’s a huge question mark of this $15,000–$75,000 for a security audit. I’m apparently at the end point with Google where all I need to do is get this security audit and get a letter of—I forget what it is—authentication or something, this audit letter that I have to send into Google that says, “Yes, Bluetick is all up to snuff and we don’t have to worry too much about security vulnerabilities for the product,” but at the same time, is that another excuse?
If the products were much further along or had more customers and was making a substantial amount of revenue, would $15,000–$75,000 matter? The answer is no, it wouldn’t. The problem is I can’t point at Google and say they’re killing my business when the reality is the business isn’t making enough money. Really, that’s just the driver that says, “Here’s a hard line that you can’t cross unless the business is making enough.” If the business was making enough, that wouldn’t matter. The actual amount of whatever that is going to come out to would make no difference or whatsoever. So, is that an excuse?
I was saying in a way it kind of is, but at the same time I could almost point at anything that I’ve come across and say, “Is this an excuse?” Anything that comes up on the business as to why something is not working, you could ask that question and I think it’s a valid question to ask. I don’t have a good answer for some of those things. I just don’t.
Rob: That’s the thing. The cold email versus warm email thing, you don’t want to market it because people are using it for cold email. There are solutions to that. If I were in your shoes, I would decide, am I willing to let people do ethical cold email and warm email? If the answer is yes, then that would be on the website. That would be in my onboarding. I would mention that in every demo. I would probably do demo only for now in your shoes because you don’t have such an influx of trials. I’m guessing that you can’t do some type of demo with everyone at a minimum of screencast, 15 minutes of screencast that seriously talks about, “Look, we only do ethical cold email.” Just make that part of the whole deal. If that’s your hard line, then take the hard line and then move forward. That’s one option.
Second option is to not take the hard line and just say, “Hey, this is legal and it’s not going to hurt my IPs so I’m okay with people doing that.” That’s the second option.
Third option, shut the product down. It’s to realize, “Boy, I really built a product that people are going to misuse,” and the nuclear option would be to shut it down. Now that’s tough. I don’t know if I can come up with an easy fourth option. I feel like the ethical cold and warm is a perfectly viable non-nuclear option, and again, to just communicate that in every onboarding sequence.
Some people will sneak through, unfortunately. The good news is, it won’t get you on a blacklist like it did with Drip where we get on the blacklist and it’s like this, “Oh, […],” moment where a bunch of us were running around trying to figure out how to ban this customer and this and that. You’ll just have to have a conversation with that customer and say, “Look, by our judgment or by my judgment, you’ve gone over the line. I need you to migrate away or I need you to improve your things.” You can get a conversation with them where they say, “How do I improve my cold email?” You say, “Here’s a good example of a super ethical one. You only hit them four times over the course of a month, not 17 like you’re doing,” and blah, blah, blah.
All of this is work. It all takes work and that’s a crappy part. It’s the same thing with the Google approval, I think, that it totally gets in your head it seems like and it becomes this road block where really, it should be a speed bump that you look at your options. I say should. You’re going to encounter these over and over. I feel like if you look at the mess of speed bumps rather than roadblocks, knowing that there’s almost without exception, there’s always a way around it.
There are a few exceptions that are not. You can get sued into oblivion. You can get seriously injured. There are these extreme things where you can’t work or where your business is completely decimated because the whole platform just blocks your IP. There are certain exceptions but I don’t see that. Aside from Google disapproving you here in the next week or two, everything else you’ve mentioned to me is a speed bump, but I feel like it impacts you more than that.
Mike: That’s absolutely true. As you were talking through that and shifting the marketing to saying much more of it is ethical cold email and warm email, I actually got excited. I was like, “That’s exactly it.” I think that there are other ways to force that as well. I was talking to Josh from Referral Rock. He said that one of the things that they had done early on was that they charged a setup fee and that works really well for them. I was thinking about doing that as well and trying to figure out how can that work in there. That fits in really well with the idea of pitching it more towards the ethical cold email and warm email for people and then forcing people to do a demo.
That’s part of what the setup fee would be and making sure that they’re doing things the right way, that they’re not just spamming a ton of people just because they have the technical capabilities to. Honestly, that would make me feel a whole heck of a lot better about it. I was actually trying to figure out, “How can I justify this setup fee and how can I do that stuff?” I think that it falls directly in line with that. It makes total sense as to how that could happen now whereas before, I struggled a little bit with how do I present it or pitch it or make sure that people are doing the right things and everything is going well for them. I’ll say it’s like software augmented by services to some extent.
Rob: Absolutely. I feel like that’s one issue but it’s not as if we can now, “Alright and that’s the whole session, Mike, you’re all good,” because there are some deeper issues going on. It seems to me like the two biggest issues that I see with Bluetick and what you’ve been up to, number one, I don’t understand how Bluetick is any different than any of the other tools. I don’t think you’re differentiated. You can convince me otherwise but I don’t feel like there’s anything Bluetick can do that three or four other tools can’t do. That’s a problem because you’re picking up crumbs at that point.
The second thing that feeds into that is you have struggled to ship things. Whether it’s health issues, the distraction from the Google approval, I know you’ve had sleep issues for a long time. You talked at the last podcast about how you had a five- or six-hour workday. Two hours of it was with calls, then your kids were going to get home, and you’ve spent an hour on the Google thing. Your workday was just poof. Gone. You’re not shipping new features. You’re not shipping marketing.
When you look at the people who are making progress in these early stages, they’re shipping something every week. You look at Derrick Reimer. Even though he shut Level down, he was shipping features, he was shipping emails, he was shipping blog post. You look at Peter Suhm, who is the founder of Branch, which is a TinySeed company, was just announced today, he’s doing the same thing. He releases a blog post almost every week and he ships new features to Branch almost every week. You’ve struggled with that going way back.
I think that’s where we talked a little bit offline before this. You have reasons but you were saying to yourself like, “Are they reasons or are they excuses?” The health issues, there’s testosterone levels a few years back, there’s CPAP, there’s all that stuff. It impacts your motivation and that means that you haven’t shipped enough stuff fast enough to differentiate Bluetick and everyone else that you’re competing against is moving, I would say faster than you. You never catch up. Again, my impression is they are better tools, they just have more features, and they do more. So, how can you possibly grow an app that isn’t differentiated in any way?
Mike: A lot of them have definitely caught up in terms of the features. Some of them even started out further along than I was at the early stages. My difference in feature was intended to be the fact that Bluetick does not miss emails, whereas I know that people who were using the Gmail API, those types of customers tend to miss emails here and there. I feel like a lot of those problems have tended to go away. I don’t know whether that’s because the Gmail API has just gotten better in terms of what data that they’ve been sending or the frequency, but I don’t hear about those problems nearly as much as I used to.
Maybe the tools have just gotten better and they’ve fixed those problems. I don’t really know the answer to that because I don’t use those tools on a regular basis. But the fact is you’re right. I’m not shipping things nearly as much as I could or should be. There are certain things where I’ve gone through and I’ve reengineered something or changed how something works, and I’ve got all these data that is going through the system. I’m terrified in some cases of breaking stuff.
I’ve been going back-and-forth recently with one of the vendors who supplies the component that I use for synchronizing with IMAP. They won’t give me access to the stuff where I know for a fact it breaks and I can’t test it. I can’t put an automated test in place and they won’t give me a way to do it. I’m just like, “I don’t know what I’m supposed to do here,” other than switching to some other component which again is non-trivial work. Is that an excuse?
Rob: It’s a problem but you’re going to encounter a problem almost everyday as an entrepreneur. If they become, they should be speed bumps. You could mock up an interface of some kind. Again, we had a bunch of APIs that we interfaced with Drip and we couldn’t hit the production or staging APIs so when our unit has ran, they would hit a mocked up interface. There’s a better word for it, but you know what I’m talking about.
You could feasibly break things but that’s what integration testing is for, and then you just have a checklist of like, “These are the five things that I’m always worried about breaking because I can’t test them well.” Those are in a Google Doc or a Trello board or whatever. Every time you do a big push or everytime you modify that code, you test those things. That’s how I would think about it. Again, it’s not perfect but it makes it into a speed bump. It makes it into a bump in the road rather than an actual road block.
Mike: The specific issue with that piece of it and the problem that I have with that, there are certain things that come up on occasion and I literally can’t do that because they’ve marked the class that I need to use as internal and sealed and there’s no interface for it. I literally cannot do it. The only way that I found to get around it is to create a constructor that uses the internal private constructor for it and basically fake the data, but I’m looking at obfuscated code at that point and I don’t know what the hell half of it does. I think all of this particular example is kind of immaterial, I agree it should be more of a speed bump than a road block. Going down the rest of that specific example is more of going down the rabbit hole more than anything else because it’s not the only thing.
Rob: The thing is, when these things come up, it’s not going to be perfect. I know that sounds silly to say, but you’re an engineer, you’re left brained, and you want every I to be dotted, every T to be crossed, every edge and corner case to be handled. Mike, your software is going to break sometimes. There is […] software that is doing seven, eight, nine figures a month and the stuff breaks. You can build a company with software that isn’t 100%. My guess is your software is going to be pretty dang good because you’re a developer and because you’ve been doing this most of your life, but at a certain point, you can’t let perfect get in the way of good and in the way of shipping.
Mike: And I do. I absolutely let that get in the way. I don’t know why it’s so hard for me to just let it go. There are some things where I can just say, “Oh, we’ll just do this. Yes, […], go ahead.” Then there are other things where I’m like, “No, it has to be right.” For whatever reason, I fixate on those things.
Rob: That’s the problem. If you can’t identify when you’re fixating, then tell yourself stop and approach this from a different mindset. What would XYZ person do? How should I think about this differently is probably a better question that when you find yourself fixating to stop yourself and have the introspection to say, “What is the hack to get the solution? What is the 95% solution to this? What are the three or four options I have?” We’ve talked about a few topics here and then each one, you see, I’m just breaking them down into what are your choices here?
You’re choices with this API or whatever or it’s the component that you don’t have internal access to and it’s sealed and whatever, Mike, here are your options. You can completely shut your entire company down. Honestly, let’s look at them. You could shut the company down because of that. You could build a solution that is 80/20 or 95/5, however you want to phrase it. That’s like the one I said earlier which has been attacked together. It’s not going to catch everything and you have a checklist, and that’s probably good enough for now. Or you can spend a lot of time fixating on it. You can fight with the guy over email, you can try to reverse engineer it.
Mike: I can replace the component.
Rob: That’s great, you could feasibly do that. You could rewrite the whole thing yourself.
Mike: No, I wouldn’t do that. I would find a different vendor where I can rip that out and replace it with something else, that’s what I would do. I would absolutely not going down that road.
Rob: But that is an option. What’s funny is you could replace it with a different one. You’re going to spend time reworking your code or you could just rewrite the whole component yourself. It’s ridiculous but it is an option. Those are your five or six options. When you look at them, some of them seem like the dumbest thing ever like shutting your business down or writing the component yourself; don’t do those. It’s obvious, those are dumb. But the other three, if we look at them, black and white mindset and try to think about them. Which of those gets you to full-time income? Which of those gets you to $10,000? Yeah, there’s a little bit of risk with the one I’m suggesting, but that turns it into a speed bump rather than a road block.
Mike: One of the challenges I run into with this is that I don’t really have a mastermind group anymore where I can bounce ideas off of people and they call me out on a weekly basis that says, “Hey, you’re not working on this,” or, “You said that you’re going to have this done. You’ve been working on this for three weeks. This should’ve been done a long time ago.” I don’t have that external forcing function anymore. I think that’s been a big challenge for me.
Rob: Yeah. You’ve talked about in the past. You’ve told me that you feel like you’re more extrinsically motivated, that having someone who’s keeping you accountable is the way you work best versus being intrinsically motivated. And that’s fine. There are successful entrepreneurs on both sides of that. This is not something that precludes you from being one. You lost your mastermind or it broke up how long ago?
Mike: A little over a year and then I started a new one but we’ve only met I think three times total.
Rob: In a year?
Mike: It was over the course of three months or so and then we haven’t had a call on five or six months, I think.
Rob: For all intents you’re not really part of a mastermind at this point. You ended a year ago. Now, didn’t your revenue peak around that time?
Mike: Yeah, it did.
Rob: So…
Mike: I know.
Rob: A correlation?
Mike: Correlation, causation. That’s a valid point too. That’s an excuse.
Rob: Don’t say it. You’re going to say, “It’s hard to find a mastermind and it’s hard to be part of one.” I would say, “All right, Mike, you have choices. Shut your company down, number one. Number two, don’t be an entrepreneur anymore. It is a choice. Number three, email Ken of MastermindJam—mastermindjam.com—and try to hook with a mastermind. Four, keep doing what you’re doing. Don’t do a mastermind and expect your future results to be the same as they have been,” is probably what I would say.
Mike: Some of these things like the other thing that it could potentially be solved by us having a cofounder. I have talked to you about this before. I’m not opposed to having a cofounder or having somebody else who works in the business with me, but at the same time it’s a question of finding the right person and all that other stuff. But again, is that an excuse? Is that what I really want? The answer is I don’t know. Is that an excuse? Probably. Is it what I really want? I don’t know. I’ve gone out in that road before and I think things worked out fantastically with you, with Microconf, the podcast, and everything else, but my past experiences have not been all sunshine and rainbows.
Rob: That’s a tougher one because finding a cofounder is hard. You can’t rush that. That’s not an easy thing to do. I do think it could be a fit for you given that you would work better with someone pushing you on and you’re feeling accountable to that.
Mike: I totally agree with that. But most of the people that I know of, that I know well enough to say, “Yeah, I wouldn’t mind going into business with them at all,” most of them have their own things going on. It’s hard to find somebody who is in that same position because I’ve got Bluetick that is substantially far along at this point. One thing that I’ve run into when you have employees or contractors or whatever, is I feel like they’re not just motivated, but they’re way less critical of the boss’ performance or decisions and things like that because they’re like, “Oh, well. That person is the person in charge. I don’t want to challenge them as hard as I probably could or would if I truly believed in this other direction versus the one that they’ve chosen or decided to go in.”
Rob: Yeah, but that’s just a minor speed bump. I’ve worked with contractors and employees and I’ve had cofounders. It’s just something you get over. I think the deeper issue comes back to the two things that I said, number one, Bluetick is not differentiated. Number two, it’s because you’re not shipping enough. It sounds like you struggle with indecision quite a bit where you’ve ruminated on a question for a long time, for days or weeks, and sometimes just can’t break out of that to make the decision to move forward. So, you get stalled.
And then the motivation thing. You told me offline that you were bored, you weren’t motivated. At times you know what you should do, “I should go build this feature,” but you’re not motivated to do it. Is that right? Talk about that. Is it a health thing? I guess you don’t know. If you knew you would fix it, right? You don’t know if it’s lack of sleep. You don’t know if it’s low testosterone. You don’t know if you just don’t want to do the idea. Do you have any thoughts or even more background for people?
Mike: My doctor took me off of my testosterone and it wasn’t because it was too high, it was because one of my other blood tests came back, it’s too high. He was like, “This is way outside of the normal range so I’m going to take you off with testosterone for four weeks to see how that plays out.” I was about a week-and-a-half into it and I was like, “I have to take some of it right now.” The downsides or drawbacks of having it, having low testosterone is you get depressed, you have a hard time focusing, you can’t get things done, you can’t really think straight. That was happening to such a severe degree, I was like, “I have to take it today just to put myself at least a little bit back on track.”
I’m going to call him and try and see if we can cut this whole thing short because it is extremely detrimental to me right now but I don’t have any answers, I wish I did. There’s a lot of things where I’m just like, “This is boring to me.” Some of it has to do with the work that needs to get done. Again, is that an excuse? Is that just a reason that I’m using to justify not feeling bad about getting the work done? I get that, as an entrepreneur, not everything is always going to be fine. You’re not always going to enjoy everything.
There are some things that you like to do versus there are things that you need to do. If you can outsource those things that need to be done that you don’t like doing, great. I don’t feel like I’ve been in a position where I can outsource everything that I hate doing because there’s financial research and things like that.
Rob: You’ll never be able to do that. Even when HitTail and Drip were growing like crazy, I still came in and did a bunch of crap that I didn’t want to do. With TinySeed, I have more resources than I’ve ever had and there’s still crap that I’m dealing with that I don’t want to do. But (a) I tried to minimize it, and (b) I tried not to let it clog the top of my to do list. When it’s sitting in that Trello board I’m like, “Oh my gosh, I do not want to look at health care plans and setting up a 401(k) for us.” But it’s like, “I’m going to power through it, suck it up, and get it done. Then I’m going to come out the other side and reward myself by doing something super fun, make it some swag or something.” I don’t know. You can’t avoid that. You can’t avoid it entirely. You can minimize it.
We’re building businesses that we want to be a part of, that we want to run. We’re building it for our lifestyles. That’s great, but that doesn’t mean that 100% of the time, it’s like a trip to Disneyland. I know you know that. I’m being a little facetious, but that’s the thing I think you’ve struggled with a lot. There’s this indecision piece. You’ve expressed to me like, “I’m not motivated to do this thing.” Whatever it is, I know that’s what has to get done. I think you’ve got to figure that out because without that, you can’t move forward. You have to be motivated some days even through the struggles.
We have a mutual friend who runs a SaaS app, who has pretty major health issues. He struggles, he works four hours a day, and it’s tough for him to travel. There’s a lot of stuff that it’s just hard. It’s hard for him, but he runs a successful SaaS app, lives off, and has a few employees. He shows up everyday. In those four hours, I bet he’s pretty damn effective by the fact that his SaaS app still grows.
Mike: I haven’t found a system, I guess, that works for me in terms of preventing me from wasting time on the stuff that I don’t want to do or procrastinating to get those things done. I don’t want to stay here and say, “Oh, well. I just need to find the right system,” because I don’t think that’s the right way to go, either, or the answer to it. I do feel maybe I just need to experiment more and say, “Okay, try this for a week or try that for a week,” and be very deliberate about trying to get things done and shipping things, as you said, versus just showing up to work every day and a lot of motion without forward progress. I feel like I’m thrashing a lot. I don’t have an answer to that. Maybe the problem is that I’ve thought about what the answer to that is without actually doing anything to try and figure it out.
Rob: Yeah, not taking action. I think effectiveness is what you’re summarizing. Thrashing is the opposite of being effective. If this founder we’re talking about works four hours a day but gets a full day’s work done, he’s highly effective. Some people can work 10 hours. If they’re not effective, their business doesn’t move forward. We’ve talked about this in the past. The 80-hour-a-week startup people, I think, are probably not effective. That’s the reason they work 80 hours.
There’s a few exceptions but there’s a lot of younger folks. I used to work longer hours when I was younger too. It’s just not picking the right stuff to work on and then not focusing on that stuff, not wandering off to answer email, jump on Twitter, go to Reddit, really focusing. I think you can get a full day’s work done in 4–6 hours. Your full day’s work would have been 10 years ago, I believe, with the personal growth, experience, and stuff that a person can be more effective with less time.
There’s a couple things that I’ll throw out. One is that I feel like you should consider whether you want to keep doing this, to continue doing Bluetick, whether you want to continue being an entrepreneur. Here’s the thing. If you’re working in a contract job or if you were working a salary job, a lot of these issues go away because daily you would do a daily standup, or weekly, or whatever. You would have accountability. That external motivation would be there for you to ship stuff. That would make a lot of these go away. That’s a pretty nuclear option. In the interest of time, we probably shouldn’t go down that today. I do think it’s something for you to take a step back and just think about longer term.
Mike: Counterargument to that would be if I worked, did the right thing, and got Bluetick to a point where I was able to hire people to put on a team, that exact same result would come out of it.
Rob: Yeah, okay. That’s fine. That’s fine but you’ve got to get there. At the rate you’re going, you’re not going to get there.
Mike: Yeah.
Rob: I don’t disagree with you, Mike. This is Startups for the Rest of Us. The whole point is that we want to help people start businesses that give them personal freedom. The whole point of this podcast and everything we do is to feel free, to do what you want to do, and work on which you want to do. That would be my answer as well. It’s just, you have to figure out how to get there because you’re not making progress there now.
The second thing I would think about which is a less nuclear option, if we’re talking about options, it’s to go one step further than our mastermind and to find someone who would do a daily standup with you. Every morning, five minute phone call or five minute Slack. They keep you accountable. You subscribe to that. When you say, “These are the things I did yesterday. This is what I’m going to do today.” The next day, you come and you do the walk of shame if you didn’t get that done. You celebrate if you did and that extrinsic motivation is something that you think will help to do that.
What do you think about that is that, does it not matter? Because you’re so tired you can’t get anything done? Is the extrinsic motivation enough if someone was breathing down your neck? Would that be enough? Or do you think no? “I’m still too damn tired. I just have health issues and I shouldn’t do this.”
Mike: I would certainly try it. I would say, it’s pretty immature for me to say that it would or wouldn’t work. I suspect that it would. I seriously contemplated trying to find a way to get a one-on-one business coach or something like that, somebody who’s going to hold me accountable. You’re right. A five minute thing like that on a daily basis could be plenty. I don’t know. Without trying it, I can’t say for sure one way or the other. My inclination is to say, “Yes, that would work,” but it would also need to be somebody who is, I don’t want to say willing to yell at me because I don’t want to be inundated with thousands of emails saying, “Hey, I’ll yell at you.”
Rob: Sure because you don’t need yelling. You do need positive and negative encouragement and feedback.
Mike: I think that’s certainly worth exploring. I would say, it goes further than my thoughts about having a business coach who holds me accountable on a weekly basis because I think a daily basis would probably be better. That’s mainly because I feel like I could waste a lot of time during a whole week whereas from a day-to-day, I can’t. I don’t want to say the stakes are higher but the deadlines are sure. I’ve always found myself to be somebody who works extremely well with tight deadlines and time pressure.
Rob: Yeah, external motivation.
Mike: Yes. When I was doing consulting, the […] gets subcontracting through, they’ve held me in with a bunch of stuff. I stopped consulting from them probably a year-and-a-half or two years ago, but every single time I get an email from them it’s because something’s on fire. They want me to deal with it. I actually got to a point where from one customer to the next, every single one, everything was on fire and burning to the ground. They needed somebody to go in and fix it. I was their person because I was really good at it. I just got burned out with the travel. That was what the problem was. It wasn’t that I didn’t enjoy doing those things but I got burned out with the travel. The customers tended to be the same from one to the next. And the problem was repetitive. It got to a point where the problem was the same thing over and over. Then, I just got bored.
Rob: Yeah. Consulting is like a hamster wheel. You want to own something. You want an equity in something that has a longer lasting thing than just […] per hour.
Mike: Sure.
Rob: Yeah, that desire.
Mike: Right. That was a big reason for me leaving and decided to do Bluetick instead because I wanted something that was going to need much more of that Rob’s flywheel as opposed to the hamster wheel.
Rob: Yeah. Obviously, we can’t solve stuff like these in a day. You and I talked about you taking some time to think about this, three weeks, four weeks where you think about both of what we’ve talked about today, some stuff we talked about offline, but really, do soul searching and figure out. I think there’s big questions here. It’s like, Mike, do you want to do this and do you want to do it bad enough that you’re willing to change? What you’re doing now isn’t working so you have to change it. Are you going to be willing and able to start looking at every problem as a speedbump rather than a roadblock?
Is this the right fit for you? Whether it’s this being entrepreneurship, Bluetick, it’s just those two. Does Bluetick have the potential? If you feel like you’re gaining your momentum and motivation to take a hard look and say, “How long will it take to get Bluetick to a point where it is differentiated?” My assessment is that, until you’re differentiated enough that you’re like, “Nope, we do this and no one else does,” or “We do this better than all these other tools.” Until you get to that point, you just don’t win many sales.
Mike: I totally agree with all that. I don’t even have to think too long about that one aspect of those. Do I still want to be an entrepreneur? For me, the answer is absolutely yes. The question for Bluetick is what does that look like moving forward? The reality is, the situation is I’ve got basically a seven month deadline at this point. I think you said there were some questions about how that shakes out with Google. I kind of know the answers to some extent. I still don’t have all the information, but I’ve gone past the last stage of Google’s verification with the exception of the security audit. That’s all that needs to be done. That’s the piece where I don’t know how much that’s going to cost. I don’t know what they have to go through or what other things I’m going to have to change. I’m still waiting to find out what that’s going to cost.
Then, I have to make a judgment called the end of it to say if it’s $15,000 and I’m going to make that $15,000 back in a reasonable time frame, not a big deal. Even if it was $75,000 or $100,000. If I were going to be able to make that back within three or four months, it’s not a big deal. If I’m in a revenue standpoint where it’s not going to happen in six months, eight months, ten months, then, no. I can’t justify even continuing with the product to that point. I don’t know what the price tag on it is right now. It’s a question of how far can I get in the next six to seven months to the point where I know how much revenue I’m going to be making three or four months down the road to be able to justify putting the cash out for that security audit.
Rob: You understand that while the security audit is one thing like we’ve talked about today, there are bigger issues. It’s shipping. Let’s say you pass the security audit and you pay for it. Bluetick is still not growing. Bluetick is still not differentiated right now. The reason again, going back, is you haven’t been motivated, or you’ve been bored with it, or there’s been health issues. There’s been all these things along the way. If that doesn’t change, it doesn’t matter what happens with the Google audit.
Mike: Yup.
Rob: We talked about you taking some time to think about it and actually stepping back from the podcast here for about three or four weeks. Give you some clarity.
Mike: Hopefully.
Rob: Some time alone. I know, give you a chance to maybe find clarity. These are hard decisions. This is retreat level kind of stuff where it’s a lot of thinking.
Mike: Yeah. The weird thing is these aren’t nothing we’ve really talked about. So far, things I haven’t thought about or considered over the past couple of years, it’ s just like I haven’t really taken the time to step back, objectively look at things, and take a hard look. I mean, if I do look at stuff and how things have gone, one constant that has been throughout the whole thing is me. Is it me? That’s a hard thing to say and the hard thing to admit to as well.
The question, can things change? Or will they change? Or do I want them to? I think that I want to. It’s just a question of how is that going to happen? How do I make sure that I don’t go through this process and come out of it and say, “Yeah, I’m motivated. I’m amped up. Let’s do this,” then put in time and effort for six months, then fall back into the same patterns again, I’ll say? That could happen. I don’t know but I need to step back.
Rob: That’s for sure. You know, Mike, I’ve always respected your technical chops, your intelligence, your writing, and you just have a lot of positive qualities. You’ve accomplished stuff in your life but you’ve definitely gotten in your own way. You’ve gotten in your own way more than I think you want to or should have. I think if you can start thinking about it, in terms of, how do I not do in the next six months what has happened in the past six months? We’ll see.
I’m going to be holding down the fort here for a few weeks. It’ll be good to hear from you. I’m sure people will be waiting with bated breath. We’ll have an episode, I don’t know, will it be 452 or 453? It’s the return of Mike. We get to hear from you, what you’ve been thinking about, and stuff.
Mike: Yeah, I don’t know. We’ll see what happens. I got to talk to my doctor and go back on a testosterone because it’s just, my God.
Rob: It’s kind of […].
Mike: It really is. You wouldn’t think that that does it. It was like, “Oh, that can’t possibly be that bad.”
Rob: I would totally think, any chemical in our body, when it gets that out a whack, it has these negative impacts that can be pretty brutal.
Mike: Yeah.
Rob: Well, thanks for delving into this today. I know this is not easy stuff to talk about. I appreciate your openness, honesty, and willing to delve into it. I’m sure the listeners do, too. This has over and over been voiced. This is like one of the favorite aspects of our show is when we do these things. We talk pretty open and raw about what’s going on.
Mike: Yup. I guess with that, why don’t you take us out then?
Rob: Yeah. If you have a question for us, call our voicemail number at 888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening and I’ll see you next time.
Episode 447 | Platform Risk, Pricing, and Customer Development
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions on topics including pricing and customer development. They also continue to discuss Mike’s verification journey with Google.
Items mentioned in this episode:
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. To where this week, man?
Mike: Remember how there was a couple weeks ago where I mentioned there was this ongoing Google app authentication approval process I was going through.
Rob: Yes. Seems like that’s been going on for quite some time.
Mike: Yeah. Like I said, they had announced it back I think in October or November. But they didn’t really give any details on it other than what was published on their website and they’re slowly adding to it and then earlier this year, they started ramping up requests for information, and all these additional things. I got an email the other day saying that they’re basically going to start yanking access. I’ve actually been going back and forth with a couple of people inside of Google who reached out.
I just want to say thanks to those listeners who do work in Google and been listening, but they forwarded it over a couple of my emails, and started pushing through some things. Hopefully, things are moving a little bit faster, but I did just get an email this morning saying, “Now, you have to go through this security review.” I’m trying to figure out or find out more information about exactly what that looks like and whether it’s absolutely required. It’s just been a red date nightmare is what it really comes down to.
Rob: Yeah. I have questions for you about this. It sounds like this could be an existential threat to Bluetick, is that right? Could it basically put you out of business overnight?
Mike: Yeah. It absolutely could.
Rob: And does that scare you?
Mike: Yeah, it does. The whole reason I chose IMAP was because I didn’t want to be beholden to the Gmail API and I didn’t want to have to deal with anything that they could come in and say, “Either change” or maybe they say, “Oh, we’re not going to offer this anymore.” I didn’t want to deal with latencies and things like that associated with it because I knew people were running the problems with that kind of stuff.
Fast forward a bit, and they decide change policy and suddenly, policy says you have to go through all these red tape in order to verify your app. Now, because of what I’m doing, I have to go through security review and it’s a third party security review. The cost for that is pushed on to me and they don’t even give you an actual price for it. It’s like, I have to pay for it and it’s anywhere from $15,000-$75,000 on an annual basis.
Rob: And you totally have that in the couch cushions, right?
Mike: Yeah. Get the money from the tooth fairy or something. I don’t know.
Rob: It’s an existential threat and you genuinely don’t know what’s going to happen. They can literally yank access in two days and just say, “You didn’t comply,” or whatever. Is that accurate?
Mike: I wouldn’t think that it’s two days. I suppose it could, but I could take an email like a couple of weeks ago saying that they were going to extend the timeline to I think, June 15. I don’t know whether the security assessment needs to be done by the 15th or there is something else in there that said, “If you’ve had it done before January 19th then you have to have it done by the December 15th or 19th,” or something like that. I don’t know whether there’s this six months’ time frame. If it’s been done in the past six months, you’re fine, but before that you have to have a new one done. I don’t really know. They’re not forthcoming with direct information when you ask them questions and it’s just slow responses.
Rob: Is this anywhere? Have you gone online to forums? Other people have to be experiencing this, right? Have you gone into forums and looked? Does anyone have clarity in this? Or who do we know that has an app like Superhuman, as an example—now, we don’t know the founders of that—but who has an app like that that also relies on Google or Gmail specifically, that you can connect with, and ask if they have any clarity on it because this does feel like something where it needs more than one person because it sounds like you are not getting answers. If we cobble together, three or four founders who’ve had experience with this, then maybe you can get some clarity.
Mike: Yeah, I don’t know. I can certainly go looking for those. I’ve been following there’s a—it’s not a blog—I guess it’s a set of blog posts from a couple of different people. Contacts.io was one that I was looking at. They have this blog article that they talked about where they’re basically shutting down the whole thing because they can’t meet the requirements. They’re like, “Yeah. We’re just done.”
Then there’s another one I’ve been following, I forgot the name of it, I’ve got it bookmarked, but they’ve been documenting the whole process of what they’ve asked, what they’ve gone through, what the responses where, what they said, and they got all the way to the point where they have to have a security assessment done, and they said out of respect for that company, they’re not posting how much it cost. But I was going to drop them an email today—and that’s a recent post that they put out there—I’m going to drop an email, and be like, “Hey, look. What does this actually involve? What does this look like because I’m not getting any answers I need either.” Since they’ve already gone through it, I’d love to hear more.
But things have been really rushed over the past two weeks because that’s when they started sending out those emails saying, “Hey, here are the days where we’re going to start notifying people who own these domains that you’re no longer going to be allowed to access the API.” Or, “Your app is no longer trusted or hasn’t been verified yet.” Over the course of the next four weeks or so, three to four weeks, they say that they’re going to yank everything if you don’t meet the requirements. But I just got an email this morning saying, “Hey, you’ve gone through this final verification.” I checked my database log, and it’s like, “Yeah, they actually logged in, they did add a mailbox.” Apparently, I’m past that point, but I still need to have this security assessment done.
I wrote a long email that I guess they’re forwarding around internally that basically, laid out all these things. It’s like, “I probably know more about security and compliance than most of the people you have working on this, and definitely more than the average developer, and not to sound arrogant about that but I actually do.” I pointed to different places where, “I’ve been the author of one of the centers for internet security benchmarks. These are independent publications where you can see my name is on them.” I offered them. “Isn’t there some sort of exemption that can be put in here? Isn’t there money set aside in Google for small companies? Isn’t there something there that says that if you’re below a certain threshold, it doesn’t apply to you? It’s not like I’m out here trying to scam the world or anything. I’m just trying to carve out an existence here for myself.” They’re like the government, I guess, that’s kind of how I see it. It’s like they’re large and inflexible, and I don’t know what to do. It’s like arguing with the IRS. You’re probably not going to get very far.
Rob: The hard part is that you know the scrutiny that they’re coming under now, with all the Facebook privacy security crap. So you understand why they might have a policy like this even though it doesn’t necessarily feel fair.
Mike: I do. I get it. I understand. But at the same time, when you look at the discrepancies between what the benefits to me are for having this security assessment done, like all that does is it benefits Google, it benefits their security baseline, benefits their security posture globally. What does it do for me? Zero. It does absolutely nothing. It doesn’t get me more customers. It doesn’t add to my marketing footprint. I don’t even get really listed anywhere where it’s going to get a large amount of traffic or anything like that. I get virtually nothing. I’m the one paying for it, and Google is reaping the rewards and benefits of it.
From that justification, “Why should I pay for this?” They’re making $15 million-$16 million per hour. They actually had to go back and forth with me to say, “Please create a free account for us so that we can log into your app.” It’s like, “Really? You can’t sign up for a free trial from Google. Nobody there’s got a credit card?” It just boggles my mind that they’re treating people this way.
Rob: The part about the credit card I get because, in a big company, very few people have credit cards, right? Because they don’t want people just willy-nilly—you can’t track all the expenses, and you wouldn’t know what’s going on. It’s not that they don’t have the money to have credit cards, it’s that tracking credit cards is a pain in the butt in an organization with thousands of people. That part makes a little more sense to me.
Mike: It makes a little more sense, but at the same time, it’s a free trial. There should have been a credit card someplace that they’ve got and said, “Look, there shouldn’t be anything paid going on this and if there is, contact whoever it is and if you need to do a chargeback, do a chargeback.” But that shouldn’t be a two-week back and forth between them and the developer. I literally waited for two weeks for them to get back to me. I was like, “What email address are you using to register?” Nothing. Two weeks, nothing. It’s not a hard question. I could have done it, and I did eventually hear back from them and got it all taken care off, but then even after I sent it to them, I said, “Hey, here it is.” It was still another week.
Rob: That’s the hard part, I think. To mean them not having a credit card, I would give them a pass on. I just know how it is at big companies, and on, and on. I don’t blame them at that point. The fact that it took them two weeks or three weeks or whatever you’re saying is, that’s the part that gets really hard when they have a deadline. You are trying to meet it, and they’re not getting back to you quick enough. It sounds like they’re not staffed up enough in this department, and some arbitrary person somewhere decided, “Oh, we have to be compliant with this by this day,” but didn’t actually make the decision to staff up or give the proper resources.
I think, to circle back on the audit, how it benefits Google and not you, I don’t disagree with. It’s the same thing with Apple and the app store—it is a monopoly in essence. They can do what they want, they can screw the developers if they want, that’s the hard part, that’s the bummer of building on someone else’s platform. Until it’s antitrust, and the government gets involved, you kind of can’t do anything. You’re in an odd position because I know that you didn’t intend to build on someone else’s platform and that you did the IMAP stuff on purpose.
You’ve said that multiple times. I remember talking in the early days, and that was the point is you were going to do something that isn’t reliant on someone else. For them to just come in and say, “You need to drop $15,000-$75,000.” They can do it, and it sucks, but I cannot imagine them bearing the cost for all the developers who use their API because I think that’s what you’re saying is, you want them to bear that burden of it. I don’t know of a large company, with such a large public API, that would do that. Are you thinking they would have their own internal team that will do it, and they would just have people on salary to do it type of thing?
Mike: I would think that they have something along those lines. Honestly, my initial thought was, “There are going to be companies that can bear the burden, and it’s not really that big a deal for them.” Fine. Those aren’t the ones that I’m publicly advocating for here. It’s the ones that are in a position like me where, very limited resources, I’m not funded, I’m not making the type of money that would make a third party audit like that particularly easy, I’m doing everything myself. If I had 5 employees or 10 employees bringing in $1 million every year, okay, that’s a very different story.
There should be something set aside or some sort of exception process in place for companies that are not meeting a certain threshold, very similar to when the government comes in and say, “Oh, if you are 50 employees or more, you have to provide healthcare for your employees.” But there’s that threshold there because the burden on super small companies is so incredibly high whereas Pfizer or Facebook or Apple, they don’t care, it’s a drop in the bucket to them. They even have an entire compliance division, I’m sure. But a six-person company? No. That’s not the case. When you get into those super small companies, basically, what they’ve done is, they’ve taken this blanket statement that says, “These rules and regulations apply to everyone.”
Personally, I understand why they’ve done that, I understand what their intent is, but the application of it and applying it to every single business—big or small—it’s skewed in a direction that benefits the big businesses by pushing the smaller companies out of business.
Rob: Yeah. The thing I struggle with is, I can see it from their perspective and that the smaller companies are most likely going to be the ones that have the security holes, I would think, right? Maybe not in your case because you know security and you did it for so many years, but think about how many two-year developers, junior developer, hacking something together in PHP getting the API key, they’re not thinking about the security at the level that you are or that Google would require. I actually think that the risk to them is higher on the low-end. I don’t think there could be exemptions. It’s almost like you want more of a scholarship. That would be it, right?
Mike: If you look at exactly what you just said, the risk for a large company versus a small company is actually very similar. The reason is because a large company will have a much larger footprint, so they have much more data available to them and a larger customer base; a smaller company would have very few customers. The likelihood of any one of those getting hacked or them getting hacked or something happening—some sort of security breach—even if it does happen, the footprint of that breach is going to be much smaller.
Think of like T.J. Maxx, however many hundreds of millions of credit cards got hacked is because they are huge. If let’s say that Stripe was hacked, that’s a very similar thing. If you look at something like Bluetick or Level, for example, which Derrick Reimer just decided that he was going to shut that down, let’s just say that he was, for whatever reason, storing credit cards on his server and that got hacked, how many people have put their credit cards into that? The answer’s going to be, it’s much smaller than T.J. Maxx.
Rob: Right. It’s a higher likelihood of it getting breached, but (a) fewer people are going to want to breach it because they know it’s small, and (b) even if it gets breached, it’s just isn’t as nearly as big of a deal.
Mike: Correct. It’s about impact at that point.
Rob: Yeah. Their policy is obviously, very hard on what you are doing. I think the question I feel like, as a founder is like, you’re fighting this now, if you somehow win this battle, this conversation, do you have concerns moving forward that this is going to continue to be an issue?
I bring that up because with apps that I’ve run in the past when Google or someone else broke when it was platform-built, they broke every year, 12-18 months, 6-18 months, whatever, they just kept breaking my stuff. It was an ongoing thing, and I think I want to post that question, (a) have you considered that, and (b) is that a reason to move on? I’m not saying you should, but have you given that thought, has that gone through your mind of like, “I shouldn’t be doing this? I should look for a different idea?”
Mike: It has crossed my mind, and I have given it thought. I think this situation is a little different in terms of the platform itself breaking because I’m relying on IMAP, not anything else. From that perspective, I don’t think that’s an ongoing issue. The policy changes could be because if they change policy once then, there’s no reason to think that they couldn’t decide that they’re going to change policy again.
Could that come up in the future? It absolutely could. Could come up next year or the year after? Yeah, it absolutely could. Am I worried about that side of it? Probably not because I think with Bluetick, it’s one of those things where I evaluate it and say, “Look, this needs to move forward at a certain amount of time, and if it doesn’t, then I should go on to something else.”
Rob: Yeah. That’s something I think we should probably dig into an episode or two. I know we don’t have it on the books today and no, we haven’t done a prep but I think it could be an interesting conversation, for you and I, to talk about where you are with Bluetick and just hear more how you’re thinking about it and where it stands in your mind especially given the light of what’s going on right now. I mean, this is a lot of hassle for—like you said—for an app that is not as successful as you want it to be.
Mike: Right. I even went in and took a screenshot of revenue and sent it to him like, “Look, this is how much this is making and you want me to do this? This is absurd.” I don’t know. We’ll see what they have to say. Hopefully, in a couple of weeks, I’ll have more information. But I mean, I may not, I don’t know. I’m spending so much of my time with Red Tape right now—and I have been for several months now. I’m not moving. It sucks. I don’t know what else I can do.
Rob: Is it taking up that much time? I can imagine replying to emails, you screenshot, you make the argument, then you sent the email, and then don’t you have the rest of your day to then build features, or market, I would say? Maybe you shouldn’t be building features right now, maybe it should be more marketing, but whatever, to do things that push the business forward.
Mike: It’s really distracting. Having that in my brain bouncing around, it’s really been distracting. It’s a little bit harder to focus.
Rob: You’re saying, you fire the email, and then you’re hung up on it for an hour or two, and you’re half struggling to work done. Is that the idea?
Mike: Some of it. In the past two days, there were two different emails that I sent. Each of them took me like an hour to put together. It just takes time to do that, which sucks, and I don’t know, maybe I could provide a lot less detail. I don’t know.
Rob: Yeah. It sounds like it’s tough because when I hear that I think, “Oh man, that is a waste of time.” But if you don’t put the thought into it and write a well-crafted email in this situation, it could be business-ending, so where’s the time best spent? But if you spent an hour to send an email, you still have the other six hours of your day, or seven hours of your day, depending on how much you work. Are you then distracted for that time or are you able to just let it go because that’s where you got to get, if you want to move this forward is to let it go and be like, “I’m going to move forward.” You do have a timeline. It’s like two weeks, three weeks until you know for sure, I’m assuming.
Mike: Sure. So, this morning, I spent some time doing support stuff this morning, and then I spent an hour on one of those emails, and then I’ve got this call for an hour, and then I’ve got another call after that for an hour, and that takes me to 1:00 in the afternoon. My kids get home at 2:45 PM, and I haven’t even eaten lunch yet, so I’ll hopefully start getting work done around 1:30 PM, and I’ll have an hour and a half to two hours before my kids get home.
It’s hard to get things done when that ends up in your schedule, so I don’t know, I don’t have a good answer at the moment, but it’s something I definitely need to think about offline, but we can discuss it next week or the week after or something.
Rob: Yeah. Let’s do that because I do think this is worthwhile digging into. I don’t want to derail this whole episode, but I think this is such an interesting topic because this is the real side of entrepreneurship, right? These are the hard things that we all go through that are scary, and you often don’t know what to do, and it’s stressful. I have to imagine that when work ends, your kids get home, you’re probably stressed all evening—I would guess—unless you can let it go.
There’s a lot of ways we can talk about this. Thanks for sharing that, man. I know that it is not easy stuff to talk about, but I think this real conversation is important.
Mike: Moving on.
Rob: Yeah. I have some updates, but I’m going to leave them until the next episode because they’re just not that time sensitive. I wasn’t thinking […] I was doing. Let’s dive into a listener question, we got a voicemail question about pricing.
“Hi, Rob and Mike. First of all, thank you for your podcast. You’ve definitely made many […] journey and things like […] enjoyable. My question is yet another question about pricing. Something that’s been playing on my mind for a while. While I’m not trying to promote, I thought some background really helps these questions, otherwise, it turns into a whole load of, it depends. I run a successful SaaS called […], that runs digilization backups. However, the vendor lock in and the fear of digitalization releasing daily backups and making my life difficult is real. I’ve been working on my next product Ultimately. For SaaS products, they integrate payment gateway with your payment gateway, so you can do emails. Another work for that integration is without any code. It’s a bit like if Drip and Churn Buster have a love child. I’ve been struggling to work out pricing though. I want it to be in line with the value a customer receives, so I thought of a percentage of monthly recurring revenue, have it settle on a hidden percentage game saying, $9 per 1,000 MRR. However, talking to customers, the percentage model seems to strike fear into people with unexpected cost. Do you have a better suggestion before I roll with that because it’s just become a distraction. Thanks again, Simon. You can learn more about […] at […].com. Thank you.”
You have thoughts on this, Mike?
Mike: Yeah. Definitely. I’ve heard from other people who have apps that are kind of in the space and they have kind of reiterate the same thing that you’ve just covered, which is people really hate having a percentage model of any kind because they want it to be predictable. I think it’s interesting to see them make that argument because if you look at what you’re doing for them, you’re basically saving their money and preventing churn, and you don’t get paid unless they receive more money.
The reality of the situation is, they’re going to make more money by using your service, but they’re concerned about the fact that it’s going to cost them more money even though they’re making more money by using your service. For whatever reason, they have it in their heads that the cost fluctuates per month, and they’re not sure if they can afford it and this is a huge hang up for them. I’ve heard it time and time again.
What I would do is I would actually go and look at some competitors and don’t try to reinvent the wheel. Look at what they’ve done for pricing models and how they are putting things together and how they’re presenting them to customers. Don’t lean toward this model where people are going to hate your pricing. Find out what other people have done, copy what they’ve done, and then show how your solution differs from theirs. Don’t differentiate on your pricing model because that’s going to actually make your job of presenting it to customers a lot more challenging because they’re not going to understand it.
They’re going to look at your competitors and say, ‘”Well, they have this pricing model and that one, and this thing that you’ve come up with is completely, not insane or ridiculous, but it’s just very, very different.” They’re going to have a hard time processing it, and they’re going to mentally, cross you off their list because they don’t understand your pricing models.
Rob: Yep. I have tried to innovate with pricing models before. I have seen founders do it, and it is very hard to do. It’s like saying, “I want to invent a new category.” It’s like, “That sounds like a great idea. Call your app an integration email blah platform,” or something. People are like, “So, what is that? How are you different from MailChimp? How are you different from Zapier?” Those are the questions you get. People want to categorize that in their mind. Pricing is similar.
I think your advice is dead-on. The way I would approach it too is to at least look around at what other players who have similar models, how they’re approaching it. There are the ones that produce churn, but then there are also ones that help abandoned carts, there’s a whole gamut of things that make people money directly using email. Personally, I would pull out my Moleskine notebook, and I would just go around and do a big survey, boom, boom, boom, write it all down, and look at how that pricing is structured, and start from there. What you may find is that everyone does it based on a percentage as well, and you’ve just hit a few customers who don’t like it, and that’s fine. Your sample size is really small, and that makes it hard so far.
As you said, Mike, I would start there. Then the more people you talk to, the more data points you’ll get, and at a certain point, you will know. If you’ve talked to 20 people, and 19 will have a problem with it, it’s a real problem. But if you talk to 20 people, and it was the first two or three who said it, then it’s a little more clear cut.
I hope that was helpful, Simon. Thanks for sending your voicemail in. As always, voicemails go to the top of the questions queue. Our next question is from Martin at quoshift.com.
He says, “Hey, Rob and Mike. My name is Martin. I’m from Australia. I’m looking to start a new SaaS business in a fairly mature space. There are about three competitors in the $10 million to $100 million range in annual revenue that I would eventually like to compete with. I’ve compiled a large list of current users of those solutions. I’m going to go ahead and reach out to schedule some interviews. My platform would be easier to use while providing an objectively better technical solution than other companies. Easier to use, objectively better. What are the top three questions you would be asking these users to see if they would be interested in switching to my product? By the same token, how can I get people to pretty sign up to my solution?”
What do you think?
Mike: I think I would start by asking them what is the single thing you hate the most about what they’re using now because that’s probably going to drive them to switch. It’s not going to be, “Oh, this could be a better solution. It’s going to be better, technically or the UI is going to be better.” You have to hone in on the things that they absolutely hate. Use that as a lever to try and move them from whatever else they’re using because they’re going to want to avoid that pain, more than to incrementally improve, what they have now. That’s where I would definitely focus. Beyond that, just the language, I’d say, in the email is a little bit concerning because you’re saying that it is objectively better, technically. Dude, your customers are not going to care. It’s more about their experience with it and what they are going to get out of it.
Rob: Yes. Switching costs, whether they’re high or not, in actuality, they are always high in someone’s mental–in their mind. You can’t make an app that is 30% better and expect people to switch. You need to make an app that is two times, three times better and have a real, compelling way to communicate that to the customers. Building a better mousetrap is a really hard way to get people to switch SaaS apps.
The switching cost on mousetrap is not high—I’ll put it that way. I like your idea, the number one question of like, “What do you hate the most? What are two or three things that you hate most about this app?” I think, to tie it in, you talked about Derrick Reimer earlier deciding not to do Level. He wrote the blog post on derrickreimer.com, about deciding to shut it down, and the process there. He felt like he didn’t do it as well as he should have. He referenced the book called, The Mom Test—the subtitle is—How to Talk to Customers & Learn If Your Business is a Good Idea When Everyone is Lying to You. One of the big questions in there is not just, “What’s your biggest pain?” But that then followed up with, “What have you done to try to get around this pain so far? What have you done to solve this pain so far?”
Because if they say, “My biggest pain is I can’t integrate with this other product. If you build that integration, it would be great.” What have you done to solve that pain? Well, if they haven’t tried to hire a developer, or write any code to do it, or tie into Zapier, or do anything to actually fix the pain, then the odds are good that that pain actually, isn’t that big of a deal. In their head, they’re thinking, “Yeah, this is a pain. This is something I dislike.” But if they haven’t taken the time, or the money, or made an effort to fix it, it starts to sound like, “Well, maybe this isn’t that big of a deal. I think that’d be the follow-up question that I would ask about each of those pain points and I would […] The Mom Test, of course, to even hope further because there’s a whole bunch of questions in that book.
You know one other thing I would consider asking is because from a customer development standpoint, you want to find out what to build, and the early things to build. I would be curious to ask, “How long have you been using this product? How hard would it be to switch? Have you considered switching in the past? If you have, why didn’t you switch to another?” You know what I mean? Go down that logic, that path, of trying to really get into it to figure out when it comes time have they actually thought through what switching to your product looked like because if they haven’t, they can get right up to the end. They actually build all these integrations, and then like, “Oh, I haven’t thought that I’d have to get a developer involved.” That’s a no go. Those are the types of questions. That’s the path I wouldn’t follow. Thanks for the question, Martin. I hope that’s helpful.
I think we have more time for one more question today. This one is also about customer development. It’s about setting up initial meetings when all you have is wireframes. It’s from Scott.
“Hi, guys. I have a question for you. I’m trying to validate my idea by talking through wireframes with people, but before that can happen, I’m sending cold emails to people that I’m assuming are the target decision makers. In my case, it’s HR Managers of companies with around 250 or so employees, which may or may not be right. I wondered if you could talk about your experiences with getting those initial meetings set up. I don’t have a website at the moment, just initial product wireframes, do you think that’s a mistake at these early stage?”
He gave us a sample email, which I think is well-written. Any thoughts on this?
Mike: I like he led off the email by saying, “We’re in the early stages of building an app,” because I think it conveys to the person on the other end that you’re, I’ll say, as an aspiring entrepreneur. I found that that’s actually, a really good opening way to position yourself because you’re essentially soliciting them for their expertise and their advice.
A couple of things I would keep in mind though, the people that you talk to very early on like this—depending on how long it takes you to get your app out the door—it could be that these people are just not going to ultimately, end up being your customers. Just bear that in mind. Don’t bend over backward for every single one of these people, thinking that you’re going to get all of them as a paying customer once you start shipping the app or you have something to ship.
There’s a bunch of different reasons for that. But the fact of the matter is people switch jobs or their priorities change. All kinds of things can happen between the time that you first talked to them, and then you have something that you can show to them. I don’t think it’s a mistake to just show them wireframes. I mean, you need something to show them especially if you want to get any sort of prepayment or commitment from them.
The reason I would lean more towards that prepayment is because it essentially overcomes a hurdle which is that they’re saying they would pay for something, versus they will pay for it. If they give you a credit card as a prepayment, then they are willing to pay for it versus, “Oh, this sounds like a good idea. I would pay for it.” But the reality is, they want to see it, and they want to be able to play around with it. There’s going to be a bunch of people who fall into that category where they would pay for it except, and then they’ve got all these different reasons, that until you ask them for their credit card, they’re not really going to tell you because they want to be helpful. Nobody wants to be the person who says, “Oh, this is a bad idea.” If they’re trying to give you advice, they’re going to say those types of nice things which is going to what you want to hear, not necessarily what you need to hear.
Rob: Yeah. The hard part here is, if you’re an HR Manager of a company with 250 employees, you’re not going to prepay for something like this. Prepayment is such an SMB thing. When you’re talking to a single founder or a founder of a five-person company, yeah, they’ll totally give you a hundred bucks or whatever, put it in a credit card or whatever, but that type of thing, it works very differently as you get to the mid-market where they have these massive budgets, and everything is tracked.
You could feasibly do prepayment. But it’s going to be like, “Would you pay us $5000 or $10,000?” Then you’re going to need contracts. You’re going to have to go through procurement. That’s what this process would be like at that point. You’re trying to fund this based on customer pre-sales with larger companies, then it is definitely, much different—we would think—than if you’re dealing with just smaller companies.
Mike: Well, I don’t think you necessarily need to get to the point where you’re funding at with their money. In my mind, it’s more a matter of are they willing to commit to paying for when it’s ready. It’s a different goal than if you’re trying to get money from them to fund the development of it. That’s two different things, depending which direction he was trying to go.
Rob: Yeah. That’s fair. You don’t have to fund it, fund it yourself, but getting someone who runs HR at a 250-person company to give you their credit card number and say, “Yes, I’ll give you a few hundred dollars.” I wouldn’t do that. I worked at larger companies, and I just know the politics and everything that goes on in there, and you’re just so busy trying to push things forward that unless the solution is there in front of me, there are so many people marketing and trying to sell to these HR managers or to any manager at a company. That it’s like, them giving you the time to even give you feedback, and then them going out on a limb and then giving you money with the thought that you might build something. I mean, if they don’t know you, did they know that you’re going to build good software? Did they trust that you’re going to deliver […] ever? It’s a whole different ball game.
You’re not going to have a reputation like you might if, let’s say, I went to our audience and was like, “Hey, I’m going to build something that is going to solve whatever your problems.” There would be reputation factors, right? People know me, and hopefully, like me, and trust that I’m going to build something good, but he’s not going to have that with these HR Managers because it’s just cold outreach.
Mike: I think, what I would lean towards doing in that case is saying, “If the products says this, this, and this, so what are the roadblocks to you purchasing it and pain for it?” That gives you a little bit of insight in to the internal politics of how that company operates. If you’re asking that company that specific question, you’re going to get, I would think, a reasonably decent cross-section of how companies at that level operate in terms of purchasing and requisition.
Like, “Some are going to need to go through the IT department and they have to hand it off to them and the IT department has to purchase it. Some of them are going to have a credit card, they’re going to be able to just buy it themselves, and tell the IT department afterwards. Some of them purchases above a certain dollar amount, they need to go through somebody.” You can ask them about, “If the pricing was this, what would you think? If the pricing was this other thing, what would you think? What are the roadblocks that lead to those different points?” That’s what you need to know is how are you going to sell to these people assuming you built what they want.
So, one line of question is, “What is it that you want and need and what would make it so that she would pull the trigger and buy it and say yes.?” The second part is, “What does it take to actually get it into here?”
Rob: Yep. I think those are good points. He asked two other questions or he asked two questions in the email, and I don’t know if we’d addressed them very well. His first one was, “I wondered if you could talk about your experience with getting those initial meeting set up.” Yeah, the experience is, you have to send a lot of emails to get very few meetings. The funnel is wide, and people are busy, and they aren’t going to want to talk to you.
Other thing that I’ve done is use my network/audience to try to get that. Whether you’re going on LinkedIn, whether you are emailing everybody you know to basically say, “Look, I’m an aspiring entrepreneur or I’m a founder, and I’m in the early stages, I need advice on an HR product. Could you make an intro?” That’s how you’re going to get people who will at least talk to you on the phone. My experience is that it’s frustrating, and takes longer than you want and you get a lot of, “No, I’m not going to talk to you.” Eventually, your persevere, you figure it out, you talk to enough people.
Then his second question is, “I don’t have a website at the moment, just the initial product wireframes. Do you think that’s a mistake at this early stage?” I could go either way on this. I think wireframes is fine, but I think non-technical people have a tough time feeling wireframes as real things, but I’m less worried about how the screens worked, and I’m more worried about what is the headline. What is the headline of the website? There’s kind of this old marketing thought, and I think it’s good, it’s something that I’ve done from time to time, where you build the marketing page first, you build the landing first page. You go from there to then building the product. By the time you get that headline in there and some bullets of what the copy is and what it does. I mean, that’s how we did with Drip.
I’m trying to think, my book was that way too where it was five sentences on a page and then I took that and said, “Now, I’m going to go manifest this into reality.” That’s what I like about you building a marketing site is whether you do it in Squarespace or WordPress SaaS theme, it doesn’t have to look amazing, but it’s really about you getting it on paper, getting the marketing thoughts and the copy even in front of yourself, and maybe if they asked, you can send them there, it’s just an email opt-in, it kind of depends, but I think I lean towards in doing that. I think it’s a helpful exercise, especially for those of us who tend to want to go to the code.
Mike: I was going to mention exactly that. I don’t think that having a website in and of itself is going to help you, but I think the process of putting together the website makes you seriously think about what it needs to say, and how you’re going to position it, and it helps you craft a better story when you’re talking to people about the solution on a call, and you’re demonstrating those wireframes. It just helps you position it better so that if they look at your email, “Well, let me just take a look at the website before I reply back to this.” That should tell them very quickly whether or not they want to even waste their time at all or whether you’re serious. If you don’t have any website at all, who knows?
I mean, I feel like, this is definitely more me than anything else, but if somebody sends me some email and says, “Hey, I’m thinking about this,” and they’ve got literally nothing on their website at all or they don’t mean to have a website, it’s really hard to take him seriously that they were even going down this road.
Rob: Yeah. I think that’s a good point. Hope those thoughts are helpful, Scott.
Rob: Well, thanks for the questions everyone. If you have a question for us, you can call it into our voicemail number 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com.
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