Rob introduces “TinySeed Tales”, a show that follows one SaaS founder week by week through their struggles, failures, and victories.
In this episode of Startups For The Rest Of Us, Craig Hewitt returns to the show to answer a number of listener questions on topics including productized services, podcasting, and more.
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In this episode of Startups For The Rest Of Us, Rob checks in with Mike Taber on his progress with Bluetick. They talk about Mike’s motivation, specifically over the long term , the continuing Google security audit, differentiating from competitors and more.
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In this episode of Startups For The Rest Of Us, Rob talks with Steli Efti of Close.com, about his highs and lows of the past year as well as a in depth dive into starting your first sales process.
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In this half episode of Startups For The Rest Of Us, Rob announces the inaugural state of independent SaaS survey. A survey that looks at SaaS benchmarks for non-venture backed companies and how you can participate.
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In this episode of Startups For The Rest Of Us, Rob does a Founder Hotseat with David Heller of Reimbi, about dealing with his specific issues with enterprise sales.
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In this episode of Startups For The Rest Of Us, Rob along with co-host Jeff Epstein, answer a number of listener questions on topics including competing against a giant company, splitting from a co-founder, having enough features and more.
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Rob: Welcome to this week’s episode for Startups for the Rest of Us. I’m your host, Rob Walling. On this week’s show, we enter listener questions on topics like competing against a 900-pound gorilla, splitting from your co-founder, and whether there is such a thing as having enough features in your app. I welcome Jeff Epstein back on the show to help me answer your questions. This is Startups for the Rest of Us episode 462.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups. Whether you’ve built your fifth start up or you’re thinking about your first. I’m Rob and today with Jeff Epstein, we’re here to share our experiences to help you avoid the mistakes we’ve made in the past.
Welcome back to Startups for the Rest of Us. Thanks for joining me. You took on the show, we covered topics relating to building and growing startups in order to provide ourselves a better life, improve the world in a small way. We strive to have a positive impact on other people, be it your customers, your team, your family. We’re ambitious founders but we’re not willing to sacrifice our life, our health, or our families to grow a company.
We have several show formats for Startups for the Rest of Us. Every month or two, Mike Taber comes on and updates us on his entrepreneurial journey. We also have some tactic and teaching episodes, I do some interviews now and again, founder hot seats, and today’s episode is all about listener questions. It’s questions from you and folks like you who are listening, they write in or send an audio question and we do our best to think it through. I really think about what I would do in their shoes and then answer the question.
Jeff Epstein comes to join me today. If you remember back to episode 453, we talked through his journey as a non-technical founder, of building a SaaS app to between $5 million and $10 million ARR, and then exiting that. He had a pretty stressful and impactful journey, life-changing journey for him, and he has a lot of experience under his belt. I think you’ll enjoy the questions that we answer today.
Before we dive into the questions, I want to remind you that MicroConf Minneapolis is next April 19th through 23rd, so you’re going to want to block those dates off on your calendar. Also let you know again that the TinySeed application process opens on November 1st. It will run for about a month, so if you are interested in potentially being part of our next batch, enter your email at tinyseed.com.
As well as tease again about my secret podcast project I’ve been working on for about three or four months and I hope you enjoy that. I’ll have more info on that as I get more of that produced. Just want it to be a bit further along before I start putting stuff like that out in public. With that, let’s dive into our listener questions today.
Jeff: thanks so much for coming back on the show.
Jeff: Hey, thanks for having me, Rob. I appreciate it.
Rob: Absolutely. We have some good questions to run through today. The first was from Twitter. I actually did a casual call-for-questions to see—after your episode went live—if anyone had a question for you and Fuego Online sent this question. He said, “Did Jeff Epstein feel way out of his depth? I know I do sometimes and I have a technical partner.”
Jeff: Yes, definitely out of my depth many times. Not necessary as much being technical or not technical, but I think it just depends on the stage of the business. For me, that probably happen pretty regularly where you feel that way.
Rob: I think that’s really common. I feel way out of my depth most of the time I’m doing something interesting, I’m learning, and it’s stretching me. I say I feel out of my depth. He said way out of your depth, which I do think is a differentiation. There’s comfort zone and then there’s almost that breaking point.
I have to imagine there were several moments over your eight- or nine-year journey that you’re on the edge, of like, “Oh my gosh, this might not work,” or, “Oh my gosh, this is the most stress I’ve ever felt.” Is there a time you could take us to?
Jeff: Yes. For me, I certainly felt over my head in many scenarios, and like you said, I’m a first-time founder. So, everything is essentially new for me. As we grow, there are new challenges ahead and there’s so many situations where I felt that way.
Two probably stick out in terms of really a horrible feeling of what did I get myself into. One was when we changed co-founders pretty early on before we even finished fund-raising. The early employee and I didn’t see eye-to-eye and he left the company. I was left with not much in terms of a team. That was one.
Another one was actually much later, maybe five years later and it was when for the first time you realize that there’s a lot of things happening that you are not aware of. This was when we’re about 20 people or so. It was one of those situations where you’re like, “Wow, I really need to step up my game.”
Basically, what happened was there was just a lot of people that weren’t happy with some people in the company or just the way things were. A lot of it was my fault, some of it I frankly didn’t know about and didn’t have the communication structure in place to solve those things or to get the feedback channels filtered up to myself. That was a really eye-opening experience and been pretty painful.
The one thing I would say is, I’m pretty confident in myself being able to learn quickly. I think that’s—for better or worse—kind of my superpower, so to speak, where if I just have the information, I figure I can do something pretty well with it. For me, it’s just a matter of figuring out what the issues are, what the problems are, and what are the available options to start fixing it. When that happens, I think I’ve done pretty well.
Rob: I would agree. I’m going to keep saying on the show more than half of being a successful entrepreneur is managing your own psychology. Part of that is believing that you can get it done, taking things that seem like roadblocks and saying, “How do I turn these into speed bumps? What are the five, six, seven options here?” No matter how bad, no matter how good, lay them all out, look at it, and move ahead. It’s like having confidence in yourself that you can figure this out.
There’s so few things that are actually company-ending. There are obviously a few, but so many of them in our heads. I know I’ve done this. You just catastrophize it. You’re like, “Oh my gosh, this is the worst thing ever. What have I built?” This will be done in three days if you handle it well. If you actually do the right thing, it will smooth over and be done in a week or whenever.
Let’s dive into our next question and it is a voicemail about competing in a space when there’s an 800-pound gorilla, namely Shopify.
Ahmed: Hi, Rob. This is Ahmed from Toronto, Canada. I have a question regarding starting a startup in a very competitive space like, say, ecommerce, specifically competing with a company like Shopify, which is pretty much a company that has been doing everything right in terms of technology, focusing on the low-end market. They also have Shopify Plus targeting more enterprisey customers.
They have a core set of features which are then built upon by app developers. They have a market effect with agencies. They have a very good content marketing strategy on their blog, and they’re dealing with B2B customers who might not be as price-sensitive as the B2C customer. So, concerning all these things, do you think it’s possible to still carve out a niche within the ecommerce space and compete with a company like Shopify? Thanks. Bye.
Rob: What do you think, Jeff? This is a tough question, obviously, but what are your thoughts on it?
Jeff: It’s surely not an area where I would necessarily look to start a company. I think if you have one, if you’re growing and doing well, there’s certainly going to be opportunities. I’m a fundamental believer that companies such as Shopify or Amazon always have blind spots and they have specific areas which don’t make sense for them to focus on, which OS or niche businesses spring up to serve those needs.
If you’re looking to start, it wouldn’t be my top choice, but if you are already building a brand and a company, you have customers. I would say focus on why customers are choosing you or why they’re considering you and make sure that you really hone in on those areas so that you can continue in that niche market for now.
Rob: Yeah. I love the answer of blind spots. That’s the first thing that came to my mind, is where are the disgruntled Shopify customers? Go to the forums. When you get this big, you’ve heard of like quickbookssucks.com where everybody rags on QuickBooks. Is there one of those for Shopify? Where are the disgruntled people who say, “Oh, Shopify doesn’t do this well,” or like you said, it’s not worth their time to go into, whether it’s a vertical niche, or whether it’s to build a certain type of feature, or whether they have just technical debt, or thousands of lines of code, or tens of thousands, tens of thousands of customers, and you just can’t change things overnight.
This is the playbook that we did with Drip. When we launched Drip, it was a mess. Think of not Drip itself, the market. Think of Mailchimp, they’re dominance with their free plan. Free up to 2000 subscribers. How do you and could possibly enter that and charge at that level? We had Infusionsoft, Pardot, Marketo. Those are all but marketing automation providers. We had Constant Contact and AWeber who had their own niches. It’s like the SMB was Constant Contact and AWeber was more into the info marketer space.
No one in their right mind would enter that space and yet we found ourselves competing against them. It was exactly what we talked about here is we looked at people didn’t like Infusionsoft because they charge this $2000 upfront fee, because they’re $300 a month and up, because they’re aggressive with their sales, because the product was not very good, it was hard to use, it was buggy.
Mailchimp, a company I’ve always respected, wasn’t moving fast enough with the automation. People wanted to be able to click a link and move from here to there. There were features that people wanted from Infusionsoft but Mailchimp and AWeber were not building. So, we as a startup, what’s the advantage?
One of your advantages is you move so quickly. We could build and launch automations in months. Where did it took them? Literally, years. That’s, to me, the advantages. It’s not an Achilles heel, it’s not like you’re going to kill them. The metaphor doesn’t quite work, but it’s a vulnerability or, as you said, a blind spot that even if they are moving there, they haven’t gotten there yet, and that’s what I would look at. I don’t know the ecommerce space well enough to know what those are for Shopify, but I do know that, that’s what I’d be looking for.
Jeff: One thing I would add, Rob, and this is where you had a ton of ability to kind of see the future is that you were looking at marketing automation companies for yourself and to leverage them. If you’re going to get into this type of business, it’s more than an intellectual exercise. The person needs to actually know or have their own specific pain. That would be really big here instead of just guessing that they maybe are power users or that they’re selling and they’re looking for another way to do something that they can’t do with Shopify. That would be a really great way to start.
Rob: Yeah, it’s a good point. If you’re going to enter a less competitive space, you don’t always need to be your first user, you don’t always need to build for your own pain. If you’re going to enter a space like competing against Shopify or Mailchimp, I would never say always, but I would say it’s a really good idea. It’s another tool in your toolbelt to have that domain expertise. So, thanks for the question. I hope that was helpful.
Our next question comes from Nick. He’s got a couple of questions. He has some kind words about the podcast. He started with, “I love the refreshed format of the podcast. Insightful and you could really feel a new surge of energy. Well done. Thanks for continuing to make it such a great show.” Then he transitions into talking about his business. He says, “Each stage of my business has brought fresh challenges and right now I have a couple of questions. It would be great to hear your thoughts on. The first question is this, splitting from a co-founder when your business is successful.” Jeff, we know your story, we know that you went through this yourself. I’m curious to hear your take.
He says, “My co-founder and I have been in business together for 12 years. Initially, we ran a successful niche consulting firm before pivoting into a product business in 2016. A product is a B2B app that helps financial companies. It’s growing slowly and steadily. We just hit $1 million in ARR.” Congrats on that, by the way. “While I’m loving the product journey, my co-founder feels differently. He’s 20 years older than I am and he wants to do other things with his time.
Our working relationship has probably run its course, but he feels his best exit is to market the business for sale and I don’t share that view. While I’m open to doing it, I’d like to keep my options open. We’ve been fortunate to find product market fit, and while our addressable market is small, I feel our business has further to run. I’ve looked at options to buy him out, but he would want a market-level multiple evaluation, which is significant. He’s also not keen in acting as a silent partner.
Currently, I hold a majority stake. I am willing to buy more shares but would also appreciate a new strategic partner who can add value in our sector. What would be my best course of action?”
I don’t know that we can recommend the best course of action, but I do think we can bat around a few ideas because I don’t think this is necessarily clear-cut. What are your thoughts, Jeff?
Jeff: In my former life, I’m an attorney, I went to law school, and talked to quite a bit of founders. One thing that is so important, having gone through it myself, is understanding how you can unwind or exit a business from a founder perspective, especially when you’re close to 50/50. It’s not clear here but it sounds like the founders have a pretty large stake each and one of them is obviously the majority. That’s always challenging.
Your best course of action, again, depends on a lot of factors. One is, do you want to retain a good relationship with this person going forward? Also, how much of a hassle do you want to have in terms of managing this process versus running the business? Legally, again, I don’t know your operating limit. You should have one; kind of the rules of what you’re allowed to do or able to do are probably contained in there.
Generally, as a majority owner, you have most of the power. You’re certainly would be able to block or not have a sale of the business happen. A couple of things that I would think of off the top of my head is maybe try to find an independent. Someone who can value the business in a fair way. Everyone loves to sell, even if it’s a house or some other asset. The reality is it’s a lot harder than it seems and it usually sells for a lot less than you expect.
I think that having on through a business sale is not at all you would expect and I’m sure Rob can say the same thing. Just putting a number on it from the minority perspective, that’s probably not the best outcome. Ultimately, hopefully you guys could sit down and come to a conclusion. You might have to get creative in terms of an earn-out or payments over a period of years, and/or maybe phasing out the hours worked. My recommended course of action is come to the table and figure something out as partners instead of trying to go the legal route.
Again, as a majority partner, you should know that you probably do have the upper hand in some way based on you are the majority and you probably have the voting ability to do things that might not be favorable for your co-founder.
Rob: Yeah, I think you’re dead on with that. Look at the operating agreement. Typically, it says other founders have the first right of refusal. If you get an offer, they have to match that, that kind of stuff. To me, there’s a lot of ways you could go, but I feel there’s three options. One, you could just sell the whole business and, as you said Jeff, that might take six months or a year to do. You lose the asset, but you get cash and then you know what fair market value is. There’s no quibbling over it. You’d run a profitable process. By the way, Nick, if you want to do that, ping me back. I know some people who do things like that for $1 million ARR SaaS companies. They run a full process and get good revenue multiples for them.
The other option that I think about is like you said, Jeff, an earn-out. Have someone assess it or try to get some offers and then use that as the assessed value, in essence, and then try to buy him out over time. Let’s just say, $2 million is what we value the business at. You owe him $1 million. You’re not going to pay him that today unless you have that in the bank, but can you pay him $100,000 a quarter for the next 10 quarters or something? I have seen that done not often, but I have seen it done with some tech businesses in the past.
The other option I think about is—it may sound complicated—finding someone to just buy his share. Again, you need to try to look for market or assessed value, he owns X percent, then you try to find someone that you would be willing to work with, whether they are a silent partner (or not) but they buy in and then as you take dividends out, they also are able to participate in that.
I think off the top of my head, those are the three options I’d be looking at. Of course, each of them comes with different timelines and different complexities. Do you have any other thoughts?
Jeff: I think those are great, great options and a really good summary of what Nick can probably do, to be honest.
Rob: Nick has another question about the app. “Obviously, it’s a three-year old B2B app, it’s generating $1 million in ARR with 15 enterprise customers. It’s a small customer base. It’s also a simple but important problem for insurance companies. With 12–18 months sales cycles, we are growing slowly but steadily in our niche market and have three developers. Thus far, we have been customer-led, relying on customer development to identify and prioritize features.
However, with our 10th release, things have slowed down. The app is stabilizing, support tickets have dropped off, feature request are drying up. We hold a user forum twice a year and then deliver the most requested items in our last release. We tried tabling some more radical ideas at our last meet-up, but the feedback from several power users was that we shouldn’t mess with it and to keep things simple. Is there such a state as having enough features? How do we know what to build next? Should we refocus on technical debt? As ever, your thoughts are appreciated.” What do you think?
Jeff: I do thing there are probably times when it makes sense to focus on technical debt. Then, it may not be time to just add more features. I think that makes sense. I don’t know if that’s a constancy. I think there can be points in time. Saying that the business is, tickets are slow, or things like that. To me, running a business is a fluid situation and it’s always changing.
I wouldn’t suggest a full stop. Perhaps it’s time to think about some ways that you can grow the business, but it also comes down to what you want to do from a business perspective. You could add features that allow you to find a new customer segment or you can say, “Hey, we just want to deliver the product faster and essentially get rid of some of this technical debt.” I think that’s a decision that, as a business owner, you have to make.
There’s no right or wrong answer. It really just depends on what your goals are. Having no more requirements, so to speak, from customers is typically a pretty good thing, but again, I don’t know your background and how you started the business. There are many cases where businesses are started or features are added that not suggest by the users per se. There are some things that the users don’t know can exist, or should exist, or does exist. I think it’s a good position to be in and I congratulate you on getting to that point. That’s pretty rare even for a brief time.
Rob: Yeah, I would agree with that. It feels to me every software product, every tech product has a life cycle. When you first build it, there’s not enough features, it’s clunky, then it gets to product maturity, and then eventually it gets to where it sunsets, where it’s just too old, 20-, 30-, 40-year old code bases, while I know they still run—a lot of the IRS and our social security system here in the US and probably in many countries around the world.
I’m guessing most SaaS apps aren’t going to make it that long. The code base is either going to go clunk, or the market’s going to change so dramatically, or there will be an entirely new form of servicing those needs.
With that in mind, it sounds like there is a chance. Three years is fast. Typically, I would expect it to be 10 or 15 years. I think of a tool like FogBugz or Basecamp. When you’re around a SaaS app that’s around 10 or 15 years, you do eventually hit a point where, “Huh, we don’t necessarily need new features, but our UX paradigms are 5 or 10 years old.” So, you need to revamp that. You have UX technical debt, in essence, or UX debt, or just technical debt. If it were built in classical ASP or PHP 1.0 or something, you would want to go back and refactor those. Given the code base is only three years old, it’s unusual but it’s not out of the realm of possibility.
I think I’m in the same boat as you, Jeff. There’s a couple of things I would think about. One, you could focus on technical debt now while you figure out what you vision for the product is. What is it that you can build that they’re not asking for? Oftentimes, it’s a mix of customer requests, internal employee requests, and founder vision or CEO vision. Those are the three things that I have most often built into a product.
Do you have a vision for something else? If not, then yeah, why not technical debt? Or why not put more funds into either marketing or sales? I know there’s long sales cycles, but can you double or triple the number of conversations you’re having such that someone’s closing every three months instead of every six months if you double that?
I don’t think it’s a bad thing to take a little break and maybe give the team time to go back and circle up. It will become obvious when you need to add more features because customers will be asking for it or there will be a competitor that you see doing something this is starting to take your customers or at least a competitor that’s getting ahead of you. That’s the time where you start thinking about heading back to features.
Jeff: I actually have one more thing that I was thinking about. I think you do have an opportunity to also ask your customers and it depends on the question you’re asking, If it’s, “What else do you want, maybe?” They say nothing. But if you ask it or you frame it as, “What else are you paying for?” or, “What else are you doing?” or, “Why else would you pay for, perhaps?” Maybe there are some different answers there or maybe it’s the way that you’re gathering feedback that you can just tweak it a little bit. Maybe get some insights from customers, of things that are maybe closely related, things that you could build that would immediately paid for so that they could pay for the development itself.
Rob: Nice. Thanks again for those questions, Nick. Our next question comes from Evan and he’s asking about a single-use niche product. He says, “First time caller, long-time listener. Honestly, I love listening to you, guys. Here’s my question. I built a script for a company I worked for, realized how much other people could use it, and then in my spare time, I refactored the idea and turned it into an enterprise product. I’ve been officially launched for almost two months. I’ve done just under $6000 in revenue, and 98% of that is profit,” which I would expect you probably have no expenses aside from hosting or something.
“The problem is that this is a single-use product that I’ve essentially built to use when people are migrating to another software package. It’s really not worth the plug because it’s so niche,” he says. “Anyway, I’m really trying to figure out how much time I should be putting into this thing.” So, is a migration tool to software company X. “Software company X could just roll out their own migration tool and kill my revenue overnight. However, they played pretty nice, thus far, and they featured my product in quite a few support articles and have started to build it into their support flow for when they get tickets regarding the problem.
Would you recommend continuing to make this product better and attempt to figure out how I could possibly get recurring revenue? Or just take it for what it is, single-use product that does what it does, and that is right now the only tool out there that does this? $6000 in almost two months isn’t a ton of money. I make decent money at my full-time job as a software developer, but it is a pretty nice supplemental income.” That’s our question, Jeff. What do you think?
Jeff: To me it seems like this is great. Sometimes, people may overanalyze what’s going on. To me, this sounds pretty straightforward. It seems like he solved a really great problem with something that was pretty simple, and it’s a single-use product that probably is a problem that this company is facing, and it doesn’t make sense for them to really spend any time or money on it, so they’re more than happy to find a solution that does the job for their customers. As long as you’re not bragging about how much money you’re making to the world and it doesn’t seem like it’s enough for the company would want to build this, to me it seems like a really awesome revenue stream that you have for the foreseeable future.
That being said, there’s very little context in terms of what it can do or how you could turn this into a recurring business. I would say that I wouldn’t over-engineer it or overthink it. I would just capitalize on what you can earn. Throw a little bit of money in the marketing and see if you can attract more people to want to use this. I think this is awesome. I don’t know what you think, Rob, but to me I think it’s pretty straightforward. It doesn’t seem there’s much there to do a company unless you want a really start building other features and tools around that. I don’t know what it is, to be honest, without all the context.
Rob: I agree with you. What a fortuitous thing you stumbled into. That’s cool. $3000 a month, while you say it’s not a lot of money, if you’re working full-time it sure wouldn’t be, but that makes most people’s house payment. It’s step one of the stairstep approach, to be honest.
For those who aren’t familiar with the Stairstep Approach to Bootstrapping, it’s something I laid out in a talk at Dynamite Circle five years ago now and then I blogged about it. Basically, don’t go for SaaS right away. Don’t go for recurring revenue. It’s too hard, too complicated, takes a long time, just all these things are against you. But, if you find a niche and you can build a WordPress plugin or another one-time use thing like this import tool, or a Shopify app, or whatever it is, find something where there’s a single sales channel and it’s going to plateau.
I did this with DotNetInvoice where it was like, “Hey, it’s a downloadable software, I’ve got $300 a pop for it.” Really, there were some SEO and AdWords, but that was about it. The market was not huge for it and this sounds very similar. So, now you have this opportunity to then take that and parlay it up into something bigger, if you want. You could potentially build on this. It doesn’t sound like you have direct ideas on how to do that, but I don’t think this needs to become your big thing. This can become $36,000 a year going into a bank account that you then use to buy a bigger app. Or, this becomes learning.
Have you learned how to do copywriting, toyed around with LinkedIn and Google AdWords? Have you ever done that before? Because now’s your chance to learn on a real product that has enough budget you could play with and not worry about chewing through your paycheck. I see this as an opportunity to stairstep if you do eventually want to get to recurring. I keep saying, doing things in public creates opportunity. This is something you’ve done in public and you never know what the next customer’s going to ask for, that brings a life of like, “Oh wow, that would be a crazy thing I could add to this that would double the value or that would make it recurring.”
I think this is all upside, personally, and frankly longer term, maybe wind up selling it to company X. It’s a migration tool for them, so why wouldn’t they? If you were like, “Hey, I’m just going to shut this thing down.” In their shoes, I would buy the thing from you. If it’s only doing $36,000 a year, maybe your exit is for $100,000 or $150,000 or something. Still, it’s worth something.
I feel like you’ve gotten further than so many software entrepreneurs or aspirin entrepreneurs ever get. So, I think you’re in a great place and have a really pretty cool resource that you can now use to parlay up that stairstep and maybe eventually buy out your own time and then get into recurring revenue as well.
Jeff: Love it. It’s all profit, almost. It really is amazing. I wouldn’t sell yourself short at all. It might not be the idea but like what was said, parlay that into something bigger if you want. I think having flexibility and optionality is huge. Reading the question again, I don’t know if it’s something that you don’t quit your job over, but keep milking it and see where it goes.
Rob: Yeah. Me from 20 years ago, I would have killed to own a software product that did $3000 a month in net profit. That was my goal. First, it was like, “I just want to make my car payment, making money on the Internet.” Then it was like, “I just want to make my house payment.” And then it was like, “I just want to cover my salary so I could quit my job.” This is an envious position, so hope these thoughts are helpful.
Our last question of the day comes from Will and he says, “Hey, guys. I’ve been mowing some stuff over for a bit and I’ve noticed something. The more I do my own projects on the side for money, the more I feel like I’m not as good of an employee. That doesn’t mean I don’t work hard and deliver, but I’ve noticed that after a certain point, I really had to fight the desire to rock the boat at my day job. For instance, I notice stuff like the following,” and he has a list.
“Companies using large numbers of developer hours to avoid having to pay $20 a month for a tool. Companies building their own internal tools when extremely cheap options exists like time trackers. Companies having really broken internal processes that would completely destroy a startup but they chug along on momentum.” This must be a non-startup like bigger companies. “Companies having highly technical products that are sold by people who don’t understand what the technology does. Companies having no idea what their sales funnel looks like. What the customer lifetime value is, et cetera.
I guess what I’m saying is that the process of going entrepreneurial has forced me to re-examine the things that made me a good employee, only to find that a lot of them don’t really suit where I’m headed. I usually don’t mention these things when I notice them as a developer, because people don’t really like devs jumping in on this stuff, but they bug me a lot.
Did either of you undergo a similar epiphany at some point? If you did, what were the main things you had to unlearn as part of making the transition to your own products? I think it’s easy to become a little too domesticated inside the walls of a cubicle and I’m wondering what else I should be doing to try to avoid that?” That is an interesting question. What do you think, Jeff?
Jeff: I love this question because it’s something that I’ve seen quite a bit. I’m going to get on my soapbox for a minute. There’s a couple of things to unpack here. I love the self-awareness and I think for many companies—it obviously depends—culturally, you should find yourself and hope to find yourself a company that wants to improve, first and foremost. If that’s the case, then pointing out things that can be better isn’t rocking the boat. It’s doing your job and the mindset that you’re “rocking the boat” hopefully isn’t correct.
That said, there’s a way to do these things. Even just reading this, it looks like a lot of things are black and white, and what I always used to say to the engineering team is I know a lot of time writing code in an engineering mindset tends to be black and white, but business is really shades of gray. There are probably dozens of factors you’re not considering from a sales funnel perspective, especially not being in the sales team or the way the company spends money.
What I would suggest is I would find an outlet to say, “Hey, I have some things that I’ve noticed that could help the business.” Someone in the company should say that’s important enough to listen to, but I wouldn’t just assume that you’re right or that you have all the information.
A lot of times, there are plenty of things that we did from a business perspective—again, we’re much smaller—that many people thought was the absolute opposite thing that you should be doing, but many times, if you explain to them why—one of our cultural values was understand why—then they’re like, “Oh, I never ever thought about that,” and, “Yeah, that’s okay. I didn’t expect you to think about it, but that’s why we’re doing this.”
I think it creates a lot of challenges inside companies when we use to say we don’t want know-it-alls in the organization. Be curious to understand why and then be helpful. Anyone in the company is going to want to save money or know that things can be done differently, but sometimes again there’s red tape and other reasons why things can’t get done the minute that it makes sense for someone.
Rob: I think your advice is better than what I was going to say. I was going to go from my own experience. Yours is from your own experiences as well but…
Jeff: Mine must be right.
Rob: Yeah, but yours is from the company side and I think that’s a really good point. Don’t assume that you’re right; that’s really good advice. I was going to say, as an employee, as I became entrepreneurial, I absolutely had the exact same thing. It wasn’t with sales and everything, but I became more and more disgruntled and frustrated with development, them hiring crappy developers we had to work with, the code was buggy, they wouldn’t let us go refactor. This was, let’s say, 2003–2006.
I got so annoyed that I would quit jobs over not feeling fulfilled. It wasn’t just like, “Oh, I’m building dumb software,” because I was fine to build this software I didn’t care about, but the processes were broken and no one would fix them.
What I did was left and I started consulting because then I get to control and processes or I would go find another job where the processes weren’t broken. I am a little bit broad here, but if you don’t like to see those things you’re seeing, then don’t work it like a Fortune 5000 company. Go work for a startup, go work for a small company. They all haven’t figured it out, but smaller teams have less dysfunction, in general. There’s less politics, there’s less of all the broken stuff, and frankly there’s more of a mindset of, “Let’s fix this stuff.” There’s less inertia and there’s less, “We do it this way because we’ve always done it this way,” and there’s more, “Let’s try to get better.”
Again, I’m generalizing, but that’s if I were in your shoes and you can Jeff’s advice, which I think is great, or you could take mine, or you could take Jeff’s and then take mine if it doesn’t turn out well. This is what we’re doing, Jeff. We’re getting people to quit their jobs.
Jeff: No, I actually think the advice is complementary, too. I think that makes a lot of sense. Really, the first part of what I said is you should find a cultural fit and that’s the challenge. And you also should remember the trade-offs. A stodgy, slow-moving company probably is just inherently more stable, if you look out 5 years and maybe not 50 years. You may make more money there or may have more benefits there. Those are personal trade-offs that you have to make.
Listen, if you want everything done exactly your way, there’s only one way to do that and that’s to start a company. But let me tell you, very soon after you start it, it won’t be your way anymore once you have other people to answer to, whether it’s investors and employees. That’s just the reality. If you want something on your own, you are going to have to do a side project.
But I totally agree with Rob. Set yourself up for success in terms of aligning with how the company’s going to work. Again, these are questions that ideally you’re finding out in the interview process so don’t want to be surprised when you start. So, do your diligence and find out, especially if you’re a developer, you have a lot of options for places to work. The lowest employment in a long time and everyone’s looking for technical talent, so you’re in a good position.
Again, I wouldn’t shy away from or train yourself away from speaking up, but I think there’s a time and a place. Don’t complain in front of the whole team. That’s not the way to get it done. Privately message someone who can help or say, “Who can I speak to about these things? I love to make some things better.” At some point in your organization, someone is going to raise their hand and say, “We should listen or we should take this into consideration.” Again, that’s my two cents.
Rob: That’s good. I had this personal adage, I don’t know if I ever written about it or said it. I’m sure I swiped it from a business book or something. It’s to say or do positive things in public and negative things in private. If you’re going to reward or congratulate someone on a good job, do that in public so that everyone knows. If you’re going to tell someone that they’re screwing up on the job, do that in private.
That’s actually one of the reasons I have such an issue with Twitter, to be honest, is there is so much open public negativity and it’s like, “Why didn’t you just email me?” in a lot of times. They’ll be someone you know and they’re complaining about you, or your company, or something you did, and you’re just like, “Dude, just email me. We can talk about this. (a) I would fix it, (b) I didn’t know what was going on. Why do you have to yell at the top of your lungs from your rooftop, telling everyone I screwed up?”
I think this is a good case of that and the reason I started saying that is because you brought up, don’t braze these things in a big public meeting with 8 or 10 people. It’s bad form, it’s rude, and I would not be happy with that. So, set up a one-on-one or a one-on-two with supervisors who are mature and can handle this kind of stuff.
Jeff: One thing to add—I don’t know if it’s helpful—I found the people that wanted to help the business in a positive way are the best employees, but on the flip side, the people that complain publicly are always the worst employees. It’s a really fine line. They both arguably wanted to help, but the people that are like, “This is wrong,” or, “This is bad.”
Again, it’s so frustrating just to think about some of those situations where people are like, even after they left they would maybe blast or post something like, “Hey, you can’t do these things. You can’t do this.” You don’t need to talk at 40 people publicly at lunch how something’s wrong when it’s a minor thing that can be addressed in five minutes.
Rob: Yeah. Negativity is toxic and it spreads, right?
Jeff: For sure.
Rob: Well, thanks again, man. Thanks so much for coming on the show.
Jeff: Of course, yeah. My pleasure.
Rob: And if folks want to catch up with you, you’re @jeff_epstein on Twitter.
Jeff: Awesome. Thanks, Rob.
Rob: And if you have a question for the show, leave us a voicemail at (888) 801-9690 or you can email us an MP3, or a Dropbox link to a WAV file, or even a text question to firstname.lastname@example.org. If you’re not already subscribed to us, you should search for “startups” in whatever podcatcher you use and subscribe. You can visit startupsfortherestofus.com to get into our mailing list. We don’t email that often, but when we do, it’s tasty, yummy goodness. You can also get transcripts of each episode. I think they’re about an episode or two behind right now, but some folks really like transcripts and actually have used a hack to search our website using the site: in Google just to figure out if we’ve talked about a topic. With 462 episodes, we’ve covered a lot of ground on this show. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Thanks for listening. I’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob checks in with Mike Taber’s progress on Bluetick. They revisit some topics that were brought up from their last episode together including motivation, personal retreat, accountability, the Google audit and more.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on the show, we cover topics related to building and growing startups in a way that’s designed for the rest of us, for the folks who can’t move to the big city, can’t move to the Silicon Valley, don’t want to sacrifice their life or their family to grow a company. We value relentless execution and we have a long-term mindset so we think in terms of years, not months, maybe even decades. As such, we don’t burn ourselves out by working crazy hours, sacrificing our health, sacrificing our relationships. This week, I circle back and catch up with Mike Taber, again, on his progress and learn about how he’s doubling down on Bluetick. This is Startups for the Rest of Us episode 461.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth startup or you’re thinking about your first. I’m Rob, and today with Mike Taber. We’re here to share our experiences to help you avoid the mistakes we’ve made.
Welcome to the show, thanks for joining me. Today’s a bit of a longer episode because I find when Mike and I catch up, he just has a lot going on. The feedback I’ve heard is not to cut it short. Typically, our Startups for the Rest of Us episodes have been 25 to 35 minutes over the years, some of the interviews run a little long and the conversations with Mike, often, they’re just pretty fun. Frankly, I feel the conversation is valuable. We touch on a lot of interesting things today that I know a lot of people are struggling with based on the emails, tweets, and reaches out that he and I have been receiving. I did allow this one to go a little long and I’ll see what I can do in the future to keep them a little shorter.
I plan to do this about every month to touch-base with Mike, to keep up on his progress. It gives him enough time to execute on things, for things to change, and I really love following the thread of any founder and that’s what the show has been for 460 episodes. We’ve always had the teaching aspect, we’ve had interviews, we’ve had hot seats, but I think the most compelling thing that keeps people coming back over these years is our stories. It’s following the journeys that we’ve traveled as entrepreneurs and it’s interesting.
While I’m going to continue doing Q&A episodes, hot seats, some interviews sprinkled here and there, I do want to touch base with Mike every three or four episodes depending on what’s going on to hear what he’s up to and try to dig-in to both the good and the bad that he’s experiencing. With that in mind, I’m working on a super secret podcast project that I’m not quite ready to talk about yet but I’ve been working on for several months now and just stay tuned to Startups for the Rest of Us because I’ll be talking about it on the show once that’s ready to go live.
In addition, I want to circle back on a topic that we brought up, probably 10 or 15 episodes ago. It was a desktop Gmail client and switching to that. I had switched to Mailplane and then switched back to Gmail. But due to some recent changes with how G Suite—forwarding, groups, interacts, and those aren’t changes actually, Google’s been doing it for years—I hadn’t realized that I wasn’t getting things that were forwarded. They were sent to Google groups which is how they do email list.
I won’t go into details. It’s all frankly boring, but it’s irritating. I’ve always just funneled everything into a single Gmail account and then did send as in order to appear as if I had a bunch of email inboxes, but that no longer works. It’s broken based on how Google has implemented some stuff in G Suite. I needed a way to have a unified inbox where I can be in a single inbox and I can funnel everything in there even though it’s multiple inboxes that I’m checking. I went through several providers that do that and I’ve landed on the Airmail which is a desktop client and I believe it was $20, maybe $30 through the Mac App Store. I did try out Kiwi per Adrian Rosebrock’s recommendation but it did not have a unified inbox on, it was just a hard requirement for me given this current situation.
Just to close that loop, I’ve been using it for a couple of weeks and it’s good. I’m probably going to keep using it. I do like that it has dark mode and it has a lot of keyboard shortcuts. It’s actually got me a little spoiled already with command delete going through the inbox. It’s almost like a touch interface where I can just swipe, swipe, swipe, and get rid of emails. So far so good on Airmail.
Lastly, I wanted to announce, you heard it here first, that applications for the next TinySeed batch are going to open up on November 1st. It’s just a couple of months out, we’ll be following up with more information. If you’re on the TinySeed email list, you’ll hear about that. Go to tinyseed.com and look for the place to subscribe to our email list. We’ll be updating folks once we have more info on how that is going to go down. If you’re interested in potentially becoming part of batch two of TinySeed, be sure your email is on that list.
I enjoyed the conversation that I had today with Mike and we cover all kinds of stuff. He went on a personal retreat and really sorted some things out, it sounds like, and it feels like his trajectory has really adjusted from the conversation we had back in episode 448. If you haven’t listened to episode 448 and 458, there’s a lead up that’s the start of the story that we’re really following today. I recommend you go back and check it out. I hope you enjoy this conversation with Mike Taber.
Mike: thanks for coming back on the show.
Mike: Thanks for having me back.
Rob: It’s been a few weeks since we caught up and I know, you and I, we’re just talking offline trying to put that line […] episode. It sounds like a lot’s been going on, a lot of progress, a lot of interesting things.
Rob: I think the first question is, I’m curious, are you still on your social media, Twitter, podcast hiatus?
Mike: I am. I still haven’t logged in to either Twitter or Facebook. I’m sure that I will in the near future if only to get Facebook Ads up and running and probably experiment a little bit with Twitter ads some more, because I’ve done that in the past and it can work out well, it’s just you have to actually dedicate the time to it and you have to log in. I haven’t bit the bullet and gone back in them.
Rob: Yeah, that’s the thing. I know that people build their entire funnel around being on social media and being a personality and typically, if you’re selling info products that works well and if you’re selling SaaS, it doesn’t as much. I’m sure there’s a counter example, but really, if you get to SaaS app to mid six or seven figures, you’re not going to do that on Twitter in essence. It can be a part of it, but it is such a trip to try to wade the value, the ROI of time and distraction, and frankly, sometimes, the stress that it can cause on you.
Mike: Yeah. I have all of the notifications turned off, whether it’s push notifications or email notifications. Literally, everything is turned off for both of them. I turned off my iPad the other day and I realized that apparently, I didn’t turn it off there so it’s telling me, “Oh, you’ve got a couple of hundred notifications here,” and I’m just like, “Nope, not looking at it.”
Rob: Uninstall, that’s cool. Good. I’m curious to see how that feels if and when you decide to re-enter that world. I know some folks that just go off permanently. I think like Marc Andreessen’s just done. He was known for having the big tweetstorms. There’s a rumor that he invented it or something, I don’t know if he did or didn’t, but he would write entire essays on it and then he just started doing likes only and that’s how people were tracking him, and now he said, “Nope, I’m just completely off,” it’s a trip to see that.
Mike: On my Facebook feed for people who I’m friends with, I have the Taber Household Conversations which is usually various conversations. They happen around the house with the kids and wife and they’re fairly entertaining. I’ve been told by a number of people that’s their most favorite thing to see on Facebook and they love watching that but I’ve been keeping track of them separately in a notepad document on my phone so that if I ever go back, I have probably 40 or 50 of them that I could post, I just haven’t logged in.
Rob: That’s cool. Talk to me about your personal retreat. When we last left you, there were some open questions that I had posed in episode 458, things like thinking about what challenges you wanted to tackle, whether you’re going to keep going with Bluetick. There’s a lot of stuff and we’ll cover that today. Part of that, I threw out an off-hand suggestion of, “Hey, maybe you should do a personal retreat to think through some of these things,” and it sounds like you wound up doing that.
Mike: Yeah, I did. It was more of a last-minute thing just because my wife had had time on her calendar when she wasn’t going to be teaching over the weekend, so she’s like, “Hey, you should go ahead and take one,” so I did. It was last minute like I said and it was really good because I sat down and started looking through my notes and stuff. I brought my notebooks that I had written in from previous retreats that I had gone on dating back to 2014.
Before I did anything else, I really just started looking through what I had previously written down as things to think about, goals, observations, and things like that. I realized that dating back all the way to 2014, one of the biggest things that came out every single one of them was I’m not sleeping well. I need to be able to figure out what’s going on and it was a continuing theme every single time. I have been taking retreat since before I was diagnosed with sleep apnea. It was eye-opening to go back and read those things and say, “Huh, that thing is basically taken care of at this point,” but it was eye-opening to see that, that was just a huge recurring theme over and over again and I couldn’t get over to figure out what was going on.
Rob: Yeah, that is such a trip, man. I think it is one of the benefits of doing the founder retreats, as we like to call them, is that if you do them year after year and you keep the notes and refer back, you can see patterns. A lot of us get so caught up in the day-to-day or looking ahead to the future—I speak for myself—I don’t frequently look back and try to see patterns, why am I feeling this way? What’s causing that? It sounds like knowing how much that’s impacted your motivation and your ability to execute over the past five or more years is a really good thing to know.
Mike: Yeah. I think what was eye-opening to me was just the fact that I recognize even then how detrimental it was to me, but because I couldn’t figure out a way to deal with it or figure out what was going on, it just kept continuing to be a problem. What I realized was that most of the time, it just snowballs. I’m not getting enough sleep, so I’m not as productive and I’m not thinking straight that I ended up on various medications for different things that are treating the symptoms, but nothing is really addressing the underlying problems, which just doesn’t go away. So then, somehow it just masks the problem. It just makes it so hard to move things forward.
It did make me realize that I’ve been beating myself up over the past 6–8 months or so just because I felt things weren’t moving forward and I was projecting past Mike to present-day Mike because I couldn’t get past those sleep issues. It’s like, “Wait a second, these things are actually mostly resolved at this point, so I shouldn’t be beating myself up over the problems that I used to have and project them on myself and continue to have motivation problems or anything like that. Each day is a new start, so just use it as that. Since I went on that retreat, actually things have really, really turned around for me.
Rob: That’s really good to hear, man. It really is. I think that’s another big benefit of founder retreats is the clarity it can bring you about big decisions or even it sounds like it was like a cleanse in a new start in a way. I’m curious how Sherry wrote The Zen Founder Guide, the Founder Retreats. Did you use something like that to help you or do you have your own system now that you’ve been doing it for so many years?
Mike: Usually, I have enough time in advance of going to be able to write things down and go through some old notes and stuff I have including stuff that Sherry had put together, but this time I didn’t. What I did was when I got there on Friday night, I started going through my old notes and I was going to put some stuff together. Then on Saturday and Sunday, I was basically going to go through it. I feel like I started going through my previous notes first and then realized that probably wasn’t necessary and it was vicious because things just popped out of me, it’s glaringly obvious in retrospect but not while I’m sitting at my desk every day.
Rob: Yeah, I think that makes sense. It sounds like you had a lot of long-term things to think about and didn’t necessarily need the search for topics to consider. You had an ample number of topics to consider just going into the retreat.
Mike: Right. I didn’t really find that it was an issue. The personal retreat was a pretty […] story, it prefers few hours to be perfectly honest. It didn’t take long for me to start to see what things have been holding me back and why and what my path forward was going to look like. Most of the time I spent was probably personal reflection on different things but not necessarily trying to answer those questions. It was just more thinking about the things that had already come up and that I’d already given thought and consideration to, that I thought I was going to need to spend a lot more time on during the personal retreat. It turned out that I just really didn’t need to. I spent most of the time just doing personal reflection more than anything else.
Rob: I have a few questions for you but I am curious to hear if there are other things that you made decisions on or thought through that I don’t ask you. These are questions that we had posed or I had posed the last couple of times we spoke and said if you want to retreat, you should probably consider this. One of them is, do you want to continue working on Bluetick?
Mike: Yeah, and the answer to that was yes, absolutely.
Rob: Was that a hard decision to make? Did you think through a lot of factors or was it like, “No, this is my gut feel and now I’m going to move on”?
Mike: I did think about it. It wasn’t just a gut feel. This is the answer that I want to have because I’m thinking that other people have expectations on me for that. What I really looked at was where is Bluetick today versus where it needs to be, and if I were to just toss the whole thing and go on to something else, would it take as long as it Bluetick has taken or would there be other risks? The reality is I know that there’d be a lot more risk if I went with something else and it would probably take me just as long because I still have to do all the customer development stuff.
The reality is, it’s a solid product that’s got a lot of things going for it. I just haven’t really put the time and effort needed in focus into the marketing side of things, and I haven’t talked to several customers. They like the product, it’s just that I need to get more of those customers.
I think that if I were to move on and try to do something else, could I sell the products ‘as is’ to somebody? Absolutely, I’ve had those conversations with people and I’m sure that I could sell Bluetick ‘as is’ to somebody if I wanted to, but do I want to start over? The answer is no.
The one thing that came to mind was is this a sunk cost thing that I’m thinking about? Is that why I’m leaning in the structure? I don’t think it is because I thought about that as well. It was actually something that […] probably thought about that more than I thought of do I want to continue on this.
Rob: I could see that because that would be the risk and that was going to be what I brought up was do you feel like you have sunk cost that was going on here and are chasing after something just because you’ve spent so many years building it.
Mike: Yeah, and that’s why I spent so much time thinking about that particular question and I don’t think that’s it. I think that there’s probably a little bit of contribution there for that particular thought but it’s certainly not the only thing. I definitely think there’s a lot more that could be done with Bluetick and there’s a lot more value there than I’ve uncovered, I just haven’t gotten in there yet.
Rob: There was another thing I had noted down and it was around, you raised this challenge, this struggle of motivation and the question I think you posted is like, “I’m not super motivated by money right now. It’s hard for me to be motivated to work on this tool and get up every day and do it. What should motivate me?” That was the question. I threw out, “Oh, you should go take the Enneagram.” That kind of was a joke but it was also helpful for me personally when I took it to have a little bit more insight into who I am and what drives you, and that’s part of what it does. It’s nice that it’s free and it takes 15 minutes to take.
I’m curious if you: (a) took the Enneagram, (b) whether that helped or not, and (c) did you also think about this question of what challenge do you want to tackle and what is going to keep you motivated this week, next week, and next month?
Mike: There’s a bunch of things packed into there. Keep me on track if I forget any of those things. I did take it, I didn’t realize that there was a free version of it. I paid $10 from the website and I took it. In my opinion, it was kind of BS, to be perfectly honest.
Rob: That’s totally fair. I’m not trying to force the Enneagram on anyone and I feel like it is. I liked it but I’m curious to hear why you didn’t like it or why you think it’s BS.
Mike: I think it could be helpful for certain people. The problem is that when I went through it, there are three different steps. The first one is to read these nine paragraphs and then you select how much do you think the whole thing describes you or not. The second step is to go through the ones that described you the most and select the ones that you affiliate the most with. I think there were three of them that you had to pick there.
In the first step, I think there were nine different paragraphs and eight of them were ranked exactly the same. In the second step, I basically completely self-classified myself. I’m like, “That’s not real helpful. I could have just read online paragraphs and then said which one do I want.” It was like throwing a dart at the dartboard, you have an equal chance of it in any of them.
Rob: The Enneagram should have been 40 or 51-sentence questions, is that what you saw? There were no paragraphs when I took it. One sentence, it would describe like, “When I’m in a situation like this, this is what I do,” but it’s just one sentence and I don’t even remember if you’ve ranked it on a one to five or if it’s just this is me or this isn’t, maybe that’s what it is. I think that’s all it was but yours is different, I wonder if you took a different test.
Mike: I think mine was different. Maybe it was the wrong one. I don’t know, let me go back and take a look at that.
Rob: Yeah. Let me see if I can find that link to the one I took because that would make more sense, I think.
Mike: Anyway, out of the three steps, there was only one of them, those nine was eliminated after the first step. Then on the second one, I had to pick out of the eight which one…
Rob: That’s not helpful at all. Dude, okay, I need to go and look. I bet I still have the link. Forget the Enneagram, it’s a tangent and we’ll try to revisit it at some point, but the other two things where have you thought about the challenge you want to tackle, really it’s what’s going to keep you motivated.
Mike: I think that it’s looking outside of what the thing is that I’m working on because I have a tendency to get so engrossed in what I’m working on that I will not look at other things in terms of what my social life, or health, or anything like that. I realized that when I get down the rabbit hole on certain projects, AuditShark being one of them, Bluetick being another, there’s a point at which I probably cross a threshold where I continue to become all consumed by that. I wouldn’t say that’s necessarily a bad thing in certain situations, but I think that I let it get the best of me and go too far.
What I really need to do is step back and say, “This is a means to an end, not the end for me. This shouldn’t be my all-consuming life purpose because essentially, it’s work. It is something I’m working on and I do enjoy it, but I can’t let it be the only thing that defines me.” I think that, that’s something else that I’ve struggled with to some extent where I look at the product itself and if the product is struggling, then I personally struggle because I see it as a reflection of myself, and that really shouldn’t be the case. It’s more of being able to step back and separate myself and my own self-value, or self-worth, or whatever form the product itself and how well it’s doing versus how well I am doing.
Rob: Yeah, I think that’s super important, it’s very hard to do. I personally drifted in and out of that over the years of having my entire, like you said, it’s like self-worth, self-confidence, happiness tied to my MRR at times. That can be tough. You said that’s outside of that. I think that’s a great realization. Easier said than done, but a great realization. What is it outside of the app that is going to motivate you?
Mike: Honestly, socializing with the people that I know that are in the area. I mentioned this several times in the past where I have a weekly meet up with a couple of guys that I played D&D with. It’s a great way for me to get out of the house, away from my desk, and away from my computer, away from technology. I find that it’s a very helpful and therapeutic for me to be looking forward to that as opposed to looking forward to getting up at five o’clock in the morning and going to work because I really want to work on something and then distracts my sleep because I’m so excited about it the night before. Being able to back off a little bit from that stuff and look at it and say, “Look, this is just a means to an end and it’s means to make a living, not an expression of me.”
Rob: Yeah. I think that’s good. I think the thing I’m missing though, because I also play D&D and I read stuff now, for the first time in a long time within the past year or two, I’ve started to read fiction again. A lot of it is graphic novels, but I’m doing hobby stuff again. I’m giving myself permission to do that, but that’s how I distract myself so that I don’t think about work all the time. Me personally, that’s my personality.
I’m missing how going and hanging out with friends, or playing games, or having a hobby is going to motivate you to stick with Bluetick everyday when it gets hard? Or does it? Or am I misunderstanding that? Because that’s what I’m trying to get at is you’ve talked about getting up and like, “I’m not motivated to do this. I don’t know why I’m doing this,” or you do know why, but it’s like, “I’m just not that motivated to sit here and work six or eight-hour days and crank away on this stuff.”
Mike: I think it’s a very subtle thing and that, as I said, Bluetick is essentially, if I view it as a means to an end, and that end being I get to go socialize with my friends and do these other things, I can’t neglect that and I can’t just let things go because if I do, then I won’t be able to do those other things. It becomes a way for me to create a balancing act that, can I let things slide sometimes? Sure. I absolutely can. Can I let them slide forever? Absolutely not because then, it puts me in a bad financial position, that I’m then stressed out and anxious, and I can’t focus on what needs to get done. But if I make myself balance those things a little bit more so that I’m not so single-handedly focused just on Bluetick or single-handedly focused on socializing with friends, if I force that balance, then it helps me to concentrate. Does that make sense?
Rob: I think so. Is it taking a break gives your mind a break and that when you come back, you’re re-energized rather than basically burning your mind out?
Rob: That’s what it is?
Rob: Fascinating. I get that. I definitely understand the link there, but I wonder if this answers the question that I posed earlier of everyday you’re going to have to get up and there are going to be things you don’t want to do dealing with the Google audit and whatever, firing a contract or hiring a contract, or maybe it’s writing code, maybe it’s marketing, maybe it’s whatever. You’re going to have to do some things you don’t want to do, some things you are excited about, but how are you going to push yourself to not sit there, stare at your screen, and churn away the time? Or whether it’s being unproductive because you are churning or whether it’s being unproductive because you are unmotivated to work on it?
Mike: I feel like that’s just more a matter of putting certain systems in place. One of the things I recognized is that systems are what really helped me stay focused, stay on track. and get things done, but at the same time, my personality is such that I hate being a cog in a wheel. In some ways, it’s demotivational to me to have a system but it’s motivational when it works. Like I said, it’s that balancing act.
One of the issues I had with me taking in the Enneagram is that by definition, I think that I’m very well-balanced in very many ways. I forget what it was called, it was a test that was given that business software like 8 or 10 years ago or something like that and afterwards, I showed it to the person who has given it, I think it was Paul Kenny, he looked at it and he’s like, “Wow, that’s extremely balanced in every direction.”
He said he hadn’t really ever seen that before which is, I don’t know whether that just speaks to how weird I am or not, but it was interesting to see. I have a lot of empathy and ability to see things in multiple ways and multiple directions and I think that’s a strength, but at the same time, it could be a downfall because I can easily find myself in a situation where I’m paralyzed because I’m like, “If I do it this way, then this will happen. If I do it this other way, then this other thing will happen.” It’s difficult to deal with that but at the same time, I also have to recognize, “Hey, you just need to move things forward. You need to make a decision and move on because you can’t stay here looking at this forever.” By timeboxing and things like that, that helps me to move things forward when I need to, but at the same time, it forces that structure which, again, I hate the structure but I do like the results of it.
Rob: Yeah, there you go. The hating structure and liking results means that you hopefully can plow through it. It sounds like the motivation will be the results that you see and I think the other side of that sword or the sharp edge of that is that if you are not seeing results, will you become demotivated? Again, last time I talked about some people are motivated by money. It’s like, “I want to make enough money so that I can support my family or that I never have to work again.” That, whether you’re seeing results or not, you’re still motivated by that.
If some people are motivated by this achievement, it’s the Jeff Bezos, “I want to start a billion-dollar company,” and that you’re just motivated to achieve. Whether you’re seeing results or not, you do still have that goal that you’re hungry for. Last time, we talked about how you’re not hungry for anything right now. I think probably my main concern is that if you’re not hungry for it, if you are not seeing results, are you going to get demotivated?
Mike: You bring up something that sparked my memory of something that came up during my personal retreat is like, “Am I running towards something or away from something?”
Rob: Yeah, because that is away from having to work full time. The last time you talked about that you had the Dilbert comic and you said, “I don’t want to go back because bosses are […].” It’s a pain in the ass to work for other people. There’s a commute, and this and that. We talked through some things about you should get a job with no commute, you should get a job where the boss is not dumb. I can remove all of those.
Mike: I’m screwed working for myself.
Rob: Yeah, but we can remove that. Are you just running away from working for other people? That’s what you’re referring to? Are you actually running towards, “I wanted to keep this,” or just running away from, “I don’t want a full-time job”?
Mike: Yeah. The sad part is I think it’s a mix of both and that’s part of what makes it a hard question for me to answer. I don’t have a specific answer for that. That’s one thing that I did come out of my retreat. One […] about is like, “What is it that I really want to achieve?” and I still don’t have a specific answer for that, but I do know that I want to have a successful SaaS application that is going to support me and my family, at least do reasonably well. If that means that I can take some time off in the middle of the week if I want to, then great.
Kids started school last week on Thursday and on Thursday, we were actually out looking for a new car for her because her Toyota Corolla from 2004 is about to die. It was nice to be able to just take the time and go do that and get it taken care of that day because I have that flexibility in my schedule. If I were working for somebody else, I wouldn’t have that. If I didn’t have an app that was doing at least reasonably well, I wouldn’t be able to do that.
Things do come up. There are bugs and stuff that will come up on occasion that I have to get those fixed and I have those come up as well last week. It’s nice to be able to rearrange my schedule, have the flexibility to move things around and work on it. That’s really what I want out of my future is to be able to have that flexibility.
Rob: Sounds like that’s the thing. That is the one thing that you have referred back to the most is flexibility, is like owning your own time. I wonder if that’s your number one motivator.
Mike: It’s funny because I think that it is, but at the same time, I also know that, as I said, those systems that I have to put in place sometimes to get things done and move things forward, those are restrictive. This weird dichotomy between them that sometimes I have to go in one direction and sometimes I have to go in the other.
Rob: Cool, that’s actually helpful for me and I want to revisit that at some point in the future, but I just want to hear how that how well that’s panning out. We can circle back in a future conversation such that I want to see what the motivation is and if you’re not seeing results, if it’s still working and if just the drive for flexibility is enough. I also updated the Enneagram link, it’s tests.enneagraminstitute.com is the official one, it’s $12 to take the test. I will Venmo you $12, Mike, Go take the test because you didn’t pay for the other one, did you?
Mike: I did. It was enneagramworldwide.com.
Rob: Oh, interesting. When I typed in like take Enneagram online, there’s a bunch of places doing it, and you paid for it and that’s what it gave you? I think go to enneagraminstitute.com, I believe those are the folks that developed it. That’s at least my rudimentary understanding right now.
Mike: Oh, well.
Rob: Anyway, it’s $12. Give it a shot. It should be a bunch of either-or questions. It will make a statement like, “I would prefer to be viewed as successful or happy,” or “I prefer to be successful or happy,” and then you can say, “Yes, this is me,” “No, this is me,” and some of them have partials, I don’t know. That’s what you should see. You should not have to read paragraphs to do this.
Cool. There’s a couple of other points we’re talking about last time that I want to revisit. One is the Google audit thing, the chaos that has been the ongoing Google going to block you if you don’t get this audit and go through their security process, update us on that status.
Mike: I’ve talked to two companies that do that. I had two discussions with each of them, worked with both of them. I’ve selected one that I will be going to. Basically, I was able to work with them on the price a little bit, so it falls at the lower end of the range of $15,000–$75,000 it was originally given. Fortunately, it’s not closer to $75,000 but it is still 5 figures. It’s a difficult pill to swallow but at the same time, it’s also, I would say, a motivational factor for me. One thing I have recognized about myself is that I’m a completionist to some extent. If I were to pay for that, it would be hard for me to not follow through afterwards because that’s a huge chunk of money that needs to be paid every year.
But the other side of it is that it also gives me a defensible moat around Bluetick as well. I probably don’t have a whole lot to worry about from competitors coming in underneath me, which is a weird situation to be in. I still have those bigger fish that are above me but I probably don’t need to worry nearly as much about anybody coming in on our niche and stealing customers or what have you. Not that I really think that would happen for a while. Even if it did, it wouldn’t make that much of a difference, but it does create a barrier to entry for anybody else who’s trying to do similar things.
Rob: I would totally agree with that. Anyone who’s thinking about just dabbling in and they’re starting a little side project to do it or wanting to start just a small lifestyle business and doesn’t really want to go after, it’s going to be deterred. I would be deterred from doing that, it would discourage me from one drop, however much it is, $20,000–$30,000 to get in and just to get started. That’s a trip.
Was it a hard decision then to decide whether to do it or not? Because, again, if they quoted you $75,000, it would have been a reason to shut the company down. We know it’s a lesson in that boat. As you’ve gotten towards it, was it a hard decision or was it like, “No, this is once I’ve decided to do it, I’m also going to suck it up and do this”?
Mike: I think when the initial pricing came in, it was like, “Gee, I don’t know if that’s actually going to fly. I’m not sure if I really want to go through and do that because it would have been really hard to swing it.” Then after going back and renegotiate with them, it was much more doable. Yeah, it’s probably going to be something that needs to be […] each year, but at the same time, it’s a SaaS application. There’s only going to be so many changes that are between them. They didn’t specifically say that was a differential they would do from one year to the next, but that certainly does factor into it if you’d go with the same company for one year to the next.
Google could easily change their policies moving forward. I’ve had this discussion with other people in my mastermind group, where I think that they are just laying down the law, drawing a line in the sand and saying, “Okay, this is what it is, and screw anyone that has to deal with this in the next 18–24 months. We’ll figure it out before then. There’s going to be small players that gets screwed in that meantime, but oh, well, we need to protect our company and our users’ data. In two years out, things will be fine.” I think that’s the decision they’ve made and things will change in a couple of years but probably not dramatically.
Rob: Yeah, and I like the way you couched it as a motivating factor. There were two times that I really recall having my back to the wall and talk about sunk cost, you are talking quite a chunk of money. I bought DotNetInvoice for $11,000 and I bought HitTail for $30,000. Those were 4–5 years apart, but those were very difficult pills for me to swallow. It was a lot of money. It was all the money that I had saved up from doing all this consulting on the side.
I had an incredibly productive two or three months stretches right after that because my back was to the wall. I worked for longer hours. That was one of the seasons where I work long hours and a big part of it was I can’t have written that check-in vain. I have to make this work. I keep saying my back was to the wall, but that’s how I feel about it. I wonder if you can use this at least in the short term as motivation of, “I have to be a good steward of that money and make this worth it.”
Mike: Yeah. I’m definitely that type of person as well. Some people crack under pressure and I do extremely well under pressure, which is a double-edged sword because sometimes, I’m a procrastinator to some extent. In some ways, that helps me because I procrastinate and then I get to this part where it’s do or die and I’m willing to put in the time and effort to make sure that things happen and that things work.
I probably haven’t experienced that in a while but there are certainly things that I can point back to in my history where I […] my masters degree, for example. I was coming up to the wire in terms of being able to finish my masters thesis and they’re like, “Okay, you need to have this done by the end of August.” So, I buckled down and I wrote the entire thing in a month-and-a-half, or two months, or something like that and I went back to them and basically got it all done, but it needed to get done and it needed to get done fast. There was really no other option, otherwise, I was blowing $20,000–$25,000 down the train and I would walk away without anything to show for. Still, having taken those classes, I don’t have the degree, not that it means a whole lot if I’m self-employed but it was one of those personal accomplishments or achievements that I wanted to have.
Rob: Yeah. It comes back to that extrinsic motivation. It’s really an optimist scenario for you. Cool. A couple more things before we wrap up, I wanted to ask about that untestable seal.net component. You had made the decision to replace it with a different component, but you were saying while you get slotted in among things and I was like, “Look, you made the decision. Just go ahead and do it because it’s keeping your back. It’s technical debt, right now, it’s a liability that keeps you from making changes to things.” Where does that sit?
Mike: I still have not touched that. Most of my time has been spent going back and forth with the vendors on the security audit because just even scheduling a meeting with them takes a week. It’s a week before it happens but it’s several days of back and forth and trying to get an answer because they’re just busy and they have to slot in conversations when they get a chance. It’s a pain in the neck.
I’ve been stalling on other things to see how that works out because obviously, it did hold it back to some extent because of the final numbers for the quotes came back in $75,000, I was just going to walk away, but since it didn’t, it made things a lot easier to get working on other stuff. At this point, I do recognize that needs to get done. It’s a matter of looking at schedule and seeing, “Where can I slot that in between marketing activities?” because I feel like that’s probably more important, but I go back and forth on that.
Rob: When do you feel you’re going to pull out that component?
Mike: I think if I get a more detailed information from the security company about what I can and can’t store, that’s probably going to dictate that to some extent because I don’t want to get in the position where I spend all this time and effort replacing that component so that I can download all the data in the way that I want to only to find out that they come back and say, “You really shouldn’t be storing that,” or those other things that go into. It’s just I’m holding off and maybe that’s a bad decision.
Rob: I don’t think it is. That’s what I would do as well. It sounds like there’s a bunch of unanswered questions and you are right with the security audit. They can come back and say anything. I would personally also wait on that but I wouldn’t wait on other development on marketing because you can do that stuff before then.
Your mastermind group is meeting weekly and you have a pseudo business coach. Both those things still going on and do you feel like they’re working for you?
Mike: I do. I actually have an email in my inbox right now from the coach that I have to reply to today and then the meetings have been going on every week and we talk about all kinds of different things from conversion rates to where marketing should be focused or conversations to customers, but I find that the weekly accountability has been pretty helpful because it forces me to make progress on everything and part of it is schedule-related because I have to make sure that I slot time for those things but it’s also what am I looking at next and then making sure that’s getting done because I’m basically committing to each of those things.
Rob: That makes a lot of sense. Glad to hear that’s still working out. I do want to touch base periodically and hear more about that. I’m curious. We had a conversation, it was episode 448 where we really dug into this stuff for the first time. You raised a concern that you didn’t really want do the spammy-cold email and I threw out an idea of a warm and ethical code email or you can just focus on warm email, is that still your thinking that you want to focus on something that you feel better about personally and have you made any strides to make that part of reality?
Mike: I have thought about it quite a bit more and I had a conversation with a customer that I onboarded a couple of weeks ago where he’s like, “I definitely want to use Bluetick, and this is what we are doing right now and it looked automated and we’re using it for cold email.” After going through and talking to them about how he was doing it, I realized like, “Hey, you’re actually doing warm email, not cold email,” because they’re sending physical mailers and things like that. It reminded me of one of the original thoughts that I’d had behind Bluetick was using it as something of a multi-channel marketing campaign because if you send somebody something in the physical mail and then send them emails or you send them tweets and things like that, this is a functionality that really hasn’t made it into Bluetick yet, but the conversation did remind me to like, “Hey, that was the original idea here.”
It turns cold contacts into warm contacts because they’ve at least seen your name before and they’ve heard of you because you’ve reached them through other channels. Some of them can be automated. I think Postable probably has an API where you can send direct mailers to people “handwritten notes.” They’re not actually handwritten, but they look like they are. Things like that are ones that would probably do well in that type of multichannel campaign. There is not a lot of people who are doing that right now, most of the people that I’ve seen who were doing that, they do it by hand and it sucks.
Rob: Yeah, no doubt. Cool. It sounds like you’ve made a decision because I have talked about life-changing your website copy, changing your onboarding, and even considered potentially doing a setup, doing a setup fee and then verifying upfront that they are doing stuff that’s in line with what you want Bluetick to do. It sounds like you haven’t moved forward on that but are those still things that you want to put in place?
Mike: Those are still on my radar. I think the larger challenge or problem that I have is just that I don’t have enough traffic. That’s the biggest thing. I don’t think that adding in a setup fee or something like that, that’s not really going to move the needle for me, at least not right now, but if I were to triple traffic, for example, that type of thing is I’m won’t say easily attainable, it’s probably something that would move the needle for me a lot more than adding in a setup fee.
Rob: Right. I think as we wrap up, there are still this open question of how to differentiate Bluetick, how are you going to make it different from the other tools that I could go out and essentially do the same thing with? Have you given that more thought?
Mike: I’ve given it some thought. I wouldn’t say that I have any concrete conclusions on that. One of the things I have seen is that people who are most successful with Bluetick are the ones that integrated it into their marketing and sales pipelines. I think that integrating Bluetick into other products directly would allow it to have a tighter integration into other people’s marketing and sales funnels. Integrating into other tools directly is probably the most straightforward way to do that. Most of these tools that are like Bluetick have an API of some kind where you can upload stuff but it’s really those integrations that are going to basically keep people around and keep churn low. If I can keep churn really low, then I don’t have to worry about growing the product as quickly to counter that churn.
Rob: That’s true. I agree with all that actually.
Mike: But it doesn’t directly answer the question.
Rob: Yeah, which was differentiation. Do those integrations differentiate you or do your competitors have some or all of those?
Mike: I think most of them have a Zapier integration of some kind. I haven’t looked in-depth enough at them. I do have somebody that I hired to help me out with marketing. They’ll probably start later this week or next week, but that’s something I’ll probably look at a little bit more to do more in-depth competitive analysis and say, “What markets do these people serve, and why?” and, “Is there a place where Bluetick can fit into those and really shine as opposed to where it currently is?”
You’re absolutely right. It doesn’t really have any major differentiating feature other than I can offer direct support and you’re going to talk to the developer if you’ve got a problem. There’s some value to that but I don’t think that it’s enough to overcome the challenges that it has by not being able to be differentiated easily.
Rob: Yeah, I would agree with that. I think I’ve used the phrase picking up crumbs a few times where if you really are similar to most of the other tools in the space, you will get some customers, you are just picking up crumbs as you get lucky, you’re not going to have that key differentiator that people are like, “Oh, my gosh, Bluetick is the only want to do this or Bluetick does this the best.” What are you really known for? It’s positioning.
In your shoes, I would try to get an idea of the entire landscape for all the competitors, the big ones, the small ones, the funded, the unfunded, whether you have a mental model of it, a mind map, or notes on a whiteboard, whatever it is, try to sketch out how are they positioned and how can you try to find feature differentiation.
Mike: Yeah. I definitely have some thoughts on those. The issue that I think I struggle with there is that most of the things that I think would be great to be able to include are packaged into Bluetick that would beat those differentiators, are things that are going to require technical heavy lifting in order to implement. It’s hard to justify spending the time and effort there without solid data to back it up and that data is hard to come by without doing it and then seeing if it works, so to speak.
Rob: I would agree with that.
Mike: It’s exploration, I guess. I definitely think I have to talk to some of my customers a little bit more, though.
Rob: Yeah, that’s what it sounds like. More research to be continued. I’d love to talk about your marketing hire because that sounds cool, but I have another call I have to jump on. I got it, I have to end it here to the groans of both me and the listeners. But there’s one other thing I actually want to ask about. What was your low point over the past month? It sounds like everything is going up into the right in general. Things have been good, you’re in good spirits, you have good answers, you’re thinking about this stuff, but what was the hardest moment or the lowest point in the past since we spoke last, which I think was about three or four weeks ago?
Mike: I would say just making the decision to make certain changes. I think that it’s the inertia of not moving just yet. When you have an idea of, “Oh, this is how I want to solve this problem or these are the things that I need to do,” where do you even start? In terms of inertia, in the past couple of weeks, I’ve been getting up at five o’clock in the morning on average and going to the gym. That’s usually the first thing I’ve done. I’ve exercised three times today. If that gives you any indication, I was at the gym before five o’clock, then I went for a one-mile walk, and after that later on, I went for a two-mile walk.
I’m making some pretty dramatic changes and I feel like they’re going well, they’re giving me energy, and I’m able to get those things done which I’ve never really put a lot of emphasis on my own personal health from the past, but those first four or five days of doing that was just brutally hard. It was really, really hard to just get started. Now that I’ve been doing it for a little while, it’s not a habit yet, by no means are no stretch of the imagination, but I think it’s on its way there. I’d really like to keep seeing that continue.
Rob: Awesome, man. Thanks again for taking the time to come and update us and I’ll talk to you again in a few weeks.
Mike: All right, sounds great.
Rob: Thanks again to Mike for coming back on the show. It’s fun to have him pop in almost like a guest now and again. I wanted to remind you if you’ve been considering potentially becoming a part of TinySeed’s second batch which will start in early 2021, head over to tinyseed.com and enter your email address or if you just want to keep up with what we’re doing, it’s a nice way to do it. We don’t email very often and we will be emailing about news like this when the batch opens, November 1st of this year.
Again, if you have a question for this show that you’d like to hear answered on air, you can leave us a voicemail at (888) 801-9690 or you can email email@example.com. You can enter that as text or attach an MP3.
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In this episode of Startups For The Rest Of Us, Rob and co-host Tracy Osborn answer a number of listener questions on topics including funded competition, growing an email newsletter audience, white-labeling and more.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on the show, we cover topics relating to building and growing startups in an ambitious and repeatable fashion. These are not your typical Silicon Valley startups where fundraising can be a goal in itself and where people build slide decks instead of building businesses. The things we’ve espoused for the past 460 episodes, things like freedom, purpose, and relationships, much of being a founder is making decisions with incomplete information, where the right answer is impossible to find through math or data.
On the show we have several different formats. Oftentimes we have tactics we discuss, we do interviews, founder hot seats, and this week we have listener questions. Questions sent by you, the listeners, over the past couple of months. I’ve been mixing up the formats as you’ve noticed and the feedback I’ve heard is that the tactical interviews and the interviews of the agony of defeat have been really well-received in addition that the listener question episodes tend to be listener favorites.
I want to get back in the groove of doing those and today, I welcome a co-host, Tracy Osborn, to come back and answer questions again. She joined me about six or eight episodes ago answer a few questions. Before we dive into those, there’s been a few comments on startupsfortherestofus.com website. Go to startupsfortherestofus.com, we have a new design, you can check it out.
On episode 456, we had a comment from Karen that said, “Just popping in after listening to this episode to say how much I value your podcast. I’ve been listening for quite a few years. As other shows have come and gone, Startups for the Rest of Us continues to be a staple for me. I’ve really enjoyed the mixing up of the format lately. It’s been good to hear from different people. In saying that and as much as I’ve enjoyed and got something out of each episode, I would not really be keen on having the podcast moved to an interview format every week.” I actually agree with that.
“I always enjoy the listener question episodes and get a lot of value out of those. The episode that really left a lasting impression on me was the one with Mike just before he started his hiatus. The way you skillfully weaved your questions in and around Mike’s comments and your observations were very eye-opening and I’m sure it resonated with a lot of listeners, too. I would love to see more of that format, like a one-off mastermind session with the SaaS founder, where it explores a specific challenge that they are currently experiencing.
No matter the format of this podcast is, it continues to be a cut above the rest and a big thank you from this listener for everything.” Thank you so much, Karen, and another listener chimed in and said, “Plus one on that.” I appreciate the feedback on that. It’s super helpful just to help guide things, to look at doing some more hot seats in the future.
In episode 457, I answered a few questions. One was about starting a market place and TJ wrote in and asked about two-sided marketplaces and how he should start it. Shawn the Wolf chimed in and said, “Great show. For two-sided marketplaces, I would suggest, number one, populate the list with the basics for free to satisfy your consumer funnel. Number two, give all artisans a basic free listing with an option to be removed. Number three, find sweeteners to sell to the artisans, to give the individual listings a competitive edge.” The sweeteners he lists are enhanced listings, ads at the top of a given page in their category, subsites inside of your website, and prospect information volunteered from consumers can go the artist for a fee.
Thank you so much for that Shawn. TJ, thank you in the comments and I appreciate everybody coming in. As a community, we obviously have so much more brain power and experience than just a podcast host or two, sitting on the microphone each week.
Also, if you haven’t got your ticket to MicroConf Europe, it’s in late October this year, head to microconfeurope.com. We still have some tickets left. It’s in Croatia and it looks over the Adriatic Sea. Every hotel room has a view of the Adriatic, it’s very nice. Consider doing that, hanging out with 120 or 130 of your closest founder friends. If you didn’t hear the save the date, MicroConf US next year is in Minneapolis and it’s April 19th through the 23rd. We’re pulling it out of Las Vegas this year.
We’ve actually been trying to do that for the last several years, in the overwhelming feedback from both folks who attended folks who don’t, that they would prefer seeing it in a different city. It happens to be in Minneapolis, this year, April 19th through the 23rd, that’s growth and then starter. Check out microconf.com. Enter your email address to hear about when tickets go on sale. We do expect the conference is to sell out, so you want to get on the email list, if you’re at all interested in joining us. I believe we’re expecting to sell tickets here in September. With that let’s dive into some listener questions.
Tracy, thanks for being a glutton for punishment and joining me on the show again.
Tracy: Happy to be back.
Rob: I’m stoked to answer some listener questions with you again today. Our first question is a voicemail. As always voicemails go to the top of the stack. This question is from a founder who has an idea or is working on a product and a funded startup with the same idea shut down in 2016 and he’s curious how to process that.
Ryan: Okay, question about a strange experience and what you think would be a good way to go forward. I’ve been working on an app for about a year. It’s a search engine your personal computing history, it’s at apse.io. The acronym is short for A Personal Search Engine.
Last week I found out about another company building almost exactly what I’ve been working on. The thing is, it is a $20 million round at 2016 and also shut down later in 2016. If I were reading the press coverage of marketing materials, they might as well be talking about my app. I can’t find any reason for the shutdown, and attempts to contact people who worked on it have been unsuccessful.
I’ve been working on the project solo for about a year. I have no idea they have existed until a few days ago. I’m bootstrapped and never released a working product so I’m not at danger of going under myself. My focus right now is I’m growing the customer base. What do you think I should do now that I know all this? Any thoughts would be appreciated. Thanks, Ryan Fox.
Rob: Interesting question. What do you think, Tracy? What are your thoughts on this?
Tracy: Super interesting, especially since $20 million is not pocket change and the fact that it shut down within the same year. Then he said he tried to contact the people running it and hasn’t heard back. There’s a lot of very suspicious things going on that lead me to think that the company shutting down was not due to the product, but probably due to something internal. I don’t know if you have the same impression that I do.
Rob: I don’t. It does sound a little weird, but frankly, if you’re going to raise that much money, then you raise it at probably $100 million valuation. It tends to be $80 million or $100 million because you typically sell 15%-25% of your company. If it’s a standard round and they were definitely go big or go home, and go big or go home is basically spend all your money in 18 months.
The fact that they spend it all, they probably hired all the way up and try to do a big marketing push, so I don’t know that it sounds suspicious, but it definitely sounds like a typical Silicon Valley play, I guess.
Tracy: I wish that they were able to contact the founders. I’ve done that for my apps, where like my old WeddingLovely app, I was able to talk to a few other founders who did something very similar, but shut down the company. In those cases, I was lucky that I was able to get a hold of them and they’re excited to tell me all the things that went wrong because there are done and over it and moved on.
He said he only heard about it a few days ago, so maybe there could be some contact. There could be valuable information if he’s able to contact those founders and be like, “Hey, above board, what happened? Is there anything to be worried about?” If that doesn’t happen, in general, I feel like it’s not something that should stop the caller from starting a company.
Rob: No, not at all. I wouldn’t be discouraged in the least. Just because a venture-funded company couldn’t make it, that can almost be a good sign at times. If they were burning through $1 million a month, hired a team of 50 people or whatever it was they were doing, a lot of ideas don’t work that way. A lot of ideas maybe they take years to do or maybe it’ll never make more than $1 million a year, but that’s a great full-time living for an individual. I don’t want to speak to this particular idea. I haven’t looked into personal search engines or really what’s it about, but just the question is really about a venture-funded company went out of business, how should I feel about that? I wouldn’t feel bad about it all.
I would feel the exact same way I do today as I did yesterday before knowing it. The other thing I would say is I wholeheartedly agree with you that getting in contact with someone from that company no matter what, if it’s the founders or if it’s an old salesperson or whatever, I have done this multiple times. Oftentimes you need to send a lot of cold email, LinkedIn outreach, Twitter DM’s, all the things to get a hold of someone, but once you get a hold of one person, they will often refer you to other folks. I would spend more time on that than you probably think, a judicious use of your time.
If they raised that much money, they had to have had, at some point, quite a few employees. I would head to LinkedIn, Twitter, and Google and try to figure out, “Hey, who was a former employee of this company,” and reach out as like, “Hey, I’m a founder of this thing, you worked on it, and I wondered if 30 minutes your time just to talk to me about something.” It works pretty well. Again, I wouldn’t stick just to the founders, although that would be ideal, but that conversation could be super valuable.
Tracy: Yeah, very valuable. I’ve used in the past myself. It’s so great because there’s some things that you probably could learn that you didn’t know about just from looking at from the outside. Try to do the internal investigation, try to talk to someone in the company. Also, just investigate everything that’s public, see what they did, see the things that they released and see what you can learn from what they did that apparently didn’t work, to see what you can learn from that.
Rob: Thanks for the question. I hope that was helpful. Our next question is another voicemail. It’s about growing an email newsletter audience.
Ben: Hey Rob and Mike. My name is Ben DeFrancisco and I run a small consultancy here in Philadelphia doing mobile web and increasingly crypto- and Blockchain-related work. I fell down the crypto rabbit hole many years ago, so it’s been awhile for me to watch you enter the mainstream consciousness so much over the last couple of years.
About a year ago, I started running a weekly newsletter covering technical topics in the crypto world. It’s called The Blockchain and you can check it out by going to newsletter.buildblockchain.tech. I post about it on Twitter and sometimes on LinkedIn and it has grown steadily but slowly over the past year. I have excellent open rates at 50% and I often get people writing back to me with a positive feedback. I think generally I’m doing something right in terms of the content. Still, the list size itself is rather modest.
My question is, how do I grow a newsletter audience? I often hear about people talking about building a list, but there’s no viral component to a newsletter and at a certain point, it seems like posting to social media has diminishing returns. Are there some tactics and strategies that I could be employing?
For context, I don’t have anything I’m trying to sell to this list right now, though in the back of my head, I can imagine launching a book, a course, or even a software product down the road. For the moment, I’m just focused on finding and growing my audience. An audience that has interests and aspirations that align with my knowledge and skills. Thanks in advance for any insights you can offer on how to do this.
Rob: What are your thoughts on this Tracy?
Tracy: This is a really good question and it’s funny when watching the last few years as newsletters have become more and more of a thing as compared to blogs. It does have that difficulty in sharing something that’s over email, and after I read this question beforehand, I went through all of my favorite newsletters that I personally subscribe to and be like, “Okay, how do other people do it?”
I feel like number one, the way I’ve found newsletters and the way all the ones I’ve been reading or have been doing it, in the newsletters, they’ll have asks, saying, “Okay, if you want to support this newsletter, please share this newsletter on social media. You can sponsor the newsletter,” and the other ways of helping out. It’s just being really clear in the newsletter, may be at the top and maybe at the bottom. Just give people an opportunity and remind them that, “Hey, if you’re enjoying this content, here’s a way to share it.”
Rob: Yeah, that’s a good approach. There’s a lot you can do with this and it depends a lot on your constraints. Do you have more time or do you have more money? Something that I would think about if you have this newsletter, you’re providing valuable content and with 50% open rates, that tells me that you’re writing engaging content, people are getting value out of it because they’re continuing to open it. What I would look for is opportunities to get your newsletter or your brand out to a broader audience.
You’re right, sharing on social is getting it out to your audience and maybe get lucky and three people will retweet and then you get it out to their audience, but that is not a predictable way to grow a subscriber base. I would think about approaches like this to reach larger audiences or audiences you currently don’t have reach into.
One is you’re already creating content. Is there a way to either repurpose some of that or create new content as guest posts? Whether you approach Inc Magazine, Entrepreneur Magazine, any of the crypto, there’s tons of crypto sites, take the top five or the top 10 and pitch them on, “Hey, I’m a writer. Here’s the quality of my writing. I want to write for you,” and you get a byline or a mention of your site within the article itself. This is a tried and true tactic. It takes time, but that’s one way to get in front of 100,000 crypto enthusiast, by being on the number one crypto news site.
A second one would be to do a podcast tour. If you’re an expert and you have all this experience and you can say, “I’m an expert because of this,” or, “I’m an expert because I’ve interviewed a bunch of experts,” and going to a podcast tour and of course you mention your brand while you’re doing that, expose it to new people.
Doing interviews. It looks like you might already be doing some interviews. I’m wondering if you are gently asking for the interviewees to social share when the post goes live. That is something I would consider. I wouldn’t do it heavy handed, but if one out of three shares it, that exposes you to a new audience. People say, “Wow, this content was really good. I want to find more like that,” and on and on. It’s the same playbook that I would say for any startup.
You’re building the list to some end, what are the marketing approaches you could go down? SEO is another one if you have a larger footprint on your website, you ought to value it. Is SEO too hard in the crypto space? Do you have the time, the money to do it? Maybe or maybe not, but that’s something I would personally value as it has such a nice fly wheel of traffic if you’re giving something away like an open source library or something else that folks aren’t able to get anywhere else. Everybody links there, then you get the SEO juice and then suddenly you triple your newsletter subscribers.
Another way that I would think about and this comes back to that time versus money thing. If I had more money than time to devote to this, I would have absolutely seen people grow email newsletters with ads. With Facebook ads, Instagram ads, Google ads may be a stretch, but ads in other email newsletters.
That depends. If you’re not monetizing at all, then that’s probably a tough justification, but that would then lead me to think about longer term, “How am I going to monetize this?” whether it’s with affiliate stuff or ads or whatever. That allows you to then know, “Oh, per subscriber, I make X dollars per month or X cents per month, that means I can pay this much for a new subscriber.” That’s where you’re going to get to if you’re going to grow it in a sustainable fashion.
The last thing I’d say is you mentioned that your URL is newsletter.buildblockchain.tech to sign up, I would just move it to the homepage. You actually have it, you have a drip put just there on the homepage, it’s buildblockchain.tech. Go there to sign up and it’s just less for people to remember.
Tracy: Yeah, it all makes sense. It basically comes down to, make it easy for people to sign up, make it easy for people to share, and put yourself out there so that more people will know about you, so they have opportunities to share what you’re doing. If you can, then you can try using ads, that’s the step-by-step process.
Rob: That’s right. Using ads is dangerous to do early on. It’ll help you move faster, but you need some budget to do it and you can churn through money if you don’t have any way to monetize or any idea of how you’re monetizing. Again, if you know the lifetime value of a subscriber, then this becomes a no brainer.
This is how Noah Kagan built the AppSumo less up to three quarters to a million or a million people was by running ads because he knew what the value of a subscriber was. This is one way that Brennan Dunn grew his Double Your Freelancing list, was using ads. It’s doable, it’s just a matter of what are your constraints, do you have the time, do you have the interest, and how big do you want to grow it?
Tracy: Yeah. Try doing step one to three first and see what success you can do for these “free ways” of growing your list and then using that as a cherry on top.
Rob: I hope that was helpful Ben. Thanks for the question.
Tracy: Our next question, by James Barnhartus, says, “Hi Rob and Mike. Thanks for all the great insights you share on the podcast. I came across your podcast about a month ago after starting my own startup journey. I’ve already learned so much from you guys. The knowledge and experience you share is amazing and has really stoked my excitement for entrepreneurship.
My question has to do with the process of transitioning from a consulting-based model to a true SaaS model. My co-founder is a consultant who helps small businesses better manage their operations. One of the tools he uses in his consulting is an app that he put together in Microsoft Access to help his clients find and track their operations. I’ve been brought on as a technical co-founder to turn this Access app into a SaaS product.
The SaaS app would initially continue to be used as a tool for my co-founder’s consulting work with the goal of eventually moving towards offering it as a standalone product. I was wondering, what is your take on this approach? Are there any benefits we should be sure to take advantage of or pitfalls we should try to avoid?
On the one hand, I see a potential advantage in the fact that we already have an initial user base in his current customers, but on the other hand, I am wondering if the fact that our initial users are using the app and a consulting context might lead to unanticipated headaches when we try to scale. Thanks again for the great podcast, James Barnhartus.
Rob: That’s a good question. I’ve seen folks do this well and I’ve seen them do it poorly. The first thing that I would make sure is that you have the IP, that your partner owns the intellectual property to the thing and that the Access app was not built under a contract that if you forked a SaaS app out off of it, that somehow that comes back to bite you in the future. That is just something that you have to clear up and make sure you have. The pitfalls I would avoid or the big one is assuming that because he has had to build this for a number of clients, that everyone needs it, or that there is a market need for this.
I would validate that other people need it, that it is sellable at a purchase price that you want to sell it at, and that you can reach them somehow in some type of scalable fashion. Obviously, there are companies that want to pay for this, but if each sale cycle is 6-12 months long and people are only willing to pay $100 a month for it, it becomes a less viable business. I would be having a lot of conversations before I went off and build a SaaS app with his existing clients.
Also then, where is a list of another hundred clients that are your potential clients that are like these other ones? How do I get in conversation with them? It’s easy, you’re not selling anything. You say, “Hey, we are building this thing,” you just tell the story of what you’re doing, “Would you be willing to have a 30-minute phone call with me?”
If you send 100 emails, maybe get 10 yeses and that will be tremendously educational for you to ask the questions of, “What are you using today? How much would you be willing to pay for this?” You pitch it, “Hey, would you be willing to pay $1000 a month?” or whatever the numbers are. There’s a lot more that I would do before I wrote a line of code on that SaaS app.
I do think that there’s a big benefit to doing this and that your partner or co-founder obviously has a lot of knowledge, institutional knowledge in his head about how this works; that’s good. You guys have built-in testimonials from the start. You could even ask the consulting clients if you can use their logo from day one, even though you don’t technically have product customers, you do have consulting customers or clients and you have logos and testimonials which is a nice thing to have from the start. You can also get their input of course to help shape the direction of the product. That’s my hot take, my initial thoughts on it. What do you think Tracy?
Tracy: I love the fact that there are existing customers that you can ask for help for building this product. I agree with you. This is a place where you can get more information, talk to other customers, and make sure there’s a market before you do any writing of code. As you start building a product, you can go to these existing customers with the MVP and start getting that feedback with people who are already hopefully fans of your co-founder because they’re working with them in that consulting context, and these people can help inform how the standalone product can grow.
Having that little bit of help helps an app grow and help the app launch, especially if you can get to a point where it’s just good enough that then you can start taking that elsewhere. Not building a full-on product, but getting just to that MVP, so then you can start talking with other people outside of this consulting contact. I think it’s going to be a huge help and it’s a really good sign to have those extra customers, but I completely agree with you that there are some pitfalls, as you mentioned, and just to be aware of what you said.
Rob: Yeah, and I was trying to think of the dangers of it being consulting today and how that can impact your mindset. Let’s say you built 10 or 15 existing consulting clients. Is there a danger that they really have a lot of input on shaping the product and they do it in such a way that it makes it less useful to the rest of the industry, or do they want undue influence on it or whatever? These are things you have to navigate. I definitely think this is more of an advantage than a disadvantage for a lot of developers go and built products and then you can’t get anybody to buy and no one will tell you why they want it or won’t pay for it. You’re not going to be in that situation, but they are definitely some things I’d be thinking about as I build this out.
Tracy: This is a process that people have done before. A lot of SaaS apps have come from consultants who realize that there is a need and that they can build something off that need. Of course, there is probably a lot that have failed as well, but this has been done before and some people have had success in it.
Rob: Yeah, and I would consider tweeting out and saying, “Hey, we’re looking to do this. Has anyone done it before so I could ask you some questions?” My guess is typically when we get a question that is this specific, we often the next week get an email from someone saying, “Hey, I did that,” connect me with him.
Rob: Yeah, it’s been cool. It’s like the Startups for the Rest of Us community coming to the aid of one another, which is really, really cool.
Tracy: Yeah, using the community. One of the big secrets for this community is the fact that we can use each other, learn from each other, and help each other out.
All right. We’ll move on to the next one. This has been submitted by Casio. He says, “Hi Mike and Rob. Thanks for providing such a valuable podcast. We have a bootstrap SaaS making low seven figures and ARR. As the founder, I constantly get emails from people interested in white little partnerships. These emails typically come from bigger businesses that are in the industry but don’t offer the feature we are most known for. Other times they come from random people who want to build a similar product but don’t have anything to offer.
Our product is somewhat complex, not rocket science but large like an ERP, HER, et cetera, and we have a brand that is trying to get some recognition in the industry. White labeling on our product would be nontrivial from a technical perspective and I believe it would distract us from building our own brand. I want to know what your general thoughts are about white labeling. These emails are so frequent, I think I’m leaving money on the table. Thank you.”
Rob: This is a good one and it’s common. If you start something that gets traction you will get these emails. My default response to these is very much like the default response to the junior partner in a venture capital firm. You’ll get two or three of those a month as well asking if you want funding and in general the answer is, “Now is not a good time.” These white labeling in general is quite distracting. It is way more technically challenging than most developers or most people think it is. It’s not just tweaking a product and swapping out someone’s logo in the upper left. There’s billing and there is provisioning. I won’t even go into it.
We evaluated that at one point and it is months and months of development work. What’s cool is that if you’re getting these interests, it shows that this industry has interest in this tool. It’s almost like you’re going to get out ahead of these bigger players, they’re trying to hedge their bet, and they’re trying to have the features that you have. To me, white labeling basically devalues your brand and creates a brand for someone else. There are cases in which to do this, but I don’t think that’s a real, kind of MicroConf, Startups for the Rest of Us self-funded move. To me, you are trying to build a brand for the long-term. You’re an ambitious founder. You’re doing low seven figures, huge congrats on that. Most people do not make it that far.
If I were in your shoes, I would not be having these conversations. If you’re curious, maybe respond to one or two of them, and do a call or two, and cap your time at five hours of exploration for two different deals or for two different conversations and see where it goes. I’ve done that, I’ve gone down the road. This is with multiple products, not just Drip and HitTail, but back before there were DotNetInvoice and a couple of others. I would say, for me it was without fail. That doesn’t mean it’s without fail, but it’s going to be a waste of time because you are trying to build a brand that you want to last. To give someone else that brand equity and have to write a bunch of code on top of it, if you already have some figures, you feel like you’re growing, and things are doing relatively well for you, I don’t see why you would entertain this at all.
Tracy: I would agree with you and I’ve done the same thing with WeddingLovely. We had a bunch of white label requests from other companies and I didn’t do that process that you mentioned. I did a few calls with them, with the folks just to see what they wanted, what they are thinking, and what kind of money was involved. Every single time at the end I was like, “That was a waste of time.”
Again, I could be wrong. There’s probably instances out there where this is a good idea, but it’s one of those things, whereas in general, I guess for this audience, it’s going to be more pain than it’s worth, especially if you’re already doing that much in ARR.
Rob, I have a question for you. Is there any situation in which you would think that, that would make it worth it for you? Would it be an upfront contract? What would you think would be the only situation where it would be worth it?
Rob: I was just asking myself the same question in my head. It’s not a blanket “no,” it’s a 99% “no.” What is that 1% or the 5% time you should do it? I’ll go on a little tangent here. There’s a SaaS app that I know of that was in the ESP space. Originally, they were a downloadable software that you installed on your own server. They white labeled for years and no one knew who they were. They grew into the seven figures and then they had to pivot out of that. They decided to pivot out of that and build their own brand. Their software was mature, but they had to build brand equity from scratch. I sat and watched and I thought to myself, how would they have been because their competitors were doing so much better by that time. I thought to myself, how would they have been if they had never done that.
The thing that comes to mind, there was one time that I almost went forth with white labeling. It was in the very early days of Drip and it was with a colleague I knew or a guy I knew who was in a completely separate, very tight vertical. It was a vertical we were not going to sell into. It wasn’t a ton of dev work. It was weeks’ worth of dev work and he was willing to commit to—I don’t remember the numbers—a non-trivial amount of MRR. He had a big email list, it’s a prosumer niche, so it was a really large list and he had a large number of paying customers doing seven figures of ARR with a relatively low-priced product. He was going to email a list and promote it over the course of a year and do webinars.
He was going to really push it in and it seemed like it could add 5K, 10K, or 15K of MRR a few times throughout the year and that was back where that was a substantial amount of money to a company. That was one time where we needed the money. We almost went through with it. I honestly don’t remember. I think it petered off and we were going to do some research.
Eventually, we mutually decided this is not going to work and I don’t regret that. I actually think that would have been a burden. It would have been essentially legacy cruft that we would have had to maintain because within 6-12 months of that, we were growing by 10K MRR a month and it would have been this thing that we had committed to, that we have to maintain, and would have always been like, “What were we thinking?” but at that time, it may have made sense and helped us move faster. That’s the one time I can think of it perhaps working for more of the self-funded indie funded types.
Tracy: The only other thing I can think of—this might not be the self-funded, indie-funded type of people—was when I was evaluating white label partnerships, just one other variable was if that company that wanted me to white label was an acquisition possibility. I have heard stories and some friends where they’ve built a product, they white labeled it for that company, but in the process of white labeling and working with that company, it comes out that it’s just easier if they just get acquired. If you wanted to be acquired, it can be and this can be very risky. This is a very risky way of trying to get an acquisition because things could fall through the white labeling, it could just suck up all your time getting it to work. I have heard instances where people start working the company under a white label product and ended up acquired at the end. If that’s something you might be interested in, that could be a path.
Rob: That’s a good point. It’s with the words that is strategic partnership. You’ll see that with a strategic investment of like, “Hey, big competitor. Number three wants to invest by 10% of the company,” and maybe they’re an acquisition partner long-term. White labeling will be another one, a really tight integration where everything goes back and forth. Before white labeling I would almost vote for a really tight-coupled integration, but you’re right. It’s risky, but I could see that as a play or a reason to do it.
Tracy: All right. Moving on to question from Lee B. Lee says, “Hey Rob and Mike,” had some really nice things to say about you and the podcast. A couple of paragraphs. I’m going to skip that and jump over to the question. Lee, thanks for the wonderful compliments.
Lee says, “Here, to contribute my own question. Is it not uncommon for developers to start at a small company with a reduced salary in exchange for a share of the company? This is what I proposed to two founders of the company where I am now writing software and they’re onboard. They feel reassured I’m in it for the long haul and will feel more confident taking ownership and business decisions along the way. Now, I take it for granted that I will want a lawyer to review any offer before it signed. How does one go about selecting a lawyer who will represent me without being overly aggressive? Googling business lawyers near me is easy enough, but I would like some advice about what questions to ask and what to look for when dealing with a master of the dark arts of law. Thank you again for providing a back catalog of knowledge and advice.”
Rob: Dark arts of law. I like that phrase. That’s a good question and good on you for having a lawyer review it; that’s a good call. The blanket advice I have is upcounsel.com. You start there, you look at the reviews. It’s like Upwork for legal. I have had generally good luck when I try to find someone with an expertise there. The way about it is I don’t want a small-town lawyer who specializes in tax, accounting, to review my startup equity grants, my stock option offer, my employment letter offer. I want someone who is familiar with the startup space so that they know.
Any lawyer can read a document and say, “Yes, legally this is saying this and this means that,” but do they know what the standards are? Do they know how the Silicon Valley treats it? Do they know how people treat it outside of the Silicon Valley? Have they dealt with startups that may have raised funding? Have they dealt with equity grants before, stock options, vesting cliffs? All of this stuff is more than academic.
It’s something that the more experience you have with it, the more you know, “That’s a common clause to be in there,” or “That’s not a common clause and this is unusual where I would push back.” What I found is when you’re dealing with lawyers who are out of their depth or out of their expertise, that’s when they get overly aggressive because they’re uncertain and they’re trying to mitigate risk, but when they’re in their comfort zone of like, “Yeah, I’ve reviewed 10 of these in the past year,” they tend to feel much more comfortable with it.
The last thing I’ll say is I’ve dealt with a lot of lawyers, way too many, actually, just over the years of forming companies and doing all this stuff. It’s only been about 10% or 15% of them that I really enjoyed talking to and having conversations with, that I feel like actually have my business at heart, my well-being, and the company’s well-being at heart rather than just logging time, and that’s super unfortunate. That’s just my experience.
I’m not saying that’s how the whole industry is, but once I found a couple of attorneys with a couple of different areas of focus of expertise, I hold on to them for dear life. I refer people to them and I use them for everything. There’s one guy who doesn’t do anything with tax accounting, but I’ll even ask him tax accounting questions just because even his almost inexperienced answer is often better than the tax accounting attorney who is just stiff and giving me some boilerplate ECYA answer.
Now, it this attorney is just going to review one document, do you need a long-term relationship with them? Probably not, so you don’t need to take it so far. I bet if you go to UpCounsel and look for folks who are experts in startup loan and equity grants, I bet you’ll be fine with it. Those are my initial thoughts. What do you think Tracy?
Tracy: The best lawyers I’ve ever worked with have been referrals from friends. There’s so many out there. You don’t want to spend the time chatting with a bunch of different lawyers and then seeing if they’re the right one for you. That’s like Googling for random lawyers near you. You can follow this trap or it takes way too long and you’re talking to these lawyers and then you’re not getting your contract reviewed.
If it is at all possible, asking people near me, other startups, other friends, people or anything for a referral to their lawyers and getting their recommendations and their thoughts about how that lawyer works upfront saves a lot of time. I’ve worked with some, like you said, terrible lawyers that never respond, or respond cryptically, or respond with one liner and then charge me a lot of money for that one liner, and I’ve worked with some really amazing lawyers. The amazing lawyers have always come from referrals from other people who used them for the same situation that I did.
Rob: That’s great advice, and asking your personal network. Going to Twitter and asking other startup founders, if you’re in a founder Slack group, if you’re in the MicroConf crowd, if you’re in FounderCafe. There’s all these resources you can go in and say, “Hey, who knows a good lawyer,” and we don’t know the jurisdiction of your law so I don’t know if you’re in the UK or the US. If it is a law, that would be state-dependent. Or you can get a lawyer in any of the 50 states and employment law tends to be state whereas tax law is IRS and on and on. You ought to look at the nuances of that, but I wholeheartedly agree with you that the best attorneys you’re going to find are going to be referrals from other folks.
Tracy: That’s a good point about different states. I wasn’t thinking about that before. Probably about 90% of the lawyers I have worked with, I haven’t met in person. I’ve always just worked with them remotely. You don’t necessarily have to have someone who can go to the office and sit down and show them the contract. If you can find the right person to work with you where you can just send over that the contract over email and get their thoughts and pay without having to meet them.
Rob: For me, I prefer solo attorneys who work out of a home office, use Dropbox and DocuSign, aren’t working for some huge firm with a big office downtown and still using paper documents, that everything needs to be a phone call, and they won’t email. There’s this real dichotomy and the attorneys I enjoy working with the most are more like us. They’re more like startup founders. They’re agile, they use the tech, the cool hip stuff these days, and that’s what I personally would look for. Again, to review one stock option doc, you don’t need to look for all of this, but if you’re going to have an ongoing relationship, that’s what I would be looking for.
Cost is part of it. A solo attorney working out of a home office tend to be less expensive. They’re also not going to delegate a bunch of stuff. That’s what I hate when I work at big firms, you talk to the attorney, great. You charge $700 an hour and your law students, paralegals, and such are charging $350 an hour, but everything is delegated to them, and they don’t tend to know what they’re doing. They tend to have to loop the attorney in to make the hard decisions anyways and you’re the whole time dealing with a junior associate. I guess that’s where I get super frustrated.
It’s like, no. I want to work with someone super knowledgeable and I am willing to pay for it actually. I’m willing to pay the rate, but please answer my questions and don’t funnel me through an intermediary and when I have a solo attorney, they’re answering your questions and you know that they’re the expert in what they do.
Some good questions today. Thanks so much for coming on the show again with me, Tracy.
Tracy: Yeah. Again, super happy to be here. Thanks for having me on.
Rob: Absolutely. As a listener, if you have questions that you’d love to hear right on the show or you want to send us a voicemail, make it to the top of the stack, please email us firstname.lastname@example.org or you can always call our voicemail number if you’re on the road. It’s (888) 801-9690. Tracy, if folks want to keep up with you, they can go to tracyosborn.com or you are @tracymakes on Twitter.
Thanks again to Tracy for joining me on the show. I had a good time answering some listener questions. Seriously, send in your questions. We have bandwidth for even more listener questions over the course of the next few months. If you haven’t subscribed to this podcast, I encourage you to head to iTunes, Stitcher, Spotify or wherever greater podcasts are sold and enter Startups for the Rest of Us, subscribe, or head to our website, startupsfortherestofus.com.
We have an email list. We almost never talk about this, it’s a mistake. There are several thousand people on the list, but if you really want to be in the know, you want to hear about inside baseball, and hear about when formats change and new designs, we don’t email very much, but it’s being within the Startups for the Rest of Us community. Go there, enter your email. Again, we don’t have very many emails and you can unsubscribe at any time. Thanks again for listening and we’ll talk to you next time.
In this episode of Startups For The Rest Of Us, Rob interviews Craig Hewitt of Castos, about the unique set of challenges to starting and growing a SaaS product as a non-technical founder.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on the show, we cover topics relating to building and growing startups in an ambitious, but in a sustainable and repeatable fashion. These are not the typical Silicon Valley startups, where fundraising can be a goal in itself, and where people build slide decks instead of building businesses. We want to be meticulous, disciplined, and have a way to repeat our success instead of relying on so much luck and so many things to come together that it’s a one in a thousand chance. We want to build real businesses with real customers who pays real money.
In this week’s episode, I speak with Craig Hewitt about how he went from his day job, to running a product-type service, to running a fast growing SaaS application called Castos; all this as a non-technical founder. This is Startups for the Rest of Us episode 459.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups. Whether you’ve built your fifth start up or you’re working on your first. I’m Rob and today with Craig Hewitt, we’re going to share our experiences to help you avoid the mistakes we’ve made on our journeys.
Thanks for joining me this week. I’m excited to talk to Craig Hewitt. You may know him from his podcast, RogueStartups, where he has chronicled his journey over the past several years. If I recall correctly, that’s where I first heard about Craig. What I like about Craig is he has been doing this for years, 4½ years ago, he started a productized consulting service.
Two years later, he quit his day job. He acquired a WordPress plugin, he started Castos, which SaaS app for podcasts hosting. He’s built it up to the point where he has four full time employees, two part time employees and he’s part of our inaugural TinySeed batch.
You’re going to enjoy the conversation with Craig. We dive into a lot of stuff that he hasn’t talked about on his podcast and per the interviews I’ve been doing recently, I try to dig into some points in particular and not just cover a broad story, but really look at the important points along his journey, things he learned, advice that you can take away to help you build and grow your startup as well.
I want to do a little experiment this week, it’s something I haven’t done before. I talked to Craig offline and said, “You know? I bet folks will listen to this episode and they might have questions for you.” Whether it’s a question about how you did it, about your journey, about podcasting, about startups in general, just anything that you would like to hear Craig and I riff on and talk about, or frankly if it’s just for Craig, that’s okay too. I want to invite him back in probably two, maybe three weeks, and any questions that have been submitted, he and I can run through on the show. It’s a Q&A episode, but it’s a Q&A episode with a guest host and you have context about his experience.
As you listen to this episode, please try to think of a question or two for Craig and then email it to email@example.com and you can send that as a text question or attach it, Dropbox link to an MP3, or you can just call our voicemail number if you’re on your phone right now. It’s (888) 801-9690 and I’d love to have Craig back on the show, assuming we get questions, and we can run through those.
It could be an interesting and fun experiment to have these guests to come on the show, not just tell their story but also offer practical advice and tips. This is something I’ve been talking about for quite some time about how I’ve enjoyed a Q&A episodes because it allows all of us to be smarter.
The fact that I’m here on the microphone, talking in answering questions is good and I’ve been able to share knowledge along with Mike Taber for the past nine plus years. The community and everyone out there, collectively, we are all smarter if more of us can weigh in on these topics. I love to pull guests back on the show and do questions, so please do send any in, firstname.lastname@example.org, if you have any questions for Craig. Maybe put “Question for Craig” in the subject line, that’ll help me catalog them. Let’s dive into the interview with Craig, I hope you enjoy it as much as I did.
Craig: thanks so much for joining me on the podcast today.
Craig: My pleasure. Thanks from me on, Rob.
Rob: I bet a lot of folks know who you are from your RogueStartups podcast. You’ve been known for several years—congrats on that, by the way—so many podcasts don’t even make it 20 or 30 episodes and you guys are at 170 something?
Craig: Yeah we’ll be at 200 around the end of the year.
Rob: Good for you. On these milestone episodes, everyone always tries to do something cool and interesting and I always find it hard to come up with new things. Have you been given thought to what you might do on that episode?
Craig: We have thought about it. We did a really cool episode at 100. It was a mash up of a bunch of little interviews that Dave did at MicroConf two years ago. We might do something similar to that, just talking about a little bit of everything, founder stories, lessons learned, stuff like that. I think those are really neat.
Rob: That’s cool. I was asking you because our 500th episode is coming up and I wanted to steal your idea and do it before you even do it. Of course I wouldn’t do that.
Craig: You’re welcome.
Rob: Yeah, exactly. The reason I wanted to have you on the show today well, there are many reasons, but one is you’re a non-technical founder who has built a successful SaaS app. Successful to the point that you have four full-time employees, two part-time, TinySeed, we backed you, you’re part of our inaugural TinySeed batch. Stuff’s really been going up into the right for you for a couple years now with Castos.
I wanted to walk through that story because starting a SaaS app is hard enough. Starting a SaaS app as a non developer, there are unique challenges with it. I want to take people back to where you started.
Now, you live in Annecy, France with your family, but you’re from the States. You were living in New Orleans, if I recall, and you were working a day job as a sales guy. Is that right?
Craig: Yes. I’m the dreaded sales guy at heart, which is actually a really nice thing. If you’re not a developer, you have to be a salesperson or a marketer. That’s what I bring to the table I guess, but yeah, I was in enterprise-level medical sales, so selling stuff the hospitals and doctors.
I started the podcast, started RougeStartups just really as a fan of entrepreneurship, software, SaaS, and stuff like that, online business. Ironically, that’s what led to my first business that was any kind of success. It’s called PodcastMotor, we do podcast editing and production, we’re a productized service. That’s what led me to quit my day job. We traveled the world for a little bit and ended up living in France. Then all the opportunities with Castos came along as a result of that. Podcasting has been the door through which all of this stuff has opened up to me.
Rob: Podcasting has been a great thread for you. Obviously, you’ve listened to podcasts for years, then you started your own, then you started a productized service that does podcast editing, and you have a quite a client list. As you said, PodcastMotor allowed you to quit your day job. Then, you have acquired a WordPress plugin that will get to podcasting and then turn that into a SaaS. It’s not often you actually see a thread like that where there are 4-5 different levels in the same space.
I do think that’s been one of your super powers is you haven’t wandered all over the place. You had invoicing software, then an SEO tool, then email service provider, and started a conference. You’d be an idiot to do something like that and wander all over the place. You have just been focused, but you’ve been able to do it in a much more succinct timeline. When did PodcastMotor start?
Craig: PodcastMotor started 4½ years ago. The very beginning of 2015.
Rob: You were working at a day job and you’re good at sales, presumably, that’s what you’re doing at 40-50 hours a week. The PodcastMotor process involved that super power, I’m guessing. There was a lot of demos in sales because it’s several hundred dollars a month for you to produce episodes for folks. I’m imagining, everybody wanted to get on a phone call. Did you find that that asset of being a salesperson and being comfortable with demos helped you a lot getting PodcastMotor off the ground?
Craig: Absolutely. At first, I was doing the sales calls, doing the editing, doing the writing, publishing to the hosting platforms and stuff, and then we built a team around it. For a very long time, actually up until just about a month ago, I’ve been doing all the sales calls. Just because I’m really good at it, we close a lot of customers, and like you said, we’re really fortunate to be able to work with a lot of the podcast that people that listen to the show probably have heard of.
It’s really cool. It’s been a really nice experience to be able to have relationships with folks like that, too, that we’re on a first name basis and able to email up a whole lot of these power players especially in our space.
Rob: PodcastMotor grew to the point where you were able to quit your day job and then fund other stuff you’re doing. Was there a point in the first, let’s say, 12-18 months where you were like, “Oh, […]. This isn’t going to work,” or, “Man, this is really hard right now,” or was it one of those Cinderella stories that I often say don’t exist?
My famous quote is, “Even in the Cinderella stories, blah, blah, blah, and there are no Cinderella stories.” I’ve been saying that. I don’t recall PodcastMotor being that hard for you to get off the ground. I guess, to summarize, what was the hardest part or the lowest point as you were building that?
Craig: It was both. It was really successful really quickly, which in a service business is really hard, because in a SaaS business, if you make it and a bunch of people sign up, there’s no more work for you other than maybe support. PodcastMotor is a relatively complex one to scale the team up, create all these processes, documentation, workflows and stuff to be able to handle to go from 5 customers to 30 is really hard. It was not hard in the fact that the business floundered, but that the business was successful, which is its own problems. That was the challenge. For a long time, I loathe the business because it was just a constant game of catch-up.
Now, I have a lot more respect for it because productized service model is absolutely fantastic for folks who are out there and they’re consulting or they have a day job and they want to quit their day job and go out on their own. There’s no faster, more clear way to do it than a productized service. There are some downsides, like scalability is a lot harder, but for folks who just want to quit their day job, there’s nothing better because it’s pretty simple.
Rob: I’ve never run a productized consulting… actually that’s not true. CMSthemer was that and that was a constant pain in my ass. I had a bunch of other stuff for products and CMSthemer was bringing in more revenue than a lot of them, but it was this constant back-and-forth with clients and I didn’t have enough volume to hire the staff to do it, so I was doing it a lot of it myself. Were you working the day job, then you’d come home and then you just work four, five, or six hours at night to keep up before you had the bandwidth to hire someone to replace yourself?
Craig: Absolutely, and that’s the hardest part in any business. Whether it’s a productized service or it’s a SaaS business, that time when you’re making a few thousand bucks to even $10,000 MRR is just really hard because you don’t have the time or the money to really do anything. That’s why stuff like TinySeed is really cool because your sweet spot with TinySeed is to take these folks that are that $5000 or even $10,000 and say, “Okay, stop messing around with your day job, go all in on this, and really dedicate yourself to marketing, or hire someone from marketing, or hire a developer, so you can go do marketing or something.”
That is the point that probably a lot of folks get burnt out on is, “I have all of these demands on my time and my mental energy and my stress is through the roof,” because yeah, you’re working a day job and you have family or whatever, then you come home, work on this, and there’s a fire to put out every day. If there’s no light at the end of the tunnel in some way, then it’s just really depressing sometimes, which is weird because then, you have this growing business that is making you depressed. It’s a strange thing, but that’s how it was.
Rob: Yeah, there’s so much to be said for the power of focus. The ability to just focus on one thing and not have a day job and side projects in addition to whatever it is you’re doing, and to your point about folks who have $5000 MRR or sub-$10,000 MRR and are depressed, shutting business down. I’ve seen that over and over and I’ve seen folks trying to do it nights and weekends for years, unable to get it past that point where they are able to quit the day job. It’s a real shame.
There are businesses that could have succeeded or could succeed faster if they just had a little more time and a little more of their best energy, the good glucose. Not the, “I just worked in an eight- or nine-hour day from my day job. Now, I commute home and I have three or four hours.” Even if I’m a developer and I can write the code, you’re just so tired, you’re not as productive, and you don’t get in the flow. There’s a lot to be said there.
Can you give us an idea of how large PodcastMotor is? I know you don’t talk about your top line revenue. Have you ever talked about number of clients or any idea, maybe even employee headcount? Something to give us an idea of the scope of the business?
Craig: We do about $30,000 a month and most of it is recurring.
Rob: That’s cool. How long after you started PodcastMotor were you able to basically quit the day job?
Craig: About two years.
Rob: Did it take that long to get to the point where it could provide a full-time income for you or were you working a job and also banking extra money in preparation for that event?
Craig: It was a little bit of both, it was more that we had wished we had a day in mind. We had a day in mind for a really long time, almost a year. My wife and I agreed, with some stuff with the kids and them finishing preschool, we wanted to quit around the summer so we could travel to Europe for three months. We just had a day in mind and the day included some personal stuff. It included PodcastMotor getting to a certain size so it could provide for us. I was in sales, so you’re making pretty good money which was allowing us to save up for this transition time, too.
Rob: I know it grew pretty well from the start. I almost would have thought the productized consulting given how quickly it can scale up, would’ve allow you to quit your day job before two years. It sounds like it would have if you really were desperate.
Back in 2008, I was just clawing and scratching to get out of the day job. The moment that I was able to, I quit If you had done it at the moment, that you had enough income to do it, it sounds like it would have been a lot sooner.
Craig: Totally. I mean, I’m always been reinvesting more back into the business than maybe I have to, and it’s venture for both Castos and PodcastMotor where the businesses don’t throw off as much profit as they could certainly, but I’m just always oriented towards growth. We were hiring team members, getting people in place, and doing all these things to where I didn’t get as much money. When I had a day job, I didn’t “need it,” but if I had to quit my day job or if I’d gotten fired, we could have lived off PodcastMotor pretty early on.
Rob: The next thing I want to touch on is your acquisition of a WordPress plugin called Seriously Simple Podcasting. This is a plugin that folks who run WordPress or want to run a podcast, they install the plugin and then when they do a new post, it allows them to upload an MP3 file and have that go into an RSS feed in iTunes, settings and all that stuff.
To the listeners, we on Startups for the Rest of Us were on PodPress for ages and it was abandoned. It did the similar functionality and it was abandoned six years ago. We just never upgraded because you just don’t do these things. You came in and generously offered to migrate us to Seriously Simple Podcasting. We’ve been on it now for about a month or two and really enjoying the more modern interface, the maintained code base, and all the things that we were lacking with PodPress.
This very podcast that runs on that plugin, but you didn’t build that, you acquired it. I wanted to dig in a little bit on that story. Namely, when did it happen in this timeline? Right now, we’re at two years after starting PodcastMotor, you’ve quit your day job. Did the acquisition happen before or after that? How did it come about? Just talk us through that process.
Craig: I had already quit my day job, we’re already in France, and it came about just an email from actually one of our PodcastMotor customers who is also in the WordPress space, emailed me and said, “Hey, the guy who’s the original creator of this plugin is selling it because he’s going to work at Automatic, the parent company of WordPress. I think you should talk to him. This sounds like a pretty interesting fit for what you’re already doing with PodcastMotor.”
I talked to Hugh Lashbrooke, the guy that wrote the plugin. Pretty quickly he was like, “Yep, this is a good fit because you’re a reasonable person, already in the space, you’ll probably take good care of it,” and we saw it as a way to expand what we’re already doing with PodcastMotor as a service business getting into a product business and SaaS, and the idea was always to build a hosting platform to connect to the plugin. The plugin, like all plugins in the WordPress repository, is entirely free and will always be entirely free. Now, the Castos hosting platform is an optional add-on to the plugin and we use the traffic flow and the lead gen from WordPress like our main source of business.
Rob: Did you think from the start, when you are evaluating the purchase of the plugin, was it in the back of your mind like this is going to be good traffic and lead gen flow to a SaaS app someday?
Craig: No, it was dumb luck. Very fortunately, but it turns out to be one of the best decisions I’ve made in a long time.
Rob: That’s the thing. If I’ve learned anything doing all the entrepreneurship stuff, the podcasting, and being in public is doing things in public creates opportunity. I don’t care whether you’re blogging about things, whether you’re podcasting, whether you’re actually have a productized business, a productized consulting business like you do where you have a SaaS app, if you had not started a podcast then decided to do PodcastMotor, you would never have gotten that email. No one would pick you out of the blue and it happened to be, “Oh, this guy’s already in the podcast.” There was some warm relationships there, there was a recommendation by someone saying, “Hey, he’ll take good care of it because we already know he’s proven this and that.”
I often give this advice to folks who can’t ship, or who are either have been working on something for years, or thinking about it or, “I just don’t know what to do to start,” I often say, “Just start podcasting or start writing. Even if you want to ultimately do software products just get out in the world, build a small tool and ship it. Help bloggers, help podcasters, help developers, something that gets you out in the world and has your name in the footer.” You’ll be shocked at how many of these little things come along just from being out there.
Craig: One of the things we all discount too much is just the value of your relationships with human beings, talking to them on the phone, and meeting them in person and stuff. We go to conferences, like MicroConf, or like […] Conf, or whatever maybe once a year and you meet up with all of your online friends. That’s really great, but I think that, especially if you’re talking about developing business acumen and a real network, that we should all take this a lot more seriously than most of us do. I was definitely on that boat. I was like, “I have my computer and run a business.” Now, I could run a really good business without a computer and just talk to people and work it like a regular business, where it’s all the relationships and the people that operate in the business and that I know in the industry and stuff. It’s an interesting flip that that’s taken.
Rob: I’ve totally seen that in my career as well. A lot of it starts with nuts and bolts, providing a service in marketing in a funnel, split testing, and then at a certain point there’s a lower leverage activities for you now because now it’s working relationships, it’s building partnerships, it’s shaking hands, and like you said, at an event that can get you hundreds of customers right off the bat rather than grinding it out with AdWords as the case may be.
To give listeners an idea of maybe the magnitude of the plugin, I know you haven’t talked about purchase price, you don’t have to name an exact number but to give listeners just some context what realm of numbers did you pay for Seriously Simple Podcasting.
Craig: I paid mid-four figures for the plugin, and at the time it was an entirely free plugin with some add-on modules which are also free and had about between 10,000 and 20,000 active installs in WordPress.
Rob: That sounds like a good deal to me.
Craig: Yeah, it was a great deal.
Rob: Long term, knowing what it turned into, obviously was a genius maneuver that I know you architected from the start.
Craig: Oh yeah.
Rob: From day one, I knew it. But even then, it sounds like that was a good exchange. You acquire this plugin, this is your first exposure to WordPress. I know you’ve used it as a podcast host or whatever, but you first time owning and operating a plugin, how long after the acquisition did you think we should build a SaaS app to back this thing?
Craig: That was always the idea, was to buy the plugin, to build a hosting platform on top of it because the model had already been proven. There’s another player in the space that does a very similar thing. I think we do it better, but there’s someone else that already does the exact same thing, basically. Our idea was, “If there’s already a player doing this in a certain way, I think we can do it better, because there are some things about that tool that I don’t like and a lot of other people don’t like.” That was the idea from the beginning.
Rob: And the rest is history, to be honest. You build Castos, it’s a SaaS app, a big channel has been your WordPress stuff. I know you have a lot of other channels at this point growing the company. Castos is about 2½ years old, four full-time, two-part time folks. Successful SaaS app on all metrics and I know your MRR—we won’t announce it here on the show—but it’s successful by any measure.
I’m curious, there’s a couple questions I have for you. The first is, podcast hosting is a very competitive and almost I say quasi-commoditized space, there are a lot of them. It’s commoditized in the way that email service providers are. There’s differentiation. It’s not truly a commodity, but there are just so many that you could go out and throw a rock and hit three. What made you think that you could enter that space just 2½ years ago after there are already as many as there were and gain enough traction to build a real business on it?
Craig: Even now and for sure back then, the thing that sets us apart from most all other players is the plugin and our WordPress integration. It makes managing your podcast content just so easy. It is Seriously Simple Podcasting. All joking aside, you just go into WordPress, you create a post, you upload the file, and your podcast is live as opposed to, “I’m going to log into Libsyn, I’m going to go over here, upload the file, then I get this iframe code which is all janky, then take it back to my WordPress site, make sure the post is published at the same time and all this kind of stuff.” There’s none of that. You just manage all your content wherever you’re managing all of your content already, which for a lot of people is WordPress.
I still believe that if I wasn’t the owner of Castos, I would still use it because it’s the best tool for my workflow, because I use WordPress for all of my sites. I manage all of my content in WordPress, so it’s the obvious tool and I would tell anyone else that. If you have a site on WordPress and you want to start a podcast, it’s just the clear, easy, good way to go.
That’s our competitive advantage. I think we have a pretty good moat around that. It would be hard for somebody to create a plugin that does as much as we do, get the traction, the name recognition and everything. I’m sure somebody could and maybe somebody will after hearing this, and that’s cool. Competition is healthy, it validates the space a lot, but that at this point, we’re a long way down that road, so it’s a pretty defendable competitive advantage for us.
Rob: Early mover advantage with stuff like WordPress plugins, SEO. I often think of WordPress plugins just as another form of SEO. If you get a plugin with a bunch of five-star reviews in the WordPress plugin repository, then you appear at or near the top of the search results when people search for podcast plugin. It just dumps hundreds or thousands of people through your funnel. And it’s a free funnel, so it’s not like they’re eating your website, but they’re downloading the plugin and then from there, you nurture them. This is a playbook where we’re seeing folks do, whether they’re moving them towards the premium plugin add-ons to a free one or towards a SaaS app as you’ve done.
Craig: Free like a puppy Rob. WordPress and WordPress plugins are not free.
Craig: It’s an expensive channel to maintain, but a very high-quality one.
Rob: Yeah, no doubt. Again, coming back to non-technical founder, you don’t write code, but you’re a more technical person than most salespeople that I’ve met. It probably comes from you selling medical devices. You have that left-brain edge and I know that you’re savvy with some of the tech stuff, just not a coder yourself. I’m curious what the hardest thing has been for you as a non-technical founder building and maintaining a SaaS app?
Craig: I know that Jonathan, our early developer for Castos, listens to this podcast so he’s going to laugh when he hears this. At the beginning, it was just him and I. He’s been our developer since day one. He started about two weeks after we acquired the plugin. We have had quite the journey of how we communicate, how we plan, how we work together, and it’s just been really challenging. It’s not anything to do with him because he’s actually been really great and gracious and forgiving of me.
For most non-technical folks, learning how to communicate effectively, and maybe efficiently is the right word, with developers is the hardest part. They speak a different language, but just being really, really clear the first time about what you want to build and why, what the user experience is going to be and all of these things.
Even to a developer that is a western person, that native English is their first language—Jonathan is both of those, he’s from South Africa—even though I would consider him a really, really good senior developer, I would come and say, “Hey, I want to go build this thing,” and he would go build it. I would come back and say, “This is not what I meant,” and he would say, “Yeah, that’s what you said.” So, just some of those things. It’s not even just scoping a feature. It’s how we track, report, decide which bugs to fix, in what order, prioritize the workload and stuff. All of this project management stuff is just really challenging. At this point, we do a pretty good job of it, but for the first year at least, it was just fires every day.
Rob: Can you give me an example of one time that you remember where you feel like you really struggled and basically did an example of what you’re talking about?
Craig: I can’t think of an example, but the classic thing, actually I’ve heard Hiten Shah talk about this recently. He calls it dropping Hiten bombs. He’ll just come in and say, “Hey, we should do this thing sometime,” and then the person that “works” for you says “Wow, Hiten or Craig, thinks that’s a really important thing. I should go do that.” That’s the biggest specific challenge for me, is organizing my thoughts and my product road map into something that’s really predictable and clear, and that we can all follow in the same way, not just scattered message and Slack every day, and changing directions on a whim. That’s just an impossible way to work. Getting over that has been huge.
Rob: I can see that. It’s amazing that if you’re like me—you and I are similar in personality—you view yourself as a scrappy founder who just wants to get stuff done, worked a day job, you built something, you’re the same person you were 10 years ago, but you’re not viewed that way by the people you hire. When you have a team and whether it’s 4 or 40 people, you still feel like you can just brainstorm like you did back in the day with a co-founder or with a mastermind group, “Yeah, I’m thinking about doing this, this, and that.”
You’re right. The Hiten bomb concept, I’ve seen it over and over with founders of you throw out an idea and it just train wrecks everybody or your thought process is really anxiety-provoking. It can be really anxiety provoking. If you say something one day and then change your mind the next day and you’re like, “No, it was just a brainstorm. It was just something I was thinking.” Folks don’t know that, and they’re trying to get a job done. I wonder, is that just learning to be a manager? A boss? Or is it learning to be communicating with developers? Maybe both.
Craig: It’s definitely more of the former. Also being more mature. I hate to say that because I’m going to be 40 next year. I need to chill out a little bit about some of these stuff and say, “Okay, the house is not on fire. We have a really great product and plugin, and everything is super stable. If I can just keep my mouth shut for another two weeks until the sprint is over, then we can talk about this.” That’s where I am these days.
Rob: As we move towards wrapping up, it seems like a tangent question or whatever, but I know that especially folks who listen to RougeStartups or maybe who have their own podcast and are building their own product on the side might be wondering, do you feel RougeStartups as your podcast you’ve been hosting for many years, do you feel like that’s had an impact on your ability to launch and grow Castos.
Craig: Totally, and I think in two ways. One is that, it is what first got me into PodcastMotor which is the door that got me into running my own businesses and was the introduction that got us into Seriously Simple Podcasting. The other reason probably is the more applicable to everybody, is that it really is honed to my niche expertise. I am pretty knowledgeable about podcasting because I run a podcast and I run a productized service around podcasting where we help a lot of really good podcasters run their podcast. Now, I run a SaaS app and a WordPress plugin around podcasting.
I just have a lot of domain expertise around this. The show itself, probably like Startups for the Rest of Us, is a really good channel to get your name out and build brand equity and stuff like that directly. Our show has helped grow Castos directly some, but more so, it has allowed us to make a lot of really good product and marketing decisions. The vast majority of our thousands of customers, I don’t know and don’t come from our listener base. That tells me that the podcast probably has helped us a little bit, but more than anything, we’ve built something that people really like.
Rob: And I would guess that the podcast has helped you more with a couple things. One, knowing what to build and knowing how to support people who are editing and posting podcast because you run a company that does it, know how to help folks who are creating podcasts, because you create one. You do have an expertise that most people even building podcast hosting SaaS apps don’t have. You have the whole gambit of being a listener, creator, and running a company that edits and produces them.
That’s one thing, but the other thing is I’m guessing that RougeStartups probably helped you more with credibility, perhaps with potential affiliates or partners like in space in the MicroConf world, they’d probably know you from RougeStartups. I’m guessing even PodcastMotor clients.
Those would be the folks that would email. I’ll admit, I’ve received at least—just over the years—probably two or three emails asking about, “Do you know Craig? Do you know about PodcastMotor? Are they legit?” that kind of stuff.
Early on, the way I first heard about you was RougeStartups. You spoke at MicroConf Europe a couple of years ago, you’re speaking again in two months, and the first time I invited you was because I had listened to you talk on this podcast for months and I was like, “This guy is sharp. He knows what he’s talking about. I think he’ll do well on stage.”
You would come to MicroConf and I believe we had met, but I meet a lot of people at MicroConf. It’s like you were in my ear buds literally six months or nine months and that was a piece of it. I’m not saying you speaking at MicroConf Europe, but you and I knowing each other has changed the course of anything, but that’s probably one of 50 examples that’s come out of it.
Craig: Yeah. Podcasting even here, getting into the fourth quarter of 2019 is probably the best use of time that anybody can put into personal branding. It’s wonderful. It’s really efficient from a time perspective. You just spend 45 minutes recording a show, edit it a little bit, or send it to somebody like PodcastMotor, or find a guy on Upwork to edit it for you, and then you get 45 minutes and a bunch of people’s ears every week. It’s just really impactful as a medium for building brand awareness, and getting your name out there.
Rob: You’re not just saying that because you run an editing service.
Craig: I’m hugely biased. Yeah.
Rob: Totally. Take it from someone like me who doesn’t run an editing and hosting service. I’ve been talking about this for years. Mike and I show up every week. We shoot a show every week and I stopped blogging years ago. I really want to blog, I just don’t have/make the time to do it, but I do make the time to podcast because it is so much less of an effort.
We need to talk offline about getting Startups for the Rest of Us moved over to Castos in the next couple weeks. Let’s figure out a good time for that to happen. We’re already on Seriously Simple Podcasting and my understanding is the move to get all of our files. Right now, for listeners, we set it up in 2010, so we literally have flat files, MP3, flat files, just sitting on a shared hosting account and a CDN over that.
We could have done Libsyn in 2010, they were the only host that I know of and they were so janky, and a lot more expensive than what we have because I have somewhat a limited shared hosting account. We’ve done that for nine years and frankly, there’s just a lot of challenges with that approach, I’ll leave it at that, and we’ve been looking at getting a legit podcast host for several years for the metrics and all that stuff, but it’s probably time we do it.
Craig: We’d love to.
Rob: Sounds great. Thanks again for coming on the show. I know folks want to keep up with Castos, they can go to castos.com. If they want to follow you, if they’re into podcasts of course, check out RougeStartups on iTunes, Stitcher, and all the other places. Where else might they keep up with what you’re up to?
Craig: The best place is probably on Twitter. I’m @TheCraigHewitt on Twitter and I tweet less often than I should, but that’s probably the easiest place to reach out and say, “Hey.”
Rob: Sounds great man. Thanks again for coming on the show.
Craig: My pleasure. Thanks.
Rob: I hope you enjoyed my interview with Craig. Again, if you have any questions that you’d like to hear Craig and I talk through on the show, please email email@example.com or call our voicemail number at (888) 801-9690. Thanks for listening. We’ll see you next time.