Josh

Rob: You’re in the right place. It’s another episode of Startups For the Rest of Us. I’m your host, Rob Walling. Every week since 2010, we’ve been shipping content for ambitious startups; founders who want to maybe not change the whole world but just change their little corner of it.

Thanks for joining me today. I’m excited to dive into listener questions with Rob’s Solo Adventure. Today, I’m going to be talking about things ranging from diversity in startups to timing for mission, philosophy, and values, how to develop features for a new app, whether to go wide or go deep, and several others.

But before we dive in, I want to let you know that tickets to MicroConf Remote 4.0 are now on sale. For this event, we’ll be talking about all things finance for bootstrap founders. We’re going to cover topics like pricing, budgeting, accounting, financing, and investing. The event is virtual. It takes place on May 3rd through the 5th from 11:00 AM to 12:30 PM daily. I believe that is Central Time, but I will need to check on that. Register now at microconfremote.com and use promo code MCmoney (MicroConf money) at MicroConf Remote to get a special deal. Hope to see you there.

My first question is from Justin at beamjobs.com about diversity in startups. Justin says, “I’m a huge fan of the podcast. I’ve been listening quasi-religiously for about four years. Working in the hiring space, I see firsthand how subtle and not-so-subtle factors conspire and leave certain groups of people massively underrepresented in tech. 

I’m curious. As someone who’s been in this space for many years, how do you think about these issues? More generally, for those of us that value creating a more equitable and diverse startup ecosystem, what are some things we can and should do to make that possible?” Great question. Thanks, Justin.

I think I’ll start with the end in which Justin asked, what are some things we can or should do to make it possible for there to be a more diverse startup ecosystem? That is Silicon Valley. It’s venture-funded, bootstrapped, and mostly bootstrapped. I see that as a win for our companies and for the entire ecosystem, the more diverse opinions and individuals that we allow in, encourage to join, or make feel safe enough that they want to dip their toe in.

I’m obviously a firm believer—I think it goes without saying—in diversity, equity, and inclusion. Since MicroConf in 2012, we have had some very deliberate efforts to improve the diversity of the ecosystem because I feel like it’s all of our responsibility. It’s not just the people running an event or running a fund but attendees as well. 

If you’re out there thinking, how can I improve this, go out of your way to look for more diverse candidates when you’re hiring at your own company. I’d say making an environment that is safe and welcoming to anyone who wants to show up regardless of racial and gender categories goes a long way towards doing it. And inviting people in.

One of the biggest ways we’ve seen diversity improve at MicroConf, and it has improved since the first event in 2011 where we had 3% female attendees, I believe. I’m going from memory, but it was very low. That was why by the time we got to 2012, we were like, how do we fix this? It turns out, surprise, it’s not an easy fix. This is not something that anyone can wave a magic wand or anyone could snap their fingers and make this suddenly equitable and amazing. If we could, we would do that. But this is a decades-long effort. 

I believe MicroConf has gone from 3% to about somewhere in the 12%–15% just speaking purely of female attendees or non-male attendees, depending on the event. We have numbers also for racial diversity, ethnic diversity, and all that, but I don’t know those off the top of my head like I do these other ones.

What we’ve seen is there has been an improvement. In fact, the attendee breakdown now at a MicroConf is in line with the general startup ecosystem. We run the State of Independent SaaS Survey every year and have done it for the past three years, and we ask about these things. One of the reasons is because we wanted to get a picture of what the ecosystem is like. 

The whole ecosystem needs to improve. You can’t magically say, well, the ecosystem only has 10% of this category of individuals, but we’re going to somehow get 20% to attend at MicroConf. It’s just not the way it works. We have made incredible efforts to reach out to groups to comp tickets. That’s why our scholarship program exists. And it is a long, slow battle. 

That brings me back to the point I was going to make, which is that one of the biggest differences we’ve seen is when individuals who are already in the ecosystem invite someone they know into the ecosystem. Invite someone to a MicroConf who is not a white male. White men are—I wish I knew the number off the top of my head—I think 80%–88%, somewhere in that range of people in the broader bootstrapper indie SaaS startup ecosystem. Anyone who is either not white or not a man is, by definition, underrepresented in the ecosystem. 

We’ve seen great strides being made with folks inviting an underrepresented friend to a MicroConf, asking if they want to attend a MicroConf Remote, or inviting them to listen to Startups For The Rest of Us since it’s a free podcast and it’s available. I would hope and encourage you to think about it as something that’s available to everyone, even underrepresented founders. That’s one way that I think about it. 

Frankly, we could write a whole book on it and do many podcasts on it, but I want to say that one other thing we realized at MicroConf (specifically) is there are things we can control like who speaks from the stage, and then there are things that we really don’t have much control over which is who buys a ticket or gets a ticket and attends the event. For a long time, we tried to change the second one. That just has not been as effective as having more diverse and underrepresented founders in MicroConf On Air, on this podcast, and on every MicroConf stage. 

If you go to microconf.com, we have a DEI pledge. You can read about it in the footer. It outlines a lot of what I’ve said here. But one thing that we realized early on was we didn’t just want to have the same percentage of (let’s say) women on stage as there are in the broader ecosystem. We want to try to double that number. We want to make progress, at least double. 

There have been times where we 3X or 4X that number, such as with our most recent two TinySeed batches. Forty percent of our companies have had at least one underrepresented founder versus in the broader ecosystem. Again, it’s that 12%–15% number. It’s a pretty low number. 

I think that each of us can and should play a part. It’s not one person’s responsibility. It is all of our responsibility to contribute to diversity and startups and make people feel included and welcomed in this ecosystem. That’s what I love about bootstrapping. 

I know the word meritocracy in Silicon Valley. People roll their eyes at it. I agree that it’s kind of […] as you can tell by the numbers. Bootstrapping (to me) is about as close to meritocracy as I know anywhere because when I start my companies, when I’ve underrepresented and over-represented friends who’ve all started these bootstrap companies and made hundreds of thousands (if not millions) of dollars, no one knew who they were because they didn’t need to go ask anyone for permission. They just needed to build a business. 

While I can’t sit here and say, well, everyone has an equal starting point—because that’s obviously not true—what I can say is that bootstrapping is an incredible equalizer. It may be the biggest equalizer in business today. It’s certainly not venture capital. 

I know that all VCs are not equal and a lot of venture capitalists are making efforts toward building a more diverse and inclusive startup ecosystem, but bootstrapping is that next level because it’s all on the merits of a business. At that point, it has built something people want and are willing to pay for, and you can build an incredible business without asking anyone’s permission. 

It’s a great topic. Thank you, Justin, for asking the question. Obviously, that’s a short summary of my thoughts on the topic, but I hope that was helpful.

My next question was an anonymous question. Someone had just emailed me. He said, “When is the right time to work on things like company mission statements, philosophy, and values?” And he says, “Hint, I don’t think they belong at the same time.”

That’s an interesting question. I often say I think a lot of us left and started our own companies because we didn’t want to deal with BS like company mission, philosophy, and values, because we’ve all worked at large companies that use these buzzwords—philosophy, values, mission—and then don’t live up to them. They’re made up in some boardroom and are fiction. 

I was against introducing these into the companies that I was starting, but about the point that you hit (I’d say) between 7–10 people, you start to realize that if you don’t set some type of agenda for the company or mission and values, then it will happen on its own. If you don’t get people’s buy-in at that point, then by the time you get to 15 or 20 employees, you can have a real problem on your hands. 

For me, mission is something that I like to have these days. I think I’ve said it on this podcast, but my mission is to multiply the world’s population of independent, self-sustaining startups. It lets me know and reinforces what I stand for. It helps me see the common thread and easily explain the common thread of this podcast of MicroConf and of TinySeed. All three of those are helping to multiply the world’s population of independent self-sustaining startups. 

But back in the day when I was starting amazing bootstrap lifestyle businesses to make $5000 a month or $250,000 a year, I didn’t need a mission. The mission was I’m going to provide value to an end-user such that they’re willing to pay for it. The mission is for me to learn a lot of interesting things, to have freedom—that was a big mission—to gain purpose by building interesting things for customers who need them, and then to maintain healthy relationships. Those really were the early missions. 

It depends on where you are on your journey as to if you’re going to have a tiny little company with 3 or 4 contractors. I don’t know if you need a mission, but I do think at 7–10, it’s like, what are you doing? What is your company doing? What is the value that you provide? I do think at that point, it’s worth sitting down, chalking up a sentence, and mulling it over. It probably took me several months to really land on the mission that I stated earlier.

In terms of philosophy and values, I do think it’s interesting. I was interviewing Omar Zenhom. He’s the founder of WebinarNinja. He talked about how they didn’t put values in writing anywhere and that they were just communicating from one person to the next. Then, they got to a point where there were 15 or 20 employees. 

The company had always had a value of frugality because they’re bootstrapped. New employees were joining with the Fortune 500 mindset where they were not being frugal. He realized that this really needs to be written down. Frugality, then with a nice little paragraph, maybe with an example or two about where we came from and how we think about this. 

It’s that example where I realize if you don’t do it by the time you get to 10–15 employees, even if it’s only 3 things, your top 3 values that the company holds. I think the big thing for me is to try to make them specific and try to make them something you really believe and hold dear such that you would say it in a team meeting with a straight face and put it on the website with a straight face. It shouldn’t be a marketing copy. It should actually describe how you’re operating today and potentially how you aspire to operate.

What a lot of those Fortune 500 companies do is they write what they really want to be and they’re not actually acting that way. It’s just eye roll–worthy both inside and out. We agreed to protect the interests. Our values are to protect the interests of investors, customers, and this and that. It’s so generic. If you have something that’s just implied and should be in everyone’s values, then don’t do it. It’s too generic. That was a great question. I hope it was helpful.

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The next question is from Salman. The subject line is how to actually develop features for a new app. Salman writes, “When working on a new project, there are various ways to complete features. One style is to go deep into a feature and make it near-production worthy. Others may take a broader approach, create a skeleton structure, and then go back and fill in the details on each specific feature. What style do you prefer? Are there certain habits that eventually lead to a project never shipping?” 

Yes, there are many habits that lead to projects never shipping, like people getting in their own way, building in the basement or in their garage for a year, over-building features, gold-plating software, building a bunch of features nobody needs, not talking to potential customers, procrastinating, and not wanting to make mistakes. There are a lot of habits in that respect.

I don’t know if the question is coming from someone who’s basically saying, I’m going to build these six features and I know that’s going to be my initial app. Should I do an iterative approach where I write some skeleton code, I come back and cycle down, build the database layer, and build the layer below that and then below that? I think that’s (to me) just a preference style versus I’m going to go deep and build a full feature all the way to production.

I would almost say the question is not super relevant. I don’t think it’s the right way to think about it. The way I think about it is figuring out what is the minimum feature set that you have? What is the minimum lovable product (MLP) or something like that where it’s a product that people can actually use and get value out of? What is that minimum feature set and how are you determining what that is? 

If the way you’re determining it is asking yourself, not talking to potential customers and going into the market, it’s probably not going to be correct. Something that I would be focusing on is how do I determine the minimum features that I need to ship something that people want and maybe are willing to pay for, or at least get me closer to that and then iterate?

I can talk about some things that I wouldn’t build and in fact, we didn’t build in the last couple of apps that we launched. I can use Drip as an example. We didn’t have a password reset when we launched. We didn’t have billing built because we knew we had a 30-day trial time and we had 30 days to build our subscription billing. Even then, we didn’t need it to be a subscription. We knew we could run it manually if we needed to. 

We didn’t build the ability to delete things. People could start an email, they could send an email as an email service provider—think of MailChimp with different features—and they couldn’t then go back and delete that email. Eventually, someone would need that, but we didn’t build it in. We didn’t build sorting in that email grid. We built minimum analytics. It was just bare bones. 

If that’s what Solomon is asking, then I do think that you have to ask yourself what is that minimum lovable feature? How can you build it in a way that is functional and that early adopters will get value out of but that can save you weeks of dev time?

One example I can think of that is we built 35 integrations in about 18 months with Drip because if you think about it, as an email service provider, we wanted it to be a hub for a lot of data, both inbound data coming into us—triggers that came in—and actions that went out. We integrated with a bunch of shopping carts. There was Stripe, PayPal, and Gumroad. I can’t remember the others, but we integrated with a bunch of carts. 

We integrated with a bunch of things like Zapier and a bunch of automation providers, but the V1 of each of those integrations, we didn’t know how many people would adopt them. We would go in and we had a framework. We could launch a V1 of integration with a third-party with about four hours of code if they had a good solid REST API with good documentation, maybe eight hours if it was a little less than that. Now, there were some old curmudgeonly integrations. I think the PayPal one took us several days because it’s PayPal and it’s 23 years old or whatever. But we could build integration in less than a day on the technical side. 

Then, to be honest, we spent more person-hours than a day building out all the marketing, copromotion, and the business development side of it. We would launch that and it didn’t have OAuth built-in and all the bells and whistles of a finished integration, so maybe you have to go copy and paste an API key and maybe you have to do some things that aren’t ideal.

But then we’d see what the adoption was. We would start getting support requests of, oh my gosh, this integration is amazing. Now I can tag all my people who buy through PayPal or Stripe. I can tag them as purchasers or as customers. This is game-changing for me.

Then over time, we’d see, oh, there are 80 people using this integration. At a time when we had 1000 customers, we had 80 people using an integration. That’s a lot of people. Let’s throw it in the feature queue to circle back on this and do a V2 version, which just makes a little better error handling, surfaces the OAuth, or whatever. Then, we had a V3 that actually included OAuth. 

That’s how we thought about a lot of features. Not all of them. You have to weigh that thought of certain features. If you launch them as V1s that are not fully baked, it can be detrimental to your product and to your brand.

An example of one of those was our visual workflow builder. You can go to drip.com until today and you can see that workflow builder and what it looks like. Launching that half-baked would have been a bad decision. 

In fact, my co-founder, Derek, was the lead developer and he spent five months of his time building that. We were okay with that. We agreed that this needed to be amazing. It needed to look and work amazing. We built basically another product launch on the back of that because I believe it was the third visual builder that was in existence in terms of marketing automation. It was the easiest to use, we innovated in a few areas, and it wasn’t totally drag and drop. They had these exit nodes.

Anyway, there were several things we did that no one else did. We wanted it to work really well. We got a massive influx. Our growth doubled that month and it was a sustained doubling of growth. It was an incredible launch and an incredible feature. 

We did not bet the company on it because if it had flopped, we wouldn’t have stayed in business, but we did bet five months of engineering time. One individual did it all on his own, but we bet a lot of time engineering time. Frankly, if it hadn’t worked, competitors were making progress against us during that time. It was painful to do that. 

That’s how I think about it, Solomon. I think it’s a good question to be thinking about this, but realizing what you build is perhaps more important than the specifics of how you build it aside from you should write unit tests. I would never build another app without having unit tests because that became such a blanket of comfort when we would want to make gutsy adventurist decisions that were going to break a bunch of legacy stuff but we knew it was better for the way that the app is moving. The massive test coverage we had gave us the confidence to be able to do that. 

A lot of apps that I’ve seen who don’t have that get crufty and buggy. If you want to build something for the long-term and you want to build a business you can be proud of, you need to seriously think about spending the extra time to write those tests from the start. Don’t be in such a hurry that you don’t do it. Thanks for the question, Solomon. I hope that was helpful.

Our last question of the day is from Louise O’Sullivan. He asks, “How do I start? Hey, I love your podcast. It’s given me such a great insight into the world of startups and introduced me to lots of interesting companies I’ve never heard of. I’m 24 and I just graduated from my computer science bachelor’s degree in Ireland last May. 

I’ve always wanted to be my own boss and run my own company. I’m very ambitious and love building things once I get started. I’m never good at coming up with ideas though and I find myself always panicking that I’ll never be able to work for myself because I’ll never be able to get started. Currently working as a software dev for a large company, but I don’t want to be here forever. Do I need to calm down and wait for inspiration or do I need to leave my comfort zone and actively search for an idea? Any advice would be great.”

It’s a good question. In my opinion, you need to actively search for an idea. I would be in forums like Indie Hackers and MicroConf Connect. I would be in those communities watching other people to see how they come up with ideas.

I believe the number one way that folks come up with ideas according to our State of Independent SaaS Survey is a problem that a coworker, a friend, or a colleague has experienced, or a problem that they experienced at work. Usually, it’s a problem that someone around you has. 

We have a bunch of TinySeed companies that have had bad customer experiences where they had a home improvement contractor working on their house and the communication was terrible, so he decided to build a CRM for home improvement contractors. It’s called Builder Prime.

We’ve had folks who have just made cold calls, like you probably heard 20 episodes ago with a senior place. He came up with an idea, made 30–40 cold calls, and realized that wasn’t a good idea, but it gave him the information to pivot into a new idea. 

It’s that whole thing of getting out there and doing things in public—like making cold calls, setting up landing pages, blogging, writing, or tweeting—that creates opportunity. A lot of times, that’s where you will come across those opportunities or those business ideas that maybe you wouldn’t have if you were just waiting for inspiration to strike.

Even listening to podcasts like this or podcasts like My First Million or Tropical MBA. These are podcasts where people talk about businesses and pain points. I think it was the last episode or maybe two episodes ago where I specifically said, if someone built a solid competitor to Submittable, I would be interested. 

There are pain points that we experienced running TinySeed, MicroConf, and this podcast that could easily be businesses. Just tuning in to these types of shows, being around these types of people, absorbing that, being on the lookout, and keeping that idea notebook. I’ve talked about this quite a bit. As you come up with ideas, as you hear ideas on podcasts, as you listen to audiobooks, or whatever, jot them down and then let them simmer. We have a 48-hour waiting period on buying domains. 

Otherwise, like Dan and Ian say, your GoDaddy account or Namecheap account starts looking like the Boulevard of Broken Dreams. You don’t want to get carried away and start registering a domain for every idea you put in that notebook. Give it two or three days to simmer down. 

That’s what I would be doing. I would be on the lookout for problems and pain points that I experience in my work and in my day-to-day personal life. I try not to let it be too much personal stuff because then you get into B2C and of course that’s not something that I love.

The other thing I do think about, Louise, is if you haven’t checked out the stair-step approach to bootstrapping, a lot of that talks about, hey, if you’re gifted at writing or building courses, maybe start there and use that to level up your skills. But if you really want to build a software product, consider looking at one of the ecosystems like Shopify, AutoCAD, Photoshop, and Heroku. 

There are all these ecosystems (even WordPress) where you can build an add-on.  You don’t have to learn all of the things at once. You can just learn building the product and supporting it, but a lot of the marketing and even the billing are often handled for you. I believe there is at least a semi-complete list of 15 or 20 of those “app stores” that you can build a web app into. I could keep going with them, but look for a list of those and then think about which of these you think might be the best fit for your skillset. 

I feel your pain and I’m glad you wrote in. I will say we’ve all been there. I was there. You’re ahead of me. At 24, you’re already thinking about this and already listening to a podcast like this. I think that you will cut a lot of time off of your journey. I of course wish you the best as you get going.

That feels like a great time to wrap up. I’m almost out of listener questions. If you have a question, please email it in to questions@startupsfortherestofus.com or just head to the website, startupsfortherestofus.com. There’s an Ask a Question link. You can send in a video, text question, or audio. 

Video and audio always go to the top of the stack. I haven’t actually had video or audio in quite some time. It’s been several months now. Maybe I need to go check my automation. Maybe that’s it. Maybe there’s a bunch in the backlog.

All that to say, thanks for joining me again this week. As always, it’s great to have you here. Hope you enjoyed this episode. Do send in your questions for the next listener question episode. I’m @robwalling on Twitter. I look forward to connecting and I’ll be back in your ears again next Tuesday morning.

Rob: Welcome back to Startups For the Rest of Us. This is episode 597. We are approaching that 600-episode mark. In today’s episode of the show I talk with Ashley Baxter. She’s the founder of With Jack which is located on the interwebs at withjack.co.uk and their h1 is “Be a confident freelancer.”

With Jack gives peace of mind and protection for UK freelancers through insurance, professional indemnity, public liability contents, legal expenses, et cetera. Today, Ashley and I dig into her pretty incredible story about losing her father. She was relatively young and she took over his insurance business and it failed. It didn’t work out. But how she bounced back, started With Jack and the successes, failures, trials, and tribulations that have happened since then has been a pretty incredible journey.

She actually spoke about it at MicroConf Europe. I believe it was in 2019, so almost three years ago. She’s come so far since then, and is really still pushing the boulder up the hill and making progress.

Before we dive into that, tickets to MicroConf 4.0 are now on sale. During this event, we’re talking about all things money. We’ll be talking finance for bootstrap founders covering topics like pricing, budgeting, accounting, financing, and investing. This fully remote and virtual conference takes place May 3-5, 2022 from 11:00 AM to 12:30 PM daily. Register now at microconf.com and use promo code MC money. I hope you enjoy my conversation with Ashley Baxter.

Ashley Baxter, thanks for joining me on the show.

Ashley: Well, thanks for having me. It’s been so long since I last spoke to you.

Rob: I know. We met at MicroConf Europe 2019. For some odd reason that I’m still trying to figure out, I never had you on Startups For the Rest of Us. It kind of doesn’t make sense to me, because I think there are a lot of interesting things to talk about with your story building Jack. You call it Jack or With Jack?

Ashley: I call it With Jack.

Rob: Okay, so withjack.com. I would describe it as insurance for freelancers. But do you have a tech twist on it? I mean, you’re a MicroConfer. You’re an entrepreneur. When I think of insurance in the US, it’s like there are farmers, and it was like my uncle sold insurance and he wore a suit and he had an office in a strip mall. I don’t think of you as that. Can you talk to people about what the difference is and how you’re approaching this with a different mindset than perhaps it’s typically someone who’s brokering insurance?

Ashley: I think like originally, I really wanted to explore how to improve the whole onboarding experience of getting a call and buying insurance. I think one of the things we’ve done quite well that’s different to a lot of other providers is that we’re super niche. Instead of all of the big competitors that I’m up against, that are selling business insurance, they’re trying to do it for estate agents and freelancers as well, and accountants—everybody.

You end up getting products that you don’t understand how they work. You end up buying products that you never need because that experience has not been tailored for you. That’s kind of where I started. How can we make this a really pleasant onboarding experience, a really slick experience of getting a call, buying a policy, and doing it in a way that because it’s so laser-focused on creative freelancers, they’re getting exactly the products that they need?

Rob: Got it. So you understand that niche so well. I said withjack.com, it’s with jack.co.uk. I apologize. Your h1 is “Be a confident freelancer. We protect you and yours on the high seas of freelancing.” If you haven’t seen this site before, listener, you should check it out. The design is on point and it does not feel like traditional insurance. Are you a designer? Did you design it yourself?

Ashley: I’m not a designer, but I really love good design and technology. That’s the whole reason that I didn’t get into insurance for that reason. The whole reason that I ended up sticking around in insurance was because I felt like at that time—things are much better now—insurers were not paying any attention to good design and current technology.

I’m not a designer, but I really appreciate good design. I worked with Scott Rayleigh, who I don’t think freelances anymore. I think he is in full-time employment now, but he was my designer. So I do have an appreciation for good design.

Rob: Where does the name come from? With Jack.

Ashley: I named the business after my dad, because he was the whole reason that I got into insurance. When I was 18 years old, I was at college studying music. I wanted to be a famous drummer. My dad was running an insurance business solely online, focusing specifically on landlords. 

He passed away when I was 18. And because I was the only person in the family with some experience building websites and deploying them—because I’d done so far a bunch of bands that I played in—it kind of fell on me to keep my dad’s business going. He was never able to make a success of his business. I wanted to take everything that I learned from that and put it into my own thing, which was With Jack.

When I was coming up with a name—I’m terrible at naming things, actually. I knew that I wanted it to have a nod back to my dad. So in the end, I just ended up naming it after him and the character that you see on the website, that is of course based on my dad.

Rob: That’s super cool. Wow. I do want to dig in. You sent me a really nice email with more to that story of basically how you weren’t able to make his business work. You used the phrase, you ran it into the ground. That feels a little harsh to me but I do want to cover that.

Before we do, I think there are folks listening that might be curious what stage you are with With Jack. I have to say two withs, but oftentimes founders come on, and few of them will share MRR, but a lot of them will say, well, I’m profitable, three people on a team or whatever, and we’re profitable. But what can you share to give us an idea of where you are?

Ashley: Yes. I feel like I’m not 100% happy with where I am with With Jack. I feel like it could be a lot further along. There are a lot of positive signs there. I’m fully supporting myself. I’ve just brought on somebody to work with me one day a week for the first time. We are charging ahead towards a really cool milestone with a business where within a few months, we’ll have written £1 million of premium. We’re growing every month so we’re heading in the right direction.

I am able to live this life that I like. I have this cool little office that I’m in right now. I have my strength coach that helps me lift heavy weights, and I have my season ticket at a football stadium that I love. So I really liked the life that I’ve built for myself but I still think With Jack should be a lot further ahead, especially considering the length of time that I’ve been in business now. But mostly considering how much work I put into this business, I feel like I’ve not yet seen that return on investment.

Rob: I think most entrepreneurs would echo that statement of I’m happy with my business but I wish it was further along. It feels like it should be further along. When you say you’ve put a lot of work into it, how long have you been full-time on it?

Ashley: I actually think it might have been just before I spoke at MicroConf so I was shooting weddings because I used to be a freelance photographer. That’s how I funded a lot of the tech side of things—the website, the core system, all that stuff was funded through doing photography. I’m pretty sure—I might be wrong—it was either 2019 or 2018 that I shot my last wedding. I just felt like I’d lost a lot of interest in shooting weddings.

It felt very not fair to take people’s money when my heart wasn’t in it anymore. I found it a bit soul-destroying to be working all week on building With Jack and then messing with weekends because that’s when people get married. So yeah, pretty sure it was 2018 or 2019 that I went full-time on With Jack. With that said, let’s just discount 2020 from everything since that […] during that period.

Rob: Speaking of your strength coach, I think I saw a picture of you on social media throwing, Were you deadlifting? You were throwing a lot of weight. What was that? You hit a PR (personal best) right?

Ashley: Yeah. It was 150 kilograms.

Rob: 330 pounds, 2.2 times, 330 pounds. Holy moly. It’s like twice what I weigh. My gosh.

Ashley: Is it really? That’s so cool. I like being strong. This is kind of a new thing that I got into because of lockdown and I really missed not being around a barbell because gyms were all locked down here in the UK. Then when they opened back up, I was like, I missed the barbell so much, I’m going to go hard on that barbell. Yeah, I really got into deadlifts and back squats and all that fun stuff.

Rob: So incredible. I’ll just say there were a lot of plates on that bar. When I saw it, I was like, oh, I’m impressed. So let’s circle back. You had mentioned you are 18 years old, your dad passes away, which, obviously, must have just rocked you and your whole family. I guess why was it you that stepped in to take over this business? I don’t know if you have siblings or if your mom or who else was around to do that, but it just feels like at 18, I barely knew which way was up. I was just doing stupid […] on the weekends, and I couldn’t have taken over a business.

Ashley: I think there are two reasons. I do have a sister and she’s very successful now. She runs a fashion business and that’s her thing, fashion. There was no crossover whatsoever with my dad stuff. My mom, she is just not techie in the slightest, so she wouldn’t have known what to do. That’s kind of where it came to me and the conversation that I had with my dad, because when he was ill. His heart was working 7%. So it was pretty obvious where things were heading.

Him and I had that conversation where he just said to me look after the family, and I did that. Like I said, I had a little bit of experience with building websites, just because I’d played in bands from the age of 14. I feel like that’s how a lot of people get into building websites as they start off making them for their bands or their friends’ bands.

I had a little bit of knowledge in that respect, but absolutely zero understanding of insurance, the audience that my dad was serving, which was landlords, so I had to figure all of that stuff out. Obviously, I didn’t do that good of a job because the business didn’t grow. It just gradually went down.

Rob: Which is a bummer. Was he an insurance broker as well?

Ashley: Actually no, he wasn’t. The best way to describe him was, I suppose with our terminology, would be more like an affiliate. I went on and did the whole thing like I’ve committed this whole insurance game. I’m fully authorized and approved by the FCA and all of that boarding, regulatory stuff.

My dad never went down that route. He basically built a bunch of websites and was so good at SEO. He got four, five, or six of them ranking on the first page of Google for his chosen keywords. Then people were coming on to the website, clicking a link and they were getting sent to the insurer or that he was referring them to.

Rob: Lead gen. Okay.

Ashley: Yeah, he did an amazing job of that, just purely through Google rankings. But no, he wasn’t a broker.

RobL Got it. So that’s the difference. Because I was going to say, today, you are making a brokerage work. You’re successful at this. I was going to ask what was the difference there, but it sounds like his superpower was SEO. 

I ask people who have often said on this program, like putting a website or business on autopilot. Usually over time, it will decline, it’s hard to keep it stable or growing, especially with Google involved, because Google just tends to do updates. They tend to just not delist but derank things over time. This stuff just kind of falls off if you don’t maintain the leads, so there was no recurring revenue, right? It was just a lead is worth X amount. Then if you don’t have the same amount of leads next month, then it’s declining.

Ashley: Yeah, and the worst part was, his timing couldn’t have been worse, because when he passed away, two massive changes happened in that industry. One was that these comparison websites popped up. I don’t know if you get them in the US, but over here, we’ve got GoCompare, confused.com, all that stuff, they popped up. Suddenly, people were flocking to them to buy their insurance. They weren’t using Google as much. That was one thing, one big change that we saw. 

It was difficult for us to get on those websites because what they do is they show you a list of providers. People are just going to choose the cheapest, so that encourages this behavior amongst providers where they are driving the price of their insurance rate down. So you’d only really make money if you bank on that customer sticking with you for 3–4 years. That’s fine for those companies with big cash flow but it wasn’t fine for us, considering we were a small, independent, family-owned business and didn’t get that cutting revenue.

The second big sucky change was that just as he passed away, Google completely changed their ranking algorithm. They went from ranking based on factors like keywords to social factors, content like blogs and things, the stuff that my dad had never focused on. Not only that, but he did do a little bit of keyword stuffing, and we got completely blacklisted.

It was a really hard time to come into the business because we went from that was how he’d made his money, it was a big success and worked for him, to him obviously passing away, and me stepping in having to figure all this stuff out. Then having our websites completely removed from the one place that actually brought us business. I think the big lesson there that we can all take away is to never depend on one channel to run your business.

Rob: Yup, the diversity of incoming leads is a huge issue. It’s platform risk, in a sense, right? We talk about that a lot. These days, you can build a pretty amazing add-on or an App Store app (for lack of a better term) on Shopify, on Heroku, or WordPress. There are all these ecosystems that you can build in. You can get traction really quickly because they already have a bunch of traffic to their app stores or to their add-on repositories. 

You get search traffic. Usually, their SEO is not that hard because we’re not as sophisticated as Google and you can rank and then you can build pretty, pretty interesting businesses pretty quickly. The rub comes when you have any modicum of success—I mean, get to half a million to a million a year—you start crossing that line, the provider that the main platform takes notice, and then they come a knockin ‘.

I’ve seen it happen to at least one business that was doing several million a year on a platform just got destroyed. It sucks and it feels like it’s not fair, but it’s their platform. They can do what they want. Google is the same way. How many businesses have you and I seen first or second hand just get destroyed because all of their reliance was on Google? It’s unfortunately a common story.

Ashley: It’s certainly—on the positive side—something that I’ve been able to take into my own businesses to make sure that I’m not depending on that is one channel. It is one channel and we do really well from it, but there has to be others, too.

Rob: That’s how all the businesses I built always had multiples, except for the very, very smallest ones. Usually, I remember even in the days when I was focusing really hard on Drip and wanting to rank for email service provider, email service software, whatever. It was like 10% of our leads, maybe 10%–15%. There was a variety of it. Now, I would have loved for that to be better. It would just happen to be really competitive when you’re competing with MailChimp, AWeber, and Infusionsoft.

It’s a trip, because if I was in your shoes, and I inherited this business for my dad, then I couldn’t make it work, I would personally probably run as far away from insurance as I could. 

But you now got your broker’s license; you leaned into it. What was that transition like? Did you ever have that feeling? Like that rage quit, table flip feeling of I’m going to get the hell out of here and go do something else that has nothing to do with this.

Ashley: No, because I really like the challenge. I feel like I’ve had three pretty pivotal moments in my career in insurance. The first is purely circumstantial. It was the circumstances that happened to me. I found myself in insurance because my dad passed away and I was left with his business.

The second transitional moment came when I realized I wanted to stick around and give this industry a good shot, because I had developed an interest in design and technology, as I’ve mentioned. Back then, insurers were just doing a terrible job with bringing their processes up to date, up to the current age. I thought I wanted to have a go and see if I can do that, if I can improve the onboarding. We were using software that was 20 years old, like proper legacy software.

That was the second moment, realizing okay, I found something. I’m not interested in insurance at this point, but I found something about this career that I quite enjoy and I want to see if there’s anything more to that. That’s when I started to learn to code more back-end stuff and work with designers.

Then the third pivotal moment, which is where I’m at right now, I would say, and hopefully there are more pivotal moments to come, it’s when I realized that, sure, it’s great to build things that look and function nice. But let’s be honest. Absolutely nobody in the world is walking around today going, wouldn’t it be great if I could shave 60 seconds off buying insurance, like if it could take me 30 seconds instead of 90 seconds. Nobody is walking around thinking that.

It wasn’t really a big problem that I was trying to solve just by making things look nicer and improving the onboarding. Sure, the conversion rate will increase, people will have a nicer time buying insurance, maybe they’ll get the products that they actually need and all that lovely stuff. But my audience (freelancers) are walking around worrying about when their clients are going to pay them, or worrying about having so much work on their plate, are they going to get that deadline done, or having a difficult conversation with a client, knowing that’s placed with insurance where I want to create products or sell products that actually solve these types of problems. 

So that’s kind of been how I got into insurance. That’s what kept me in insurance, the interest in design and tech. Now, I’m really excited about actually coming out from […] a problem perspective. What is it that freelancers want to achieve? What insurance products can we build to help them get to that desired state?

Rob: I bet you’re thinking about it in such a unique way, because no mainstream broker who serves a bunch of people has any idea, who serves a bunch of niches or just as a broad horizontal offering is going to be thinking about it at that level that you are.

Ashley: So far, I haven’t really seen people think about it at that level. Just today, I saw another competitor pop up, and I had a look at their website. Again, it’s just all the same stuff—buy insurance in 60 seconds, manage your policy online, all of that stuff. Like I said, it’s nice, it’s going to help you, but that’s not why people are buying insurance.

We have to understand the reasons why they’re getting a policy and for us, that’s why the whole ethos With Jack is to help you be a confident freelancer. Believe it or not, I wholeheartedly believe that insurance can help you be a confident freelancer.

Rob: For sure. It’s interesting. Something we talked a little bit offline, but I was going to bring up is this concept of a vitamin versus an aspirin. Vitamin businesses are, we all know, we should take our vitamins, we know we should eat our spinach, but if there’s no impetus or a push to do it, I don’t know, maybe I’m not going to buy insurance this month, because nothing bad happened. There’s just nothing to push me to do it versus aspirin is like, oh my gosh, my hair’s on fire.

I need a way to record a podcast, so I’m going to sign up for SquadCast because it’s a desperate burning need that I have today. You’re in a vitamin business and that’s tough. How have you thought about that? Because I imagine that might be part of what you talked about, it’s not where you wanted to be, the business isn’t where you want it to be. Have you ever thought that well, maybe that’s just the way these go because they are vitamins in essence.

Ashley: Yeah, 100%. What I’ve noticed is that insurance, in my opinion, is the best thing in the world when it works, but only 5% of our customers actually make a claim. You’ve got 95% of people who are buying a product that on a practical level they’ll never have to use.

I do believe that every freelancer benefits on an emotional aspirational level, because like I said, it helps you be a competent freelancer because you can go into projects and be a bit more confrontational with clients who are maybe going to try to take advantage of you because you know that if they do ever take things a little bit farther, you have a team of people in the background ready to help you. But let’s be honest, most people don’t ever think they’ll find themselves in a situation where they need to use their insurance, and 95% of them are […].

We know that there are two million freelancers in the UK so it’s a decent-sized market. I would guess that 75% of them are uninsured. The difficulty that I’ve had is not just selling a product, but it’s been trying to educate the market about why they need this product. That’s the bet that I’m finding really difficult. I agree with you. I think that’s why I’m not getting the growth that I want.

The way that I’m kind of thinking about things right now is, like I said, we’ve got a bunch of customers that insurance is great when it works, but it only works when a fairly specific set of circumstances happen, which is either a threat of legal action, or somebody trying to recover money from you. 

We know that there are all of these other freelancers experiencing definite problems that are falling through the cracks. That for me, is the missing piece of the puzzle. I need to figure out what to create—might be insurance related, might not be—or what to build that helps the freelancers that are falling through the cracks. There’s 100% a missing piece of the puzzle with my business right now. I’m trying to figure out what that is. I haven’t figured it out yet but I think I will. I think once I do, you and I will be having a very different conversation.

Rob: Do you think this ties into you becoming a delegated authority? You mentioned this to me in an email. I had no idea what that meant but you said delegated authority means the insurers authorized me to quote and bind on their behalf, which then means I can build the tech to do it for me as opposed to sitting at a computer all hours of the day.

You were saying you do “sales renewals, midterm adjustments, cancel it.” You do all this busy work. It’s admin work that really you as the founder of this business shouldn’t be doing. Does it feel like that’s going to be a turning point in that could be a turning point in the business?

Ashley: Yes, it does for a variety of reasons. Firstly with a delegated authority I can actually create my own products. That’s going to be really exciting. Instead of selling somebody else’s, I can identify things that we can add in there that will serve our customers even better, so I’m excited about that. But also having the technology to do everything for me, instead of me sitting at a computer at all hours of the day processing quotes, sending out renewals, binding people’s policies when they bought one.

It will free up my time to then work on other areas of the business that will bring more value to people. But also, it will just free up my mind, because I’m so tired of sitting there doing this work. I feel like I’m not getting an opportunity to let my mind go to places where I’m thinking about new products or new services. I’m finding, as I’ve mentioned before, that missing piece of the puzzle. I feel like I’m unable to figure out what that is right now because I’m just constantly consumed by doing all of that manual work.

When I get my delegated authority, and I have the technology to do it for me, that is going to free up my time. It’s going to free up, give me some more mental freedom and space to come up with new products and services to bring more value. I do think it’s a really important step for the business. 

However, one thing I worry about is—Rob, you have come across these founders in the past, and I’ve come across them too—we need to build a product, to build an app. They have a handful of users and you’re asking them how they’re getting on. They say, yeah, things are fine. I’m just in the middle of refactoring the app so that it can scale just in case I miraculously get 20,000 new users overnight, or they focus on building a massive new feature based on the request of one non-paying user, and you’re from the outside looking in, look at that and think this is not right.

That’s not what you should be doing. I do worry that I sound a bit like those founders when I’m like, as soon as I get my delegated authority, everything will fall into place. But I do think it’s important just to free up time, and help me get my life back and be able to start working on the important parts of the business that are going to help me deliver more value for freelancers.

Rob: Do you have anyone? You said you have a customer support person, I believe, helping you part time. It sounds like the stuff you’re doing could potentially, in the short term, be delegated to an admin assistant, an executive assistant, someone like that. Do they have to have a broker’s license to do what you’re doing?

Ashley: They don’t have to have a license, but they do have to adhere to some regulatory stuff. There’s just a certain amount of CPD and stuff that they have to do. But yeah, that’s going to help me enormously. I don’t know why I haven’t done it sooner. I’ve just been very resistant. I’m a bit of a control freak. You probably speak to a lot of founders like that, where you just want to do things yourself because you’re capable of it and you’re worried that somebody else doesn’t do as good a job as you. 

At the same time, this is a really good stop gap between me getting the delegated authority. I can still at least outsource a little bit, block off eight hours on my calendar that day to focus on working on the business. We haven’t quite got to that stage yet because it’s early days, and she’s just learning the ropes. I reckon that this will pay off in another month or so. I can honestly see myself getting to the stage where I’m like, why did I not do that sooner? Or even asking her to do more hours. I’m really excited about that. We’ll see where it goes.

Rob: Yeah, very common, right? Hard to let it go. They’re not going to do it to get a job as I do. It’s the kind of mental refrain. Then usually it’s why didn’t I do that a year earlier or more. 

I kind of want to wrap us up with this story you were telling me offline about basically having a competitor steal all your stuff. I’ll just leave it at that vague description, and then you can share whatever you feel comfortable sharing.

The reason I want to cover this is this has happened to me multiple times. This happens to a lot of founders. I’ve had probably two or three conversations with TinySeed founders in the last probably nine months, where they’re like, this competitor is stealing all our crap and it’s really bothering me. Usually as we dig into it, it’s like, yeah, they don’t know what they’re doing so they’re copying you because they don’t know what is making you successful.

They think copying your font or your headline, or your naming, or your features, or whatever is what it is. But it’s not, it’s the magic that you have. Usually that’s the case—not always. Talk us through what happened. How did that make you feel? I’m sure it made you feel like crap, and then how it turned out.

Ashley: It’s happened a couple of times, actually. But the sore one was the first time it happened, because I think the first time it happens is a bit of a shock. I was the first provider on the market to focus specifically on freelancers. That obviously doesn’t mean that I’m the only one that should be in that space. Other people are going to come in but I was the first to do it.

I remember my designers came to me, and obviously you looked at With Jack’s website, and it’s got a very distinctive design. They came to me and they were like, just a heads up, a company approached us. They said that they’re a competitor to you, and that they want something similar to you. We just thought you should know. 

I took a note of it and I knew how hard it had been for me to start this business with all of the regulatory and compliance stuff, so I wasn’t too worried at the time. Then their name popped up again when I was having a chat with the insurer that I work with. I realized, oh okay, I really have to look into these people a bit more. Then I looked into it just to see if I’d ever had any previous dealings with them, put their name into my inbox, and I popped an email from them a few years before being like, hey, really interested in what you’re doing, we’d love to pick your brain sometime.

I just realized that at that point, they hadn’t launched so I didn’t actually see the visual aspects of the website. But when it launched, there were definitely a lot of similarities. There’s the whole, nautical vibe going on, too. Same insurer, had tried to work with the same designers, same demographic, going after the same market, a lot of similarities with the design element of it, too.

What really, really scared me at the time was that they had funding. I just thought, well, this is it. This is it for me, because I can’t compete with that. They’ve got more resources, bigger team. Honestly, I was terrified about the whole experience. I remember finding out about it when I was on holiday as well. It ruined the holiday because I couldn’t stop thinking about it.

Fast forward, and however many years later, and honestly, it ended up not impacting my business in the slightest. I know that they actually had to do a bit of a fire sale. Just as an aside, I’m not fully convinced yet that funded insurtechs, as they’re called, is the route to go because (obviously) with funding, you need to get a lot of traction to show that you warrant that next round of funding.

With insurance, it’s such a slow burner, as we’ve established with the way that my business has been growing. Even if you build the best company, the slickest onboarding, the nicest design, whatever, people do not feel that way about insurance that they’ll cancel their current provider and come flocking to whoever the new kid on the block is.

So yeah, it didn’t end up working out for them. They had to sell it. It’s a very similar story with the next startup that did a somewhat similar thing, too. It’s quite cool that I feel like yeah, me, the one person bootstrapped business is still here to tell the tale. We really shouldn’t be afraid of all these big scary VC-backed businesses that try to come into our turf.

Rob: It’s often the case, where mostly bootstrapped startups who are quite capital-efficient, executing, getting customers, doing all the blocking and tackling the SEO, the content, the cold outreach, closing sales. They always want to go faster, but then they see the big funded competitor, and they think, oh, no, this is a huge deal.

More often than not, that funded competitor is less knowledgeable of the space, less experienced, and just has a bucket of money. Sometimes that bucket is half a million, sometimes it’s $2–$3 million, unless they are prior founders or have some unique insight into the market. It’s often kind of dumb money, for lack of a better term. Other people will say, smart money is from a VC or an angel investor who knows what they’re doing, who’s been in startups, and dumb money is from a dentist or a doctor who’s just writing some money. 

That’s not what I mean, here. I mean, it’s just money that’s been pushed into a market in a way that’s not being deployed as surgically. Because if you, Ashley Baxter, had half a million dollars in funding versus no name clown who raises half a million dollars and doesn’t know insurance. I’ll say I’m no name clown. I could raise half a million dollars and say, I’m going to compete with Ashley. It would be really hard for me to do that because I don’t have the years of experience that you do and I don’t have the patience.

A lot of capital doesn’t have patience, right? That’s the difference between how I invest in TinySeed invest, it’s very longer term. It’s not like, oh, we need to get our money out and have an IPO and this and that, and you need to hit these growth targets for us or we’re not going to fund anymore. That’s often what happens. 

At one point, with Drip, we had a competitor raise buckets of money. I remember telling my co-founder, well, let’s set an alarm for a calendar reminder for 18 months down the line and see if we can buy their assets when they close up shop. You know what, I was kind of joking and it happened. They ran out of money. They hired a bunch of people. They tried to build what we had plus some stuff, and it just didn’t resonate fast enough. They were trying to artificially accelerate growth.

Again, it’s not all cases. There are cases when someone is actually quite smart. They know a space and they raise money and then they’re really dangerous. Then it’s like you being funded in a space. Let’s say I raised $2 million today to start another ASP. As much as I don’t want to do that, I would be dangerous because I’ve been there. I’m a smart actor in that space.

Ashley: I also think if you raise that kind of money, though you also have different intentions to what the bootstrap solo founder has. I said there are two million freelancers in the market. If you raise the amount of capital that these companies are raising, you’re clearly making a statement to investors. We’re going after the big chunk of that two million.

I have it in my head, I want to get to 10,000 customers. I just feel like that’s a really nice, manageable number. That’s what I need to stay in business. It’s very different to what they need to stay in business. But it’s happened so often now. It always has the same outcome. They either have to sell or have to shut down.

Even today, I noticed that quote come through on my website. You can sometimes tell people just put in false information because they’re playing around with the UX but they use their real email address. I put in their domain name to have a look. It was obviously a new startup that’s moving into my space, and they’re having a little look around, and that’s fine. In the past, I would have freaked out. And I’m just like, cool. Welcome to the space. Good luck.

Rob: I got all the bumps and bruises. I know what it takes to stay alive here, when many have not made it. Ashley, thanks so much for joining me today. Your twitter handle is @iamashley, and of course withjack.co.uk if folks want to see what you’re working on.

Ashley: Thanks so much for having me, Rob. It was really good to chat. I hope that next time we catch up, I figured out what that missing piece of the puzzle is.

Rob: I look forward to the day. It’s going to be awesome. Thanks again to Ashley for coming on the show. And thank you for joining me this week and every week as we continue to produce the show for you. If you keep listening, we will keep shipping these episodes. I look forward to being back in your ears again next Tuesday morning.

Rob: This is Startups For the Rest of Us. I’m Rob Walling. Thanks for joining me again this week. We have a bootstrapper news round up where we look at Google ending doing work from home. We take a look at some founder salary data in North America, the UK, and Europe. And we talked about how to use email, at least, according to a blog post I saw on Hacker News.

We got some interesting insights and ideas that we threw around, as well as we talked a bit about Twitter, how they are now favoring the algorithmic timeline and almost kind of burying the reverse chrono timeline, and how I didn’t even really know that the reverse chrono timeline was still available.

This was a fun episode to record. I had Tracy Osborn—program director from TinySeed—and Einar Vollset—my co-founder at TinySeed—back on the show, as I have for the past many news round ups to hear their thoughts and opinions on the stories today.

Before we dive into that, the third Annual State of Independent SaaS Report comes out next week. We’re doing a live stream straight from MicroConf Growth in Minneapolis. If you have not headed to stateofindiesaas.com and entered your email to be notified, you should do that now because I’m going to be going through all kinds of cool findings from this year’s report. 

We changed up almost a quarter of the questions. We asked some differently, we’re doing some different analyses, so this report is going to have new insights and findings. We also asked a bunch of sentiment questions about, as a founder, how are you feeling about hiring this year versus last? What do you think about no-code? We had five or six like that, some really interesting data to share. I hope you’ll join me for the 30-minute live stream next week. Head to stateofindiesaas.com to make sure you are notified. With that, let’s dive into our bootstrapper news roundup.

My first panelist, the only person I know whose Twitter handle is a complete sentence, Tracy Osborn. Welcome to the show.

Tracy: That completely threw me off. Thanks for having me.

Rob: That was the goal. Do you want to tell folks your Twitter handle?

Tracy: Yeah, @tracymakes.

Rob: Tracy, it does indeed make. My second panelist, that man with the most mispronounced twitter handle on the planet, Einar Vollset.

Einar: That’s right. Hello. Thanks for having me.

Rob: Yes, indeed. Before we dive into these awesome news stories aimed at bootstrap and mostly bootstrap startup founders, I want to do something with you that I think is fun. It’s something I discovered two days ago, I was on a call. I believe it might have been an interview with a TinySeed applicant, and they mentioned Deel. Have you heard of Deel?

Einar: Sure.

Rob: It’s like a payroll, contractor payments and all that stuff. Somebody mentioned it and I was like, oh, I’m going to go to their website. I know they’ve raised a kajillion dollars. They’ve actually raised $629 million. I said, I’m going to deel.com. It’s misspelled, so certainly, they own the dotcom. I want both of you to type in deel.com. It’s not porn. I want to hear your reaction, but don’t tell people what happens because I want every listener after you to go to deel.com.

Tracy: It went to letsdeel.com. It redirected for me.

Rob: It redirected?

Tracy: Yeah. I went from deel.com to letsdeel.com.

Einar: It redirects to letsdeel.com.

Tracy: Did they hear you play about it?

Rob: What a trip. This is fascinating. I typed it in. Because if you go to Google and type in deel URL or just type in deel, it goes with letsdeel.com.

Einar: That’s right, yeah.

Rob: That’s what appears in Google. That’s their canonical homepage. Deel.com, for me, two days ago and now, today, it continues to go to a Rickroll, to YouTube, to Rick Astley singing Never Gonna Give You Up.

Tracy: Are you sure? Wonder if kids did get into your hosts file. It switched out for you.

Rob: It’s so bizarre. I showed my kids last night. I’m actually going to disable my Wi-Fi, come on Wi-Fi, do gown, just to make sure. When I went through the other day, it did it. It may be cached at this point at the router.

Tracy: I can only imagine if it’s on their end. There might have been a bug or something like that. That is so funny. It does go there. Al right, so Rob is showing us his phone and his phone is showing you to Rickroll.

Rob: Is someone trolling? Is someone messing with DNS?

Tracy: World’s weirdest A-B test.

Rob: Yes. What I thought was that a competitor had bought their deel.com and was just Rickrolling it, had private domain registration, and had done it. I wanted the two of you to see it and laugh. I wanted to do the biggest Rickroll I’ve ever done and have every listener go to deel.com.

Now that it’s out, that everyone knows, I am curious for folks to go to deel.com where they are. And it’s like, am I the only person? Did I just hit it? Did they get hacked? And I hit it right at the point where it was a Rickroll and then it’s cached in my DNS now? That might be the thing. It’s so bizarre.

All right, shall we get into some actual news stories? This first one is that Google is ending work from home options for most of its Bay Area workers. In fact, a bunch of the larger tech companies are doing that within the next month or so.

I had a tweet a couple of weeks ago saying that I think this bodes well for bootstrappers that this is happening, because that’s always been one of the big advantages of being a bootstrapper. You tend to do it remote and therefore, you can hire people at reasonable salaries. I know that during Covid, obviously, salaries have gone crazy. I’ll kick it to you first, Tracy. Do you have agreeing or disagreeing thoughts on this whole concept?

Tracy: It’s like nature’s healing and that whole meme. I feel like it’s completely unexpected. It was unexpected to me for it to go back to this because looking in history, pre-Covid, Yahoo, they had this whole thing where they allowed people to be fully remote. Then Marissa Mayer, I believe, became the CEO. She took it away entirely and everyone had to go back to the office.

There’s this huge corporate inertia towards always being in person at the office. Covid was an interesting experiment. There are interesting times to see these companies trying out other ways of working. Just a couple of years of a strange time during a pandemic is not going to change that overall large company corporate feeling of being at the office is where people get work done.

It doesn’t surprise me that these big companies are going back to these policies. It’s not on here, but I want to see data in terms of overall. Somehow, all the companies in the world, if there’s going to be a percentage, the percentage of people who do part-time remote work or fully remote is going to stay higher than it was before. I feel like that is a good thing.

I don’t expect big companies to ever go that direction just because it’s the anti way big companies work, so I’m not surprised by this. But what my hope is, is that overall, Covid has led people to seeing the light in terms of the advantages of having remote work.

Rob: There have to be a lot of companies that were against remote work and then did it because of Covid, shut down offices and are never going back. I think that’s what you’re saying. It’s like, how many are out there?

Tracy: Exactly. But Google, they have their giant campuses, they have all these things that are around being in-person. They probably have some policies for people to work from home. I’m pretty sure that happened with my husband who worked at Google. He had the ability to work from home every now and then. But their inertia towards working in the office is too strong for this to be a permanent effect, the fully remote to be permanent.

Rob: What do you think, Einar? Is TinySeed going to set up headquarters in Minneapolis and everybody’s going to move here?

Tracy: I want that.

Einar: In Minneapolis? Why should it be in Minneapolis?

Rob: I want it there. The cost of living is lower.

Tracy: If I could get a portal so I could work in person two days a week, I would absolutely do that for TinySeed, but I wouldn’t want to do it five days a week.

Rob: Yup.

Einar: I think that’s the thing. I think the idea of what people are saying is they want to do 2–3 days a week in person and then 2 days at home. I think the challenge for big companies is, how are you going to pull that off in terms of now you’re going to have empty office space 50% of the time? I think that’s probably the challenge.

To play devil’s advocate a little bit, on the bootstrap side, we’re always like, it’s the best. Work from home. I’m also curious whether some of these bigger companies have actually started to do some serious analysis of their own productivity and whether they’ve actually found out that this is crap, for whatever the culture that we built before Covid. Whatever happens isn’t as productive when we go remote.

Fundamentally, I don’t think there’s anything inherent with being an in-person company versus a remote company. But I think if you’re built from the start to be in person, then I can totally see how some of these companies found that productivity has gone down. That’s not good for them.

Tracy: It also depends on that team because I feel that developers can probably work better as fully remote because they’re at their home. They’re not in these open office plans, having all these distractions. They have that deep work time to work on code. Whereas folks who are more on the marketing side of things where there maybe have to be more meetings, more in-person time trying to work fast, ask someone a question, that kind of stuff where they would be losing productivity from being separated from their co-workers.

Rob: Yeah, the in-person stuff is designed for collaboration. It’s like if you don’t have self-motivated people or if you need a lot of collaboration. Sometimes, I think you’re on dev teams where you can go and code for weeks and not need to do a bunch of collaboration. And then there are points where you do need to design or architect a new system and that’s when you need to be in front of a whiteboard.

The best work arrangement that I’ve ever had was what we had in Fresno with Drip and it was two or three days a week. We all decided, well, let’s all come in on Monday, Wednesday, and then Friday was optional or something like that. We put all of our collaboration on those two days, and then all of our deep work the other days.

I hired really motivated people who were just super loyal to the company. They weren’t going to go home and screw around. Versus I have worked at a company that had a couple of days, two days a week were remote. There were several hundred employees and there were definitely people who were just taking the company for a ride. I don’t know if that’s inevitable at scale. I don’t know if that’s just always what happens. Some people just can blend into a team and not pull their weight, but kind of.

Einar: Wasn’t there the story about this guy who worked at Verizon or something and basically just outsourced his job? Then the only way they found it was with a security scan because there was an outbound VPN connection to China or somewhere that never went down? In big-enough companies, there’s always going to be that situation.

Tracy: I was going to bring up Silicon Valley, but that’s a real life version, like people sitting on the roof.

Einar: Rob, it sounds like we should all move to Fresno. That’s what you’re proposing here. Have an office in Fresno. You got to live within 20 miles of downtown Fresno.

Rob: The issue is that once you have one day in an office, then everybody needs to live within a 60-minute drive, in essence. As we continued to hire, by the time we hit 10 people, half the team was in Fresno and half was not. They were remote because I couldn’t find great marketers, more great developers or couldn’t afford them at the time. So we did become half remote, half not. That definitely posed some challenges with communication.

Next story is about what startup founders pay themselves. There is a new report from Seedcamp, where they have a relatively small sample size. There are 185 founders from pre-seed to Series A, so pre-seed seed and Series A. Of course, when they say founder salaries, it has to be funded by the founders.

Bootstrappers are not mentioned because that’s not even a thing. This gets my go. When I go to Quora and search for a startup founder or startup questions, they’re all about raising funding. But that aside, I’m intrigued by this.

It’s in British pounds. It’s like the average pre-seed founder salary across the UK, the rest of Europe, and North America. The average salary for a pre-seed company is £49,000. That’s about $65,000 and then seed is just under £70,000. We’re looking at about $90,000 and then Series A, £106,000, which puts us at about $136,000–$140,000.

Einar: I think all those numbers are too high. That’s just because the dollar has been slightly off because of the war.

Rob: It’s like 1.3 right now, I believe. But wait, you think those are high in Europe and UK because down below, it starts breaking it down. When you see the massive disparity, it’s all the same in pounds to not confuse everybody. Pre-seed, Europe average is £36,000. North America average is £73,000 and UK is just under £50,000, so pretty big differences there. Einar, you grew up in Norway and often identify as European. What do you think about this whole discrepancy?

Einar: I’m not surprised in the slightest, to be perfectly honest with you. I think a lot part of this is partly because of the cost of living, probably. It’s probably higher in places like the UK than it is in Poland or other parts of the EU.

Actually, one of the most interesting parts is actually not exactly what the difference is. Also on top of that, I think just generically salaries, particularly for developers, are different. If you’re a senior software engineer who works in the US, you’re probably going to get paid more money than if you’re a senior software engineer working anywhere in Europe. I think that’s true.

The alternative to being a founder, I think, is a higher salary in the US. Naturally, that tends to pull up salaries that people are willing to give themselves. I think of this data, I was looking through it. I think one of the most interesting data points impacted the number of co-founders on salary.

Did you see this piece? It basically says, oh, the really weird thing is a pre-seed. A single founder pays themselves more than two founders, or three founders, or more, but that then reverts that seed. I’m curious what you guys think about that. That is probably the most interesting data point for me. I wasn’t surprised about the US, UK, and Europe discrepancy as much.

Rob: Anything, Tracy?

Tracy: I’m distracted by the fact this graph has one column for five co-founders. Sorry. I can’t stop staring at it. There are so many co-founders. Rob, I’m going to get my brain ordered. You start.

Rob: I wonder if that’s just a data anomaly because it looks like by the time you get to Series A, one founder, two founders…

Einar: It’s about the same. The big difference is pre-seed to seed. My theory is that I think if you just raised a pre-seed round, I think with two founders or more, you’re all like, oh, let’s not spend too. You don’t want to really ask for the salary. You think it’s fair because you’re on the team, versus maybe if you’re just one of you, you’re like, yeah, this is what I need, so I’m going to take it.

Tracy: What about the fact that we know from TinySeed, generally VCs are like, oh, two founders or more. Is there maybe a difference in terms of the amount of money you get at your seed round that would affect how you can pay your two co-founders as compared to how much money a solo founder might get in their seed round?

Rob: I don’t know the valuations. I don’t know if they vary based on founder count.

Tracy: I would like to see how that kind of worked out. Because if companies with more than two co-founders receive more seed money, then it stands to reason that they would be able to pay themselves more as compared to a solo vendor. But I could be wrong, too.

Rob: I agree. I haven’t heard of that. Usually, I think it’s based on market rates and metrics. It’s like, you’re growing this fast, this much MRR, and this kind of a range. Accelerators are the only things I’ve heard of that vary it based on founder count.

Tracy: Maybe when you have another co-founder or when you raise your seed round, you bounce off each other, like, cool, we raise money, we can raise our salaries, and you increased that number, as compared to a solo founder who probably still has some of that anxiety, which I say as a former solo founder. That’s also probably not true, but in my head I can see that situation happening.

Rob: Another element of this is they had some quotes from people basically saying, look, if you’re going to start a company like this, make it sustainable. Don’t pay yourself so little that you’re not having a decent standard of living or that you’re worried about cash.

There’s that famous tweet from Rand Fishkin, where he’s the running Moz. They’ve raised tens of millions in venture and they’re doing $40 million a year as a SaaS company, and he says, my net worth is $15,000 in cash in the bank. I think he had a rented apartment and my car. That’s it.

They were going to raise another round and he was like, should I take some secondary? Kind of like he felt guilty doing it. And people were like, you need to get some money out of this. At least feel comfortable. Even a few $100,000 can make you so much more comfortable.

I don’t mean comfortable, like, I’m going to go spend this lavishly, but if this all goes to […], then at least I’ll walk away with something and I’m not sweating it if I need to buy a new car. The last thing I want a founder worried about is personal expenses, as long as they’re living within reasonable means.

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All right, let’s check out our next story. Title is The Clickbaity: You’re using email wrong. I picked this up on Hacker News. It’s basically a short blog post. It’s a three-minute read that says at the top. It says you probably don’t like email, the author of this post started using Hey and some of their concepts, so he adapted them into his fast mail account.

His inbox is where all the emails sent by humans end up. Then he has a paper trail folder that contains notifications, invoices, and everything that you don’t want to delete but are not really interested in. He said it has about 1600 unread emails right now. They’re not meant to be read, but he will look them up when he needs to. Then there’s a news feed which handles all the email newsletters that come in.

He does it by just being smart and thinking about it in advance. He has separate email addresses because you can say yourname+anything@gmail.com. Google will forward it and then you can easily just filter and label that. But you have to think about that when you sign up for things.

See I’m already signed up under all these accounts. For me, I would have to filter by sender or something just every time I got one looped in. I’m teeing this one up. In volleyball, this is a bump and a set. I am teeing this up to Tracy Osborn.

Tracy: I’m sitting over here bouncing waiting for you to call me. This is not a new concept. This article is so funny because this pops up every year or so and goes higher in Hacker News.

I wrote an article very similar to this for Gmail like 10 years ago. I want to pull that up and compare and contrast it. The clickbaity headline aside, it’s something that I believe really strongly in terms of email process. The point is that your inbox should only be things you don’t expect.

As this article says, it does make your inbox so much more of a joy to experience because you know everything in there is either going to be unexpected emails from other people, which is something that usually you want to click on. It’s not newsletters, it’s not spam. Ideally, all those things are all in a different area and a different filter or something like that.

When you come onto your computer and you see you have, say, 16 or so emails, it’s a different feeling than if you think you come on, and there’s 120 emails, and everything is all mixed up together. I’m a process person. This is something that I don’t think I would get through my day if my email wasn’t organized in one way, shape, or another.

You can do this in Gmail by doing that plus sign. But as Rob said, doing filtering based on the sender is something you can do in hindsight. Honestly, for anyone who has too many emails, I would say just archive all and then start setting all those filters at that point. Because if you have thousands of things in your email, you’re not going to see it anyway.

You might as well just archive it and be like, woohoo, I got to inbox zero. Then you can start setting up those filters for things that have already come in and you can use the plus sign trick for things that are future-focused.

Overall, I want to say, if there’s any point where you’re looking at your email and you have this sense of dread to your email, I think it’s totally worth spending half an hour to an hour just cleaning things up and then setting it up so you don’t have to have that dread anymore. I don’t think it’s worth it.

This article is great. This is why Gmail now has different inboxes too because we’re trying to force this on people without making them go through the effort of setting up those filters. But really, the filter stuff in Gmail is really great. Hey does this well.

You can use these tools that these people work on. If you’re using Gmail, it’s also simple. I don’t understand people who have thousands upon thousands of emails. Just archive them.

Rob: What do you think, Einar? Do you have copious amounts of filters? Inbox zero?

Einar: I actually don’t. I’m very much an inbox-zero-everyday kind of guy. I have a very strong sense of despair when I open my emails in the morning.

Tracy: But then you get more emails than I do. You probably know that most of those are ones you have to react to.

Einar: The weird thing for me is that that’s true to a degree. I’m very harsh on subscribers. I use one of these Unroll.Me or whatever. I’m very quick to unroll. The problem I’ve been having, at least, since TinySeed, I think, mostly because now my email is in various official places, so random people find them.

I’ve been added to a lot more things that I’m like, I never signed up for this. It’s never happened before in my life. I get a lot of pitches that I was like, they’re not spam, but they’re also poorly researched and cold out round. I probably wake up and I probably have 150 or 200 emails in my inbox.

Tracy: Do you respond to those pitches?

Einar: No. In some cases, they’re right. […] of big numbers. Occasionally, there’s a really perfect pitch for me. But most of the time, I just go through and I archive everything without responding.

Actually, one of the things I’ve been wanting for a while is an email that you can use for things where you know it’s going to be compromised, but it’s like a whitelist system. I want to be able to say, okay, I know I have to put my email the Secretary of State data. That’s just kind of has to. But if I could put up a special email address that’s like, yeah, if you’re not on my email list, you’ll get a bounce back that says, you’re not on my whitelist, please apply if you think that’s wrong.

Tracy: I think that’s what Hey does, right?

Rob: Hey doesn’t bounce it but they…

Tracy: It is a whitelist?

Rob: Yeah.

Einar: I want it bouncing. You were telling me, Rob, that this is not possible because it breaks email protocol or something, but that’s what I want. I want to be bounced out of all the cold email automation systems because that’s what happens. If you get a hard bounce or even a soft bounce, you get unsubscribed automatically. That’s what I want for most of my email.

Rob: I think it’s three soft bounces, usually. I don’t know that it breaks email, but it isn’t in the spirit of how email is supposed to work, right?

Einar: I know that. It’s very selfish, but that’s what I want for some of my emails.

Rob: I kind of want that too, actually. I started blogging in 2005. Within a couple of years, I was on dozens of lists I didn’t sign up for. Being on the podcast, just TinySeed. I get probably five new things a day that I didn’t sign up for.

That is not including cold pitches that I’m getting for not even companies. I got a few company stuff, but I got a lot of, I have this product, it’ll be great for you, blah-blah-blah, just cold email outreach. I unsubscribe a lot of it. I do a lot of hand filtering, unfortunately, but the system that I use has two labels in Gmail. One is _this week and one is _updates.

All of the investor updates that I get, I think I get about maybe even north of $80 or $90 a month. They go directly into _updates. Then once a week, I have an hour on my calendar where I sit and I go through as many as I can get through. I just do that every week. I’m never caught up, but it’s fine. I’m never too far behind.

I have the same thing for this _this week, although that is a manual filtering process. Right now in my inbox, anything that’s there is important and I need to respond to it soon. If it can wait until this Thursday, then I have an hour and it is all this week’s email. It’s just a way that I prioritize stuff.

Oftentimes, that’s my family emailing and asking for something or there’s a Kickstarter thing that I need to go fill out or need to figure out which rewards I want to get. Again, it’s just a low priority. It isn’t a blocker for anyone that I’m working with and doesn’t need to get done ASAP like everything else.

Einar: I have something similar, but it’s more generic. One of the main things I have is there are things that you got to do, but it’s just admin. It’s a pain in the ass, and it disrupts flow, and whatever.

I just give myself the permission that I have two hours on a Monday, where I’m just doing admin […] and just blocked out just to do admin crap. I know anything that’s admin, you got to fill in this thing, or pay these taxes, or your 401(k), or something. I’m like, great, let’s not worry about it now. Let’s do admin time, basically.

Tracy: Do you use keyboard shortcuts for going through email or is it a mouse?

Einar: No.

Tracy: God, so good.

Rob: Yeah, I use keyboard shortcuts. Absolutely.

Tracy: It’s just like, boom, archive, archive, archive.

Einar: I’ve never used keyboard shortcuts ever. No. I don’t use it for anything. I don’t use it for coding when I was coding.

Tracy: As a designer, I remember being in my beginning design classes using Photoshop and the people who are teaching Photoshop learned the keyboard shortcuts. I remember being like, no, I don’t want to use keyboard shortcuts. And here I am so many years later from university. Keyboard shortcuts for Photoshop, keyboard shortcuts especially for Gmail, just knowing the archive one, and the next email one means it’s so much easier to fly through that initial trunk of emails that are in your inbox.

Einar: I do all my email processing on my phone. That’s my problem.

Rob: It’s fast on the phone. I will open it up first. First run through is it because it’s just left, swipe left, swipe left. I delete a lot of emails.

Einar: I don’t need to delete anything.

Rob: When I search, I just don’t want much. There are things that just should be deleted. I don’t delete email threads, but it’s like a notification from Airtable that the editor finished the podcast. But then when I search for a thing, then I get like thousands of results and that’s a pain in the butt.

Einar: If only someone would build me the product that I really want, which is a SQL connector so I can do SQL queries across my most important database, which is my email, but nobody seems to be doing that.

Tracy: You want that everywhere, yes. You want it in email, you want it in every table we’ve ever used at TinySeed.

Rob: They would sell one license. You’d be the one customer […] have to build a whole business on you.

Einar: I don’t believe that. Come on.

Rob: No one else would do that.

Einar: Are you telling me people don’t write SQL queries against their email? That’s ludicrous, Rob. Come on.

Rob: Nope.

Einar: I will fund this startup.

Rob: Oh, boy. Out of your own? I will veto that. You do that out of your own pocket. No TinySeed funds will go towards that. But if someone wants to build a submittable competitor, that’s a whole tangent.

Einar: That’s totally fine.

Rob: Yeah, I mean submittable is not great. We have looked at every alternative that does all the things we need and we have not found anything that works.

Einar: It’s turning into a request for startup. What else do we want to build in this world? I just want more startups, actually. It goes completely against TinySeed, but there are these accelerators now, which you can apply without an idea.

Tracy: Just back the founder?

Einar: Yeah. It’s just like, you seem smart, do one of these things. I don’t know. It’s interesting.

Tracy: It’s kind of like an entrepreneur in residence, right?

Einar: Yeah, the VC funds one, but that’s typically like, I already succeeded in some way, shape, or form, and now I get setup […].

Tracy: I’m already a success. I’m obviously going to be a success again.

Rob: All right, let’s head to our next story. Twitter makes it hard to choose the old reverse chronological feed. This is on theverge.com and subheading, you won’t be able to default to the chronological timeline. I just got sucked into the algorithm. I didn’t even know you could go back to the reverse chrono. Do you go?

Einar: Reverse chrono is the only way that I rush.

Tracy: Twitter doesn’t know why you use it.

Einar: They put on the Twitter on the Twitter iPhone app now. They put these two tabs, which is bad enough in itself. For me, the latest, the one that I use doesn’t even load any tweets. So I’m forced to look at whatever optimized algorithm thing they’re doing.

On top of that, whoever did the design didn’t manage to figure out that they’ve added a navbar, but it now hides part of the topmost tweet. I’m like, does nobody use this app? Where do you spend all your money?

Tracy: The team that is implementing the KPIs of trying to get people sucked into Twitter, and clicking on their ads, and whatnot is definitely a different team than the people who work on a user experience stat. It sucks. Twitter is dead to me. I don’t want to say that. I’m completely over at this point. It’s just really annoying because I know.

Einar: Wow, I’m not crazy here. I still spend hours a day on it arguing and things. Come on. What else would I do with it tonight? Oh, baseball’s back. Did you hear that the lockout ended yesterday? Good times, April 8th […].

Rob: This is where we stop following Einar Vollset on Twitter.

Einar: April 8th, baby. Come on.

Tracy: In my opinion, the dream of Twitter is over, at least the dream of people who used it more than five or so years ago back in its previous iteration.

Einar: In the old days.

Tracy: In the old days. It is a different product now. When I see things like this on The Verge where it’s like, ah, they keep moving forward into this other direction. This other direction is where Twitter is, and will be, and will never change.

People being loud about losing chronological tweets is why Twitter has been forced to continue to have some way for people to access that list. But obviously, they’re trying to make it harder, and harder, and harder until people just give up like I am and then move on to a different product.

I’m not being very negative here, but this is something. In the last month or so ago, it’s just like the dream of Twitter is over. I want another thing. If you wanted to use it to see your friends’ updates, this is not the product for it anymore. Twitter has evolved to a different product.

Einar: That’s not what Twitter is for. That’s never what Twitter has been, for me. Twitter has always been where I pick random fights with people like me, like to argue on the Internet. What are you talking about?

Tracy: Twitter loves that. Look at all the engagement you’re giving them.

Rob: I don’t know. What is the tool then, Tracy?

Einar: FriendFeed.

Tracy: No, there needs to be another thing.

Einar: That was FriendFeed. That’s what it was before they got acquired by Facebook.

Rob: The next thing came out, it’s TikTok. It’s not going in the direction that you’re thinking.

Tracy: I agree. Tiktok has kind of replaced that early Twitter. Talking to other people, I have refused to download TikTok. But I use Instagram instead for friends stuff.

Einar: We should just start doing TinySeed marketing on TikTok and make Tracy head of it, I think, maybe.

Rob: Yes, that would be great.

Tracy: And I can do the little dances I see, like cross post it over to Instagram. Yeah, that’d be great.

Rob: I’m going to confess here something I’ve never told the two of you.

Tracy: You’ve never actually followed us.

Rob: No, I’m definitely following you. It is probably once a week at most that I actually hit my feed on Twitter.

Tracy: Oh, same.

Rob: I look at mentions and the notifications of people liking things and then reply. And then I tweet things out that I’m thinking about or whatever. Today, I was asking about aside from Steli Efti or in addition to Steli Efti, like who’s someone that’s creating great sales content? I do stuff like that. The news feed—that’s what they call it on Facebook—I just don’t find anything there I like ever. It’s not interesting.

Tracy: Yeah.

Einar: How many people do you follow on Twitter? I’m curious.

Rob: 300? 200?

Einar: I see. I follow a thousand people and I think it’s too much. I’m thinking about maybe declaring Twitter bankruptcy, deleting all my followers, and start again.

Tracy: I’m actually in the process of doing that. Ever since I came back from vacation, I’ve been slowly deleting people because I would jump on and I’d be like, oh, and I realized I was following way too many VC people.

Einar: These are robbing our guys. Such […].

Tracy: It’s like constantly doing these thought leadership kind of performative tweets. I would go onto it and I’m just like, […].

Einar: That’s why you got to mute the word, a thread, or the thread symbol. That will make your Twitter experience much better.

Tracy: No wonder you don’t see anything I do on Twitter for TinySeed.

Einar: Wait, we do threads?

Tracy: We do threads, yes. For every article we’ve ever released, we have a thread version of it.

Rob: And that’s why he doesn’t see it.

Einar: We tweet them?

Tracy: That’s the thing. I use Twitter for TinySeed and that thought leadership thing is what works for TinySeed and we have a lot of, I think, clouts on Twitter through the TinySeed fund account. My personal account, though, before you say anything about me losing the fact that I was verified before and now I’m not. This is not related to that.

Einar: Hey, were you verified, Tracy?

Tracy: It’s a different product now. I see things like this in The Verge, where it’s like, oh, wow, Twitter is really focusing on these other KPIs and like, yeah, no duh.

Rob: They’ve been doing that and breaking the product ever since. But at least you didn’t delete all your tweets by accident, right?

Tracy: You have a lot of tweets. I went on it. I don’t know if those are cached, but I found ones that are quite old. I was wondering if you got some of them back.

Rob: No, Einar doesn’t listen to podcasts about this. I told him on a podcast a couple of weeks ago.

Einar: I don’t listen to your podcast? You release a podcast every week.

Rob: That’s right, every week.

Einar: I don’t have time.

Rob: Yes, you do.

Einar: I don’t have time for that because I have to go into my inbox, and get the inbox zero, and need to check Twitter for who to argue with.

Tracy: He’s too busy fighting people on Twitter and doesn’t listen to your podcast.

Rob: I have better systems. This episode is off the rails. Everyone has to adapt.

Einar: This is the best episode so far.

Rob: We will lose all our listeners if we have more episodes like this.

Tracy: Get to know how it is like at TinySeed by listening to this episode.

Einar: This is what it’s like, yeah.

Rob: This is like a weekly update meeting, except we’re missing Alex and Xander. With that, I think we will wrap up for the day. I think we’ve hopefully given the people what they want. Do you guys have stuff you want to chat about? Let’s do it.

Tracy: No, sorry.

Einar: Let’s see, baseball, Ukraine war maybe? Although, there is something interesting there because that is actually, I think, applicable to a lot of the TinySeed-type startups, bootstrappers, and stuff is the challenge now because so many people have developers in the Ukraine and particularly in Russia. How do you get those people money?

Obviously, there are people in the actual warzone and things. But even people far away from the front line, how do you get them? Upwork is closing. They’re terminating old Belarus and Russian contracts by the end of this month or sometime next month. How do you get money to people? I think across the board, that’s going to be a problem, particularly as sanctions tighten further.

Rob: Crypto.

Einar: That doesn’t work either because the problem is, how do you get money to them? Coinbase shut down all the crypto wallets out of Russia, so people can’t cash out.

Rob: They can have a bunch of crypto, but no money.

Einar: The only thing I’ve seen that still works, I think, is Deel, which is interesting because that’s the one with Rickroll at the start of the show. Other than that, I think if that starts to become a problem, I don’t know what’s going to happen. There are so many startups. I have teams in Russia or Ukraine, at least partially.

Rob: Yeah, and we have a few TinySeed founders in Russia and Ukraine. Obviously, our hearts go out to everyone there.

Tracy: Yeah. Reading our updates recently has been really rough because it seems like every update we’ve been getting for all the company, they have people in Ukraine or Russia, or they are developer teams and developed people on their team in those areas. It’s been rough.

Rob: Yeah. Our thoughts go out to all the folks there, obviously. No easy answers on the payment. I don’t know what’s going to happen. This is why this is such a mess. Yeah, so deel.com, I guess, if you want to check out the potential Rickroll.

If you want to hear about arguing and the San Francisco Giants, follow Einar Vollset on Twitter. We’ll put his Twitter handle in the show notes. And of course, @tracymakes is Tracy Osborn’s handle. Thanks to the two of you for joining me today.

Tracy: Yeah, thanks for having me.

Einar: Thanks for having me.

Rob: Thanks for joining me again today. I am @robwalling on Twitter. If you want to connect and obviously if you’re not subscribed to this show and you enjoy this episode, you should subscribe. Check us out every week. We’ve been shipping episodes since 2010 and hope to continue doing it for at least another decade or two. I’ll be back in your ears again next Tuesday morning.

Rob: Welcome back to Startups For the Rest of Us. I’m your host, Rob Walling. This week, we have a ‘Where Are They Now?’ episode, where we look back at season two of TinySeed Tales. We talked to Brian and Scottie, the founders of Gather.

If you haven’t heard TinySeed Tales, it’s a podcast that I host. We do heavy production value on it where I have voiceovers, background music, and we cover the struggles, victories, and failures of SaaS founders. I do between 8 and 12 interviews over the course of a year. It’s about every month or two with the founder or founders who are going through TinySeed.

Season one ran through 2019 and it was Craig Hewitt, founder of Castos, who many of you have heard on this pod. Season two followed Brian and Scottie, who are a married couple who run Gather at gatherit.co. It is a SaaS for interior designers. That season aired in September and October, a little bit of November of 2020. Those interviews, I believe, ended around the summer of 2020, and then we aired them a month or two later.

It’s been about 18–20 months since I’ve spoken with them. During that season, they had struggled as the world entered COVID. They were not growing as quickly as they wanted. They were going upmarket. That was a big part of trying to raise their price and change who they were focused on. I believe when they first started season two episode one, they were around $4000 of MRR. It may have been $4500. When we ended the season, they were just getting over a cash crunch. They were looking ahead to, I believe, double their MRR in the subsequent year.

Today, in the conversation, we talked about how they’ve made it upmarket, how they’re looking to double their MRR again this year, and how their growth has accelerated since they found product-market fit. Of course, you’ll also hear my new segment: How did you know when you had product-market fit? With that, let’s dive in to my conversation with Brian and Scottie, the founders of Gather.

Brian and Scottie of Gather, welcome back to Startups for the Rest of Us.

Brian: Thanks, Rob. It’s good to be back.

Rob: It is so nice to have you. Folks who listened to TinySeed Tales season two will remember your trials and tribulations throughout that year of TinySeed. You were in batch one back in 2019. You graduated and became alums. Really, your business has gone up into the right since then.

We were talking before we hit record. You were making good progress during the year, but really something kicked in. I was caught like a bootstrapper hockey stick where it’s not the Facebook, Google hockey sticks that they talk about in Silicon Valley, but noticeable upturn going from you’d grow 500 MRR in a month. You’d grow a thousand and a thousand was a decent month. Then suddenly, it was 2000, 2500, 2000, 3000.

It was a really noticeable thing that happened in, really, I guess it was mid-2021. This was eight or nine months ago. When you started with TinySeed in the first year, you were doing just over $4000 a month, so under $50,000 a year. You’re on track now to 10x that number by the end of this year. My first question is, how does that feel to think about we’re about to 10x our business? Does that feel real?

Brian: I think it feels real. I think that the thing that startles me sometimes is thinking back to how slow things went in the first five years of Gather and how that compounding growth starts kicking in. When you’re living just in the moment and you’re trying to set goals, for us, it’s doubling this year. You think, oh, well, we can double this year because we’ve more than doubled last year and then we doubled the year before. But where it really starts to get interesting and exciting is just seeing the compound trajectory go steeper and steeper.

Rob: What do you think has been the cause of that?

Scottie: I think it’s hard to tell exactly the reason for that growth. I attribute it to us finally getting our footing with the right set of customers like the right customer. When we started TinySeed, we were catering to a smaller design firm, a solo designer. Anybody who listened to Tiny Tales would know that we started to go towards the larger teams. I think that saved us in the end, especially with COVID.

There’s some churn there during COVID. When we ended up on our exit checklist, when we asked them why they turned, we added COVID. There were a few that did say they were leaving because of COVID and they were always the smaller, the solo. I think that actually focusing on teams and building platform geared towards team communication and collaboration, especially for COVID teams looking to work remotely, it was almost like we didn’t know that was gonna happen, but it was the best thing we could have done. 

When COVID happened, I think design teams were looking for a tool just like ours. I think that was really beneficial.

Rob: A big theme of your episodes of TinySeed Tales was moving upmarket. Every episode, I kept saying, you’re going upmarket, you’re moving upmarket, this is the process, and we don’t know how long it’s going to take. It seems to me it took longer than we all thought. But once that happened, it really clicked all at once because your churn plummeted at that point.

You had increased your prices three or four times, which is the definition of going upmarket. I remember you increased prices a couple of times and I’m not sure your product had caught up with it yet. I think it maybe took some development months, some cycles to get there. Do you agree or disagree with that?

Brian: Yeah, I agree. Also, it occurred to me too that when we were going through TinySeed and you were mentoring us on going upmarket, somewhere I think towards the end of 2019 we decided to shut off self-service and we went to a demo-only model. We did that for almost a year while we were trying to build the product and gear it towards the customer that we were trying to attract and work on language and positioning.

I think that that was a good decision, even though we didn’t go real fast. We were going slow that year or we were going at the same speed, but we were learning a lot more from our customers because we were talking to them, sales demos, and learning about what they needed while we worked on the product.

Sometime (I think it was) at the end of 2020, we turned the self-service back on. We had a dual model, both sales demos, and self-serve. That’s right around the time when things started to go out. I think you’re right. I think we had found the right product for the customer that we were trying to attract upmarket. We gave them more flexibility as to how they chose to sign up and come into our funnel.

Rob: Yeah, and oftentimes, growth like this comes from a lot of different factors hitting at once. It can be hard to determine exactly was one thing? Probably not. It seems like it was a combination of things. I know that it was towards the end of TinySeed Tales.

I think we recorded the end of those, let’s say, the end of 2019 maybe. No, because we were in the pandemic. It was mid-2020 that we recorded the end of those. I remember that you weren’t growing as fast as you wanted. You wanted to both see if you could retain some customers, but also try to accelerate your short-term revenue.

Scottie, you and Brian added a consulting service, in essence, to where you were going to help your customers and you were going to charge them a monthly rate. I think of it like a design pickle but for interior designers, where it’s like, pay us $800 a month or $1000 a month, then I’ll do all these things for you. Because for folks who don’t know, Scottie, you yourself used to work in the interior design space.

I don’t think we ever wrapped that up. Do you want to let folks know? Is that a roaring success? Is that still happening or did it just fizzle out?

Scottie: Sadly or however you want to look at it, it did not pan out the way we wanted it to. In hindsight, I think that’s probably a good thing. It required a lot more of my attention than I had anticipated. Literally, I almost felt like I wasn’t focusing on Gather, the product, anymore. I was just focusing on Gather services.

I was doing, actually, more of the work than I had anticipated doing myself. I, all of a sudden, found myself in a job. I didn’t really want that and I couldn’t really figure a way out of that quickly. It’s something that maybe over time I could have figured that piece out. The ROI on it just was not there.

I had one firm that we were piloting the program with. They were really gracious and let me stumble my way through it. Then we ended up just killing it after we were done with those two projects with them.

Rob: It’s one of those bittersweet things perhaps because long-term, do I really want services in my SaaS? At this point, I’m not sure that you would want that to stick around. But I know in the near term, you were in a cash crunch for a bit and wanted to be able to pay your devs and do all that. It’s an experiment. We’re entrepreneurs. We try a lot of things. Some of them don’t work out. Many of them don’t work out and I consider this one of those.

I’m not sure if you know, but I have a new segment on Startups for the Rest of Us. It’s called, How did you know when you found product-market fit? I’m asking this of all the founders that come on the show because no matter how many times we talk about it, if you’ve never seen or achieved product-market fit, it’s still this very I-know-it-when-I-see-it type of thing. I want to get one of your perspectives on, do you remember when that happened, how did you know what that felt like, and how did you identify it?

Brian: I guess, for me, it wasn’t like a binary, black and white thing. You’re right, you know it when you see it. I definitely think we have it now and I feel confident. I just think that there are some signals that you can look out for.

For us, like I said, it wasn’t just all of a sudden, one day, we went from zero to 60. I can say it definitely turns a big signal. Our churn had been slowly dropping over time to the point where it got to be pretty predictable as to what range it would fall within and it was to the low end of the margin.

In fact, I even remember looking, we used bear metrics for our analytics. They’ll actually let you look at where you lie in the cohort that you belong to as far as your revenue is concerned. We watched ourselves go from medium to not so good into the best cohort repeatedly.

That was actually an interesting way to feel like we’ve got product-market fit and then just having customers that stick around for a long time so you can watch your lifetime value just come up, and up, and up, and up. It got to the point where our lifetime value became 10x what it was just a couple of years prior. A lot of that is because they’re not churning out and they’re happy. Those were signals that indicated to me that we truly had product-market fit and we were probably ready to start scaling more seriously.

Rob: It’s a good answer. Like I always say, it’s a continuum and it sounds like it was. It’s always a long process. It’s never like, oh, now we have it. You have it with a certain audience. You have it with a certain size. If you went after a massive hotel chain, you wouldn’t have it. You need different features and all that, but that’s a good perspective.

I want to regale you with a little story that happened in summer 2021. I’ve logged into TinySeed Slack. I don’t remember if it was advice needed or if I got a DM, but it was from Brian. Basically, our hair is on fire. Our entire app is catastrophically down.

I’m just going to come out and say it, it was the worst moment. I always asked what was the best and the worst since we last spoke. I think this was the worst moment for the two of you and Gather. Your entire infrastructure—what happened with this? First, let’s give the facts, what happened? And then I’m going to ask you the question. You tell me what it felt like in that moment because I’ve been there too.

Brian: Yeah, that was awful. I think I literally did text you in Slack and say, hey, Rob, do you know any really good DevOps guys? Which is always the lead question to something really bad that’s just happened. We run on AWS all over infrastructure, not to get too technical, but we used some automated infrastructure tools and processes.

Our developer who wasn’t really that knowledgeable of the infrastructure set up, he tore down the infrastructure, basically, just by accidentally running a script that he thought was innocuous and he brought the whole infrastructure down. Meaning, he literally tore down the entire infrastructure, like deleted all the servers, all the provisioning. That, of course, crashed the app for our users.

Due to some technical reasons, we couldn’t just press some buttons and then reload the infrastructure. It wasn’t the best time for me or Scottie, me from the technical side and Scottie from customers beaten down our door.

Rob: Yeah. And so you couldn’t just run a script and redeploy. Things are on fire. Customers are probably calling in. I don’t know if they have your number, but they’re certainly emailing in live chat. They can’t live chat because it’s down, so they’re emailing. Scottie, what was that like?

Scottie: Because I was doing support from the beginning and so many people have my personal email, my inbox was just filled to the brim. They weren’t happy. They were frustrated. I think the frustrating thing for us was that we didn’t know how long it was going to take to get it back up.

Our engineer would say an hour, two hours, three hours. That turned into 14 hours, 16 hours. Basically, I finally stopped giving them a timeframe. I just would say, I’m very sorry, we’re working on it, we’re doing our best.

I did actually pick up the phone and call some important accounts that I wanted to reassure that this wasn’t a data issue. Their data was safe, the site was just not accessible. It was damage control for sure.

The thing that I realized once my blood pressure had dropped, I calmed down, reevaluated the situation, and maybe took a couple of days, but our customers were so surprisingly forgiving. I think, in a way, it made them realize how valuable Gather was for them because they couldn’t access it all day.

They were like, oh, my gosh, what would I do if I couldn’t use Gather ever again? In a way, it was awful, but it was also encouraging to see how valuable we were for them. I think it made them realize that as well. That was interesting.

Rob: That’s pretty cool that you didn’t lose any customers. It shows the level of trust that you’ve built with them, that they figured, hey, this is a one-time thing. And although we’re mad and frustrated, we’re not going to bail.

The other interesting thing I found is there is a product-market fit survey that Sean Ellis developed. One of the questions is, how disappointed would you be if you could no longer use the product name? That’s another way of how you knew you had product-market fit. That is pretty cool.

Brian, you and I messaged and I said, hey, there’s a few people in TinySeed or whatever that could help out. But you mentioned specifically that some TinySed folks were super helpful in correcting this.

Brian: Yeah, it was amazing because when you’re in a situation like that and you’re like, who do I know or who can I reach out to? Had I not had such a great TinySeed batch to reach out to and then, of course, yourself to reach out to it would have been terrifying.

I just jumped on Slack because, obviously, TinySeed has a really great Slack community and just put out the bat signal. Several people actually came and swooped in to help. Shout out to Andy Hawkes. He was amazing.

Rob: Yeah, let’s give him a plug, loadster.app. He was in batch one as well. I actually love his h1. Your site has a breaking point. Let’s find it before your users do. It’s load testing your web app. He’s really good at all the DevOps stuff and I know that he worked with you for several hours just to help because it’s a relationship. You’re part of the same community.

Brian: Yeah, it was amazing. He literally dropped everything he was doing to help us out and helped to get the site back online and point us in the right direction. Just having those relationships are just so critical. I can’t imagine going through the world without the network that we’ve built with TinySeed.

It was amazing, and obviously, you helped out. We wound up finding some really awesome DevOps guys. They got things back up and running overtime. It took months, honestly, to really get things to the point where they were stable.

We’re still working on things that aren’t directly related to that whole incident, but that made us realize how much technical debt and infrastructure debt we had gotten ourselves in over five years. We have almost climbed out of that, which is a great feeling.

Rob: Yeah, it’s that hidden cost of technical debt that you don’t see until it comes and bites you like that. The outage, how long did it wind up being?

Brian: It was like a little roller coaster where there’s one big dip and then there’s a bunch of little twisty turns. The first one, I think, Scottie is probably about right, it was 20-ish hours, probably.

Rob: Catastrophic.

Brian: Yeah, awful. After that, we’d go down for an hour here, a couple of hours there for probably a week or two. Then in the back end, we’re just scrambling to make stuff work. There were points where the site wasn’t totally down, but key features were not working. That continued, I’d say, for two or three weeks at least.

Rob: That’s a bummer, but you’re pretty much wrapped with that and dug yourself out of that technical debt.

Brian: Yeah, it’s a bummer because you want to work on features and stuff but you realize, once you get to any level of scale—and we’re not super big or anything, but we’re big enough that we can’t mess around with core performance, infrastructure, and reliability—it’s just too important. You do what you have to do, you pay the debt off, and hopefully, you move on.

Rob: I actually talked with Brian last week. He was asking me questions about you having this growth so now you have more money. Oftentimes, it’s hard to decide where to spend that. What’s been your process? If you grow $2500 in a month, you’d grow $10,000 over the course of a few months. Suddenly, that’s recurring revenue because it’s SaaS and it’s the cheat code of business.

What do you do with that? Because I know that you don’t want to put that in the bank. You don’t want to take it out and spend it on lavish vacations. You want to grow your company. That’s why you’ve been building it for this long. What’s been your thought process behind how do we deploy this newfound capital?

Brian: Scottie can attest to this. I probably spent an unhealthy amount of time on runway spreadsheets and try to analyze all the avenues, I guess. I think what we came to is, we’re really going to focus primarily on brand building, long-term play stuff, primarily really high quality content, and probably share that through the community. I think that’s probably where we’ll spend a lot of our money and energy.

We’ve also had some decent success, I think, with advertising. We’ll be doing more of that. It’s cool to see as revenue goes up and after you get to the point where all of your base expenses are met, then you can start to think about things like advertising and content being a percentage of MRR, percentage of growth, and then watching how that works.

I’d say it’s still in the early days of us figuring out exactly what works. I don’t know if Scottie feels the same way, but I’m comfortable with the next two years building a brand rather than always jumping from how do we make enough revenue this month to stay alive. We’re a little bit beyond that where we can sit back and go like, what kind of company do we want to build over the next three to five years? That’s a better feeling for me.

Rob: I was going to say I have this kind of three-step mental model of, in the early days, we’re building a product and it’s writing code, it’s trying to get people to use, it’s trying to get a few paying users, and then the next step. It’s usually between, let’s say, $10,000 and $20,000 MRR. It’s like you’re building a business.

Gather became a business under my definition around that time as well. Then the step after that is when you’re building a company. That’s where you have a lot of choice. You start hiring, maybe you hire your first manager. It’s just a different phase. I think you are solidly in that.

Now we’re building a business. Businesses have repeatable processes. They have repeatable marketing approaches. They usually have more predictable growth. I feel like you’re now squarely in that.

With that in mind, Scottie, what are you most excited about? In true TinySeed Tales, end of episode fashion, what are you most excited about over the next 6–12 months?

Scottie: Exactly what Brian’s talking about, it’s just building our brand. I’m leading the charge on the content side since it’s my industry. Like you said, when you’re first starting out, you’re so heads down and just trying to build the product, sell it, get users, and make sure you have product-market fit.

For me, I was deep into customer success and customer support. I’ve wiggled my way out of this actually being the front person on the support side, which really freed me to focus more on what I’m more excited about, which is building relationships and building community with industry partners within the industry. I’m excited to focus on that this year now that I’m freed up to do that more. I’m looking forward to that.

Rob: It’s a luxury when you’re not scrapping for survival, to be able to work on the business, instead of in it. You fire yourself from the jobs that you don’t want to do in the business.

Scottie: That’s been really nice.

Rob: How about you, Brian?

Brian: I think Scottie said it perfectly. I would say, for me, because I’m more focused on the product side, building our product team, getting to the point where we can actually add a lot of value on the product side, and continue to choose what direction we want to go with as far as our customers or potential customers are concerned.

I’m really excited to take on the product side again, build more features because I think there’s a ton of opportunity. There’s more opportunity than we realize in our marketplace and even in our product category that we haven’t even tapped into. I think there are several different directions that we can go. I think it’s exciting to go after a direction, see where that takes us, and maybe even enter into new markets down the line.

Rob: I was going to ask what’s next for Gather itself, but I think you answered that question right there. Thanks again so much for joining me for this, Where Are They Now episode of TinySeed Tales. If folks want to keep up with what you’re working on, gatherit.co.

Brian: That’s the one.

Rob: Thanks for joining me, you two.

Brian: Thanks, Rob.

Scottie: Thank you.

Rob: Thanks to Brian and Scottie for coming back on the mic with me. I hope you enjoyed that lookback episode. Thanks for joining me every week. It’s great to have you. I’ll be back in your ears again next Tuesday morning.

Rob: In this 594th episode of Startups For The Rest of Us, I talk with Dan Andrews and Ian Schoen from the Tropical MBA Podcast. We cover the gamut, but we talk a lot about how they’ve started over. They’ve started a new business after selling their physical products company back in 2015, I believe it was. Then, they run their community, the Dynamite Circle, and they have in-person events and a podcast. It’s very much a sister podcast of Startups For The Rest of Us. It’s just that they don’t focus necessarily on SaaS. 

They saw a need within their community. It’s a need that would be really hard for most people to bootstrap because it is a two-sided marketplace, but Dan and Ian have the advantage of having an audience on one or both sides of that marketplace. You’ll hear how we talk through that in today’s episode. Thanks for joining me as always. Let’s dive right into our conversation.

When I introduce you guys, I never use your last names. I always say, do you know Dan and Ian from Tropical MBA? It’s like Tropical MBA is your collective last name. 

Dan Andrews and Ian Schoen are joining me today. Gents, thanks so much for coming on the show.

Dan: Yeah, a pleasure to be here.

Rob: I described the Tropical MBA Podcast, which used to be called the Lifestyle Business Podcast years ago, as a sister podcast of Startups For The Rest of Us. The two of you are some of the few podcasters who’ve been doing it longer than I have. There aren’t many people I meet who’ve actually been cranking on this. 2009, is that when you originally launched?

Dan: Yeah. I appreciate that. I do feel very similar themes and very similar ethics. One is Ian and I are very concerned that our business chops coming from doing actual business is a bigger deal than the podcast business itself. That’s something that you guys have always had. I guess the difference is that 25% of our audience are developers. The rest are ecommerce owners, publishers, and affiliate marketers.

Rob: Courses, info products, ebooks—that kind of stuff. Crypto, a lot of crypto going on in there. That’s how I think of it too. There’s a Venn diagram of overlap. 

But you came with digital nomadism. That was how you started. The Lifestyle Business and then Tropical MBA—when I used to listen to it, I was like, this is super cool. I’m not going to strap on a backpack and head to Chiang Mai, but these dudes are living this pretty amazing life.

Both of you have settled down a little bit in Austin, Texas now. Do you feel like the digital nomad aspect of the early emphasis is still alive and well? Do you emphasize that as much, or do you feel like it’s more of a business focus?

Ian: I think it’s always hopefully been business-focused, but definitely, we had a lot of lifestyle in there. Obviously, COVID has slowed things down. We are both based in Austin, Texas. For us, there have actually been a lot of huge benefits to that. We got to sit down over the last couple of years and restructure our business in the way that we operate and interact with each other. It’s been amazing because we haven’t really been in the same place for this long together. I thank COVID for that certainly.

Dan: I also want to point out that one of the things Ian and I often talk about on our show is that our digital nomad journey was one of necessity because you were a California developer typing up websites. We were California marketers and manufacturers desperate for development support. We couldn’t afford it in California, so we went to the Philippines and Vietnam to hire our first group of developers and marketers. Along the way in the early days, we were like, this is amazing. This is actually a thing. We’re making money doing this.

We started sharing that journey on the podcast. I believe we were the first regularly publishing bloggers or podcasters that owned a physical product’s location-independent business.

Rob: That’s pretty incredible. That’s the thing. To my knowledge, you never sold the Make Money Online courses. You didn’t monetize the podcast like, hey, we know how to do business and we’re going to teach you how to do it. It’s been so much more about building the community. 

You have the Dynamite Circle, which is a paid online membership community that you had long before we had MicroConf Connect. Then, you have started in-person events. Was that because you heard us (Mike and I) talk about MicroConf? Were you influenced by that? I think you launched those after us because we started in 2011.

Dan: In those early days, we were inundated by emails from listeners basically saying, we really want to know who else is out there. Where are you guys? How do we do this?

Ian and I did launch a seminar business in 2012 where 44 students paid us $2000, but we actually way over-delivered. We had people come to an island resort. They stayed with us for 10 days. We did presentations, workshops, and masterminds every day.

Rob: I remember those now.

Dan: Ian and I just were absolutely exhausted emotionally. We realized we can’t help you guys build a business in 10 days. It was interesting and a lot of great businesses came from it. 

It was during those seminars that we were like, what if we just rented a nice hotel and got everybody together? That was the first DCBKK in 2012. We were there and it’s just like a light bulb went off. We were like, people just want to meet each other and we’re getting more credit for their business growth just by throwing a party than we were by doing 10 days worth of teaching every day.

Rob: That’s the thing. I’ll say before 2009, the old info marketer model—Dan Kennedy and those folks—was always to be the guru. It was, I know the stuff and I’m going to teach you. 

I feel like that model switched with our generation because actually if you go back and listen to early Startups For The Rest of Us, I was trying to be that. I’m like, I know all this stuff. Probably by episode 30 or by the time we got together at MicroConf, I remember thinking that the value here is getting people together in a room like you said. They want the relationships versus no one person here knows it all, contrary to what Internet marketers used to claim.

Ian: Yeah. The guruism didn’t really go anywhere. You can still see that DNA in our marketplace, but I think the transparency allowed this new practitioner-preacher, or we call it the Chops Index. It’s like, watch me do my thing right in front of you every week. That’s solidarity, trust, and peer-to-peer. That’s something that people were probably even more interested in. You want to meet your peers and your people as opposed to kissing the ring of Dan Kennedy if you pay the right amount of money for inner circle access.

Rob: That’s always been something that resonates certainly with me and why I’ve been a listener since 2009–2010 of your show. Why a lot of folks resonate with it is that you’ve always been practitioners. 

While you started the Dynamite Circle community, you had a business manufacturing cat furniture and valet podiums. You sold that business in—I’m going to try to remember this because I believe I heard the episode when I was in an apartment in France with my family. You know those moments where you hear something and it’s like, I remember what the apartment looked like and I remember the kids were younger, but what I don’t remember is what year it was. I think it was 2015, is that right? It would have been fall, September, October?

Ian: I think it was summer because I was in Greece. I remember where I was too. I was on a hotel bed signing these documents. This was the biggest deal that we ever did. I was signing these documents, and then the next day, I got sick. It’s like when all your adrenaline just runs out of your body.

Rob: Yeah. It’s like, I’m signing millions of dollars in documents here. You’re probably doing it on your iPhone with your finger. I did one of those too. It’s the kid’s cello camp and I’m supposed to be in there managing the kid. They’re like, we got to get these docs signed. I walked out, and the teacher gave me a bunch of crap about it. I was like, you need to cut me just a little slack. I am the most stressed I’ve ever been.

You guys sold that business and then within a couple of years launched Dynamite Jobs, which we’re going to talk quite a bit about today. Tell me if I’m describing it right. It’s a job board and an online recruiting help. Those are the two focuses.

I’m quite familiar with it because we at TinySeed proper have used you to help fill two of our roles so far and then a bunch of the TinySeed and frankly, MicroConf companies when they go to hire. I have used your flat fee recruiting service.

This is a lesson I learned. As we were building Drip, I was cash strapped, bootstrapped, and doing all the hiring myself. By the time we got to 10 people, that’s basically half my job for 10–20 hours a week. I was doing it and I hated it. All the recruiters I talked to are like, yeah, 20% of first-year salary. I was like, this is […] insane. 

I was looking all over for a reputable recruiter that I can trust who I can pay $3000, $5000, or a reasonable number because I could have afforded that, but I couldn’t afford $15,000 or $20,000.

When we got acquired, we had two or three in-house recruiters and I was able to basically let them do all the hard work and then just pick the best candidates. I thought to myself, I will never go back. When I leave Drip, if I ever hire again, I’m not doing it myself.

When you guys started talking about it, I was like, this is a baller idea. I believe right now you charge $3500–$3600, a done-for-you recruiting light is how I think about it. You market it, you sift through the resumes, you do the pre-screens, and then you hand the best candidates off. Is that a relatively accurate description?

Ian: Close. The price is a little off.

Dan: We just raised the price. Thanks for the shout-out, Rob.

Rob: How much is it?

Ian: If we do the recruiting for you, meaning we handle the whole process and we place the person in your company, it’s $5500. We do have a lite version of that where essentially, we screen candidates for you, but we don’t actually talk with them on the phone. That’s $2000. Going down from there, we have our posted job offerings basically.

Dan: We do all the promotion. For me, I feel this anxiety when I come to a job board. It’s like, oh my gosh, all the work’s ahead of me right now. I got to compose something that’s interesting. I got to market it. I got to decide whether this is the right job board or not. It’s not like I do it four times a year, so I don’t know if this is the best job for marketers.

I think we tapped into that negative emotion of, we’ll take care of it for you. Don’t worry, just get on the phone with us for 15 minutes and we’ll take care of it for you. That’s this business generation heuristic that we’ve seen over time in our industry which is blank for the rest of us. 

There’s this really established recruiting industry—like you said, 20% of first-year salary—in tech. Everybody knows about it and it’s enormous, but they get so well-compensated for serving in their traditional niche that they’re not going to cross the chasm, come over, and do it for the rest of us.

As our peers mature and become the next generation of business leaders, there’s a big opportunity for listeners of this podcast just to provide professional and marketing services for the rest of us. That’s essentially what our DJ recruiting product is.

Rob: How did you get there? Again, you sold your company in 2015. You’re running a successful podcast. You have an online and in-person community and that’s a business unto itself that is profitable. Where was the spark or the click of, this is what we’re going to spend the next decade working on? That’s a big commitment to this. How did that come together?

Ian: I think the Genesis story of this goes way back to the Tropical MBA, which is essentially trying to find people that we could afford, oftentimes there in other countries, for our business. It was our competitive advantage. Even going back to the manufacturing company back in the day, we couldn’t afford to hire designers, developers, and marketers in California, so we had to look abroad essentially. I think we became pretty good at it and people recognized us as having that talent of being able to find these people. 

There’s another Genesis story, too, which is essentially in DC, which is our community. People were bombing into the forum basically saying, hey, I’m trying to hire somebody. Does anybody know anybody? Hey, I’ve got this job. Would you like to work? It was, in a lot of ways, clogging up the forum. 

There are a lot of different instances of this happening when you own a forum—people coming in and pitching or whatever—but one of the biggest things that we saw there were people trying to pitch job opportunities, so we thought, hey, what if we start marketing these roles for people? That was essentially the Genesis story for Dynamite Jobs.

Dan: We have over 1000 members in there. We were like, if we could just harvest these jobs, that would earn a really impressive audience. Our members are hustling startup founders. They were starting, in some cases, to use our events as hiring fairs. They were realizing that the quality of a remote-first primary candidate, somebody who really understands what we’re doing, is so valuable that they were willing to risk their reputation in the group to build their businesses. They didn’t want to go to indeed.com or other communities that just don’t “get it.” 

We saw that annoyance and that scratch your own itch. People were trying to jump on our bandwagon to leverage our brand to do this anyway. Why don’t we help them turn around and turn an annoyance into an opportunity? 

It was interesting because we just started basically saying, look, we’ll put all our energy into promoting your jobs. Thanks for being clients of the DC private members. We’ll work on your behalf to find great people for you. 

We essentially just did that for years and didn’t make any money. We put a lot of our backs into it and we saw it in the audience. Dynamite Jobs was the fastest thing we’ve ever grown. I always felt like Ian and I were always putting brick after brick after brick. This was really the first thing where we saw some levers. It’s like, oh my gosh, we have 10,000 email subscribers all of a sudden. 

We saw an opportunity during the pandemic to step in with our full-time effort and to try to turn those eyeballs into revenue.

Rob: Got it. Did it start with the job board, then hey, we’re going to allow folks to post and charge a fee, or you weren’t charging early on and you were just promoting?

Ian: We hardly charged anything. A lot of the companies that were posting jobs were DC members so essentially, our value prop to them was, hey, you’re a member of our community. Let us help you find these people that you need. We either charge nothing or very little. 

Looking back, it was amazing the amount of running around that our team did to try and fill these jobs. Our key metric back in the day was the number of jobs filled, which if you look at it is still a good metric. We still keep track of it, but it’s a ridiculous one because half the jobs people post gets abandoned or blown up for whatever reason. As a founder, you change your mind halfway through and here we are, scrambling for basically no money to fill these jobs. 

But it was a really good exercise for us because it taught us actually how to fill a job. That’s when we started to think about the recruiting service essentially. This wasn’t just going to be a job board, per se, but there was a services component behind it.

Rob: What you’re talking about is providing an enormous amount of value for free upfront, more than anyone else would be willing to do. That’s what you’ve done with your podcast. You have hundreds and hundreds of free episodes educating folks, and then you start this job board and you essentially do what anyone else would charge $3500 for a 30-day job posting. They don’t do anything beyond that. It sounds like you just gave value. 

This is one of those things Dan asked me about when I was on your show a few weeks ago. It’s about how I say never bootstrap a two-sided marketplace. You can do it if you have reached into one or both sides of that market. If you already have an audience on one or both sides, it’s much easier.

It’s still hard because you’re fighting a war on two fronts, but you guys have reached into that space and you’re willing to take this approach that not a lot of people are, which is to have staff working to fill these jobs. Nobody does that. That’s why I think this has been successful.

Dan: In 2019, our revenue was less than $5,000.

Rob: But you had the DC basically. You had staff working on the podcast in DC and were able to see if it was that compensating.

Dan: That’s right. Our membership is a profitable business, so we thought, this is a really interesting marketing and services arm. We’re providing these services on behalf of our members from their dues. We have a full-time person trying to maximize the number of placements. That built a lot of relationships on the side.

I do think it’s interesting though. Things changed when Ian, myself, and our CTO, Simon Payne, got involved. That was probably late summer, fall 2020. 

Our website fundamentally looks similar to what it did in 2019 from a passerby. It’s all that stuff that’s happening below the website. That’s a message for makers. Getting on the phone with your clients and having that calendar link front and center, those conversations ultimately led us to our monetization paths. What we’re able to do with that service’s revenue is pump it back into our platform in building technology for our users.

Ian: If you back up a bit, number one, Rob, we cite you all the time. In our meetings, we’ll be like, Rob said not to do this, man. We probably shouldn’t be doing this two-sided marketplace. That still comes up all the time. 

But if you back up and you take a look at Dan and myself, we’re not software guys. We never have been. We’ve tried a couple of times and this is our first go at it. 

If you look at the history of Dynamite Jobs, it was a service-based company. We started with a WordPress site and we started literally running around trying to solve people’s problems. That’s been an advantage for us because we couldn’t just go off and write software to solve these problems. We actually had to physically do the work and figure it out. 

It did get to a certain time where we brought Simon on, our CTO, where we figured out, hey, we’re starting to connect these dots, have a platform, have these profiles, and make it easy for these candidates to apply to jobs. This stuff all makes sense. At a certain point, as marketers, we couldn’t do that. We’re starting to see a lot of these software opportunities, but a lot of these are still very new to us because we’re not software guys, per se.

Dan: We’re the guys that the Airtable people are like, oh, they’re an interesting user.

Rob: You guys are software guys now. You have a CTO who’s writing custom code and I believe you have at least one more developer. You’re running a software company here real soon.

Dan: Yeah. One of the things that I thought of before this conversation is that we and a lot of listeners of this show aren’t in a position to not have premium developers working for you. The market is a bloodbath right now for technology people, it’s competitive, but you got to find some way to step up and get quality people in because we really missed out on a lot of quality development this year by pitter-pattering around with some junior folks.

Another big argument for TinySeed funding is to just be able to enter the market with confidence and not to lose 6 or 12 critical months. 

Ian and I are going back to the marketplace on Monday to hire our third developer, and we’re not screwing around. I don’t sit in Golang every day or I don’t understand what Tailwind is, the nuts and bolts, so I want to hedge my bets because I want to be a responsible entrepreneur. 

I think one of the lessons I learned this year is there are places where it’s worth cutting corners, and your development resources in a startup aren’t really one of them. I know that sounds obvious, but it’s harder to say I’m going to write this check and then you’re on the line to go and create the revenue that will support it responsibly.

Ian: I’ll give you an example of how we really screwed that up in the last year. Dan had a great idea which is essentially a services marketplace. If you look at remote work and the future of work in general, there’s a lot of services overlap, meaning, essentially, employees will be replaced by services at some point because there’s a lot of efficiency in that. We’re already starting to see this happen. We have clients come to us and they’re like, hey, I’m thinking about hiring a senior marketer. I’m thinking about hiring this firm. That’s a decision that people are making these days. We’ve seen and done this in our own businesses. 

We launched the services marketplace on the side of DJ because it’s like, hey, I’m trying to solve a problem here. Maybe we need a person, a service, a consultant, or a freelancer, but it’s all the same thing. It essentially didn’t work big time, but when you look at the amount of development resources that went into that project, it was easily six months. 

It’s something that we just wiped off our screen the other day. The buttons are completely gone. Sad to say, it wasn’t a good idea, but certainly, the timing wasn’t good, we didn’t have enough resources to market it properly, and people don’t really understand it. There are a lot of reasons why it didn’t work in the context of DJ, but in terms of our resources, it put us behind in making that decision. 

That’s going to happen to us a couple of other times, but trying to figure out how to properly deploy our factories so they’re making the right things that are pushing us forward is really difficult. It’s also really powerful. 

Dan and I can sit here as non-technical people and order the team around to be like, hey, wouldn’t it be cool if we had a services marketplace? Everybody’s like, yeah, it would be great. It’s like, well, now we’re back 12 months.

Dan: Good idea, boss, who doesn’t know anything about this.

Rob: It’s tough to know what’s going to work. I think it’s Tim Cook, CEO of Apple, who says, there will always be many more good ideas than we can possibly implement and we just have to figure out which one or two we focus on. That’s the trick of all businesses probably but software especially because if you don’t focus, then you do that. You wind up building entire features that no one uses and you lose months of time. It’s especially challenging when you’re writing code.

Dan: And you got to babysit those features once you build them. They don’t just hang out. You got to constantly be improving and fixing bugs. We’ve been really focused on this concept of pushing deeper. Why doesn’t everybody just have this […] grin the entire time they’re using our job board? 

These are the sorts of concepts that we’re focusing on right now to find opportunities in the details as opposed to I think Jordan Gall calls it CEO bombing. You just come into a meeting and you’re like, hey, I had a dream last night, everybody. Job board is the future of work. It’s like, how about the future that a button doesn’t work on the other browser? Let’s talk about that.

Rob: Yeah, totally hear you. You guys have a couple of frameworks that I think are really interesting. One is the thousand-day principle. Dan, do you want to define that briefly? My question is, where is Dynamite Jobs on that journey? Where are the two of you on that journey with Dynamite Jobs?

Dan: The thousand-day principle, I first heard of it from a mentor of mine named David McKeegan who runs a wonderful business, which is also a for-the-rest-of-us business. It’s tax consulting for digital nomads.

Rob: Greenback Tax Services?

Dan: Yeah. This was in 2012. I was in my 20s. I was like, why isn’t everybody here? We were hanging out at some villa in Bali and I’m like, they read the blog post. Why aren’t more people joining this entrepreneurial revolution? It seems like this amazing opportunity.

He said, I think the thing that people aren’t willing to traverse or understand is that they’ll have to make less than they would make at their professional careers for three years or about 1000 days. I think most people can’t get through the 1000 days, and that’s why they won’t join.

I just thought it was clever, interesting, and sticky, so I started just asking what normally happens in the first year? What normally happens in the second year? In the third year, you have this feeling where you’re like, now I can hire people to run the business for me and I make as much as I made previously in my professional career. 

I’ve just seen this pattern happen time and time again since that time that cultural context has changed, but the basic process of suffering for three years in order to get your vision out into the world is a decent rule of thumb or at least a decent way to set expectations for what the journey might look like.

Rob: Yeah. That’s a line I often say, think in terms of years, not months, especially if you’re bootstrapping because people read TechCrunch. It’s like, it raised millions and they have millions of users. It’s like, it just doesn’t happen that way.

Dan: For me, this idea of emotionally plowing through plateaus is really frustrating. When we came back to Dynamite Jobs, I had a little bit of rose-colored glasses because we had already had a “successful business,” and then feeling that pain again of, okay, we’re back here. It’s the 14th Wednesday in a row that our revenue is the same, we made a bunch of mistakes, and it just feels like there are all these problems. 

That’s a lot of what growing a business is. It’s not always positive feedback every day. You’re hanging out at plateaus until you break through to the next level. It’s been interesting to have to eat some humble pie, come back, and go through the process again. We’re not immune to these struggles, challenges, and doubts of sustaining yourself for months and years at a time when things aren’t always up and to the right.

Rob: You guys have built so many assets that you can lean on. You’ve built the audience, you’ve built the community, and you built a stream of revenue to be able to basically fund yourself. As long as you’re motivated and interested, you have an infinite runway effectively. That’s something that you’ve earned through 13 years of podcasting and community building.

Ian: That’s the other thing about the thousand-day principle, not only have you replaced your income from a job at the end of those three years hopefully, but now you have an asset. 

We’re just starting to be at the point where we’ve reached our 1000 days with Dynamite Jobs. The first year or two though, Dan and I were just throwing a bunch of cash at it. We weren’t paying much attention to it, meaning, we were doing the CEO bomb. We have all these good ideas and we had some cash to deploy, but we didn’t really have our finger on the pulse. It’s been about 1 ½ years of our full-time concentrated effort on this.

Rob: In 2019, Dan, you mentioned that you think you had about $5000 in revenue and you’ve been public about this, but in 2021, you had $500,000 in revenue, and in 2020, some number in between that. Do you remember what it was?

Dan: I think it was something between $50,000 and $80,000.

Rob: That’s a huge jump. That’s almost 10X from 2020 to 2021. What do you ascribe that to? 

Ian: There are a couple of things. Number one is Dan and I started putting our full-time effort into it. I think that there was a big change when that started to happen.

Dan: Let me just underline what that is because a lot of it is emotional bravery. Like you said, Rob, we didn’t need to do this. We were trying to get real with ourselves about what we want our careers to look like over the next five years, what goals we want to take on, and why we are going to sit in front of our desks and go through the pain of having difficult client interactions and of looking at competitors who are outperforming us. 

There are all these emotional difficulties of doing this work. For Ian and I, we had to have a rock-solid communal goal of why we were going to do it. That’s how I’m interpreting that point of getting our fingers on the pulse. It’s a lot easier just to put something on the Internet, have some Wi-Fi money coming your way, and just ride your bike or something.

Ian: Another way to say it is we had to engineer our backs being up against the wall, which is a unique position to be in. When we first started our business way back in 2007 or 2008, our backs were literally up against the wall. We had no choice. This time, it’s like we had to throw ourselves to the wolves when we weren’t necessarily in a position where we had to do that, per se, but we wanted to do it.

Dan: One of the critical next steps was stepping up, genuinely hiring people, and recruiting people who were better than us. For example, our CTO, we had this friendship happening over the years. We watched each other’s projects and supported each other. We were Internet friends, but I wasn’t confident enough to say you should change your life to come work with us. That was a problem because I didn’t have a vision. 

Ian and I weren’t on the same page. We didn’t decide what that was. The moment we decided that, hey, we’re going to go for this, and here’s how we’re going to go for it, we were able to recruit a CTO. We were clear about the vision. We were able to recruit a senior recruiter, both of whom have skill sets that are far beyond Ian and myself. That was a watershed moment. Now, all of a sudden, we can sell $6000 products. I can’t evaluate candidates to a $6000 level. Our senior recruiter has been doing it for 15 years.

Rob: It sounds like you committed to the business at a certain point in 2020 where you’re like, oh, this is what we’re going to do and went all-in. I know you still have all this other stuff going on, but you went all-in on it and that gave you the confidence to bring on people at that level. Is that right?

Ian: Yeah. I’d say it was the confidence of going all-in, but then once we started hiring professionals—and I don’t think we’ll ever go back from this now—and people that are truly better than you, it really changes the scope of what’s possible. 

Even in our product manufacturing business that we sold in 2015, everybody was pretty good at what they did, but no one came into that business on fire and the best in the business kind of thing. I feel like we’re starting to cultivate that over at Dynamite Jobs. It’s certainly inspiring for me to come to work every day and watch people perform on a stage that they’re professionals at.

Certainly, it’s expensive. That’s one thing to notice. If you’re going to build that kind of organization, it’s not cheap, but the things that we’re going to be able to achieve with these A-players are going to be pretty cool.

Rob: What’s interesting once you get on this side of it—because I’m there as well and I’m going to give a couple of examples of how I made the same mistakes of hiring junior people and really wasting time and/or energy—you’re like, my early hires are all going to be senior people. They’re all going to be better than I am at their particular job. Suddenly, the case for raising funding makes a lot more sense. 

I know when I was bootstrapping and I hear people say, I’m bootstrapped and that’s all I do, that’s great, but you don’t have money to hire senior people. 

In the early days of Drip, obviously, Derrick Reimer, you guys have seen him do Drip and then SavvyCal. When I met him, he was 23 years old, but he had the chops of a super senior person. But everyone else we hired were these people out of code school and out of three-month code academies because I didn’t have the money to hire them. It worked out, but it took us way longer and there was a lot more headache to get there. 

The moment that we got acquired and had all this venture funding to spend, it was game-changing for us. That was another moment where I said, I’m not going back, much like you guys have decided. You’ve seen the other side of it.

Now, we hired Tracy to run TinySeed America. She’s a type-A who keeps these trains running on time. She’s a way better integrator than Einar or I. 

Xander runs events better than I ever could. We used to run them and they were successful, and then Xander started helping us in 2014. I was like, wait a minute, this guy is really good. This is a hard-learned lesson because I’m cheap. I think we’re all cheap.

Ian: I don’t think you’re necessarily cheap, but part of the bootstrappers’ curse is being resourceful and clever. You get in this clever pattern and then you don’t realize what you’re missing out on because we’re all super clever to get our businesses to this point. Then now it’s like, well, am I going to keep being clever and maybe cheap, or am I going to actually go for it?

Dan: I’ll be transparent. Earlier in the year, we did this clever thing, which I think was a mistake, where we hired multiple developers that were junior and basically pitted them against each other. We were transparent about that element, but the thing about those salary levels, Rob, is you’re already at 60%–70% of what the premier would cost. 

We ended up spending more money and wasting more time in the long run than if we just went out and got somebody senior. I’m really passionate about these pivotal lever moments. As an entrepreneur, it’s like, okay, you were clever about cutting costs. What about being clever about your business model? Why can’t you pay top-of-industry? Maybe there’s some thinking to be done on the upside and the margin side. 

That’s something that Ian and I have really been exploring intellectually over the past few months as we really focus on this new developer we want to hire. We want someone this premium that loves autonomy, sits on top of our candidate side of the marketplace, and just digs into these problems on a daily basis. That’s different than saying, here’s how much we think we can afford. It’s scary, too, because now we have to go out and find a way to pay for it. 

I agree that we talk a lot about control. If you raise a little bit of money, now, all of a sudden, you’re not 100% in control, but that also means that your business can morph outside of your immediate skillset and ability to come to work every day. I’m all in favor of opening up the floodgates a little bit and getting better people involved earlier. It’s almost like a self-respect thing, too. If your time’s worth it, you should be dealing with your peers and people that you look up to.

Rob: The two of you run a job board and a recruiting agency. When you go to recruit, you’re going to hire a developer starting tomorrow or next week. What is it that you have learned that you do differently than someone who doesn’t know what they’re doing? How do you find great people? What is your pull into that from your learnings?

Ian: We’ve learned a lot. Hopefully, we’re good at what we do when we go to hire a developer, and I think we are. 

There are a couple of things that are going on right now. One thing that’s going on right now is a candidate’s paradise essentially. All these candidates have multiple offers on the table at any given time which is a unique point in history. It’s not generally the case, but right now it is. All these companies are going remote. The companies that have been remote are frustrated, I think.

Rob: That used to be our advantage, right?

Ian: Yeah, exactly. Now, you look at Latin America, Asia, and all these different places. They’re coming up as well because now, everything’s flattening and there’s becoming a lot more transparency around the marketplace, salaries, and whatnot. It’s like, hey, I’m a developer in Latin America. Shouldn’t I make just as much as a developer in the United States? I have the same skill set. Here’s my portfolio.

The costs are going up for everybody. Those are some of the unique things that are happening in the landscape today.

Another thing that is happening that we should point out is you can’t just post a job in most cases on any given job board and find your candidate. Essentially, what we do over at Dynamite Jobs is we post at Dynamite Jobs, and then we post in a lot of other places on the Internet where we think that these people are hanging out because it’s very fragmented. It’s good. 

Not everybody back in the day go into monster.com and find their perfect candidate in five days. It’s hard. You got to dig around and find these people, especially these candidates that are A-players. They’re not necessarily hanging out on job boards. 

What does that mean? Maybe that means a cold approach. Maybe that means finding them in these weird places, seeking them out, and then trying to figure out what their motivations are. This is where an A-player recruiter comes in to have conversations with candidates in terms of their motivations, like what’s going on at your job right now, are you happy with your income, what moves are you trying to make, and try to suss out basically where these candidates are and where they want to be. 

There’s actually a thread on Hacker News the other day about why you should always talk to a recruiter. There are a lot of reasons why you should. They can be your advocate as a candidate, they can help you make moves, and they can let you know what’s going on in the marketplace in terms of salaries. They work both sides of the aisle which is, in a lot of ways, good.

Dan: But most recruiters suck which is why that article went to the top of Hacker News. The way I’m thinking about this is because the world’s completely fragmented now, you need to tell a founder-level story to candidates. With geographic constriction or before the pandemic, you could be like, we are this kind of agency. We pay this much. We’re in this city. This is a job, apply. 

There’s a lot of implicit narrative there that candidates can buy into. Probably the lowest cost, highest leverage action for founders is telling that founder-level story in your job post and to the candidates. Candidates can know right away if they’re an A-player and they’re talking to a B-level recruiter that doesn’t understand their situation. That’s a huge turnoff. That’s basically what we’re trying to emulate. 

We talked to Greg on the phone. He understands our client stories at the founder level. He understands why they started the business, what kind of opportunity it is, and what direction it’s going. He can communicate that up here to A-players. 

Most recruiters are just playing the numbers game essentially. That narrative of what you’re doing as a business is in our DNA. That’s how we’ve always hired, we’ve told the story of what our business is doing. I think it’s expensive to do and is why 90% of our job posts don’t have a compelling company narrative.

Rob: Yeah. There’s advice that I always give to founders, and it’s that you’re not a big company. Don’t write a job description that acts like a big company. Don’t go read the Target, Best Buy, and General Mills job descriptions because they don’t have the same things to offer. What they have is their salaries are probably higher and they have more benefits, but we used to call it combat pay because you have to put up with all the […] at those companies. You’re kind of in combat, so you make more, but you hate your job versus if you’re a 5-person company or a 10-person company, what do you actually have to offer? What is your advantage? How can you use that against a larger company?

Usually, the way I’ve done it is to almost think of the job description a little bit like the sales letter, not go over-the-top Dan Kennedy style but to be unique.

Dan: You’d be better off to do Dan Kennedy style honestly. Be careful who you copy because there’s this big implicit story in a job post for Best Buy. You don’t need to write it. Everybody sees a Best Buy job post and they can tell their own story. 

I look at our site and I see these brands that I’ve never heard of before. There are 15 employees and it’s a genuine life-changing opportunity, but the founder’s not taking the time to describe that. I understand why. It takes a lot of energy, but I feel like that’s the number one piece of advice right there.

Rob: Last question for you guys today as we wrap up. Another framework that you’ve called out a lot is Rip, Pivot, and Jam. It’s where you see an idea, you rip it which just means you take it, you pivot so you change it, and then you jam on it. You basically execute on it. 

Whether it’s the job board side or the recruiting side, did you actively rip, pivot, and jam because I can see some ripping, pivoting, and jamming happening? It’s like you had the traditional recruiter model and you took it, tweaked it to make it flat-fee (it’s less expensive), and you focused on startups and digital nomads type of folks. People are building businesses but not big companies. I can see it on the job board side as well. What’s your take on that?

Dan: The fundamental idea of Rip, Pivot, Jam was how can you not be so intellectually challenged to get started in business? It sounds very intimidating to me to come up with a business idea and you realize that you’re surrounded by 10,000 business ideas every day. 

In other words, you could say, well, scratch your own itch, find a problem, or whatever, but how about just look at the business? That business is working. Go and talk to the people who run it and make sure it works. This recruiting business is a $1 billion industry and it works. 

The pivot part is why don’t people do that for this or this for that? That’s just the basic pivot. There are a bunch of different ways you can formulate a pivot. In our case, it was simply like, this service is valuable, it’s profitable, and it has a track record in the world, but there’s none of it for our people, and our people need it too. That was simply it. 

Then, the jam part is the thousand days. It’s not going to work on month number one. We had some momentum early but then you got to hire people. You got to backflow that revenue stream. You got to hire a boat line and you got to keep plowing to those plateaus. That’s the jam portion.

Ian: When I look back at our business success and failures, most of our failures were what we thought were the best ideas. It’s like, here’s a brand-new idea that’s never existed before. Let’s put this into the marketplace. Thud, it doesn’t work. 

The ones that do work are like, hey, this has been around forever. Why don’t we just change this a little bit? 

Rob, there’s a lot of that going on in DJ. These things have existed. Job boards have existed forever. Recruiting has existed forever. Now, it’s like, how are we going to pivot this? How are we going to make it 5% better this year or this month, repackage it, and present it?

Dan: Yeah. There are a bunch of different methodologies that come across in Startups For The Rest of Us where you can find that pivot. 

We’re certainly not fans of copying anybody’s work. Originality is important, but you don’t need to be original about the conception of how to make money online. That’s been proven out. 

The question for founders to determine is what’s the thing that you can do differently that other people aren’t willing to or technically able to do? In our case, we were willing to cash flow essentially a recruiting service for the price of a job board. There’s no job board in the world who’s dumb enough to do that, but we were like, we’ll do it for two years because we can afford to and we were in a unique position to have a perspective on these cool jobs that our members had that no other job boards had access to. 

We were able to build these relationships. That was our pivot. It’s like, okay, there are job boards, but there’s nobody willing to do this. If you come to Dynamite Jobs, a person talks to you about your role and figures out what’s best for you. That’s a necessity because other job boards are established and they sell based on trust. We had to earn that trust in a different way. That was our perspective in pivot, and it got us to where we are now. Hopefully, we keep going.

Rob: You almost 10X last year and I hope to see a 10X this year. If folks want to keep up with you guys, you are @anythingian on Twitter, @tropicalmba as well on Twitter, and of course, Dynamite Jobs if folks want to check out what you’re working on. Thank you so much for coming by, guys.

Dan: We appreciate it, Rob.

Ian: Thanks for having us.

Rob: Thanks to Dan and Ian for showing up. I could talk for hours and actually, I do talk for hours with those guys whenever we get together. Last time I was in Austin for MicroConf Local in September, I had dinner with them and had such a great time with awesome conversation. I hope to have them back on the show again soon. 

Thank you for listening every week. If you haven’t subscribed, do that. If we’re not connected on Twitter, look me up @robwalling. I look forward to being back in your ears again next Tuesday morning.

Rob: Welcome back. It’s Startups for the Rest of Us. This is Episode 592 where we’re going to dive into nine tactics for amazing customer support. If you recall, this is an experimental format where Cody Duval, the founder/acquirer of Keeping, which is a help desk tool, came on the show last week. We dug into his story of coming to MicroConf in 2019 and later acquiring Keeping through FE International. He’s been running that ever since.

I’m bringing him on the show today purely for the tactics, the tips, the tricks, the do’s and don’ts of amazing customer support. Without further ado, let’s dive into my conversation with Cody Duval.

Cody, I think you are the first guest on Startups for the Rest of Us to have ever made his first and second appearance seven days apart.

Cody: All right, excited.

Rob: Congratulations.

Cody: Thank you, Rob.

Rob: This is great. As people just heard in the intro, this is an experimental format. I realized that a lot of the founders that I interview have this subject matter expertise that you gain through the osmosis of running or building an app in a space.

I remember when I was running HitTail, which was an SEO keyword tool, early on, I acquired it, revamped it, and started marketing it. People started asking me, well, how do I do SEO? And what should I do with this? I was just like, it’s a tool, go use it. I don’t know, whatever. I know how to do SEO, but I’m not your coach.

I started realizing, oh, so much of the value is the knowledge that’s in our heads of whether it’s SEO, running an ESP and knowing best practices for email, running a support tool like Keeping and having a lot more knowledge and a lot more exposure to a lot of, I’d say, probably successful customer support experiences. You’ve probably seen some that aren’t great. That’s why we’re here.

Cody: Yup, that’s exactly right. I’m an operator of a tool that empowers teams to provide customer support to their customers, but I’m by no means a professional. I’d love to, as we have this conversation, have folks disagree, I’m @codee on Twitter to shout back because all the things we’re going to talk about here are things that I’ve just absorbed from talking to my own customers, having conversations with professionals. I think this will be fun.

Rob: I want to kick it off before we dive into these. It’s called nine tips for customer support or something like that. That’ll be the title of the episode. Maybe we wind up with 8 or 10. We kind of wander, but the interesting thing we were just talking about is the term customer success versus customer support.

I want to walk back and talk about my understanding of these definitions. Customer success was not even a term seven years ago. I think the first time I ever heard it was probably 2013, 2014. Customer support has been around forever because we know that you would call United. You called Pan American Airways and you’ll get customer support.

Startups have traditionally done it via email, sometimes chat widget. Customer success became this way a lot around onboarding and a lot around helping high value clients get value out of a product and retain those folks to cut churn. That became this new role with the subscription businesses.

You didn’t really need customer success if you made a one-time sale. They had implementation engineers and all that, but there was a relationship manager and AE or whatever. But really, SaaS, I think, brought about this need for customer success because we know that churn is the death knell. It’s the kryptonite of SaaS and customer success.

I think their overarching umbrella is to help people get onboarded, not churn, and stick around, but you and I were talking offline just before this that this definition may be changing or adjusting. Do you want to talk through how you see success versus support?

Cody: Yeah. I do think that this is a term or a job title that, like you said, has been birthed in the past couple of years. The way I see it, at least with my own customers, is that customer success envelops the full lifecycle from when someone comes on board as a customer to when they might churn on the other end. We might talk about customer support once they’re already a happy customer and they’re needing advice and/or a problem solved. I think in the industry, customer success now covers the whole lifecycle.

Even up another level, you have the customer experience or CX. There are conferences where these folks go. I think if you’re working in the industry, you probably call yourself a customer success professional, but you may be doing customer support as well. We’re going to talk about customer support stuff here, but this maybe is under the umbrella of customer success.

Rob: Yeah, and that’s the difference. When I left Drip, there were about 110, 120 employees and there was a 6-person customer success team. They very much were high value clients. We get them on board and keep them around, thinking about making onboarding better—all the stuff we could think of under customer success. Then there was a 12- or 14-person customer support team and they were very separate.

Someone talked about merging those two and I was like, there’s an overarching theme, but the skill sets of those two roles are actually quite different. If they move customer success up to this umbrella term over both of those, I think we need a new term for what those customer success people were doing at Drip. Whether it’s an account manager or relationship manager, there should be something that has to replace that so it’s not ambiguous. Does that make sense?

Cody: Yeah, I think those are AEs or account executives. They’re managing the customer at a strategic level, not just dealing with tickets.

Rob: Right, not reactive but proactive. All right, let’s dive into this first tip. If you pay attention to only one metric, make it response time.

Cody: Right. If you adopt a tool, there’s going to be a ton of metrics that you can look at, there are dashboards that are all dedicated to customer support. What we hear from our customers and what I’ve noticed is that the thing that matters the most to their own customers is response time, in particular, first response time. That specifically is how long does it take to get a reply from a real human, not an auto reply. The auto reply does not count.

Just to say, hey, we acknowledge that you have an issue or you have a question and that we’re on it or even you provide a solution. There are, I think, various metrics as to what is a good response time or a good first response time. We can talk about that too.

Actually, just before we started recording, I recently emailed a very well-known SaaS tool and I got an auto reply that said, our typical response time is three days. I just immediately was like, oh, are you kidding me? I get it, but a customer doesn’t care or know that you have thousands of folks emailing you. You are a special, and at Snowflake you are one and you want to reply. Generally, we can talk about what’s a good response time, but I think that this is the most important metric to pay attention to.

Rob: Yeah, what is a good response time?

Cody: I think that for teams that we’re talking about here, generally, around 12 hours or less is what you should aim for, which really means like a business day. I think that there are definitely tools and areas where maybe more than that would be acceptable. What I see from most of my own customers is that going anything longer than a day, customers start to feel ignored and they feel sad. That should be a nice rule of thumb to pay attention to is to try to get back to everybody within one day.

Rob: The second topic is this difference of interacting with a human, like, hey, this is just an email between two people. As cold as email might be, email always feels like I’m texting with a little bit of delay and I’m having a human interaction versus some systems like Zendesk is the one that comes to mind because, again, I hate to keep talking about merging with Leadpages and that whole thing. That’s why I have experience with a bunch of different systems because I’ve been on both sides of this.

We were on Help Scout. I liked it because it felt like a person-to-person interaction. It wasn’t a bunch of cruft around the email or it wasn’t this survey at the end. It wasn’t all this stuff. Then we moved to Zendesk because that’s what they were using and I hated it as an experience. Do you have thoughts knowing the space better than most about which is preferred by customers?

Cody: Yeah. This is near and dear to my heart because at Keeping, it’s one of the things that we like to say. What makes Keeping different is that you really should feel, as a customer, that you’re dealing with a human. I have to give Help Scout some props here because if you look in their marketing docs or even in their own support docs, they don’t like to use the word ticket. They call it a conversation.

This goes to what you’re saying, which is, when you start labeling, hey, here’s your ticket, it becomes anonymous. You’re this work product being pushed around a system. If you’re at a high value SaaS, again, you want to be talking to a real person that knows what they’re doing.

I really encourage folks to look at tools that don’t say, here’s your ticket number, click on this link to check your status, please reply to this, go to this portal. I think that today, in 2022, even though it’s an email, people want to know there’s another human on the other end of that email and not just a robot.

Rob: How do you feel about these surveys that go out after where it’s like, rate us one to five? How did Josh help you out? I have my own thoughts on it and I get it. I get that when I have a team of 5 or 500 customer support people, the way I’m going to evaluate them is based on response time and customer satisfaction.

If I’m not sending those surveys, I don’t have that second piece of data. I get it from a business perspective. From a user perspective, it pisses me off. I hate it, and I’m curious. You’re on both sides of it, what are your thoughts?

Cody: You can start to see customer service tools are really segmented. We’re going to pick on Zendesk here. They are geared towards teams with hundreds, maybe thousands of folks on the other end who are replying to customer support requests. There’s a manager and a manager’s manager. They need data to know, oh, wait a minute, are we doing a good job? Unfortunately, you, as the customer, are being bullied into providing that data.

I think more often than not, the data isn’t very helpful if you’re at a small scale like most of us are. Number two, I think customers kind of resent it. I think a lot of times, they’re only going to click the frowny face and probably ignore the medium and the happy face. You’re going to get skewed.

Oftentimes, data folks were like, well, what does that frowny face mean? I took too long to reply? Was the person rude? It’s often not very actionable. Again, if you’re a 5000-person organization, maybe you can get some value out of it. But I think for most of the folks that are listening to this podcast, it’s not very useful.

Rob: Yeah. And I feel like the only times that I respond to it are when someone either is amazing and I want to give them a thumbs up or they’re terrible and I want to give them a thumbs down like they were overtly rude. Other than that, to me, it’s more work for me. My inbox is already clogged with stuff. I don’t want another email that I have to think about and sit there and may not even remember the experience.

A question I know that I get a lot when I’m mentoring and advising founders is, when do I hire my first employee? When do I hire my first developer? When do I hire my first customer support person? What are your thoughts on that?

Cody: Right. This is hard because I think that depending on the type of service that you’re offering really is going to […] the kind of person that you can hire. My own rule of thumb, just very generally without going too far into that, is that if you can’t get back to your customers within a day, so this goes back to that response time we’re talking about, that’s a signal that, wait a minute, maybe you need to hire somebody to be that first line to respond to your customers.

The big assumption here though is that those tickets are fixable by someone that you hire. If you’re early and you have a lot of technical bugs and everything requires a ticket in JIRA or your project management tool, that customer support hire is going to be not very helpful because they’re just going to say, well, yup, it’s broken. That’s it. But if you get a lot of requests that can be tackled resetting passwords or billing questions that can be hired by somebody who’s relatively trainable, I think a lot of founders find this as a huge weight off their shoulders that they’re not staring at that queue and they can focus on their business.

I also like to say that if you’re a technical SaaS that this is a great place to start a junior engineer, somebody who’s learning if your Rails and this is their first job. Opening bug tickets and tracking down bugs is a great place to start. They can bridge into a more senior role from there.

It really depends on your domain and the kind of tickets that you’re getting. But I think for the most part, if you’re feeling overwhelmed and you’re not able to get to your customers back in the day, then think about hiring somebody.

Rob: I think a lot of founders wait too long to hire a customer support rep. Oftentimes, it’s the same reason/excuse where it’s like, well, but I just know so much and as the founder, I can just do better support or our product is too technical, I hear this all the time. You don’t hire someone with no technical experience then. You hire someone who can either figure it out, or as you said, it’s a junior engineer.

I have known multiple founders who told me, oh, it just isn’t that much time. I’m not going to hire someone full time. I don’t know if I can hire someone part time. It’s only 30 to 60 minutes a day. A founder told me that and I was like, are you fucking kidding me that you’re spending up to five hours a week on this? This is the lowest value. Customer support is extremely valuable, but you can find someone for not very much money to do it well, not very much money compared to what your hours as a founder are worth.

Cody: It’s the thing that keeps people up at night. One thing as a solo founder, especially, you’ve got all these things circling you taking a little bit of your founder mana away. I think that not having to worry about that customer support queue, you’re just going to sleep better at night. I agree.

Rob: Yes. And the interruption, you don’t take that into account. The distraction and the interruption are the two biggest things, not the five minutes to respond to it. It’s that it’s off your plate.

Next thing is a chat widget. To chat widget or not is a pretty common question I get. I advised a company that had the chat widget for everybody including their free users and really inexpensive plans. They have plans running from $9 up to thousands a month and they have thousands of people coming in. They were trying to man the chat window or the chat widget and it was a huge amount of effort.

I talked them through, hey, maybe we should not have it available for free plans or maybe we should not have them available for $9 and it’s only 49%. We just talked through maybe only during a trial, blah, blah, blah. There are just ways to hide it. But I also know that chat can be great because it’s real time and people can get fast responses. What’s your thought on that?

Cody: Yeah, it’s just not an easy answer. But I will say that when Intercom came onto the scene, they really I think were the ones that made the chat widget ubiquitous. My chat widget is amazing, especially if it’s manned and there’s somebody there. The one thing I will say is that once you offer a chat widget and you’re responsive on the chat widget, your customers will always go to the chat widget. Not everything needs an instant reply, but it’s very, very satisfying as a customer to not have to wait.

In talking to a lot of folks about what you just said, at some point, your business is going to be just too big to support a chat widget. I think if you’re less than 200 customers, that’s just a ballpark number, consider a chat widget. I think that it’s something that can give you really good feedback. It’s really, really useful when customers get stuck in their onboarding process and they just need a little bit of this or a little bit of that.

I think it’s worth it in those cases. But after 200 customers, I think it may be a feature that’s only offered on the higher plans. Premium support actually means something a lot of folks have on their higher plans and it doesn’t mean anything, but I think chat support is something that people will pay for.

The last thing is, you have to make sure that there’s someone there. I think that an empty chat widget is often worse than no chat widget. A lot of the chat like Intercom comes with bots that fake type, which is a little bit of a pet peeve of mine. We see a bot typing when we know a bot doesn’t type.

Those can be useful. I think chat widgets can get people to their answer like, hey, here’s a support article that you asked for. But if folks really want to talk to a human and they can’t get to a human in a chat widget, I think you’re, at this point, just have them email and then you’re going to meet their expectations. Chat is a tricky one. I think that just be careful because once it’s there, it becomes something that’s really hard to take away.

Rob: Cody, you have a note here in the outline. This is tip number five, by the way. It’s about how early in the pre-product market fit that customer success, sales, and product are almost the same role. I want you to dig into that in just a second.

I remember, I talked about hiring customer support out and how I always did with all my apps, but I didn’t do it at the start. When I acquired HitTail, I personally responded to every email ticket that came in for three months, it might have been a little more.

Drip was the same way. Three to six months, I did it until it started (a) I started hearing the same things over and over, (b) our product roadmap was set, and (c) it became enough of an interruption and a distraction and it made sense. But I found those early days extremely valuable for me as a founder to be doing it. Why don’t you tell us what you’re thinking about this one?

Cody: Early on, this really is about when you’re still trying to find the right product for the right customer. Your support channel is really just another way to talk to your customers. If your customers are taking the time to write you an email or get on your chat widget, they’ve just opened the door to being able to have a conversation about, hey, something’s not quite right, this product doesn’t quite meet my needs. But they clearly like you enough to take time out of their day to write you an email.

I think as far as product development goes, it doesn’t have to be like an outbound email. Hey, will you talk to me about this product that I’m offering? Someone’s already raised their hand and said they’re ready to have a conversation with you, even though it’s in a customer support ticket, and that can be turned into sales.

As soon as somebody has said, hey, this is great but.. Then you can say, oh, well, let’s do this instead of that. And the next thing you know, you’ve turned somebody that was maybe on the fence. This is during a trial into a customer.

I think in the beginning, it’s really, really critical, even though no one probably loves doing customer support, that as a founder that is your main channel to getting a dialogue with your customers. Getting feedback about the product, you’re seeing how they type about it, how they talk about it, you’re getting all that language, and that’s going to come out in all sorts of ways as you build your product.

Rob: Tip number six is training your customer success team or yourself to ask every customer a question. What’s that question?

Cody: This is just a very quick tip. Attribution is just a mess right now in marketing. If you have a lot of inbound sales, where do they come from? You have this opportunity to just say, hey, how did you find us? And they will almost always say, Google, but they may also say, oh, I saw you on a buddy at a bar and said, hey, you should check out this tool.

It’s just an opportunity to get a little bit of insight into your marketing, especially if you don’t know where they came from. Obviously, if you reached out, if this was an outbound lead that you pulled in, you don’t need to ask them. But if you have a customer that came to you and you don’t know where they came from, just ask them.

Rob: Another question that I get pretty frequently is, how should I deal with abusive customers that are pretty far out of line? What’s your tip for that?

Cody: This is really hard. I think there’s a line between rude and abusive. I think a lot of folks, especially in an impersonal medium like email, can come off a little rude. I think that’s okay. I think we need to be able to deal with rude customers. That just comes with the territory. They may not be nice, but they are your customer.

I think when something drips into abuse, and I think it’s important as your company that you have already decided what is abusive with your team. Especially if you have employees and you need to train your team to very, very quickly just push that ticket if you’re dealing with a support ticket system to you, the founder, and let you deal with it so that your employee isn’t in the firing line of somebody who’s really stepped over the line.

After that, it’s up to you as a founder how to deal with it. You can fire them as a customer. I certainly have done that. I think I’ve talked to other founders who said, you know what, we just don’t need or want your business.

Obviously, that comes with some risk, especially in the world of social media, product review sites, and all the things that come with it. A customer support tool or a customer support platform gives you, as a founder, visibility into what’s going on. I think it’s something that just happens and it comes with the territory.

Rob: I had to fire a few customers for sure over stuff like this. My phrase was always, it sounds like we aren’t a fit for your needs. I would apologize. I’m sorry that we’ve disappointed you. It sounds like we’re not a fit for your needs. We need to part ways.

Sometimes the person then just went ballistic. Other times, they apologize and start begging for me to let them stay. This wasn’t one email that was rude, like you said. This was way over the top stuff—threats and this kind of stuff. It’s like, no, you’ve shown me your true colors. There’s just no way that, unfortunately, I can let you stick around.

Cody: Yeah. Again, this is after you reach a certain point. It’s worth spending some time. We actually have a blog post on our site about typing up a policy about what we consider abusive.

You can just outline things ahead of time that you can share with your team, anyone that’s on the front line, that they know they tripped over into a new character. Then it goes up to you as the founder or if you’re big enough into their boss and then you can handle it, so someone’s not stuck there in that really bad space.

Rob: Got it. We’ll link that blog post up in the show notes. It’s on the keeping.com blog.

Cody: That’s right, yup.

Rob: All right, we have two more here. This one seems obvious to me but maybe it won’t be to some people. It’s about deciding when to pay for a customer support tool. I know some people in the early days tried to do it directly in Gmail with labels. I think that not having tooling around that, whether you do go for a full-blown Help Scout or whatever or using something like Keeping that makes that possible within your Gmail. What’s your thought process around that?

Cody: I think some folks don’t know or, hey, what do I get with the customer service tool? What does it bring? I actually think that if you’re really small, if you’re still in the product development stage, these tools are expensive, so it’s okay to wait. You can get really far with just an email support@mycompany.com. Especially if you’re a solo founder, you’re not assigning tickets to anybody, you’re just dealing with them. 

On the high end, some of these full-service customer support platforms are $30 or $40 a month per user. That’s not a lot if you’re a big, well-funded SaaS, but if you’re bootstrapping, that’s a pretty big expense.

The killer features that may make you want to pay for a tool are (some call these) canned answers, shared templates, response templates. You’re going to find that you get the same questions over and over again. Not having to type the same email over and over again is a huge time saver if you can take the time. Basically, cut and paste that question and answer into a system that lets you one-click, insert. You can even customize it, of course, to make it feel like it’s being typed. That’s just a huge time saver.

All these tools give you basic analytics like we talked about with response time. The more expensive tools go really crazy here. I don’t think you need every metric under the sun. But being able to calculate something like response time with a little dashboard, I think, is really important after a certain size.

I think most of these tools allow you to communicate on the side about a support ticket, call it a note instead of forwarding an email around, is a huge thing you don’t know you need until you need it. A customer emails in and says, I have this question. So having able to have a chat about that ticket inside of your tool is really great.

One thing that is different for each domain is, we’re living in this omnichannel world and some folks get customer service requests only through email, then you should choose a tool that’s optimized for that. If you’re in the more prosumer consumer side of the equation, you’re going to get a lot of your customer support requests on Twitter and Facebook. And so you need a tool that can plug into those platforms.

In fact, I think for a lot of consumers today, that’s their primary channel. They’ve realized that the visibility of complaining on Twitter or Facebook gets a faster response. You got to have a tool that plugs in there.

Rob: Aside from spammers and IP blacklists, that right there, going to social media because my thing is so urgent and you should just pay attention to it. Those were the top three things that I hated about running Drip.

Actually, I […] despise them like it ground on me. Because then it was always like, cool, well… oh, I already have. And it’s like, oh, yeah, I see you’re third in the queue, we’ll get back to you. Our response times were very fast. It was especially in the days when I owned it. It was a few hours tops for an initial response.

It just always felt so entitled. It was never from the awesome customers who were singing our praises and who legitimately had an urgent issue. It was always the demandy customers paying us the least and who complained the most. It just inevitably was that.

Cody: Yup.

Rob: All right, last one, our ninth tip. This is around tooling and software. You have some specific thoughts for folks about deciding maybe which type of tool to look at.

Cody: Yeah. What toy to pick? This is a hugely crowded space. If you were to go into Google right now and search for a help desk or customer service tool, you would get page upon page upon page of options.

Obviously, I’m going to plug Keeping if you’re primarily dealing with customer support through email and you need a tool that does everything we just talked about. Perhaps, you don’t have a 10- or 15-person customer service team, Keeping may be a great fit for you.

My own advice is that buy the tool that’s the right stage for your company. Help Scout is a great tool, but maybe not if you have 10 customers. The segments are now big enough that really, these tools are oriented towards specific use cases.

There’s a tool called Gorgeous, which is all about ecommerce. I think it’s worth spending a little bit of time and investigating which tool is really oriented towards your industry. My churn is very low. I’d like to think that’s because we have a great product, but it’s also because there’s a real investment that you make with these tools by pouring in your knowledge base, all your customer support data gets in there.

Once you choose a tool, you’re going to be on it probably for a while. Just take some time to choose the tool that’s right for you. Don’t just grab the first one. Know that most of these bigger customer support tools are built for customer support teams. If that’s where you’re going, then choose those tools. 

If you’re a founder with a couple of folks, just be aware that you’re not falling into a really complicated and expensive tool that is way more than you need. I think those are just some things to think about before you put your money up on the table.

Rob: In terms of the knowledge base thing, I was always resistant to putting my knowledge base into a support tool because then it tied me into it. We either looked at third-party knowledge base tools or, at one point, we used WordPress with a theme. There are just other options, but it does seem like that’s the way people are going now. Is that accurate, where the KB is combined with the tool?

Cody: Yeah, the public knowledge base I think is a business idea for anyone out there. I think that it’s a really underserved market. I think if you want to build a knowledge base right now, all of these tools come with a not very good knowledge base, I have to say.

It’s good enough. It’s nice. It’s integrated with your tools so you can easily link to it from a support ticket. But from a customer side, they all just don’t feel very good. This is true with Intercoms, it’s true with Help Scout, it’s true with Zendesk. I think they all just feel like they’re not very well—there’s not a lot of folks paying attention to those products inside those companies. They feel like kind of an add-on. 

I really encourage folks to unbundle if possible. I just don’t think there is a lot of great knowledge base that’s specifically oriented towards SaaS tools right now. A lot of folks just do, like you said, something in WordPress, a Gatsby static site, but it doesn’t feel like there are a lot of great options for knowledge bases right now.

Rob: I think the bummer is, given the fact that there are mediocre free versions—free in essence—attached to these customer support tools, it would make me resistant personally to going into the knowledge base phase because I know that a bunch of the sales objections are going to be, well, I already have a half-assed one in Zendesk, so why would I pay what I want to charge for it? Hopefully, someone out there is gaining traction.

Frankly, if you are getting traction, I’d love to have you on the show and talk through similarly. Do the interview about your product and then do an episode like this where it’s like things to do in your knowledge base, nine tips for founders.

Cody, thanks so much for coming back on the show. You are @codee on Twitter and, of course, keeping.com.

Cody: Thank you, Rob. Great talking.

Rob: Let me know what you think of this new experimental format where I have a founder come on and tell their story, and then the next week come back with tactics, strategies, or thoughts on how to do things better, something they’re a subject matter expert on. You can hit me up questions at startupsfortherestofus.com.

You can click the Ask a Question link at the top of Startups for the Rest of Us or you can head to Twitter. I’m @robwalling and we’re @startupspod. Let me know if you liked it. If you didn’t like it, you want more, or what have you. Thanks so much for listening this week and every week. I’ll be back in your ears again next Tuesday morning.

Rob: If you can believe it, it’s another episode of Startups For the Rest of Us. This is a show where every week we cover topics related to building and growing startups using an ambitious yet sustainable approach. This is where we talk about building real businesses with real customers who pay us real money. We seek freedom, purpose, and relationships.

Thanks so much for joining me again this week. Great conversation with Cody Duval. He is the founder/acquirer of a customer support app called Keeping.

I’m doing something a little different over the next two weeks. It occurred to me that the last time I did a really tactical tip-oriented learning episode, several people tweeted me and actually a couple wrote in saying, you should do more of those. Those are like the early days of Startups For the Rest of Us. Of course, I want to have a mix. I want to have a balance of different episode types. 

What we’re going to do over the next two weeks is today, we’re going to hear Cody’s story of acquiring and growing Keeping in this really crowded space of help desk and customer support tools. Then next week, we’re going to hear from him nine tactics for amazing customer support because obviously, Cody, running an app with a bunch of customers doing customer support, sees the do’s and don’ts. He sees the strategies and tactics that win and those that are pretty big mistakes. 

I’m excited for this format and I think it’s something I’m going to consider doing with additional guests in the future. Because someone running an app that sends a lot of email or that helps people do customer support probably knows a lot more about sending email and doing customer support than most of us do as generalist founders.

But before we dive into today’s show, I wanted to remind you that we launched the TinySeed Syndicate a couple of months ago. The syndicate is, in essence, an investment vehicle that allows us to invest in B2B SaaS companies that may be a little later-stage than the traditional TinySeed accelerator companies.

I think my rule of thumb guidance if you want to apply to get investment from the syndicate is that you should probably be doing $700,000 or $800,000 in ARR. It can be a little lower. It depends on the growth rate and a lot of things, but if you’re interested in raising from TinySeed like MicroConf, Startups For the Rest of Us, and investors, TinySeed Syndicate is something you’ll want to check out. We’ve been running 1–2 deals per month. Folks are raising, at this point, between $500,000–$1 million. They usually have some section of that filled. We get an allocation of a few $100,000, and it’s been going really well. It’s always exciting to be working on something new.

If you’re interested in that, head to tinyseed.com/apply. At the bottom, there’s a form to fill out info about the syndicate. Of course, if you’re an accredited investor and you want to invest in great B2B SaaS companies that would be listening to Startups For the Rest of Us, head to tinyseed.com/syndicate. It’s an easy application process. As long as you’re accredited, it’s all done through AngelList. It only takes a few minutes. 

You get to see the syndicate deals as they come through and you can invest in one and not the next one. You basically get to pick and choose the syndicate deals because each one is an individual investment. The minimum investments are really low, usually between $2000 and $5000 for the most part. If you’re interested, tinyseed.com/syndicate. With that, let’s dive into my conversation with the founder of Keeping, Cody Duval.

Cody Duval, thanks so much for joining me.

Cody: Great to be here, Rob.

Rob: It’s good to have you on. Keeping is your startup. Keeping is a simple customer support tool that integrates with Gmail. You’re a single founder. You’re part of the current TinySeed batch. Do you want to give folks an idea of what stage you’re at? Some founders give MRR. Some founders do, hey, the team size is this big and we’re default alive. Just some ideas so folks have an idea.

Cody: I’m a solo founder. There are three remote engineers that I employed basically full-time. I would say we’re default alive but with the caveat that all of my profit is going into building the business. I could certainly go into solo mode and make a business at Keeping, but right now, we’re very much into investing and growing the business.

Rob: As so many of us are. You started a help desk software three years ago. There are already a lot of them out there. Some of them are good, some are not. What was the thought process there of, I’m going to enter this incredibly competitive market as a solo bootstrap founder?

Cody: It is crazy that there are crowded markets and uncrowded markets. The help desk customer service tool space is huge. You’ve got Zendesk, Help Scout, Freshdesk. The real epiphany for me, at least as to why Keeping exists, is that a small business—perhaps a non-SaaS business—doesn’t need all the horsepower of a Help Scout or a Zendesk. For the most part, those tools are quite expensive and quite complicated. There’s a gap in the market between doing it yourself in Gmail just sharing an inbox, and then those big tools which are really built for customer support teams that are professionals.

If it’s not clear, when we say we integrate with Gmail, we actually prod into Gmail and turn your Gmail inbox into a customer support tool, which is basically just the right size for a lot of teams. If your team grows and you got a 10-person customer support team, then maybe that’s right, maybe you should go and buy Help Scout. But for the rest of the world, there’s a tool that’s the right size and we think that’s Keeping.

Rob: When you and I talked during the TinySeed interview process, I brought up a couple of concerns that I had. One is if you’re going after small teams, it’s not necessarily going to be a lower price point, but certainly a 2-person company is a little more price-sensitive than a 10-person support team. That was one thing. I’m just thinking that churn is going to be worse. The other is when they get to three or four support reps, aren’t people going to migrate off and essentially outgrow Keeping?

Cody: Starting with the second concern. I think most of our customers probably never will have customer support reps. They’re a wholesale business. They’re a B2B business. Customer support is a part of their day, but they’re not going to grow a big customer support team.

As far as being price-sensitive, when you’re at this part of the market, there is a little bit of, okay, what is the right pricing? It’s something we’ve talked about, especially in this space which is all per-seat pricing. You open up a bunch of pricing pages and you’ll see anything from $60 a user to $9 a user. 

For the most part, the tool becomes so integrated into your workflow—this isn’t true just of Keeping but it’s true of the category—that they’re almost immune from churn because you really spent a lot of time setting up, you build it into your day-to-day operations, there’s a knowledge base where you spend a lot of time pouring in your content, and it becomes painful to churn. It’s not like an SEO optimization tool, which is you go in and use it and you’re done. This becomes really a core part of your workflow. 

I think this is true for Help Scout and Zendesk. Once you get a customer on board, they’re pretty loyal. I’ve had customers from day zero that are still trudging along, and our churn continues to be really, really low. We’re really focusing on growth and we think we’ve got a good sense of, all right, this is the right tool for some segment of the market because they’re not churning out, at least not yet.

Rob: As much as on this show, I talk about higher price points and larger teams less likely to switch. The way that that cuts the other way is those folks take a long time to make decisions. There are often many people involved, and it’s decision by committee. Enterprise sales are a reason they take three, four, or five months.

With a tool like Keeping—or I had Christopher Gimmer with Snappa—or any tool that has that lower price point and is either aimed at (I’ll say) solopreneurs, solo founders, or just small teams, there’s one decision-maker with a credit card. If they like the tool, they sign up, and it’s done. It’s not a big, long process. Is Keeping’s sales process purely self-served at this point?

Cody: Totally inbound. Because of our ARPU (average revenue per user) being a little bit lower than some of our competitors like the Help Scouts and the Zendesks, the menu of growth channels available to us is limited. We’re all bidding on the same keywords in Google, but if your average customer is $300 a month versus ours which is way lower than that, we’re both bidding for the same keyword. We’re not going to be able to play. 

SEO content marketing has become our core channel; it goes without saying. But even there, they’ve got fleets of writers and I’ve got a couple, so it’s really trying to optimize that inbound channel. Maybe there’s a day we graduate to a little bit of outbound, but you can do the math there and figure out that it really takes a lot of effort to drag one lead in the door with outbound sales. For now, we’re pretty happy with the inbound model.

Rob: I want to get into the later challenges of being a bootstrapper in such a massive market. But before we do that, let’s take a step back and roll the clock back three years. MicroConf 2019, you were working on another idea. Talk us through how the transition happened.

Cody: That’s right. You can correct me, I think this was the last big US MicroConf—it was in Vegas—which feels just like another lifetime ago. I was there kicking around a totally different idea. 

My background is a developer. I work and live in Brooklyn as a consultant in Series B, Series C startups and really understood some of the challenges affecting software teams. I thought, I’m going to build a startup that is being sold to developers.

I was at MicroConf. I had a cofounder who just had a baby and couldn’t afford to work full-time. The zero to one problem is real. At MicroConf, I met the FE International folks. They are—I think your audience probably knows—a brokerage that sells businesses.

Shortly after MicroConf, Keeping came along. It had a great domain. It was a single-word domain, keeping.com, and a handful of customers. The out-of-pocket was not very much. It was this epiphany of, wait a minute. I could spend a lot of time trying to get an idea past the zero stage to 0.1. What about this idea? It really resonated with me that in the world of buying businesses, by the time they reach someone like me, they’ve been through a lot of channels first. A lot of folks probably passed over Keeping because it was a technical mess.

The FEI pitch is it just needs a little marketing to scale and it’s ready to go. Of course, it’s more complicated than that, but being a technical founder, I thought, okay, wait a minute. I can do the work needed to get this back into shape. Again, the out-of-pocket wasn’t very much and it came basically with a validated idea that maybe just needed some iteration.

Rob: There’s so much to dig into here. Did you know it was a technical dumpster fire when you bought it or was that after?

Cody: The due diligence process when you’re buying a business allows you to get into GitHub and poke around. It was like, oh, this doesn’t look great, but it seems to be working. It wasn’t really until a few weeks in when I was really running the business. I had customers emailing me saying, hey, the server’s down. Could you restart it again? We’re doing, basically, my customer support. 

In a weird way, that was a great sign because they weren’t churning out. They were completely tolerant of this service that was going down multiple times per day. I had to wake up at 3:00 AM to reboot the server. 

It’s really hard to know unless you spend a lot of time with the codebase to know how bad this is. It’s definitely a lesson that if you’re buying a business off of something like FE International, make sure you’re ready to support it technically because it definitely could be the hardest part of it.

Rob: I have bought many small software products. I bought info products, ebooks, and an ecommerce site. I bought probably 20+ of them from about 2006 until 2011. That was my last acquisition. There were a few SaaS apps in there, too.

Most people don’t know or don’t remember, but in the early days when I started talking about micropreneurship and being a software developer who doesn’t take venture funding, a big part of that I used to say buy instead of build because if you can get past product-market fit, amazing. You’ve saved yourself 18 months or 2 years from no code to product-market fit. If it gets you to $1000 a month, maybe you don’t have a product-market fit. What did it save you? Six months or maybe a year of nights and weekends depending on how complex the product is.

The first product I ever bought was DotNetInvoice. It was $11,000. It’s a […] load of money. It scared the crap out of me. I grew up making minimum wage, $4.15/hour I think was my first job. The $11,000 was more money than I knew about. I had never driven a new car. It’s all that stuff. It was a huge risk for me. But the moment that I acquired it, I realized this just saved me a year’s worth of nights and weekends. 

It had some issues. It was invoicing software. You have one job, it’s to do math right. And it had math errors in the invoices. It was not a technical nightmare like what you’re talking about. There were bugs, there were some overpromises, and customer support sucked. I fixed all that and it turned into a great business for me. Over its lifetime, it probably made me a few hundred thousand dollars. It was a side project. For $11,000 plus my time, it did that.

I think more people should be open to the possibility of buying apps. As a developer, oftentimes, the big complaint I get or the big reservation is how do you know what you’re going to get? How do you know if the code is going to be a mess? I’m always like, well, if it is, then you fix it. That’s your superpower. You are the person who has this ability, so what are you worried about?

Similarly, I don’t know if I’ve ever said this—and then I’ll actually continue with the interview instead of ranting—but I bought HitTail in 2011 for $30,000. It took me almost two months to get it technically to where I wanted it to be. Basically, I had to migrate servers. It was 40–60-hour weeks for 2 months, and I finally got it stabilized.

Over the life of that product, the revenue, which was almost purely net profit, plus what I wound up selling it for in 2015 was just over $1 million for a $30,000 investment and then months of my time.

Don’t get me wrong. It’s not like I was working full-time on that thing for a year before we started Drip, but I was willing to do the slog that other devs probably weren’t. There was a bit of risk because $30,000 is a lot of money. But at that time, $30,000 felt like $11,000 a few years earlier.

When I hear you talk about this, of course, I would have made that bet, too. But what I want to find out is when you were about to make this bet to put this money on the table and decide, hey, I’m going to go full-time, and I’m not going to build my own thing, were you reticent? Were you anxious? Were there second thoughts? How did that go down emotionally?

Cody: Absolutely. The amount of money we’re talking about here is not insignificant. It’s a big chunk of savings. I’ve got a wife and kids. There’s a partnership here, so it’s not as easy as just being like, well, this is going to work. 

It’s easier now looking back because Keeping is working and it is successful, so I can have some hindsight. One thing that has probably changed from 2011 when you bought HitTail or even 2019 when I bought Keeping is that the buying pool is much wider now. By the time deals make it to us little folks, they passed over private equity and really well-funded aggregators of SaaS businesses.

I don’t want to say we get the dregs, but just be aware that the good stuff may be swiped up before it gets to you. In my case, I very quickly decided that I had to rebuild it from scratch. 

As a consultant back when I was working at startups, that is almost always a bad idea. When I hear peers of mine that are saying, I’m going to do a rewrite, the honest advice I always have is you probably shouldn’t because it’s going to take five times as long as you think and it will never get done. But in this case, the app was just basically unusable.

One of the great decisions I made right away was to not do it myself and to hire a team. I hired a very, very experienced team in Poland, so it wasn’t like buying a team here in New York. Looking back, it may be a little counterintuitive. I probably could have put my head down and six months later or even a year later, come back with a working app.

I think that technical solo founders should stop developing as soon as they can afford it. They should move on to something else. They should start managing and stop developing. That’s an opinion that can’t be applied in all cases because obviously, you need to have some capital to be able to do that, but there’s some level—$2000 or $3000 a month—where the money needs to start going towards an offshore team or a person, and you become more of reviewing pull requests but stop shipping code. Again, I’m really glad I did that in my case.

Rob: That is a controversial take. It’s a take I have said many times. Anytime I say it, I get pushback from devs who say, but I want to write the code. I was like, well, who’s going to market it? Well, I’m going to hire a marketer. It’s like, huh, I think it’s harder for a developer to hire a marketer than to learn to market yourself and it’s easier for you to hire a dev because you know what you’re looking for. You have that superpower and the advantage of it.

That’s a trip. You didn’t rewrite it yourself, you hired a team pretty early.

Cody: I didn’t rewrite it myself. I even chose a tech stack. This is against the developer thing, though. You get to choose the tech stack. It’s written in Elixir and Phoenix, which is a very developer-friendly ecosystem. I was very excited to get in there and basically just spent my day writing code. But I knew from my experience elsewhere that it was just going to be a long, long slog, and I was going to be done and be at the same place as I started, except that nine months would have gone by. I didn’t have that time, nor that money to do that. It felt like, okay, my time is worth more than the rate that I’m paying for an offshore developer, so let’s do that. 

The inverse is true as well, which is if a solo marketer is involved in a technical business, they should hire a marketing team as soon as they can. Don’t learn to code, but learn how to manage developers. Get a little bit technical, find a coach, and work with someone else.

Again, for me, as I said, okay, I’m going to become more of a marketer, I quickly said, I’m going to hire a content marketing agency. I realized I had no idea if they were doing a good or a bad job. I’m just sending them a check and blog posts are going up. I realized, wait a minute, I need to do this on my own for a little while to figure out how it works, what’s good, and what’s bad. 

That’s true with every section of building a SaaS business. You have these little boss battles where you have to become good enough to manage the people you’re hiring. I don’t think we enter as founders there. You have to work for it, and that’s hard.

Rob: Yeah, especially when you don’t have buckets of funding because if you had half a million dollars, you could feasibly hire a really senior person who probably knows what they’re doing and can do the strategy. But when you’re bootstrapped like us, that’s just not an option. Like you said, you’re going offshore. 

Like you, I did customer support for all of my apps before I hired it out. I did marketing for all my apps before I hired it out. I did development on all of them except for Drip before I hired it out, but eventually, I hired it out as soon as I could.

A big epiphany for me and something I tried to preach early on through my books and all that is there aren’t that many developers who start software companies, remain developers full-time, and experience the success that they want. There’s usually some type of transition to a different role. Not always, but I find that that’s pretty common.

You hire a small team in Poland and they rewrite the codebase. Did you have to migrate? Did you relaunch it? Did you have to migrate people over? 

Cody: I bought Keeping with a handful of customers so it wasn’t like, oh my God, how am I going to migrate these thousands of accounts? It was small enough at that point that we could do it by hand. Literally, account by account got pushed over to the new database. Over a period of weeks, we moved all the customers over and then shut off the old app. 

It worked, but again because we were small. I would be really terrified to do it right now. Mostly just the database side of it, but there are patterns that you can do to do that well. It was a scary couple of weeks, but we got through it.

Rob: You get everyone migrated over and then does it start growing? Did you launch it? What happened next in terms of getting traction? When you and I first spoke, it was about a year after you relaunched, I guess. It would have been January-ish of 2021. You got done with the codebase in March 2020 and you were far enough along that it made sense for you to join TinySeed. Some magic happened in those 9 or 10 months.

Cody: I would love to say that a bolt of lightning came through the sky. What happened was that the content marketing that I had been doing started to take root. It’s always a lesson. It takes a lot longer for that to happen than you think. I started to show up in search results for some really important high-intent keyword phrases. The growth just kept happening without me focusing too hard on marketing. 

Unfortunately, that was a little bit of a trap because there was natural growth happening month-to-month, partly because I’m on the lower end of the MRR curve at this point. I realized after about six months, who my customer is? Who am I marketing this to? Keeping has grown organically to this point. There is a lot of advice in the bootstrapper community about niching down (for lack of a better term), which is like, oh, wait a minute, you’re a customer help desk for anybody. How can you market to everybody? You should be a customer support tool for school principals and lawyers.

Since Keeping already has a Gmail niche, number one, you can’t use Keeping unless you’re using Chrome and Gmail. I feel like we’re already sliced off enough of the market that we weren’t going to try to go and be yet another slice which was for some persona. Trying to build Keeping off of its revenue by the bootstraps was really hard when you’re sub-$5000 MRR. There’s just not enough money to pump back into marketing.

One of the reasons I joined TinySeed, frankly, was that you need to have a little bit of a war chest if you’re in this giant market. Zendesk has 6000 employees. It’s a publicly-traded company. There are some advantages to that. They probably move really slowly, but they also take up a lot of oxygen in the marketing space. 

A lot of what I was trying to do on my own was just good enough, but it wasn’t quite enough to get over the hump. In mid-2020, I hired Asia Orangio at DemandMaven and we did a bunch of customer marketing research, which was also really revelatory and a key step in us growing.

Rob: Asia is a friend of the pod. She’s appeared here several times. She’s a friend at MicroConf and a TinySeed mentor. That’s awesome. She’s great.

You touched on this a little bit. You basically said you’re in this space, you’re starting to get traction, and you’re competing against Zendesk who has—I thought you were going to say customers—6000 employees. They’re that big. I guess they’re a public company, right?

Cody: They are public, yeah.

Rob: That’s still a lot of people. You’re competing in this market and you’re competing with big companies. I’m sure there are some really obvious challenges, but what are some of the challenges you’ve seen? How have you overcome them?

Cody: The biggest challenge is just that there aren’t new marketing channels sprouting up every day. Given a different category, I’d be paying a little heavier in paid search because you get a little more of an instant boost of customers. Just frankly, that channel’s closed because of investment that’s coming from these big publicly-traded companies.

The other challenge is that we did a bunch of customer interviews. Another truism that we all know at this point is you have to be talking to your customer and find out what they need. When you’re in a big category that’s been existing for a long time, like a customer support help desk, when you talk to customers, sometimes they say, I just want you to build Zendesk. The features that they know about are the ones that exist in other tools. You have to be willing to say, no, we just can’t do that right now.

An example of this is a chat widget. A lot of my customers want a chat widget, something we may do, but I have to be conscious as a solo founder with a small team that the doors open up from a support standpoint.

The challenges come from just trying to play a feature-to-feature war with these big companies. You just can’t do it. Navigating, finding my little seam in this big space, and understanding why people choose Keeping over these other tools is just super important. Otherwise, I’m just building Zendesk and I’m going to lose, right?

Rob: Right, because your customers are going to just keep requesting like, I want that feature. They used to do that with Drip. Everybody wanted us to build Mailchimp. It’s like, no, that’s not how we win. We need to either have a unique feature set, unique positioning, or own a traffic channel. Just get ranked one higher than Zendesk and Google and you’ll do really well. Will you be willing to pay more than Zendesk for an ad? I know you can’t, but then you’ll do really well.

I hear a lot of people wanting to just replicate an idea. It’s like, I don’t mind people building competitors. I think that’s great. But how are you going to win at least in this small segment? What you’re talking about is understanding your differentiation, right?

Cody: Yeah. It’s communicating that in a way when folks are looking at Keeping. How is this different is the challenge. It is to immediately say, right off the jump, here’s how Keeping is different.

What we find for most folks is another tab and another tool. A lot of folks don’t want that. We have to somehow zoom that into them and say, listen, you can do everything you need inside Gmail. Wouldn’t that be nice?

That takes a little bit of communication. It takes a video. It can take more than you can get off of an h1 on a website. The core challenge right now is making sure that we have space from these giant competitors and there’s a reason to choose us.

Rob: I’m going to start a new segment on Startups For the Rest of Us starting today. I’m going to ask every founder who comes on here. I hope you keep me accountable to this. This segment is called, How Did You Know When You Hit Product-Market Fit?

The reason I want to ask that is because you know it when you see it. I remember pointing to two graphs when Drip hit product-market fit, which obviously is a continuum. You can have it with a smaller group and then more.

It’s not this binary thing, but I remember pointing and telling Derek and Anna, that’s what product-market fit looks like. The two graphs were churn plummeting, trial-to-paid accelerating, and traffic was flat, but all the numbers are going right. I knew it, and we launched automation and blah-blah-blah. But that was my experience of it. I know that a lot of people are always asking, how do I know? How did you know? Do you remember that moment?

Cody: I still don’t know. I’m waiting for the email from you, Rob, to tell me that product-market fit. I think you’re right. Churn is a big indicator. When you’re talking to customers, you can hear it from them whether they’re excited or happy that they found the thing you’ve built. I don’t think you always see it in MRR graphs. A lot of folks imagine product-market fit being this big hockey stick in ProfitWell or ChartMogul. I don’t think that’s the case because you still have to expose your product to the world and you have to sign up folks. It’s really as with these smaller metrics.

For us, we’ve generally seen a really good trial-to-paid conversion. We have some metrics internally that we use, about when is somebody an engaged user, and when did they actually go to paid. And those numbers continue to get better.

That’s how we say we’ve met product-market fit, but honestly, I think it’s a constant thing. You’re always polishing, iterating, and maybe expanding your product enough so that you’re fitting a few more customers at a time.

Rob: That’s perfect. That’s exactly how I think about it, too. Not only is it a continuum. It’s not a winner’s era. It’s more like a 0 to 100 but with a certain group of people. And that ring gets bigger and bigger, hopefully if you’re doing things right. That’s why it’s so hard.

You have this successful business, it’s growing well, you start ranking for these terms, and you applied to TinySeed about seven months ago. Is that right?

Cody: I’m in the November batch.

Rob: When did we run them? I think we ran it in August. Is that six months? Yeah, you applied about six months ago. What went into that decision? I always preface this question with, I don’t bring TinySeed founders on here to make it an advertisement for TinySeed. I think that of the founders I know who have really interesting stories, there are a lot of them that wind up in TinySeed. In addition, it’s not for us to sit here and say, oh, TinySeed is amazing and this and that even though I think it is.

I do want to know, from the outside, when you’re considering whether to take money—whether it’s from TinySeed or someone else—it’s a big decision. It’s a little bit like buying an app. It’s a hard decision to undo and it is a risk. You are giving something up. In the case of buying the app, it’s cash, and in the case of TinySeed, it’s equity in your company. What was that thought process for you?

Cody: It’s funny you asked because my decision to apply to TinySeed was always in the back of my mind. I think this is probably true for a lot of bootstrap founders. Like, oh, I think that I’m going to try that someday. If you’re paying attention to the MicroConf ecosystem, you hear the announcements that it’s happening. I was listening to Startups For the Rest of Us and you announced it like, hey, TinySeed batches are opening up. I literally, on an impulse (in my boxers), went over to my computer and said, I think I’m going to apply.

It was a 5-minute or maybe a 10-minute process of putting in some numbers into a form. I wish I could say it was more considered. You just gave a great preamble about what a big decision it is, but for me, it was like, well, I’m just going to do this first step, see if I get it, and then I’ll make the next decision.

The honest answer on why is twofold. If you’re a solo founder who has two kids—I’ve got a five-year-old and an eight-year-old—there’s the money. Of course, that’s an important reason. But the real honest answer is that you are desperate for validation as a founder. I’m like, am I doing the right thing? Should I keep doing this? It’s not just to your buddies in the business community, but to your wife and your partner.

Joining an accelerator, whether it’s TinySeed or another one, is a really important validation of being like, hey, you’re on the right path, keep doing this. It’s easy to overlook that part of taking investment or joining an accelerator. It’s an external validation that I think we all need as founders. Then, there’s a community that comes with it, which has been, frankly, as worthwhile as the money. We’re all in our basements right now with COVID doing the best we can, but it’s a grind. If anyone tells you that it’s not, they’re not telling you the whole story. Being able to do that in a cohort with other people and to be able to do masterminds with folks that are in the same spot as you is great.

The second reason is the more obvious one which is I’m in a big expensive category with lots of competitors and I need money to market to them. Going to my savings to do that is a limited option. I can’t do that forever. I can’t pour all of the profits into marketing forever, so having an outside investment when you’re in a big category is really important.

It’s allowed me to really invest in content marketing. I’ve hired two writers. I have a content strategist. There’s a whole bunch of folks that came on board because of the investment. That would just not be possible if it wasn’t for that.

Two separate reasons why TinySeed, one financial and the other is emotional.

Rob: I think you touched on some good points. Einar and I talked at one point about why don’t we just raise a fund before we launch the accelerator? It would be so much easier to just write checks because the accelerator is a lot of work. It’s what we signed up for, but we wanted to not just write checks. We wanted to be able to mentor, advise, and build that community. 

If you listen to all the Startups For the Rest of Us and the TinySeed Tales interviews I’ve done with TinySeed founders, they keep coming back to that community. The advice is actually as important, if not more important, than the money.

Cody: Right. There’s a “playbook.” It’s important that folks understand that everyone’s journey is their own journey and there’s no, okay, you follow steps A, B, C, D, E, and you’re going to be a unicorn. That’s absolutely not the case. I do think that there are things that you don’t know that you don’t know, that are incredibly helpful, and you can learn in—again, I’m using this more generally—any accelerator environment. It doesn’t have to be TinySeed that gets you up a level. That’s really important if you’re going to be a founder and a CEO of a company.

Rob: Cody, thanks so much for joining me today. Great story and told very well. If folks want to keep up with you on Twitter, you are @codee. I get the double meaning there; you’re a coder and you’re Cody. That’s if they want to see your latest Wordle. And keeping.com, of course. Again, your h1 is “Delightfully Simple Customer Support in Gmail.” You never have to leave Gmail.

When I first saw this idea, I thought, I like this because Hiten Shah with Crazy Egg and whatever else he had done—I don’t think his metrics stayed in Gmail—I know that to this day, Crazy Egg, which is a very profitable business and quite a few employees, everything’s done in Gmail. They have custom labels and all that. Have you talked to him? Have you heard about that?

Cody: I have not talked to him, but there’s a whole ecosystem of businesses that are riding on top of Gmail. God bless us if Gmail decides to not allow us into their world. Platform risk is real. But there are also three billion users there, so it’s nice to have access to that.

Rob: Awesome. Thanks again for coming on the show.

Thanks again to Cody for taking the time to tell his story and for coming back on the show next week where we’re going to dive into nine tactics for amazing customer support.

If we’re not connected on Twitter, look me up. I’m @robwalling. Thanks for listening today, and I’ll be back again next Tuesday morning.

Rob: It’s another episode of Startups for the Rest of Us. It’s episode 590 with Craig Hewitt and I answer listener questions. We cover topics ranging from building versus buying internal tools, how to compete in a competitive space, accounting software, a founder who has a zombie company where investors want their money back, and I think there are at least two or three more. 

If you recall, Craig Hewitt was the subject of the first season of TinySeed Tales. He’s the founder of Castos, which is a podcast hosting both public and private as well as podcast production services. Craig Hewitt also co-hosts a couple of podcasts, one called Rogue Startups and the other is Seeking Scale. Craig is a wealth of knowledge, runs a very successful SaaS company, and has a great take on all the questions that we talked about today. 

Before we dive into that, I want to let you know that MicroConf mastermind matching is happening again. We do it a few times a year, I think it’s about every 3–6 months. If you’re not familiar, I’ve been espousing the benefit of startup masterminds for almost a decade on this podcast. I’ve personally relied on masterminds to sanity check decisions, help myself with accountability, and frankly, just maintaining motivation and having other founders invested and interested in what I’m doing has been an invaluable part of my journey. 

We now have over 600 successful matches under our belt at MicroConf from over 50 countries across 20 time zones, with a collective ARR north of $150 million. There is a small one-time fee to be matched with your mastermind and that’s all visible on microconfmasterminds.com. That’s where you would also go if you wanted to start your application. It takes I think 5–7 minutes. You give a few pieces of information, like location, experience level, your goals, your skill sets, some business metrics, and producer Xander and the crack team at MicroConf matches you up with other folks. 

Again, we have hundreds and hundreds of successful matches. Hundreds of masterminds that are currently operating and providing value to founders. If you’re not in a mastermind—I think you should be—head to microconfmasterminds.com. With that, let’s dive into answering listener questions with Craig Hewitt. 

Craig Hewitt, thanks for joining me back on the show. 

Craig: Hey, thanks, Rob.

Rob: It’s always great to have you, man. You said you’ve been on the show three times. I think you’ve been on more. 

Craig: I think four, maybe five? Yeah, it’s been a hot minute though.

Rob: It mixes with TinySeed Tales where we did 10 episodes or something across that year. You were Season One of TinySeed tales. Have you gone back and listened to that? Because I haven’t in a while.

Craig: I haven’t gone back and listened to it, but I think about a few of those recordings a lot. We had some really great times and some really horrible times, and I’m scarred. I’d definitely go back and say I cannot believe that happened, for sure, but it’s really cool to capture it in the moment because it’s like having kids. You forget about changing diapers at two in the morning and it all seems like roses so it’s really good to grab it in the moment.

Rob: I would agree. There was one recording you made at 11 o’clock at night. You’re just like I feel so terrible. You did the reality TV thing where they go in the booth and you sent me that recording. That’s a really good episode. I’m working on season three right now. 

Craig: Awesome. 

Rob: Well, sir, let’s dive into some listener questions today. These are some of my favorite episodes where we get to hear from listeners who write in to questions@startupsfortherestofus.com. Sometimes they just send a text question like Devon Tracy did, which I’ll read in a second. Or sometimes they go to the website and they can send a video or an audio question using the link at the top, Ask a Question. 

The subject of this one is a non-technical founder. He says, “Hey, Rob. I am a non-technical founder. I have an idea for a business/software that I’m interested in pursuing. As a non-technical founder with a day job as a high school math teacher and a decent amount of marketing background selling products, memberships, et cetera through Facebook and Google ads, I have an idea. How do I go about finding programmers to help me build this? I know you’ve answered the questions about vetting partners and hiring good talent on the show. My question is even more fundamental than that. Quite literally, how do I find people to talk to about this? Short of going on Fiverr which doesn’t seem like the best option yet. I have no idea how to go about it. Thanks for any insights you have.” 

Craig Hewitt, coincidentally or not, you are also a non-developer founder. What do you think of Devon’s question?

Craig: I’m just smiling hearing this question. We’re about five years into Castos at this point. I am a solo non-technical founder and can totally relate to this situation. I’ll just say for background, I got really lucky on our first developer. Jonathan Basinger was with us for four years. It was just amazing, like really good work. It would help me kind of level up my skills as a founder working with a technical team for the first time because that is super hard. For people who haven’t built software before, to work with a developer, cold, out-of-the-box is just super hard. 

My advice would be to find a technical co-founder. I will never, ever, ever do this again by myself because we’re just at the point now with 14 people to where I feel it’s honestly tolerable, that the risk of me not being technical is okay right now. But before, it was just silly. I had no idea what I was doing and we got by with a lot of help and with a lot of really good early people. 

I think they’re asking how do you make sure you get those good people? It’s so hard. Then the risk of if you get the wrong developer, you’re just sunk. You’re going to spend a whole bunch of time, money, and knock it off the ground. I think you need somebody with skin in the game, or them like that. Unless you had a bunch of money or were really sure of your hypothesis for product-market fit and your marketing abilities, to where you’d think you’d get off the ground really quick, like a big audience or something, then you probably could swing it. If you don’t have those few things, I would find a technical co-founder.

Rob: Yeah, there is a reason that I think it’s a low two-digit percentage of bootstrap SaaS founders don’t have at least one technical co-founder. I’m going to take these off the top my head, but it’s ballpark. I think it’s somewhere around 15% of TinySeed companies don’t have a technical co-founder like yourself. Somewhere in that 10%–20%, but I think it’s about 15%. 

I think in the broader kind of indie SaaS space—we did the State of Independent SaaS with MicroConf—the number is a little higher. I think it’s maybe 20% or maybe just north of 20%. It’s a vast minority because of just what you’ve said, of SaaS is really complicated. Building info products, courses, and all of that takes some expertise, it takes some time in front of a microphone, or writing, or audio or whatever, and those are skills unto themselves. SaaS is like a moving jet engine. As Reid Hoffman says, you’re assembling it on the way down as it’s crashing to try to keep it from going. It’s very complicated and it’s constantly moving. 

Craig: And just to peel back what you’re saying, the needs of your technical team change over time. That’s the really hard thing. You could find a good developer for an MVP, but they’re probably not the person that’s going to help you scale and stabilize your AWS setup. That’s where a person that 100% you trust has your back no matter what is just super important because you don’t even know. You don’t know what you don’t know.

Rob: That’s right. When I think about it, if you had buckets of money, you could try to hire and find an expensive, really good developer in your own country. And that is possible. If I were good to go about that, I would get referrals, I would go to the Toptal. There are certain sites that are just higher priced, it’s not Fiverr. It’s places like that. 

One way to get to the point where you have those buckets of money is to stair-step your way up if you’re non-technical. It is to start with those simple products, whether they’re info or courses. Building a Shopify app, having that built, or a WordPress plugin, is simpler than SaaS, and the technical debt is less. You’re not self-hosting it so you don’t have to worry about all the DevOps stuff. 

Again, you don’t know what you don’t know, but there’s a reason that I’ve espoused the stair-step approach for years and years, it’s for both technical and non-technical people is that then you learn 60% of what you know, 70% of what you need to know in order to run a SaaS. If you’re successful, you get some revenue out of it. Now you take that revenue, and you parlay that into either hiring your co-founder, or at least when you approach a technical person and say, I want you to work nights and weekends, while you have a day job as a developer at a Fortune 1000 Company. 

They get these offers all the time, so they’re going to say, why should I do this for you? You can say, well, I have this money that I can pay you. Or look, I’ve already built a successful product. I have an audience and I want to sell it to the same one. Or I validated it, I pre-sold it. I have an MVP. There are all these things. Coming to a developer and asking him to be your co-founder for free, may be even more challenging than trying to hire one because developers just get this pitch all the time. If you’re a good developer, you do, every few months—a relative, someone says this—and that’s the challenge. 

Craig: I would say if you are hell-bent on going this way and wanting to do it right now like some kind of community like MicroConf Connect or whatever, because there are those people searching for their next thing in there, too. It’s the right time to fit in a lot of times. It’s the right person at the right time in their career, changing career paths. You might say, hey, yeah, I got six months of the runway. I can go do this. Let’s give it a whirl. But that’s a big risk for them, so you just have to understand that.

Rob: We make that analogy often of finding a co-founder is like finding a spouse, a life partner, in that you’re probably going to have to date several, and it’s not going to work out. That’s the hard part. Okay, so you start this SaaS app, someone starts writing the code, and then it doesn’t work out. Now you have this code base. You have this legacy that may be even more concrete and heavy than the emotional baggage of dating. Am I right? 

Craig: Absolutely. 

Rob: So Devon, it’s a great question and obviously, it’s not all sunshine and roses. I wish I could tell you there was a magical thing. I’ve hired good devs on Upwork. I’ve hired terrible devs on Upwork. I’ve hired good devs from Elance back in the day and I’ve heard folks hiring through Toptal. 

Again, if you have the budget, there are agencies that can build a good product, but boy, to pay them to build a SaaS app when I don’t know if you have a product-market fit. Certainly you don’t have it, but how far along your confidence level is, that this actually is a good idea and you want to drop $30,000–$40,000 on it. It gets tough. 

Then what do you do? You launch. You get a couple of thousand in MRR, best case. Now, who maintains that? Because agencies are expensive. I’ll stop talking there. Thanks again for the question, Devon. Let’s move on to our next one. 

This question is from Prabat and he says, “Looking for advice for a poor startup founder. I’m a new founder from a beautiful but poor country, Nepal. I believe software has no borders and all it needs is a good idea to be a global idea. Hence, I’ve been trying to learn for the past nine months. 

I have a question. I have a SaaS idea but I lack funding as my country’s startup ecosystem is not very advanced. I’ve started to do some client projects, which allow me to invest in my idea, but sometimes I find it very hard to manage between client projects versus my in-house ideas of my SaaS idea. 

Clients sometimes come up with very hard deadlines, which happens quite often, and that gives us no time to manage our own in-house SaaS ideas. What do you think would be a wise way to manage between these two pulling the forces? I don’t want to be dependent on client projects to sustain my startup. Every week listener, Prabat.”

What do you think, Craig Hewitt? Have you ever been in that boat where it’s kind of nights and weekends and they are competing for priorities? 

Craig: Yeah. I think all of us come from this type of scenario. Day job and wanting to start something up on the side, or doing consulting or client work and starting something up on the side. For me, there are a couple of paths. If you’re quite sure that your idea is good and/or you have an MVP, then joining an accelerator program and getting money is a good way to go. I will say in all fairness, the amount of money that you get from TinySeed is often not enough to get you from zero to one if you’re by yourself. I know that’s not the model that TinySeed is going after these days. 

This probably my second part is to try to make it work with nights and weekends and maybe work for days on client projects and Fridays on your own thing or something. Be pretty regimented about that. I know someone who owns a consultancy and owns a bunch of products. They actually build the products back through the consultancy, to make all of this work from an accountability and accounting standpoint.

I would maybe try to do both, really be diligent about setting aside a day or a half a day a couple of times a week for your product, and pay the bills with client work. Raising prices on the client work obviously makes that a lot easier, so if you can raise prices by 20% then you don’t lose any of your revenue. Generally, I think there’s almost always room for that as a consultant. 

Then once you get a product and have some degree of product-market fit, things like TinySeed make a lot of sense to really just accelerate your ability to stop doing client work and go full-time on this more so. That’s probably what I would do. 

Rob: I think that’s a really good suggestion. There is no easy answer here. There is no silver bullet or magic pill that you’re going to take that’s going to help you. I’ve heard of a lot of agencies and in fact, I was on micro agency myself as I was doing these products. I also had to say, I can bill $150 for the next 60 minutes or I can go work on this product that is making me almost no money right now. I had to make that decision every day. 

That $150 went to my bottom line and my family’s bottom line, and I really struggled with it emotionally. Morally, am I doing the best for my family if I’m taking two hours a day, $300 a day, that’s $1500 a week, that’s more than $6000 a month that I could have been billing because I was always booked full time? I just had a good funnel. I had to wrestle with that, which is the same thing that you’re asking about. How do I reconcile that? Especially with things that aren’t a sure thing. And that’s the hard part. 

I really liked Craig’s idea of being disciplined about it at either carving out one day a week, or it sounds like you have a small team. You fork one developer off and they’re doing the skunkworks project and you never pull them into client projects anymore. I don’t know how big your team is. 

At a certain point, I’ve heard some agencies that take 10% of their entire team, all you’re doing is focus on this one idea. I would be careful. I think Prabat may have mentioned that it was in-house products or projects. I would focus on one with your already limited time. Then I think a big thing is are you building or are you validating? 

If you haven’t validated, you shouldn’t be building at all. Just because you can write code doesn’t mean you should be writing code. The biggest risk is not whether you can build this product. The biggest risk is that no one will care and that you won’t be able to market it.

That’s the very first thing I’d be figuring out is, what are my channels? Where am I going to get customers from? Then start building those and talking to those potential customers to find out do they actually need this? Do they actually need this thing we’re building? Or are we wasting our time? Very much a customer development mentality.

Craig: There’s a very popular book called The Mom Test that talks a lot about this, is people tell you what they think you want to hear. They’re dishonest, not in a malicious way, but they don’t want to be jerks. I think when doing customer validation, especially these days, I think it’s super hard without a product. Maybe pick that book up and read through it so that you can make sure you’re getting honest and objective feedback on your idea before you build something. 

I’ve seen a lot of friends and colleagues in space, validate something they thought, they go build it, and then it doesn’t work out. That’s a bummer, just in terms of opportunity cost, real cost, and everything. I would definitely be careful about how you approach that.

Rob: Here’s an advantage you have, Prabat. You live in a country with a very low cost of living. I’m guessing the wages are low compared to what you might be able to charge if you’re going to market to the US market. You’re going to have a lot more revenue than you will have cost. We have some folks, TinySeed applicants or folks at MicroConf who I talked to. They’ll be at $10,000 MRR, and they’ll have a team of eight working on it. I’m like how are you bleeding money? They’re like no, we’re at breakeven. Well, how are you breakeven? Well, we are in India and it’s just very inexpensive. I can hire developers for pennies on the dollar compared to what would be in the US. You have that advantage of your cost basis is low. 

Another thing is if you are able to do agency work, do your consulting work for international clients in Europe, in the US, you can obviously bill more. That’s the internationalization of all this, the kind of globalization I think can provide you with some pretty incredible opportunities. That’s the advantage you have. 

It’s the advantage we kind of had being in Fresno, California and bootstrapping, not to the extent that you are in Nepal, but to hire a developer was about a third of the cost of the Bay Area, which was a three-hour drive away. That was a reason I didn’t live in the Bay Area. I didn’t want to deal with those costs as a bootstrapper. Think about that as potentially your superpower. Thanks for the question. I hope that was helpful. 

Our next question asker would like to remain anonymous. He says, “I have a zombie company and investors want their money back.” He says, “Hey, Rob. I’ve been a longtime listener of the show and your approach and ethos have always resonated with me. Your podcast subjects have an uncanny knack of being timed perfectly with whatever stage of the startup journey I happen to be up to. 

My question is essentially about whether I should be prioritizing getting investors their initial investment back to them or continue to grow my company for the benefit of the co-founders, but probably not the investors at least for a number of years. I will say this is a longer email so bear with me.” 

He says, “To keep the stories brief as I can, my company raised two rounds of capital—2017 and 2018—from a mix of venture high net worth individuals and a couple of friends and family. The total amount raised over both rounds was in the low hundred thousand. It’s not a huge sum overall, but let’s say the friends and family would love to have their chunk of change returned as soon as possible.”

I’m going to break in here. It’s the first two months of 2022. Let’s just say it’s the end of 2021 for date’s sake. This is a three- to four-year-old investment. If people want their money back, that’s a problem because startups don’t return money back quickly. I will couch that and resume the email. 

“My business had a rather inflated valuation for the second round so those friends and family got a pretty rough deal. Then in 2020, the business took a dramatic change in direction.” Basically, he lost his co-founder. Now, he’s running it solo. 

He says, “Although we’re finally breaking even, seeing good growth, ultimately, the company is in more of a lifestyle business for the next few years. Not so much the venture or the high net worth investors, but the friends and family seem to be getting impatient. Realizing they didn’t invest in the next rocket ship, they’re questioning when they can get their money out. If we sold the business now—and there is no guarantee we could sell—investors might get 75% of their money back, but the ordinary shareholders, meaning the co-founders, would likely get nothing.”

Breaking in here, I guess there’s a 1X liquidation preference. “If the business continues to grow for (say) another five years, it’s likely the co-founders would get something back after sale and investors are more likely to get all their money back, but realistically not much more. In other words, investors’ money would be stuck in the company, not doing a great deal for them for five or more years, but co-founders would benefit from the extended period of growth. 

Should I feel guilty for building the business essentially for my own employment and future gains of the co-founders? Or should my priorities be to maximize the return to investors no matter what, and therefore sell the company now given that they’re unlikely to see much additional return for a number of years?”

Craig Hewitt, what a predicament. what do you think?

Craig: This is a really hard one. We have raised money in two different rounds, just under a million dollars total. I will say, personally—and this is a really personal thing—I feel an enormous obligation to return money to our investors. It is probably the thing that drives me most days, the business is for me, but also a chunk of the business is not for me anymore. It’s for our investors. That’s the decision that I made about 3½ years ago when we joined TinySeed. 

I think that for folks who haven’t brought on investors, that’s definitely something I say, when you have an investor, it’s not just your business anymore. You have a responsibility to them. This is going into answering the question. I would say that you need to do a little bit of both here. You definitely have a responsibility to make a return for investors if at all possible. If they’re not going to get their money back right now, then right now is not the time to sell. I would ask them to just be patient and just explain this exactly to them. If we sold the business right now, you’d get $0.75 on the dollar back. I think that’s a pretty bummer deal and if you’re hell bent on that, then maybe we can work something out to where you could start paying it back over time or something.

To break even, that would be tough. They don’t have hundreds of thousands of dollars in the bank to just pay them back with. That’s tough, but I probably would not try to just sell the business now and liquidate to give people an impartial return. Just try to frame it with this is where we are. This is what has happened with the co-founder and the setbacks we’ve had in the business. This is what I see as our trajectory over the next couple of years and in two, three, or four years, this is what I’m hoping to see.

There’s this term of lifestyle business in there. Some people that listen to this podcast might not like this. To me, lifestyle business and investors do not go together. When you take investors, you’re signing up for the hardball and really trying to build a great business that is really high value in the market. When you create a lifestyle business, you’re creating the business for yourself so you can make a bunch of money and not work a lot, to me. There’s nothing wrong with either of those but the two can’t go together to their fullest extent.

I would say that they probably need to get serious about growing the business and make that return for their investors. That might not be the answer they want to hear, though.

Rob: I don’t know that I disagree with anything you’ve said. I think that this is the trouble with friends and family money. There’s this phrase, it’s a pejorative term, but they say they’re smart money and there’s dumb money. Usually dumb money is it’s friends and family who don’t understand startups or it’s maybe the dentist or the doctor down the street who wants to write a $25,000 check and then feels like they need to give you a bunch of business advice about your start up.

That’s not what you want. You want business advice from the smart people, the venture capitalists, potentially high net worth individuals if they were entrepreneurs. You want advice from them. I guess as a cautionary tale, it’s not going to help the asker here, but as a cautionary tale if you’re going to take money from friends and family, I would not only sit down with them, but I would put it in writing as well in an email, please realize that this is more than likely to go to zero than do anything else. It is also, if it’s going to do anything else, going to take me 7–10 years. That’s typical liquidity for venture backed startups.

I’m just going to throw that number out. For bootstrappers, that’s actually quite a long time for someone to run a company, but I would just set the expectation. It’s really far out. The go to zero part, what’s so interesting is the venture capitalists and high net worth individuals are like whatever, because (a) they probably already knew that. They did not expect money out of a startup in three years. And (b) they have a portfolio of investments. How much do you want to bet, they don’t have one startup investment. They have 10, or 50, or 100 and you’re one of many.

Friends and family, again, the trouble with it is exactly that. If they write you a check and it’s a chunk of their net worth, everything’s riding on that. If it doesn’t win, they lose a lot of money versus if they had a portfolio of 10 or 20, which realistically if you’re going to get into angel investing that typical advice is, you don’t make a lot of small bets. If you have $25,000 to invest in startups and you’re accredited, make 25 $1000 bets, or 10 $2500 bets because you just don’t know which of these is going to hit.

Craig: Maybe applicable to this but just curious, for me the return expectation for an early-stage angel investor is double their money. I’m just reading between the lines here. This is maybe not a unicorn business, which is totally cool. We’re not either, but we’re hoping to double our investors’ money. I think that that’s a fair expectation. For folks who maybe are earlier on the process of just talking to angels, that’s what they should expect and a good outcome.

Rob: Angels who are used to venture investing, they want it to go to zero or 100X usually. There are certainly more angels like a lot of the TinySeed LPs who would say a 5X or a 10X return is good because there are a lot of downside protection in SaaS because the value usually doesn’t go to zero. If you build anything of any revenue these days, you can sell it. I don’t know of angel investors who would be happy with a 2X return. Usually, in my head 3–5 is the more sure bet, the more sure thing, but also it’s a lot of individuals.

You and I are just generalizing across a bunch of people and some people are fine with a really not risky bet. Because betting on a SaaS company, once they’re north of $1 million and have a pretty consistent growth rate, there are not many bets I know that are as sure in the space. Certainly buying individual stocks is not. I don’t think it is as predictable as a return. The downside protection is really strong. 

Anyway, question-asker, I think Craig’s advice is probably correct. If I were in your shoes, if I was still interested in the business, I would continue to run the business. I would focus on growth. I would focus on getting investor returns, but also focus on getting me a return for the years that you put into this business.

To walk away from it now and walk away with nothing because some people want money, and I get it. Friends and family can be a pain in the ass and they can ruin your thanksgiving. Some people don’t take friends and family money because of it, but the right decision, the non-emotional decision is to keep going and hopefully provide them with a return and you as well but definitely feel your pain. It sucks to be in a predicament.

The next question is actually From Twitter. I had posted a few weeks ago about topics for Courtland Allen and I to discuss. There were 30-something topics and we covered four of them. I just pulled this one down because I feel like it’s a quick one. “Do you guys have any resource recommendations for accounting software for founders? It’s a boring topic but it’s essential when you do actually start making money.” What do you think?

Craig: We’ve used Bench for a long time all the way back to the PodcastMotor days and it’s really great. I think that we are just getting to the point where we might need something more at this point, and that’s a whole other topic. I don’t have a recommendation for whatever the next step is after Bench, just to get a little more sophisticated and fine-tuned or fine-detailed accounting, but it is accounting software and a service in one. It’s about $150 a month and I think it’s great until you get to (say) $1 million. I think it does everything you want it to do.

Rob: For me I use Xero. I believe they’re an Australian company and they basically went after QuickBooks Online and they said we’re not the QuickBooks Online. We are not the crappy version of that. They import from all the credit cards and all the Stripes and PayPals and all that. Then I have an accountant/bookkeeper who monthly logs in and does the reconciling. Bench has it built in where they have people on staff and I don’t know if Xero does or if you just go to their page with a bunch of freelancers and hire people. But if you’re just looking for software, I think either of those is a great resource.

Next question, “How do you build in a competitive market as a solo founder? Example, a community platform, social media tools,” and he didn’t say it, podcast hosting. I’m throwing it in there. I picked this one out just for you. How do you build a competitive market, sir?

Craig: I think that the couple of things that I would really keep in mind are first of all to have something that’s different. For us it was our integration with WordPress early on. Now it’s how we think about and how we integrate with other tools around private podcasting. Those are the two things we hang our hat on. You can easily say we’re podcast hosting for people that do X, or Y, or want Z. That’s just really easy because then you can be really opinionated on your marketing copy on your website, where you stand in the market, and how you talk to potential customers. That’s the easiest not knowing where the question asker is coming from. 

I think the other one that’s really powerful is early on, especially the founder having a really strong brand. I think that scales to a point and then doesn’t anymore. It is a really nice advantage to have early on. I think I had a personal brand we started and that helped. There certainly are people that have bigger ones. That just helps you get off the ground, but I think just being as opinionated as you can, your positioning, stance, messaging, and everything is the easiest way to stand out.

Rob: You’ve touched on one of the four advantages for faster SaaS growth that I had named in this talk that I did four or five years ago, but it was having an audience, having a network, being early to a space which, while there’s competition—that one doesn’t apply—and owning a unique traffic channel. I think any of those can help you in a competitive space. 

I liked your mention of private podcasting because that’s essentially a unique position that you’re taking. You’re being opinionated in your copying and you’re positioning Castos as different from all the other players. You’re carving out this corner and if you want public and private podcasting, you come here. 

I think I’ve harped on this a lot with Mike Taber, when he comes back on the show of what do you have that’s unique in your startup? You either need unique positioning or you need to own a traffic channel. I’ve seen entire businesses built on buying a WordPress plugin and owning that traffic channel, or being really good at SEO. We see SignWell doing quite well, but he’s competing against DocuSign and all these other e-signature things.

He does have some unique positioning. This is Ruben Gamez, the founder. He has been on the show many times. He has some unique positioning but really without owning that traffic channel. I used to call it a proprietary traffic channel, but that’s not really what it is. I’m really good at this or I own, like I said, an add-on for an ecosystem and I rank for this traffic. 

So there’s unique positioning—we’ve touched on—audience network, and owning a traffic channel. The one other thing that can help you and I don’t know if on its own if it’s enough, but it’s having a big incumbent that is hated. Having a QuickBooks for Xero to go against. Having an Infusionsoft for Drip to go against. Having—

Craig: Having Libsyn for Castos to go against.

Rob: Yes. Where people are, I use this thing and the incumbent is such a pain in the ass. It’s like, we are not that. We are that that doesn’t suck. That’s your headline. I hear this with, I think Intercom. Intercom is a good product and offers all kinds of stuff, but what they’ve done with their pricing, they’ve gone so far up market that I’m still shocked that no one has come in underneath them. 

I hear people complaining about Intercom and yet, where is that? Where’s that upstart who’s going to come in and take out the, not the bottom end of the market because that sounds like your bottom feeding but I do think there’s room in the spaces where the money’s in the enterprise and they just keep going up, up, up, up, and it leaves room for you to sneak in as a starter founder.

Craig: I got just two things to piggyback there. One, I think Userlist has a really good chance of capitalizing on Intercom’s move up market. They’re a great tool and add a lot of really cool features that are addressing the needs that people who would use Intercom have. I think that that’s one to watch out for. I agree, I think it’s an enormous opportunity. 

A recommendation for resources on positioning is a podcast called Everyone Hates Marketers. Louis there is a friend and a customer of ours. I’ve known him for a year, but just really strongly positioned himself and talks about this a lot and is just a really good resource for folks who want to say, how do I stand out in this market? He definitely does sink in.

Rob: I’ve been on that show. I was on it a few years ago. It was cool. Last question for the day. When do you buy versus build tools that you use in your business? I’m thinking this one is a softball, but I think we’re going to agree. When do you folks at Castos build versus buy tools?

Craig: We almost never built. Do the math on it. Josh Pigford had a great blog post about this from Baremetrics. It just almost never makes sense to build it in-house, unless it is really integral to the day-to-day customer experience of your application. I’m talking just SaaS specifically, but what I wouldn’t do is take people off of my platform onto the Stripe-hosted checkout page to check out or to cancel their subscriptions. I want that in-house. That’s a really specific example. Basically, anything else you use to run your business should integrate or Zapier-connect to what you’re doing and you shouldn’t have to build any of it.

Rob: Yup. That’s pretty much it. Whenever I used to hear people say we’ll just build this in-house. They’ll be talking to potential customers with whatever SaaS I happen to be part of or advising, or whatever, it’s like they have no idea. Developers think you can build… SavvyCal, it’s just this link. I’ll build Drip in a week. That’s what we think until you get to the DevOps and the security and the spam. It’s endless. It’s really hard. Build Castos in a week. I can just host some flat files on the server. Yeah, but then there’s no CDN. Okay, so now I’m going to have a CDN. Okay, but no you don’t have X, Y, Z.

It’s just this endless thing. There’s a reason that you have a team of 14 people working on a product that some developers somewhere thinks they can build in a weekend. The same thing, if you want to get onboarding stuff to Appcues-type stuff into your SaaS. 

At Drip when we were going to do this, one of our developers said why don’t we just build it in-house? I’m like, because then we have to maintain that product. You have to make it, so marketing and customer success can come in and update it. Do you want to build and manage a WYSIWYG editor? Then they report bugs and they go to you? Because I don’t want to pull you off the core product that’s making us millions of dollars to maintain this other thing that we can pay $200 a month, $500 a month. It’s crazy cheap compared to your salary

Also I think as developers, as a recovering developer myself, we just think we can hack everything together. It’s usually not the right choice. Usually, the right choice is building things that provide value to your end user. 

Here’s when we used to have to build everything was in 2005–2007. You’re building a SaaS app. There was no Zapier. There was no Stripe. There was no Appcues. All the stuff we rely on today is great that we have this ecosystem. I know it’s expensive and I know we get subscription fatigue. I’m sure you’re like $10,000 a month in a $50 a month app.

Craig: Why is my American Express bill four pages long?

Rob: Exactly, and it’s because of that. But you know what? If you didn’t have that, you would need another developer or two to build and maintain crappier versions of all of that just for you. We live in an amazing time I think.

Craig: I think that the next level topic with this is leverage of your time. Just paying Appcues $800 a month lets you not worry about it and focus on other things. The kind of rotation you’re talking about is not maintaining this thing but letting you, your developers, your team, and your support folks all focus on really important things that move the ball forward in a meaningful way, because it’s worth way more than that $800 a month to those folks.

Rob: Yes indeed, sir. Thanks again for joining me on the show today.

Craig: Good time. Thanks Rob.

Rob: If folks want to keep up with you, you are @TheCraigHewitt on Twitter. I’d like to recommend your audience a podcast. I know Matt’s doing a lot of the hosting there now, but audience, it’s legit. If folks are into podcasting and want to hear about the creative process, episodes come out every week. I’d encourage you to go check that out. And of course castos.com, but that almost goes without saying. Thanks again, Craig.

Craig: Thanks Rob.

Rob: If you have not checked out Craig’s podcasts, they are two shows that I listen to every week, Rogue Startups and Seeking Scale. I recommend you check them out. Thanks for joining me every week on the show. We are approaching episode 600 and I believe next month, we’ll be 12 years of Startups For The Rest Of Us. I’ll be back in your ears again next Tuesday morning.

Rob: In this week’s episode of Startups For the Rest of Us, I talk with Jason Buckingham about how he made essentially 70 cold calls to find a startup idea. Jason was a developer and then a development manager at Microsoft when he decided I want to build a software product, I want to build a SaaS. He didn’t have any idea how to do that or really what idea to build.

You’re going to hear the story of how he just grounded out, just put in the hard work, and eventually found an idea that became Senior Place, which is now a successful SaaS team size of four. You’ll hear us talk about how they got into TinySeed back in 2020 and then again in 2021. You’ll have to listen to find out how that all panned out.

It’s a great story about focus and about, perhaps, just putting in the time and doing the work that it took to get it done realizing that it might be harder than he wanted it to be, or it might take more hours than he wanted it to, but being really focused on, I’m going to succeed, I’m going to brute force this thing until it works. With that, let’s dive in to my conversation with Jason from Senior Place. Jason, welcome to the show.

Jason: Hey. Nice to join you, Rob.

Rob: Absolutely, man. You are the co-founder of Senior Place and your H1 is Placement Software Designed Specifically for You! Okay, let me paint a picture. You know how there are realtors, Jason? I’m not telling you this, I’m trying to tell this for the users or the listeners of this podcast. There are realtors and there’s software for realtors to be able to help manage someone buying a house. You are software for these placement firms that might help say, my elderly mother, find a senior living facility, and these are like realtors or brokers. Is that right? Am I summarizing this right?

Jason: Yeah, that’s exactly right. They’re the equivalent of realtors but for the elderly. Instead of someone buying a house, they’re helping people who are going to move into an assisted living community. They do the same job as a realtor would do. The compensation is somewhat similar. They get paid by the assisted living facility. We build software to make that process a lot easier for them to manage the communities and the clients’ needs because there’s a lot that needs to be matched from side to side.

Rob: Got it. You have a handwritten font on your website, Placement Software Designed Specifically for You. People go to seniorplace.io, they can witness this handwritten font. That’s an unusual approach for a SaaS app. Did you design this out yourself?

Jason: Absolutely. I’m going to take ownership of that as well. A big part of that is the demographic of our customers. We are not selling to hip trendy 20-year-olds. Our average customer is most of them are female, most of them are in their 50s or 60s. We do have a number of male-owned companies as well, but that seems to have worked pretty well for getting customers so far.

Rob: That’s why I wanted to call it out. There are several exceptions to rules that you and Senior Place have. If you look at the website design, it does not compare to a lot of MicroConf companies or a lot of TinySeed companies, but those companies are selling to designers, developers, picky UX people, and Senior Place is not.

If you look at the screenshots for software, if you look at, again, just the marketing side, someone might turn up their nose and say, oh my gosh, this is not the amazing Squarespace site that I might be able to get from blah blah blah. But it works because you’re in a space where that’s okay.

Jason: I think it comes down to knowing your customer and knowing what’s important to them. I don’t want to disrespect our technically skilled customers, but we do have a lot of customers who are very technically challenged. I can probably share a story here that I maybe shouldn’t if it gets listened to.

I’ve done Zoom calls where I’m screen sharing and some of our customers on the call are trying to click on my screen share saying I can’t edit the box. I’m like, are you on your page or you on the screenshare? We just have customers who fall into that category. They really appreciate simplicity. They really appreciate something that feels comfortable. We know that because we talk to our customers.

When we get into our story later about how we started the company, it’s all been conversations with our customers. I actually just had a call with one of our customers this morning who’s one of our original for-users. Talking through with them again on the phone, it’s just really great to connect directly with them and hear in their own words what they like and what they don’t like.

By and large, we’ve had customers tell us, me and computers we’re not even acquainted, but your software is so easy to use it’s meeting my needs perfectly. That’s really what we’re targeting. We’re not targeting the cool, hip audience, we’re targeting our demographic and what they need.

Rob: Real software for real people who pay us real money. It’s a tool. People don’t want software, they want a result. In your case, that’s making it easier to track and place folks. Two episodes ago, I interviewed Michele Hansen. She wrote a book about getting really good at customer interviews.

That’s a big theme of your story—your and your co-founder story—is, we’ll get into it in a second, but the entire idea came out of a bunch of cold emails and cold calls, which is unique. I’ve heard this approach espoused in certain—there were some courses five, eight years ago by a SaaS founder who has basically built an info product course about, you can just cold call and find ideas. I remember, for most people, it didn’t work.

I’m going to pull up the State of Independent SaaS report, which we do with MicroConf each year, and we ask people, which of the categories below best describes how you develop the idea for your product or company? And 45% of respondents said it was a specific problem I was experiencing and another 22% was a problem my customers or my clients were experiencing. Right there, that’s 2/3 of the results were my problem or my customer and client’s problem. Another 13% was an experience at my day job and another 11% was a problem a friend or relative was experiencing.

I think we’re over 90% at that point and we haven’t gotten to what you did, which is the next one, which is 8% of folks who responded said it was research. Then it was 0.2% purchased it and there was other. I’ve heard the idea of, you go to Facebook groups, you do the cold calls, you talk to attorneys, or you talk to real estate agents, you just find a problem, and then you solve it.

I’ve always espoused absolutely to find a problem, but finding a problem cold just by conversations is hard to make work, it often doesn’t, and it’s a ton of work to do it. With that, I want to tee you up, your story is exactly this and you made it work. Let’s flashback, spring of 2016, you’re working at Microsoft, and you’re looking for a startup idea. Take us from there.

Jason: I was at Microsoft. I loved Microsoft. I was there for almost 15 years. It was a great company, but I didn’t want to stay in corporate America forever. I am not creative enough to have a great idea. I didn’t have customers that I knew had problems. I went down that path that 8% of people did with research.

For me, I looked at my own past. When I was a kid, my great-grandmother lived near us. She was in her 90s. She needed to move into a nursing home. It was just this emotionally traumatic event for our extended family. Maybe this ties into a relative thing, but this was 20+, 30 years ago.

My grandma put her in the nursing home. She felt super guilty and then in 2016, I was thinking what if we had a way to deal with that? I know that there are home care companies that send care providers directly to your home and care for your loved one. This would have been perfect for great-grandma and grandma.

I started cold emailing some home care owners that I just found their website online, I searched for home care and whatever city, and then I sent them an email and said, hey, my name is Jason, I’m a software entrepreneur. I’m working at Microsoft right now, sure, I’m an entrepreneur. I said that in the email and that I want to find ways to help their companies with whatever their software challenges might be. 

Would you have 15 minutes to chat just about yourself, what you do day-to-day? I got a really high response rate on those emails saying, sure, because I was only asking for 15 minutes, I wasn’t asking for much. I was asking to talk about them and every email I sent was personalized to them.

With those three qualities of each of my messages, people said, yeah, let’s talk. On every call, 15 minutes came and went, and I was like, okay, I want to respect your time, no, let’s keep talking because I was talking about them. I didn’t talk about myself at all on those calls. I just said, hey, I just want to learn what you do, I want to see if there are ways I can build software that would help you.

It was super intimidating when I first started doing this because how are they going to receive me? I don’t like salespeople. But I did send the cold email first, they did schedule the meeting with me, and so I persevered. I think the thing that made it work for me is I kept going. I did 35 calls with the home care industry and person after person after person said, we don’t have this problem. We actually have this software we just bought that is working really well. Next company, oh, we’re using that software, we just switched to them last month. Next person, oh, we’re switching that software next week.

Somebody was already solving the problem and they had $50 or $75 million of VC money.  They had a big head start with a lot of money. I just kept going. I don’t give up easily, and on call 35, somebody said, well, we do home care and we do senior placement. I was like, I’ve never heard of senior placement, what is that? That’s where I went on the next steps.

They told me, we really need help with software in that space. I said, does anybody else do that? Are you the only one? I’ve never heard of this. Oh, no, lots of people and it’s a really rapidly growing industry. We went and called 30–40 more placement agencies from around the country. This was something I was doing.

I’m based in Seattle. At 6:00 AM, I’d get up and have a call at 7:00 AM with somebody on the East Coast so I could do that, then still get to work, and do my day job. I was doing those calls three or four days a week for a couple of months.

Rob: That’s the hustle. I get emails from folks who are like, I have a day job and I’m tired when I get home from it, and what should I do to work around it? It sounds like you just didn’t give a crap that you were tired and working around. It is just what you were going to do. Is that an innate motivation? Were you raised with that motivation or were you so hungry for this that you’re like, I have to do my own thing and I’m just going to brute force it until it works?

Jason: I think there are a couple of things. One, I was hungry for it. I feel like I have entrepreneurial desires. I want to run my own company, I want to figure out the problems, I want to wear all the hats, and do all the things. One, I was hungry for it. Two, I don’t give up easily.

A neat story from my grandfather. He was a three-star general in the Air Force. His dad left him. He was raised by a single mom, and this was in the ’30s and ’40s. He wanted to get an appointment to West Point. To get in, you have to have a congressman sign your paperwork and get you in. He ended up going to the congressman’s office saying, I want to meet with this congressman in his hometown. The congressman’s secretary or whoever it was at that time said, no, he’s busy. He said, well, I’ll wait.

He waited all day, Monday, came back on Tuesday. The secretary said, what do you want? I’m here for the same thing, wait all day Tuesday, all day Wednesday. Sometime on Thursday afternoon, the congressman’s like, who’s that guy who has been sitting there all four days this week? I think just seeing that when you persevere, when you keep going, and when you don’t quit, you’ll eventually find success. That’s how my parents raised me and that’s what we did when we were trying to start Senior Place.

Rob: That’s that. I often say hard work, luck, and skill are the three things you need to achieve some success. It sounds like hard work was a big part of these early days. You may have had some luck because you had 35 calls and one of them finally said, oh, senior placement. It’s like, oh, you could say, yeah, I got lucky with that. Did you or did you just work hard enough that you made your own luck, I guess, in that sense?

Jason: Yeah, I think both are necessary, as you said.

Rob: Then you have all these calls with what? You did another 35–40 calls with senior placement agencies and they’re saying, we have this same problem. Where did you go from there? Because often, there’s conventional wisdom and there’s unconventional wisdom of like, do you go in the basement and build it? There are mockups? There are presale conversations.

Walk us through your thought process there, and really, how did you decide on what to do next? Were you listening to podcasts, reading blogs, and you’ve read Lean Startup? What was it that made you say, oh, this is how we’re going to proceed, this is the right way?

Jason: After 35 calls of the home care industry hearing nothing good, and then switching over to the placement industry and hearing lots of people say, we have this problem, there were different takes on the problem, but everybody identified the problem that they couldn’t keep track of their clients and their communities to match them up and all the needs that they had. I was taking detailed notes on all of those calls, so mostly handwritten notes as I was listening on the phone and then I kind of aggregated those notes.

After 35 calls, my friend JD who also happened to work at Microsoft at the time. We actually didn’t know each other through Microsoft at all. We just lived in the same community and we’re friends that way. He’s like, hey, I want to start something too. JD is an outstanding developer. I came from a software developer background as well. But we thought it’d be great to have two of us building the system and managing all the things you need when you start a company.

We partnered in, I guess, November 2016 and officially formed the company. We had a good idea that we were going to have customers, but I also didn’t want to just move forward. It’s hard to judge. Are people just telling you they have a problem and they need it? Are they saying I’m going to pay for it but maybe they won’t? I felt really good, but not quite good enough.

I reached out to some of the customers who had been like, keep me posted if you do anything. There were some who were really eager. I was like, I tell you what, would you be willing to prepay for three months of Senior Place? We’re going to set the prices here, and in exchange, if you give us this check today before we even start building it, we’ll give you a 20% lifetime discount? I had somebody.

We actually were able to meet with someone locally in person at a coffee shop. She brought her two employees with her. We were demoing mock-ups on just a tablet and showing like, this is what we’ve drawn up, and like, yes, this is what we want. She took out her checkbook and gave us a check. We walked out of that coffee shop with a physical paper check and we’re like, wow, we just got paid for the software. We started a company.

It was just an incredible feeling. We ended up doing that with five people. Once we got to five we’re like we don’t need to pre-sell and give any more discounts. I think we feel good. We then hit the coding hard, and January, February was just heads down 40 hours a week at Microsoft, 30 hours a week writing code, weekends, and whatever else. It was craziness because I always wanted to be a good worker at my day job. I don’t want to skimp out and bail on them because they’re paying me there, even though I’m trying to reach this other goal on the side. It was a challenging time.

Rob: You didn’t need the money. You didn’t pre-sell because you needed the money. You wanted the commitment, right? You wanted to know they had skin in the game and that if you and JD spent two or three months building it, that at least they were going to try it out.

Jason: Absolutely. We didn’t need the money at all. It was absolutely about the commitment. I wasn’t going to put in hundreds of hours between JD and me over two to three months, 30 hours a week. You can do the math. I wasn’t going to put in that many hours. We had already put in a lot of hours, but I’m willing to cut my losses if there’s not an idea. But I wanted to see the skin in the game when they did that. I’m like, if they pay before we build it, I think other people will pay after we build it.

Rob: Right. That’s a really good way to think about it. During this time, the two of you were working at Microsoft. Are you married? Did you have children? Because a lot of folks who listen to this are in one of those positions. I was too. While I was building my businesses, we had a young son who was born. It was 2006 now. That was right at the time that I started ramping up nights and weekend stuff, so I know the struggles of working around a family.

Jason: Yeah. I think at that point, JD already had three kids, my business partner. My wife and I, at the time, had two kids and my wife was pregnant with number three. Even when I was doing these calls, one of the calls that I did, I had gotten networked with somebody who ran a larger placement agency. We had talked to a lot of small-time shops and I wanted to talk to somebody bigger, and somebody referred us to him specifically like this is going to be a great call to get some insights and really confirm where we’re going.

My wife had our baby four weeks early. This call that I thought I was scheduling well before the baby was going to come, I did when our third was three days old. I didn’t want to cancel the call because this guy took me a month to get on the calendar. Yeah, we had kids. I have four now. We had a fourth about three years ago.

It’s been managing and I take family super seriously being part of my family, not ignoring them, making sure my kids don’t grow up. I’m doing this so I can spend more time with my family. I don’t want them to grow up and be like, well, daddy was never there. I don’t even know daddy now that he finally has been successful and I’m a teenager.

My kids are all 10 and under right now. I want to be spending time with them. A lot of this was, I would work at Microsoft during the day. In the evening, it was dinner at the table every night with the family, helping get the kids ready for bed, spend a half-hour or an hour talking with my wife catching up on her day, stayed in touch with her, then it was an hour, two, or three of coding until 2:00 AM often, and then calls at 8:00 AM or so.

Microsoft was flexible. I could often get into work at like 9:30 AM, so if I had calls maybe a couple of times a week, once we started coding, I was trying to start selling some more. It was just juggling all of those priorities. I wasn’t playing video games. I wasn’t watching TV like people are talking about the TV shows. I don’t know what those are. I wasn’t going to the movie theater.

For me, it was the priorities. It was family. It was keeping my job, not getting fired there, and making sure I’m doing a good job, and then moving towards the next thing that I wanted to be doing, which was Senior Place in the startup.

Rob: I’m guessing you knew it wasn’t permanent. You weren’t going to work that schedule for 10 years. It was, I’m going to work it for a few months until I turn a corner. Was that what was in your head?

Jason: That was exactly what’s in our head. We experimented different times with bringing on developers onto our team. JD and I, both being software developers ourselves, are probably pickier than an average entrepreneur maybe. I know a lot of entrepreneurs are developers.

We probably made some mistakes in not hiring earlier because, again, we had the money. We could fund them out of our own paychecks, but we didn’t like the quality of what we got. So we did a lot more work on our own than we probably needed to. That led to us staying at our day jobs longer while doing this at the same time than would have been ideal. That was the path we took and we’re just both super thankful that we are now full time only on our business that was a side business now. It’s the only thing.

Rob: It’s the focus, yeah. How big is your team now? Is it still just the two of you? Do you have anybody else helping you out?

Jason: Yeah. There are four of us now. We have another developer. I guess he’s still, technically, a 1099 contractor, but he’s working for us and only for us. Then we’ve got somebody doing support and onboarding. That’s been one of our challenges.

As we were building Senior Place, we cut some corners on administrative tools for our customers because we can just do that ourselves. Customers don’t need to add a user account very often. They can email us and we can take one minute to do that. If we build it, we have to spend two or three weeks building it right. Instead, let’s build other features.

We have not built all the things. We still have some manual tasks to do, but that helped us get to an MVP. Now we’re trying to invest in some of those other things that will save us more time and/or hire people that can do those tasks instead of us.

Rob: How do you describe the stage you’re at? Some people say we have this much MRR, other people say, we have this many hundred customers, some people say, we’re a team of four and we’re basically running at breakeven. Any of those, give us an idea of where you’re at.

Jason: We joined with TinySeed about nine months ago, and that allowed us to bridge the gap to pay ourselves. We definitely took a pay cut coming from Microsoft, but we are probably taking a little bit more money than maybe a lot of startup founders are, just since we both have families, mortgages, and such.

We’re running at a slight loss monthly right now. We’re going to be breakeven within two months, probably. We’ve got a lot of other partnerships coming down the line that could cause us to double or triple our MRR pretty fast, so we’re pretty excited about the potential of those.

Rob: I’m pretty excited about the potential of those. I didn’t mention at the top, but you’re part of TinySeed batch three, I believe. You’re the spring 2022 batch.

Jason: 2021.

Rob: 2021. Yes, sorry. There’s a funny story around that about how you were going to be part of the spring 2020 batch, but then COVID hit. We’ll get to that a little later. I want to ask this question that I think a lot of people are thinking about. How did you and JD get your spouses on board with this journey? Because it was a sacrifice for you, but it was a sacrifice for them too. Did you talk to your spouse in advance, your wife, and say, this is going to be tough, but it can change our life. I want to do it, it’s important to me, or how did that go down?

Jason: We did talk to our wives. If we were talking with JD on this call as well, I’m sure he could tell you lots of conversations that he and his wife have had. My wife and I talked about it before we started. It’s pretty easy to get your wife on board when I’m not spending the evenings and weekends yet. Hey, I’m going to do this, this is what it means. Oh, sure, that sounds great, go for it, honey. And then having to continue to check-in, how are we doing as we keep going? It’s been this many hours, it’s been this long.

We took a weekend away from the kids where we got my in-laws to watch the kids. It’s just my wife and I getting three or four days, a long weekend together to sync up. I think prioritizing your spouse to get date nights if you have kids. If you don’t have kids, it’s easier to get date nights. You just have to be intentional about that. The date is getting away from your work. For us, it’s getting away from work and kids. That’s also been harder with getting babysitters during COVID, but prioritizing that. 

Both of our spouses are really supportive. My wife is very supportive. I think it helps that, as I mentioned earlier, we have that hour every evening after we get the kids to bed where we’re talking. She feels like she’s got a connection to me and me to her. All of those things helped her continue to be on board. She knows where we’re at. Yeah, lots of things like that.

Rob: All of those things you called out are super insightful. I think a lot of early entrepreneurs miss them. I know that I missed it. Rolling back 16 years as I was working stuff nights and weekends, I remember saying, all right, I’m handling the day job or the consultant, whatever I was doing. I’m spending time with the kid, our one-year-old or two-year-old, but I forgot to be intentional about spending time with Sherry. Then eventually, I realized that is way important.

I need to balance these three things plus the startup. I can’t overlook that. In fact, Sherry and I recorded an episode of the Zen Founder podcast, episode 45, Onboarding Your Spouse, where we talked about this whole process. This was years ago. It’s probably from 2013, but I think it still holds true and it touches on a lot of the things you just said, very specifically about that.

You guys wind up launching in 2017, it sounds like spring of 2017. Then you and JD applied to TinySeed. It was the spring 2020 batch. I think we ran it in November of 2019 or something. So there are a couple of years there. Two and a half or three years have gone by and the two of you were still working day jobs. Is that because Senior Place didn’t grow fast enough to the point where it could support both of you? I guess to piggyback on that is, how was that for the two of you to then be working on this side project for those two and a half years?

Jason: There were certainly ebbs and flows in terms of how much work we were putting in. We were putting in a minimum of 15 hours every week. There were some weeks where we’re putting in 30–40 hours a week. We had to manage some of the burnout and it was because we weren’t growing super quickly.

We weren’t growing super quickly because we were trying to balance which features do we need to build? Okay, well, we’re both spending time writing code. Who’s doing the marketing? Okay, well, I’m trying to do marketing, but now I’m not coding. Now we’ve onboarded these customers, we’ve got 10 customers now. Five of them are like, hey, I can’t use it because of X, Y, and Z. So now we have to go back to that, and then we’re like, well, we don’t want to try to add more customers if they’re all going to quit. 

It was this slow ratcheting up of trying to get customers while meeting the customers’ critical needs. One thing we didn’t realize about this industry is our customers. Even with those 35 one-hour calls, I didn’t realize how unique the customers’ needs were. We’ve had to do a lot of customization.

I think anytime you can stay away from that, you’re going to be a lot better off for it. That has slowed us down because, oh, this customer says it has to be this way, this customer says it has to be that way. They want some core stuff, but they won’t use it if we don’t have both of those things. We’re kind of building two things.

There have been some challenges with a particular market we’re in that has inhibited our growth early on. We’re now turning the corner past those things. We built those different customizations, but yeah, we just kept on going, plugging away, trying to balance, okay, are we ready to do a marketing push? Because if we get five more customers, I don’t think we can even handle them right now. It was continually that process.

Rob: I meant to ask you, you had the five pre-purchases who wrote you checks in essence or send you money, and then you had the other, let’s say, 30 calls that you had done. Maybe they were not as warm, hadn’t given you money, but you at least had the list. When you launched, how did the five pan out? Did they all become customers? Then with the other 30, what did it look like after a couple of months?

Jason: When we launched, actually, one of the five didn’t even join us at that point. She said she was actually pivoting her business. She moved to a totally different business and didn’t need our software. The other four joined and this was five years ago. They’ve all been with us. All four of them have been with us since the beginning. They haven’t left.

Rob: You have an incredible business in that way. I talk about customer pain versus competitor pain, where if I started an email service provider today, I’m going to have competitor pain because there are 500 of them. We know it’s a big proven market. We know it’s not that hard to get customers, but there are a lot of competitors.

Customer pain is usually when you have maybe less technical customers. They’re not exactly searching for this online, so it’s just a grind. It’s harder to get them. It’s harder to get them on board, it’s harder to get them successful. But usually, with customer pain, once you have them, the churn is zero. You have an incredible business in that respect.

Jason: Yeah, we’ve managed to have extremely low churn. We haven’t lost a customer to a competitor in two or three years. We’re a CRM system. We’re a niche-based CRM system. Theoretically, every other CRM is a competitor.

Two or three years ago, we lost customers to other CRMs that had bells and whistles that we couldn’t build in yet. We’d built niche features, but we hadn’t built some of the bells and whistles. We still are adding more of those. We’ve just focused on what are the things our customers cannot do outside of our software without us and then built those things first. We do have very low churn, but it was still family, plus day job, plus side hustle meant slow progress. It meant, perseverance was absolutely required.

Rob: I have been there and a lot of people listening to this have been there or are currently there in that exact same position. It’s just such a common story when you’re trying to bootstrap something on the side.

When you applied to TinySeed the first time, we accepted you. You had traction, we said, we think this is a great business, let’s do it. I believe we went all the way through due diligence, signed paperwork, wired money. Is that accurate?

Jason: Yup.

Rob: And you gave notice at work because you’re like, I’m home free, I’m working full time. This is February of 2020. What happened in March of 2020, Jason?

Jason: Everyone knows the COVID story and the COVID time, I don’t think any of us will forget March of 2020. It was when work from work became work from home for the last couple of years. The TinySeed money was coming in April or so. We actually got it wired in late March maybe.

I was a manager at Microsoft and I had several direct reports. I didn’t want to suddenly bail on my manager. They have been really good to me. I liked the company. I wanted to treat them well. So I gave a two-month notice period. I was like, hey, I’m going to be transitioning. I just want to help find a replacement, train my replacement, and do all of that.

I talked to my manager in February, then COVID hit early March, and then our customers who serve the elderly in an industry that I thought was recession-proof because, of course, people still get old even during the recession. People still need care even during a recession. We’re totally golden. All of a sudden, people didn’t want to put their loved ones in assisted living. They wanted them to stay at home and they were now working from home.

Our customers were not having any business. We lost five customers in one week at the end of March of 2020. We hadn’t lost five customers ever combined in the previous three years total. We’re looking at this.

The TinySeed money came in that same week that we lost five customers. JD and I are talking like, what do we do? How much runway do we have? TinySeed money is absolutely outstanding, but we have just lost 20% of our revenue, and are we going to get notice from all the other customers next month? I went back to my manager. We talked to Rob and said, hey, what are our options here?

I went back to my manager. Can I ungive notice, please? My manager said, well, we didn’t want you to leave anyway, we haven’t found someone to replace you yet. I stayed at Microsoft, we gave the money back. I think I cried the day that I wired it back. This has been three years ready to be done.

We stayed one more year and we actually grew quite substantially in 2020 after the pandemic leveled out. I think we roughly doubled in 2020. We went back to Rob, TinySeed, Einar and said, hey, can we apply again? Let’s talk again. We’re ready. We’ve been growing.

Rob: Right, and that was the thing. COVID started changing everything in the midst of due diligence, but we had made a commitment to invest. So we said, it’s not like we’re going to back out. We hand shook on that deal via email. We sent the money and if the two of you wanted to keep going, we were all for it, but you were worried like, is it six months, a year, or two years? We have day jobs that are really great.

The fact that you made that decision and you basically said, look, we don’t want to give this money back, but we are going to unravel this thing. Can we handshake that assuming things are better in a year next time you run applications that we can move forward? We were like, yeah.

This is the only time that’s happened to us. There’s always these weird edge cases, but it was just like crazy times and we’re like, yeah, let’s do this. Frankly, even if you hadn’t grown during that time, if it was still a solid business and there was recovery underway, which there was by the time the next batch went, it made total sense. That’s what it was. It wasn’t until it was another year of you guys grinding.

Jason: It was heartbreaking.

Rob: I’m sure it was, man. That was April, May of 2021, which is just eight or nine months ago, but that’s when you received the funding. How did that feel, the final day? I’m sure that was four years in the making of being able to…

Jason: It was awesome. The hard part is I had worked at Microsoft for 15 years and with COVID, there’s no real goodbye. It’s just like, see you later, I’m out. I think we had a Microsoft Team goodbye call with some of my co-workers, but certainly, anyone who had worked at Microsoft for a while and had built relationships, there used to be a goodbye lunch and all of that. Some of that wasn’t there, but being full time at my own company now and having the feeling of walking out the door virtually was still an incredible feeling.

Rob: Yeah, I remember that. I still remember that feeling, how I felt years ago. Thanks for coming on and telling your story, man. I love the elements of it that are a little bit unpredictable. I love the elements of it that are a little bit outside the standard. We get into this cold calling to find an idea, and to hear it actually working and that you have a business that is doing quite well is really cool for folks to hear.

If people want to keep up with you, they want to see what you’re working on, you’re at seniorplace.io. You said, if folks had further additional questions, they could contact you directly. Your email is jason@seniorplace.io. Thanks for coming on the show, man.

Jason: Thanks so much for having me, Rob. Great catching up with you again.

Rob: Thanks again to Jason for coming on the show and thank you for listening every week. I enjoy being on the microphone. As long as you keep listening, I’ll keep recording. I’ll be back in your ears again next Tuesday morning.