Josh

Rob Walling:
This is in line with that thinking. That really, even if you’re a horizontal product, you still have to make some difficult decisions about who your someones are going to be. Who are you going to have everything for? Because even if you have a horizontal product, there are going to be different use cases and you are going to have to make hard decisions with incomplete information as the founder, or as the product leader, about what to build and what to say no to. 

You’re listening to Startups For the Rest of Us. I’m your host, Rob Walling. Today, I’m going to be covering some solo topics. There’s a listener question or two thrown in here, but they are questions that I think apply to a Rob solo adventure. 

The first topic I’d like to cover today is about testing pricing for your product. This came about when I asked Twitter for questions when Derrick Reimer was going to be on the show and we got more questions than we had time to cover. This question was an overflow that I saved in a questions Trello board. It’s from Kat at buildthekeyword.com. She asks, “How do you test different prices for your product?” The answer is there are several different ways to do this. 

Testing pricing is hard, but the thing to think about is there’s testing pricing for brand new customers who are coming to your website, or doing a demo or sales call. And then, there is changing pricing on existing customers. Notifying them, “You’re currently paying $50. It’s going up to 100,” or 75. Separate those two things in your mind. Because what you don’t want to do is change and test prices on existing customers without being really confident that those price changes are in order. Usually, you test it on new folks coming in. 

I have only known of one SaaS company that ever test prices. Everyone else just does not have the volume, and frankly it is so much work to do this well. It’s truly just split testing. Having people click and the price appeared differently, the standard split test definition that we talk about. It’s not something that I see almost anyone doing. Usually, the way that you test pricing if you have a low touch funnel is you go to your pricing page and you just change the pricing on it. You see how it impacts your conversion rate over the next week or month. I’ve called this a poor person’s split test before, which is it’s not ideal, it’s not scientific. But if you have a real pulse on your business, and you have a decent flow of traffic, and prospects, and people coming across your pricing page frankly, then you can see patterns. When I used to test pricing, it was only when I had a lot of folks hitting that pricing page. Because if it’s a trickle, you can’t see the difference. There’s too much noise. 

Usually, most people don’t look at changing their pricing as a test. They often say, “I’m going all-in and I’m just going to change my pricing. I think I’m priced too low or I think the value metric is off.” They go to the pricing page in the Stripe call, and they just change it. I’ll say hope for the best, but really it’s a calculated risk. It’s a calculated gamble of odds are pretty good I’m under-priced, I feel like I’m under-priced. I am going to solve that by raising all of my tiers. Or by, let’s say, dropping my lowest tier is something people frequently do. Obviously, I’ve seen several TinySeed founders do that. And then, trying to make it work. There were times, when I’ve raised prices, where I was just like, “I’m committed to making this price point work.” It’s called aspirational pricing. I aspire for my product to be worth this much, this is the business I want to build, it has this pricing. Therefore, I’m going to keep building features to where this price is a no-brainer. 

You can say, “I want my price points to be $1000, that’s the minimum.” It’s like yeah, it’ll take you years to get there, or you’re just in the wrong category to have that kind of price point. There’s all kinds of ways I can poke holes in what I just said. But for me, it worked. It allowed me to build a great business. 

If you are demos, and it’s one-call closes, or it’s procurement, or whatever, and it’s a high touch sales environment, you can just unpublish your pricing from your website. You can either say, “Starts at 499 a month. Starts at $1000 a month,” whatever it is. Or you can list some pricing and call us, or you can just not list pricing at all. Have a pricing page. When they click through say, “Hey, click here to talk to our demo team.” You could say our sales team. You could say, “Click here to talk to the founder to learn more about how we structure the product and how this works.” Then you split test it a bit, and you start quoting prices that are higher than what you’re currently changing, basically. You see the reaction. You see if folks choke, or you see if folks … 

Usually, what you’ll do is you’ll double your price and someone will say, “Oh, yeah. Great,” and they still sign up. Then you’ll double it again, and maybe get some pushback from a few but you realize, “Oh, I can still close some deals. This is how I think of testing pricing. Notice I haven’t said test price drops. That does happen, it’s just very, very infrequent. Usually if you’re testing, you are trying to test the price elasticity of your space and of the folks who visit your website. Or the folks who are raising their hands and becoming leads for you. It is an inexact science. It just always is. 

So is attribution. When people are clicking through and converting, where did all these leads come from? You can’t attribute 100%. Can you attribute 60 or 70 percent? Yeah, probably. Is that good enough, is that the best you can do? It probably is. It’s the same with any hard decision where you have incomplete information. You do the best that you can. Part of it is some founder gut. You collect what data you can, and you make observations, and then you make a bit of a gut decision about, “Should I continue with this price increase, or is it not working? Have I killed the business?” Not even killed the business, have I slowed the growth? 

It’s not just testing pricing. It could be I’m going to add a credit card before free trial. I’m going to remove the credit card before a free trial. I want to try freemium. I want to discontinue freemium. I want to keep the pricing the same, but I just want to change the structure. I want to change the value metrics. So my tiers are still 50, 100, 200, but maybe I don’t price based on storage, now it’s priced on emails sent, or whatever. There’s a bunch of different things you can do here. 

Before I did these, I would always have a conversation, well A, with myself. But B, with a couple other trusted folks that I had. Is this a co-founder? Is this an advisor? Is this someone in my mastermind? Is it a mentor, if you’re in a program like TinySeed. I would get the best advice that I knew how to get. I would factor that in with my own gut feeling, and then I would test. For me, most of the time, I was dealing with low, medium touch funnel so I could test on the website and we also had a lot of traffic. It allowed me to quickly … I wasn’t split testing, keep in mind. But I knew historically, in any given week, how many new trials we got. And in any given week, how many new conversions we had. I could see, within a week, I was like, “Okay, we’re still on track but our pricing has increased from there.” Or, “We’re ahead of track.” You could get a gauge for it early. It wasn’t definitive, but it made me feel more comfortable with it. 

Testing pricing is hard, it really is. But I would actually say you have an advantage if you are doing high touch, if you’re doing demos, and that allows you to have conversations with people. It allows you, you double the price, you quote it to them and they say, “Wow, that’s out of our budget.” You say, “Oh, what is the budget? What is your budget?” Or, “We can work with you. For example, if you want to pay annually, I can knock 20% off of that.” I’m not saying sell from your heels. I’m not saying you just back off instantly. But when you are increasing prices, there are ways to back off that increase in realtime on a sales call if you realize that you have potentially over-quoted for this particular prospect. 

Thanks for that question, Kat. I hope it was helpful. 

My next topic is about one-time payments, especially folks talking about them on Twitter. It is usually indie hacker founders, who are now doing, I don’t know if they’re following in the Basecamp steps of doing once. They’re doing lifetime deals on SaaS, which doesn’t quite … Who was it, Ahnar and I were talking on this show? It might have been Derrick. Where I said if you collect one-time lifetime payments for a SaaS, but you now need to keep that SaaS running for years, and years, and years, is it a little bit, I don’t want to say Ponzi scheme, I know you’re not doing that intentionally. 

Basically, if you don’t sell additional lifetimes a year from now, you will be paying server costs, hosting costs, whatever, all the other costs, storage costs, whatever else is there. Even maintenance cost, unless you’re doing everything yourself. You are taking that out of one-time earnings that you got 12-months ago. It’s just an odd model. One time software makes sense if you download it and install it, and there is “no maintenance.” I don’t need to do bug fixes, I don’t need to maintain server infrastructure, and all that. That’s one my struggles with it. 

My other struggle is I almost feel like people don’t understand how different one-time revenue is from recurring revenue. Monthly recurring revenue is the golden standard. This is the cheat code of every other business, where they want to get paid monthly on a predictable schedule. SaaS has that cheat code built in by default. You’ve heard me talk about the cheat codes of SaaS being net negative churn and a handful of others. But even annual revenue, when it’s recurring, can be tricky. It can seem … 

I’m going to give you an example. We’ll get folks who apply for TinySeed. You’ll see their revenue over the past six months, we ask for MRR. You’ll see it going up. It’ll be six months ago, it was 1000. Then it was 2000, 3000, 4000, 5000, 6000. We’re like, “Well, this is an interesting early stage business.” For a business to be growing that quickly over that short a period of time, obviously depending on their customer count and all this, they have some product market fit. Someone is wanting to buy this, they’re sticking around. There’s growth, they know how to market. There’s signals there. It’s early, but you see it. Then we’ll get on a call with them and we’ll realize they are collecting annual payments. All those numbers have to be divided by 12. Because it’s actually $6000 of ARR, of annual recurring revenue they collected. Which, divided by 12, is only $500 a month of MRR. 

Really quickly, we can have a $6000 MRR business, that appeared to be that way but wasn’t actually, suddenly become a $500 MRR business. Which frankly, is at the bottom, bottom end of the threshold at which we would even consider funding a company. So it went from this amazing business to oh this is, I won’t say unfundable, but as a general rule, we don’t fund companies with MRR that low. That’s just going from monthly to annual. 

One-time is another order of magnitude removed from this. To where, this is the old days, where I started the first of every month with DotNetInvoice, which was $300 downloadable software. First of every month, $0 in revenue. It was such an uphill battle to grow that business. It was a step one business, there was a bunch of things around it so I’m not trying to extrapolate my experience with that one thing. But once I went to recurring, I swear, I will never go back. Recurring revenue is where it’s at. Whether you’re doing annual … I’m not saying monthly is better than annual or anything like that. 

I really want to caution you against getting caught up in what feels like zigging when everyone else is zagging, but just doing it for the sake of being a contrarian. It feels like this willful belief in something that … As I’m saying annual and recurring, and doing the math, and then saying one-time is just so, so much less valuable than that, there are folks on Twitter in the indie hacker community who are posting these one-time things and acting like it’s a big deal. It’s something, but you’re selling a lifetime whatever for $50. You’re just competing on price at that point. I guess that’s good, to get your brand out there. There are pros and cons to this. But this is not the kind of business you should aspire to. 

If you’re listening to this podcast and you view it as a step in the direction of trying to get your name out, great. Be really aware what you’re getting into if you’re going to be charging lifetime or one-time deals. It’s not a never from me, but it’s a be very, very cautious of how you think about that revenue. As Ruben Gomez says, he did an App Sumo deal. He views those users, he got paid once, and he made I forget what the number is, 33,000 or something from it. App Sumo takes the lion’s share, they take 70 or 80 percent, I believe. He views them as freemium users. He says, “They don’t even think of them as paid users.” That’s how you need to think about it. They are free users that you happened to get a check at one point to maybe help you develop, to maybe help you build. 

I think that’s a much more healthy way to do it. Personally, I can’t imagine ever doing lifetime deals, actually. Then those customers, if you go to try to sell this app, now they are a liability because you have to service them and there is no ongoing revenue. There are some problems with it. It’s not a never do, but it’s a highly discouraged. If a TinySeed company came to me and said they were going to do a lifetime deal, it’s like forking your code base, it’s like translating it into other languages, it’s like launching a second product. I would be pretty hard against it, unless they convinced me that they have thought through all of the ramifications, both positive and negative, and they could convince me why it’s the right choice. 

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My next topic is one from Des Traynor. I saw a tweet from him. He’s the co-founder of Intercom, which I believe is a unicorn company out there with a few billion. He spoke at MicroConf several years back, he’s a good dude. I invited him actually to speak at a recent MicroConf, but he’s busy. He said he has a hard time getting out and about, and speaking at events. But he tweeted, “Having something for everyone gets you acquisition. Having everything for someone gets you retention. Choose wisely.” What an insightful tweet. I respect Des a lot as a product thinker. If you’ve heard any of his conference talks frankly, he’s done talks at YC, he’s done talks at MicroConf. Search him up on YouTube. 

His thinking, for me, it always lines up with a lot of the things I’m thinking, but it takes them to the next level. He says things that, once he says them, I’m like, “Oh my gosh, that’s brilliant. Oh my gosh, that’s obvious.” But it wasn’t obvious before he said it. That’s the best type of philosophy or thinking that I like, which is something that makes me realize something new, it educates me, but it feels very also intuitive at the same time. 

I love this idea. “Having something for everyone gets you acquisition. Having everything for someone gets you retention.” And, “Choose wisely,” he’s implying you have to choose between those. Because in a perfect world, wouldn’t we have a bunch of stuff for everyone so that we could acquire new customers? And then, we could have everything for just one or two of those ICPs. But what he’s saying is then you lose the others, they all churn out. This is in line with that thinking. That really, even if you’re a horizontal product, you still have to make some difficult decisions about who your someones are going to be. Who are you going to have everything for? Because even if you have a horizontal product, there are going to be different use cases, and you are going to have to make hard decisions with incomplete information, as the founder or as the product leader, about what to build and what to say no to. 

This is where realizing who your ideal customers are, who are your best customers, who are the ones who are least price sensitive, who are the ones that get the most value out of your product that churn that least. That are, I don’t know, the best to work with, and that just love it, and stick around. And they tell their friends. They do all these things that help push the business forward. Those are the folks that you try to build everything for. It can often to be hard to find those people, or to know what their commonalities are. 

It might be as simple for you as it was when I built my last startup, Drip. Originally I was like, “Well it’s going to be SaaS founders, and bloggers are using it, and WordPress plugin developers.” There might have been one other, but I think those were the first three. What I realized quickly was WordPress plugin developers were not actually a great audience for it. There’s a bunch of reasons for it. But it became obvious that really, SaaS founders, because there wasn’t a great ESP for SaaS at the time, and then bloggers because they were trying to move automations, move up from MailChimp or move down from Infusionsoft. Then what we realized is we actually were naturally, organically acquiring ecommerce customers. 15% of our customer base was eComm and we had never marketed to eComm. 

It was surprising to me when we found that out. I didn’t know. We had a few thousand customers. We had a virtual assistant. This is before AI, I’d have AI do this now. But we had a virtual assistant go through and categorize a big sampling of them. It turns out that it was surprising to me that so many eComm folks were using it. There was later a pivot to focus on eComm after I left, or as I was transitioning out. Now, it’s been a pivot back to where it’s more of a general email marketing tool and not going specifically after eComm. But those realizations … Drip is a horizontal play. It is an ESP. It could be used by anyone. We had realtors using it. We had folks building custom, bespoke tailor in London. We had podcasters, we had all this stuff. We had internet marketers, info marketers, course makers, all this stuff. That was actually the third, I was grouping bloggers with course folks. I think today they’re called makers or creators, but that term wasn’t really around back then. 

What that made us realize though, is I could bucket the feature requests into, “Oh, they’re SaaS, so they’re going to want this. I want to build some stuff for SaaS.” We did realize that SaaS wanted to go down a path that was really complicated. At a certain point, we backed of it, I’ll say. Folks like Customer.io and Userlist have done a much better job of catering to SaaS. But the bloggers, the course creators and eComm were folks that we were taking comments, thoughts, and really trying to serve. 

Now what we also realized was that bloggers were high churn. Bloggers really hopped around. They would quickly switch. Or they would stop blogging, that’s what we saw a lot. They were very price sensitive, actually. It became this interesting balance of you can have a few ICPs, especially if you have a larger team. But you can’t have 20. You would need separate products if you were going to do that. You would need a lot of folks working. Can you imagine, one code base that catered towards 20 different ideal customer profiles? It’d be a mess. 

That’s what I like about what Des is saying here. It’s, “Having something for everyone gets you acquisition. Having everything for someone gets you retention.” That idea of having everything for one ICP in the early days, and then two, and then three. Maybe you never even get to three, maybe you do only have a specific vertical where you’re targeting HR representatives that work for construction firms, for example. And that is your vertical, then maybe you really do have one ICP. That makes it even easier. Then you build everything for that someone. At a certain point, you tap out your total reachable market. Then, you get to decide do I build a second product for this same ICP? Or do I expand into an adjacent vertical? Do I move to be more horizontal? Do I raise prices? Whatever else, you figure out how to get past that plateau. 

But having something for everyone, a little bit for everyone, it can get people in the door. But does it create the longterm retention, and net negative churn, and expansion revenue, loyal customers, retention, all that? It’s hard to do that. You have to build a product that your ideal customers love and need, and solves a desperate pain point. Desperate enough that they are willing to stick around through the ups and the downs. It’s easier said than done. But that’s why I liked Des’ relatively succinct yet elegant statement of choosing wisely, which you focus on. 

The last topic is on recommending things to other people. This is a person-to-person recommendation thing I’m thinking about. As an example, when I recommend a biography to someone I will say, “Even if you don’t know this person or know their story, it’s a really good story.” This is Phil Knight with Shoe Dog. I don’t really care about the advent of Nike and the start of the company. In fact, I didn’t even wear Nikes when I was a runner, I love ASICS. The idea of Nike was just, “Okay, is this going to be interesting?” It is so well written. If you’re listening to this and you haven’t read or listened to Shoe Dog, I recommend it. It’s an incredible story. One of the best parts is that it ends right at the startup story because it ends, I believe, right before they go public. It’s like once they go public, I don’t really care. I don’t want to hear the trials and tribulations of being a big company, it’s not something that interests me. That’s one of those books where I’m pretty opinionated. Even if you don’t know the person, it’s good. 

Versus the Sid Meier autobiography. If you don’t know who Sid Meier is, you don’t know the games he made, it’s fine. But it’s really cool if you know Civilization. His book is called Sid Meier: A Memoir, or something like that. If you know some of the games he created and you hear him, the touchpoints are really interesting. 

Another one is Masters of Doom, which is the story of id Software, that made Doom, and Quake, and Wolfenstein 3D. I never played any of those games, didn’t really care about them. Even if you haven’t, it’s incredible. It’s one of my favorite audiobooks of all time. Then there are others where, again, you need to know the person in order to be super interested in it. I actually felt like John Romero, who is one of the id Software guys, has a book. It’s an autobiography called Doom Guy. That one was similar where it’s like, “This is cool.” But if you don’t know him or don’t know the story, I think it’s less interesting, so you have to weigh that. 

The reason I’m bringing this up is I think this is a helpful mindset or a helpful framework to think about why you’re recommending someone and letting someone know that. It’s like having strong tastes about particular elements of it. Because I get recommended, I’ll ask on Twitter or I will just get recommended stuff. I’m often like, “What did you like about it?” Because I want to figure out if our tastes are in line enough that it’s worth my time. It’s not the cost. Buying a book, whether it’s on Audible, or on Kindle, or in dead tree version, the cost is irrelevant for me. It is the time it’s going to take me to get into it and evaluate it. I dig in pretty deep on recommendations. 

I’ve had a lot of recommendations. Like I will ask specifically, “Hey, I’m looking for a book that goes deep on SaaS or startup marketing approaches.” I’ll say tactics, specifically marketing tactics, “I want to know a good one to recommend to people.” People will just recommend just crazy random (beep) like, “Shoe Dog by Phil Knight.” I’m like that’s not startup marketing, what are you talking about? Or someone recommended The Lean Startup. Its talks almost nothing about marketing. There’s nothing about marketing tactics in there. It’s this fundamental misunderstand of what the question asker … it’s like they see a keyword, maybe it was an AI answer. I don’t know, man. It’s like they see a keyword that says startup and the AI writes something. But you didn’t think it through, so usually I have a followup question of if I didn’t know any better, I wouldn’t know those were not good suggestions for what I was looking for. 

That’s why, if I’m going to recommend something to anyone, to a friend or to a startup founder, I will tell them, “I recommend you read this book and here is specifically why.” In fact, I recommended Chet Holmes Ultimate Sales Machine today. What I said is, “I think the book is 20 years old, so it’s a little dated. I also think there’s about a third of it that you don’t need to read, and there’s a third of it that is really focused on the Dream 100 customers. I think that’s what you really need. Then there’s a third that’s about business operations, and you can read that if you want to. But really, the reason I’m recommending it to you is because this whole concept around sales and how we does sales. Even though it’s outdated today, you’ll get the idea and you can adapt it.” 

That recommendation is so much more helpful than me saying, “You should read this book.” Not only does it tell you why, it puts guardrails around which part should you really focus on. “If you really like it, read the whole thing, but in the interest of your time being valuable, you can probably just read the part about the Dream 100.” It allows them to think internally, “Oh, this is why I should or shouldn’t read this.” And it allows them to think, “Maybe I shouldn’t.” Maybe the recommendation is off and I get to make that decision. I think being pretty descriptive when you make recommendations is certainly something that I’m doing and I hope it’s something that you will consider doing as well. 

That’s it for today’s episode. Thank you so much for joining me this week and every week. I’ll be back in your ears again, one week from now. Same time, same place. This is Rob Walling, signing off from episode 719.

Rob Walling:
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Welcome back to Startups with the Rest of Us. I’m your host, Rob Walling. In this episode, I sit down with Derrick Reimer, and we tackle I think it’s like six or seven, maybe even eight questions that were submitted on Twitter. When I let folks know Derrick and I were going to be having a conversation, got some really interesting questions from listeners just like yourself, questions about how Derrick validated or whether he validated his idea for SavvyCal, the most painful feature he’s built for SavvyCal, how his redesign worked out, what it’s like to have an opensource competitor raise a bunch of money and compete with him, and the key question you’re all wondering, is Derek looking to get on a regular weekly podcast again at some point in the future? Stick around to the end to find the answer to that, and with that, let’s dive into my conversation with Derrick. 

Derrick Reimer, it’s great to have you back on the show.  

Derrick Reimer:
Always a pleasure to be on the mics with you.  

Rob Walling:
Little do people know you are founder of SavvyCal and an author of the upcoming book, I’m Obsessed with Kerning.  

Derrick Reimer:
That’s a good one.  

Rob Walling:
The reason few people know that is because you’re not working on the book, but you are in fact obsessed with kerning. I had never heard the word kerning before I met you.  

Derrick Reimer:
Really? Yeah. I’ve always had a thing for fonts. I don’t know why. That was one of my childhood obsessions with my computer was exploring the world of fonts. Maybe in another life I could be a font designer.  

Rob Walling:
Yeah. Oh, I could see it in this life.  

Derrick Reimer:
Yeah, I probably could, not this season.  

Rob Walling:
After you exit SavvyCal for 50 million, you’re just on the beach designing fonts. I feel like you might’ve been called a nerd when you were younger, huh?  

Derrick Reimer:
Maybe a few times, yeah.  

Rob Walling:
Few times? When you were obsessing about fonts? That’s great.  

Derrick Reimer:
Fonts, accounting software.  

Rob Walling:
Oh, yeah, doing things in Photoshop that may or may not have a statute of limitations on them, meaning trying to replicate currency.  

Derrick Reimer:
Yup. There was that.  

Rob Walling:
We won’t talk about that. It was a hypothetical. So I was going to have you on the show and I had three or four topics I thought we could cover, and I was like, “You know, I might want one or two more.” So I go to Twitter. I mentioned that you’re coming on the show and just inundated in the best way with really good questions, topics, suggestions from a swath of people. So that’s what we’re going to do. We booted all my topics. Those will go into some other, I don’t know, maybe I’ll talk about them in the future. Maybe we’ll do them next time or whatever, but I want to dive right in. 

It won’t be a lightning round per se, but we probably do have, what, 8, 10, 12 things, not necessarily topics, questions to dive through. So our first one is from KP on Twitter, and we just met KP MicroConf in Atlanta. He is the host of the Build in Public Podcast, and his question for you is, “What’s the most painful feature that you’ve built for SavvyCal, pain as in which took longer and felt harder than you imagined?”  

Derrick Reimer:
I think we actually just built this feature, and it launched this past month called Group Scheduling Mode. So this is a feature that allows you to basically specify a link that allows multiple people to book the same time slot. So think of a webinar or a group coaching call, and it seems simple on the surface because it’s just a setting like what’s the maximum number of people you want to allow to book this, but under the covers, it basically touches almost every part of the scheduling infrastructure because we have so many places where we assume that only one person can be on a calendar event at a time booked through SavvyCal, I guess. Obviously, you can have calendar events with multiple people on them, but generally, the product assumed that when a booking occurs through SavvyCal, once that booking is in place, that time slot is blocked and not available for others to hop onto. 

So adding this meant, okay, so someone can book a time slot, and then if another person picks that and it hasn’t reached the limit yet, then they basically hop onto the calendar event, which is kind of a separate action. We need to notify in a different way about that. Then if that person decides to reschedule, well, now we need to remove them from that event and spin up a new event if it doesn’t exist already, but if they reschedule from an existing time slot to another time slot that already has a person attending, then we’re doing this lateral translation move of moving this attendee from one existing event to another. 

So you can see all the permutations that this takes. Ultimately, I feel like we’re in a better place. We had to refactor a bunch of the guts of the scheduling infrastructure to kind of pass around, change events, I guess you could say like one type of change is when an event is scheduled, another is when an attendee is added or an attendee rescheduled. So we kind of formalized the underlying infrastructure for this, which will set us up for being able to build integrations easier. So I’m happy that a lot of the work is not just for this feature, but, boy, it ended up a lot gnarlier than we anticipated at the outset.  

Rob Walling:
So when you quoted your manager an estimate of two days to complete it, how quickly did you realize, “Uh-oh, this is going to be a problem”?  

Derrick Reimer:
Yeah.  

Rob Walling:
I ran into a few of those, the iceberg problem of getting in and discovering. That’s the beauty, honestly. So I used to be a consultant. I was a contractor, and we would give estimates, and it’s like, “We bill 150 bucks an hour. I think it’s going to take probably 16 hours,” I might say or however many, and it’s like, “All right.” So the client’s like, “All right, 16 hours.” Sometimes you get six hours into that 16 hours and you realize, “Oh, no, this is an 80-hour project,” and you have to go back to them and say, “Look, we either don’t do this and we just lose the six or we move forward,” and it got even worse on big projects when you’re like, “Oh,” you estimate all these webpages or whatever, and you estimate 400, 500, 600 hours, and then you get in and you realize, “I was off by 10, 20%.” 

So that’s the beauty of being an entrepreneur is that you’re able to make that call and you could have just pulled the plug. You could have gotten three days in and been like, “You know what? This is not worth it,” and just killed it, but I’m guessing you did that calculus and you were like, “No, it’s worth doing,” for all the reasons you just said and you kept moving forward.  

Derrick Reimer:
Yeah, there were definitely a few points where, because I never want to fall victim to the sunk cost fallacy if at all possible, so even a month in stepping back, and Taylor and I are talking about this daily as the project is going on and we’re talking about different snags and roadblocks that we’re running into and things that we know are going to expand the scope, and we would kind of regularly check in like, “Is this still worth it? Do we still want to do this?” I think it was only because we could see the follow-on benefits and the way that it makes the infrastructure better not just for this feature that kept us going because otherwise may have just pulled the plug and said, “Sorry, you can’t do that kind of thing with SavvyCal,” which sometimes you have to make those kinds of hard calls, but in this case, this one’s been requested basically from day one, and we have a huge long list of people who wanted it. So it was kind of like, “Yeah, if at all possible, we should probably add this.”  

Rob Walling:
Are there any other calendaring apps, scheduling links that do that? Because it seems like that would be not for mere mortals.  

Derrick Reimer:
Yeah. I was actually kind of surprised. Calendly does it, and it’s implemented similarly, I think. As part of our research on what might users be expecting, we took a hard look at how Calendly’s handling some of these changes and what happens when the last person on a group event reschedules, does the event just disappear? So we learned about and saw that all the edge cases they had to think through, we kind of teased them out in our testing and we’re able to get a good sense for, “Okay. I think they had to solve a lot of these heart problems too. We’re not just complicating this thing,” but as far as the others, I’m not sure. I think, yeah, definitely anyone else who has it had to go through a lot of pain.  

Rob Walling:
So thanks for that question, KP. Next question comes from Mark Gadala Maria, and he asks, “At what point would you think it’s time to give up on a SaaS idea and move on?” You and I have both each killed SaaS ideas. We’ve started things that we didn’t see through. We’ve started things that we did see through. So why don’t you weigh in first with your criteria of when it is you throw in the towel?  

Derrick Reimer:
Yeah. I mean, it’s a hard question because it’s so dependent on so many factors. Part of it is, how much energy do you have for something to keep working on it? Are you a Matt Wensing type where you’re kind of relentless and you keep pivoting and working off the same core but trying to find the right market? I have a lot of respect for entrepreneurs who have the grit to do that and the resources and the capability and all that, but these days, I try to think about the reasons why I would bail on an idea. So if there’s not enough demand or people just don’t seem to be problem aware or if I find there’s not really willingness to pay or maybe there’s some huge platform risk things or external factors like that or I can’t seem to find viable distribution channels, these are all reasons that would cause me to really pause and reevaluate. 

So I kind of think then in reverse like, “How can I get confidence that these things aren’t true as early as possible?” So generally, if the answer is I don’t know, then I would try to think through how to get an answer to those. You’re not going to know with 100% certainty in most cases. You can’t talk to the entire market unless you have a market of three people or something, but try to gain some degree of confidence on knowing that there actually is demand and that people are aware of the problem and they’re searching for it and they’re willing to pay and all those things.  

Rob Walling:
What you’re saying is that could be summarized as validation. You could say, “Oh, we bucket that all into validation.” I hear some people say, “Oh, yeah, validation doesn’t work,” or, “Oh, validation doesn’t work the way it used to,” or, “I don’t believe in validation,” or whatever. It’s like it does exist. It’s a thing. It’s not 100%, but what you’re saying is it’s learning, it’s research, it’s conversations. It’s like if I came up with a brand new idea and I told it to you and five other people, I would at least get some feedback, positive or negative, and then I would want to dig in and, as you said, look at search query, volley. 

There’s a bunch of stuff. We don’t have to go into what validation is, but I still today believe there’s no formula for validation. There’s no like, “Oh, do this,” and then you’re 20%, and then if you get 10 yeses, then you’re 50. It’s like there’s no exact number, but there’s this directional correctness in this founder gut. It’s incomplete information, and that’s you have to make a hard decision is, “Do I keep going?” but I’m totally on board with that.  

Derrick Reimer:
So with Level, which I think a lot of folks probably have heard me talk about this, wrote a blog post about it back in 2018 when I shut down that startup attempt, and that one I found contrary to what I expected or I just didn’t anticipate this, that the people who were most excited about it and were giving me all the positive signals were sort of downstream users of the product, and they weren’t the actual people responsible for buying it. So a lot of makers in an organization really disliked Slack and wanted something that was calmer, but the people who were charged with buying it were more of in the manager tier of the company, and they loved it. They loved the ability to ping an engineer anytime and get an answer quickly. 

So there was a disconnect on recognizing the actual core problem that I was trying to solve, and it was going to require more of a cultural shift for a lot of the people that I thought would be good customers for their organizations to actually buy into the premise was a whole different animal. To me, it just deemed too difficult, too risky. I’ve since watched others try to run a similar playbook and grow really, really slowly because there’s just so much headwind there. So that was just one anecdote from my experience.  

Rob Walling:
Look, it could be a matter of if you’d raised half a million dollars and spent years more working on it, maybe eventually it would work. You have to make the calculus at some point. You don’t know. The timing, I think of Slack being unseated, is probably coming. I think more and more people I’m hearing really don’t like it. I don’t know if that’s still a real thing though. If you built Level today, would you get any more at traction? I don’t know. You got to make the decision and move on. 

I say a lot that funded companies go out of business or fail when they run out of money, and bootstrap companies fail when the founder runs out of motivation. So that’s usually how I think about it is when I’m … To summarize it colloquially, it’s like when I run out of ideas, when I have no more ideas or no motivation to keep going, and when I say, I mean I would come to you, I would go to Ruben, I would go to Einar, I’d go to all Craig Hewitt, I’d go to all the smart people I know if today I was trying to grow something and it wasn’t growing, and I’d say, “Here’s the situation. What’s your thinking? What should I try?” Someone might be like, “Oh, you know what? I saw this other product do this thing,” and if you had an API layer, whatever, there might be ideas. 

As long as there were ideas on the table that I thought were viable much like back in the days of DripWord, it’s like, “We’re not growing, man. We are plateaued,” but ideas kept coming in of like, “Ooh, you could build automations. Oh, you could build a shopping cart, you could build affiliate management.” There’s all these ideas and we just had to figure out which one or ones do you pick. So I think that’s probably my thing. 

Now, the hard part is if you’re young or you’re new to all of this, you don’t have many ideas. So do you just quit? Do you just launch and then quit because you have no ideas? No, I think you get better at coming up with ideas. You learn from folks that are ahead of you. You learn from this podcast and the guests on this podcast like yourself, and you read the books in our space. There’s a lot of them, whatever it is, podcasts, there’s YouTube, however you’re going to learn about this so that you start to get a sense of, “What would Derrick Reimer do in this situation? How could I channel Derrick Reimer?” Maybe I train an AI bot on all of your podcast episodes and try to talk to it. I know a bunch of people that have done that with Startups for the Rest of Us. 

I actually think that’s an interesting idea of just come up with thoughts and ideas and then figure out, “Are these viable do and do I want to do them?” because at a certain point, you have viable ideas in front of you and you’re like, “I’m so (beep) tired of working on this. I just don’t have the motivation,” and at that point, you get to then take a beat because you don’t want to make an impulsive decision and shut it down overnight, but you get to take a beat and whether a beat is a day, a week, a month and take a breath and say, “Am I getting used to the idea of not working on this anymore?” and kind of let that sink in. So that’s probably my … I feel like I read a whole book chapter on this, but that’s as about as succinct as I can get it to when I give up on something or shut down an effort.  

Derrick Reimer:
I’m seeing more and more people kind of pulling the line of nobody really knows what they’re doing, this is all kind of luck anyways, so you just launch a bunch of stuff, right?  

Rob Walling:
It kills me. Absolutely.  

Derrick Reimer:
I guess that is a way you could do it. So you could start something and then not really pursue a bunch of ideas on how to actually grow it and then just kind of let it sit and wait and see if something hits randomly, but I think the whole-  

Rob Walling:
The roulette, the roulette approach, the lottery ticket approach to building a bootstrap startup, right?  

Derrick Reimer:
Right, and I think there always is a certain amount of timing and luck that has to get woven in as you’re systematically trying to get traction for something like we’re not 100% responsible for all of our traction. There’s always going to be a little bit of the timing, and honestly, hopefully it correlates with you identifying a problem that maybe the market needs. So you intuited that there was an opportunity here, which increases your odds of getting lucky, I guess, with the timing. 

I would say for me, I’ve always been of the mind that if I’m going to work on something, I want to really focus on it and give it the best shot at succeeding, and if that’s not happening, I think it’s really hard to set a SaaS on the side and just wait for it to take off because SaaSes are not really, you can’t autopilot a SaaS. I haven’t really seen it happen with much success. 

So for me, it just is not worth the effort of trying to keep something running on the back burner, but not really investing effort into it. So if I was up against that, do I put this on the side and wait for it to magically start growing or do I just throw my effort behind something else, I would be more apt to just throw my effort behind something else.  

Rob Walling:
Yeah, I think that’s a good summary of it. This is always hard, especially when it’s a gut feel and you’re going to have to ask yourself questions, and it’s different for different people, but I think knowing yourself is another part of it of, “Do I give up on things too early? Do I not push on them? Then I should probably stick with this for longer, but am I the person that stays with the same idea for six years when it still has four customers?” Well, then you should probably not do that again. There’s also that kind of personality factor. So appreciate the question. 

Next question comes from Kartik Manjunath, and he asks, “How do you find customers in a crowded market when SavvyCal is competing against the likes of Calendly?” That’s not only a crowded market, but it’s like there is a 900-pound gorilla as well. Not all crowded markets have a 900-pound gorilla, and not all 900-pound gorilla markets are crowded. Sometimes there’s one big player and there aren’t too much competition, but you are in one of those spaces that has both. So how does one get customers, Mr. Reimer?  

Derrick Reimer:
As I was thinking about this question, I was trying to figure out if it’s really much different in a “crowded market” than a not crowded market because, I mean, fundamentally, it’s the same. You got to show up in front of prospects who have some purchase intent, some demand, and then you have to present them with positioning and a message that resonates with what they care about. So when I think about how SavvyCal, how we position ourselves against Calendly, I mean, obviously, it would be very tough to just copy their H1 and lead with the exact same messaging. That’s a recipe for failure right there. 

So I think it’s figuring out how to really authentically identify some traits or some qualities about what you’re offering that is meaningfully different. Then I think it’s a lot of blocking and tackling on trying to run the playbooks so that you do show up in the places where people are looking for things. So that’s trying to get listed in the Listicles, where if someone searches scheduling software and they see a bunch of articles that are showing top 10 lists, can you get in those articles? Can you get in the Zapier blog when they’re talking about automating scheduling? There’s a bunch of these things that take time and effort and varying degrees of success, but basically trying to get in the conversation as much as possible is how I think about it. 

I think for SavvyCal too, there are some things that are to our advantage like the inherent virality of the product is a helpful dynamic for SavvyCal, and it’s not necessarily there for other products. So every time someone uses it, they’re exposing our brand to the person on the other side, which I think is a pretty big lever. It’s admittedly pretty difficult for us to measure because I think a lot of times there’s kind of initial touch and then maybe they book multiple times and it gets them thinking, and then whenever they’re ready to purchase scheduling tool, now SavvyCal is sort of in their mind because they’ve already been on the other side of it. 

So it’s kind of hard to track through the whole chain of touchpoints to attribute to virality, but I definitely know in qualitatively asking customers when they sign up, “How did you hear about us?” a lot of people talk about, “I used such-and-such as link.” So there’s things like that that just help drive that exposure, but, yeah, I mean, crowded markets, it is tough. Like If I search scheduling software in Google, I mean, there’s hundreds and hundreds and hundreds of tools. So you can’t just rely on those head keywords and trying to rank them. You got to get a little craftier, I guess.  

Rob Walling:
When I think about it super simply, if someone were to say one sentence how do you do it because it’s way more than a sentence, but one sentence, I piggyback on what you said, which is you have to figure out how to be differentiated and/or you want to find what I’ll call proprietary or owned traffic channels. I can’t figure out the exact word for this, but I think of Rubin with Seinwell, where dude is really good at SEO like to an extreme. If you enter any space and you can rank for those head terms, you can get a lot of traffic. Rubin also differentiated Seinwell, like he has features that all his competitors don’t. 

One or the other though can get you customers. You could actually have kind of a clone of the big player. If you had massive, let’s say you got 50,000, 100,000 uniques a month and you were top three in Google, you would grow, not as fast as if you were also differentiated. That’s why I said and and or. I try to do both, but you can’t always do both. 

To quote from page 51 of the SaaS Playbook, “How can I compete in a competitive market? A mature competitive market can be a total bloodbath, but it can also be a fantastic place to grow your business once you get a foothold.” Then I go through. Here are different ways to get a foothold. So one, compete on price, and I say competing on price is tricky, but you can get traction if you offer more than 80% of the product for half the cost. You get it. It’s not exact numbers, but it’s there. I go through five paragraphs of that, compete on sales model. 

So oftentimes, incumbents in competitive markets have high touch sales process where customers may schedule a demo and mandatory setup fees, and it’s just a big pain in the ass. I don’t put that in the book, but I’m ad libing here. So you can go in and do a self server, a lower server, a one call closer or whatever. Compete on product, that’s a little bit what you and I are talking about or trying to differentiate. 

Now, later in the book I talk about features are temporary moats because people replicate your features, which I think you’ve experienced to a large extent. Then I have how to market against large competitors, how much should I worry about them. I talk about building moats and different types. 

Anyways, there’s enough content. I’m not trying to plug the book, but there’s a reason I put that in there because it is really important. This is not a 10-minute podcast answer. This is a big answer of it’s a lot of things to compete in a competitive market, but if you can do it, it’s a superpower because competitive markets usually are large and that’s why they have competition, and so you can grow faster. Usually, I would say competitive markets are often growing quickly. That’s why everyone’s launching in them. So thanks for that question. 

Next question is from Aboma Kelly, and they ask, “Question for Derrick. Do you have any plans or desire to start podcasting again on a regular basis or are you officially retired?”  

Derrick Reimer:
Officially retired.  

Rob Walling:
That is like that, huh? Do you want to tell them our little secret of how we specifically had this conversation?  

Derrick Reimer:
Yeah. We talked about this over cocktails a couple months ago, I think. I’m really enjoying doing episodes just like this one on this podcast. So for those who don’t know, I used to do one of those kind of check-in on what you’re working on every week type of podcast. It was called The Art of Product. Me and Ben Orenstein from Tuple did that for, gosh, five, six years. It was both a lot of fun, helped me build a small audience and a little community, but also, it was a ton of work. It was taxing on me. I think for Ben, it was an easier thing. So I think it kind of depends on your personality, but for me, it was like I always felt this pressure to have something smart to say and summarize, well, my learnings from the last week, and I just found it was kind of ended up being a little bit of an energy drain. 

So I think while I hear from a lot of folks that they miss The Art of Product and they really enjoyed the content, in that regard, I wish I had the energy and the ability to keep that cadence going, but I don’t know, I think I’m done with that sort of podcasting, but I really love showing up here and answering listener questions and just talking about stuff.  

Rob Walling:
Yeah, and that was, as you said, we were having cocktails and I said, “Well, do you just want to come on every, I don’t know, six, eight weeks to the show, just I leave it as a standing invite, you ping me whenever, it’s not a recurring calendar invite, but just come on quite a bit as a guest?” and you were like, “Yeah, why not? Let’s try it.” So we haven’t told anybody until now, but that’s the idea of getting you back on the show, and they’re so easy. These are easy recordings. We always have topics. Even if I hadn’t tweeted today, we would fill 35 40 minutes of good content. 

So I think of it less as retiring and more of moving to that next stage, that next phase like when someone has a big exit, they often become, what, an investor or some other thing, and you are like, “You know what? I had a big exit from Art of Product and now I’m investing in the rest of the community.” The braid metaphor broke down around there. 

Anyways, thanks a lot for that question. Hope it was helpful. TinySeed’s own Einar Vollset asks, “How did it feel to get an open source competitor entering the market with $40 million in funding and that would have developers work for free to rip off,” his words, “rip off every innovative feature that you added?”  

Derrick Reimer:
Oh, Einar, good question.  

Rob Walling:
I love the wording of it. It’s like I feel great. It feels amazing.  

Derrick Reimer:
By the way, those are Einar’s words, not mine. Yeah, no, but honestly, on this topic, I guess in general, I would say these kinds of things like having competitors that are quite active in the market and obviously looking around at the stuff that other people are building, and that includes us as a participant in the market, it really does help you to more quickly understand what your actual differentiators are. I think you point this out in the SaaS Playbook about how features are not moats because there’s not really intellectual property protection in that way for what we’re doing in the software space. Anyone can look at an interface and say, “I like that. Let’s build that.” There’s no recourse. There’s nothing proprietary, so to speak, in that. 

So I think when you’re seeing some of your key interfaces showing up in other places, it’s disheartening at first, but also, it just makes you realize, “Ultimately, I can make my business stronger by not trying to rely so much on things that are ultimately not defensible.” So I think that’s what we’ve been, with this latest brand refresh that we did, we’re trying to really sharpen our positioning a bit to really speak to the people who come across us in the market as they’re searching around for tools like, “Why do they choose us? Why do they like SavvyCal?” 

We had a lot of conversations with people about this and mined through different survey data that we’ve run over the years and just workshopped it a bit and tried to get a sense for this. I think it’s like people like SavvyCal because we’re small and nimble, because they trust us to listen to customers. We started out in response to Calendly not really changing much over the years, and there were many, many forums where people were asking for stuff and they just sort of felt like they weren’t being listened to. 

So we showed up as like, “Hey, we’re a scrappy upstart looking to talk to customers and figure out how to build the best tool possible. We’re going to sweat the details.” So these are all things that we’re trying to call out. I think a company that’s riding on a huge batch of venture capital and trying to grow as quickly as possible probably doesn’t care about the same details. 

So I think we can call out some of that stuff. It’s a little fuzzier than saying, “We have this feature and they don’t have this feature,” but ultimately, features are all, I don’t know, yeah, it’s not super defensible. So I guess that’s how we think about it, and ultimately, I think it does help us be a stronger company.  

Rob Walling:
All right. We have four more questions to get through. Two are from Greg Deneo. His first question is, “How is Derrick’s redesign working out, the SavvyCal redesign?” So for folks who don’t know, you redesigned the home page inside the app as well. It’s a pretty significant one, right?  

Derrick Reimer:
Yeah, not much in the app, although we did at the same time release a refreshed link editor, the core-  

Rob Walling:
That’s what it was.  

Derrick Reimer:
Yeah, the core editing interface in the app with a bunch of UX improvements and a refreshed marketing site, refreshed logo. It’s been really well-received.  

Rob Walling:
Did you change your H1 as well?  

Derrick Reimer:
Yup. H1 changed a bit.  

Rob Walling:
You changed some copy?  

Derrick Reimer:
Yeah. Most of the copy on the home page is different. Added a features page, so one place to kind of summarize key features, and then we’re gradually porting over the other pages to match the design aesthetic, but, yeah, it’s been really well received. I mean, people have recognized the effort that we put into it to try to … We didn’t want it to feel like your typical startup, safe, corporate startup, blue and white landing page. We wanted it to feel organic, and we wanted the design to communicate similar values that we were saying in our words. I feel like we nailed it. I think, yeah, it’s been well-received. We’ve had our best sales month this last month that we’ve had in a long time, so yeah.  

Rob Walling:
Do you attribute that at least partially to the new look?  

Derrick Reimer:
I mean, I think we made a lot of noise when launching the brand refresh and sent some emails to the list. So it’s hard to say that it’s attributable directly to the refresh design, but it was nice to have an excuse to go out and ship a bunch of stuff. We shipped that group scheduling feature and the refresh link editor and the brand refresh. So hopefully that that’s just another indicator that there’s energy and momentum behind the company, which I think helps with marketing effort.  

Rob Walling:
Neat, and I mean even the home page. So I don’t see the home page because when I go to savvycal.com, I’m logged in, so I never … I know I can log out.  

Derrick Reimer:
Oh, yeah, you can go to slash home.  

Rob Walling:
Yeah, and I went incognito to look at it now, but just as a rule, when I go to SavvyCal, I never see the home page because it has me logged in, but I did see you announced it on Twitter and then I checked it out. I mean, the green, the fonts, the kerning, all the things that you care the most about, I mean, it looks great. It looks really, really solid. So yeah, I think you should be happy with it. 

Greg’s other question is, “Was there ever a consideration for launching SavvyCal as a vertical SaaS?” I will actually add to this, launching or narrowing focus at any time. He says, “For example, a calendar scheduling link for salespeople, for lawyers, for insert any customer segment that you enjoy working with.”  

Derrick Reimer:
Yup, that’s a good question. So I mean, initially, the thinking was to be horizontally positioned and pick up on signals on who’s getting the most value out of this and potentially refined positioning or narrow things a bit. To date, I mean, we have a very diverse set of customers, which is both good and bad. It’s good in that we’re hitting the mark on being a general purpose tool for a lot of different people, but the challenge is we have to try to identify the commonalities between them and figure out like, “Should we go after one specific set or should we keep speaking to the same messaging that resonated with this diverse set of customers?” 

I think we’ve experimented with things here and there, but haven’t gone as far as fully updating the H1 on the home page to speak to a specific vertical. I mean, I think in order to do that, I would want to have a strong enough hypothesis that basically, that I’d be willing to exclude some of the people that maybe otherwise would’ve signed up like if they saw that this is for sales teams on the H1, someone who’s not doing sales probably would choose not to sign up versus if we did. 

So I see that as the more mature the business gets, the riskier it feels to make that kind of shift, but I think in smaller ways, we experimented with like for a couple of months we’ll spend some time building features for sales teams and we’ll work on some things, some efforts to try to see, gauge how it’s resonating aside from fully shifting the positioning on the homepage, if that makes sense.  

Rob Walling:
You have to be pretty certain of that to make such a strategic shift, I think. So it’s one of those I would need to sit with for a very long time. I mean, I can bring up a bunch of examples, it doesn’t really matter, but any big strategic shift like that, I need probably months of mulling it over and saying it out loud internally and saying, “I think this is where we need to go. What do you think?” and then I sleep on it for a week and then I come back to it and I try it on again. It’s one of those things of like, “Does this really feel right?” Oftentimes, I can’t remember. It’s been very few times where I’ve made a decision of that magnitude quickly and without some pretty strong … I need some strong conviction that it’s the right call. Sometimes if you don’t have that, it’s tough. It’s tough to think about doing it.  

Derrick Reimer:
The hypothesis around that niche down needs to be as strong or stronger than the one that’s currently working for the business. It has to overcome that, I think for me.  

Rob Walling:
Yup, and I think there’s also has to be a bit of excitement, your internal excitement of like, “Oh, I’m really excited to work on this and I really want to dive deep into this.” So thanks for those questions, Greg. 

Last two questions from Chris Livdahl. He asks, “How did you land on the idea for SavvyCal among others that you decided to pursue, and did you validate the idea before launching it, and if so, how did you validate it?”  

Derrick Reimer:
So I made couple of bullet points here. I’m trying to capture what my initial thinking was because it’s funny how it does shift over time, but I could think back to what was I thinking back in 2020 when I was just starting to pursue this. So the thinking was Calendly doesn’t seem to be innovating much these days. They’ve been kind of the household name, so to speak, for this type of product, but the product hasn’t really shifted that much and it doesn’t seem like they’re really listening to customers that closely. For me, it was big that it would be a relatively quick to get an MVP to market, to build a basic scheduling functionality. So I felt confident that I could start to test this with an actual product in hand pretty quickly. 

It’s a product that has the virality built in, so that was a big selling point for me too. A lot of my existing audience uses scheduling tools. I think about this as this is like kindling for the fire. I can’t rely on personal audience to sustain the entire business, but it’s enough to get maybe a kernel of customers that are really excited about it and willing to start using it and spreading the SavvyCal name and talking about it to their friends and helping get the wheels moving on this thing. So that was an important thing for me. Since I had a small existing audience, I wanted to leverage that. 

Then there was this hook that I picked up on. It was the power dynamic issue. So I feel like every other week there was a Twitter thread where someone was opining that Calendly is rude and it’s not good professional form to send a Calendly link to somebody because of the power dynamic issues. You’re forcing me to do work to get on your calendar sort of thing. It was an interesting like it’s both a people problem and I think a technology problem. I think the tech can help it feel a bit more collaborative so it doesn’t feel as off-putting to receive, but it’s also like, are you exhibiting good etiquette? This was enough of a hook where it’s like, “Well, what if we could build a tool that doesn’t feel so awkward, that feels more collaborative, feels more personal?” and that was the initial hook. 

So I think we wrote a little manifesto talking about the power dynamic and how we’re going to fix it. We had this visual booking interface and personalization and a bunch of other little details that were going to make this better, and put that on a landing page and started to gather email addresses and have conversations with potential customers and engage interest. I think that was the extent of the validation, and then I got down to work building an MVP, and within a couple of months was able to start testing it out with real users.  

Rob Walling:
To take you back even further, I believe you started even considering … You had a list of software that Calendly was on, and that list came from what did we pay for at Drip, what was all the software we paid for, right? There was GitHub and Slack and Calendly. You can imagine what the stack was. You came over, we sat in my front room and we’re talking through like, “Which of these can be disrupted.” You’d already tried to disrupt Slack with Level and that hadn’t panned out, but we were looking at, “Are you going to compete with GitHub? Not directly, but is there a thing there? Is there, whatever?” We went down the list and marked off like, “Oh, these are bootstrappable or mostly bootstrappable businesses.” Then we said, “Which of these has an in?” because that’s the other thing. It’s like, again, Stripe, probably not a bootstrappable competitor business, but there were some, I don’t remember what they were, but it was like, “Oh, there’s this product, but people love that product,” and there’s no wedge, there’s no differentiation, there’s no angle, there are no people complaining about it or whatever. That was what we determined. 

Calendly was one of a couple, I don’t remember what they were, but there were two or three where it was like, “Ooh, any of these you could probably do.” You then talked to me and I said, “Look, I would pay for a Calendly alternative that did X, Y, Z.” I think at the time it was like that integrated with my podcast recording suite, whether that’s Squadcast or Riverside or whatever, but it integrates and automatically creates a room, and it’s like, “I don’t think Calendly is going to build that.” Then you talked to other people. I think you talked to Wensing. You probably talked to Peter. You talked to Einar, and you talked to all these people and said, “What don’t you like about this?” and you were trying to get that of like, “How do I be different?” because again we said, “You could have just gone and replicated Calendly. You’re a good builder. You could have done it. It’d been elegant,” and all that stuff, but that doesn’t get you there. 

So yeah, I just wanted to take people back even further because by the time, you had already gone through a process just to narrow down to what space, what category. Notice you didn’t start with a technology and say, “What can this do?” You didn’t start with, “What new novel thing that has no category can I build?” You were like, “I really want to enter an existing category.” Everything on that list was super competitive. There are a bunch of tools and there’s a big leader in almost all of them. 

I’ve actually quoted that process. I have this book that I will publish it eventually, it’s probably going to be next year. It’s called the SaaS Launchpad. It’s a precursor to the SaaS Playbook, and it’s about coming up with ideas, trying to validate, pre-validate, launching, building a launch, just all the early stuff that comes before that. It’s a hard book to write because it’s so squishy. You can hear us, even you and I, experienced entrepreneurs done it multiple times. It’s still a very squishy process. So to actually put it in writing is like you need a lot of, “Well, this, it depends, this and that,” but one of the chapters is about coming up with ideas like this. 

I have seven different approaches, and one of them is make a list of all the things that your company pays for an hour that you pay for an hour. I totally got this from you doing it. Others are like, “Hey, take a vertical SaaS and go horizontal or a horizontal SaaS and go vertical,” or you have a bad customer experience and you can improve, blah, blah, blah. You can imagine the list of those seven kind of … They’re not frameworks on themselves, kind of a single framework, but I think this is a super interesting way to ideate. 

Then the thing is is how do you get to that next step. How do you not just pick it and say, “Ohm boy, I want to be in that space,” and you don’t take the next step, which is, “Now let’s research. Now let’s find out what the weaknesses are. Now let’s find out what people are unhappy with in this space so that I can at least have some type of wedge or angle or focus that differentiates me from the big incumbent.”  

Derrick Reimer:
Yup, and also when I was taking that list and evaluating them against each other, there’s all kinds of criteria I’m looking at, but one of the ones I was careful to do this time around especially was like, “All right. I want to make sure that this has as close a fit to what my ambitions are and the way that I want to work,” because assuming that I don’t have to work on this for the next several years, what’s the founder fit element of it? I hadn’t always necessarily considered that. It was kind of like, “Well, we’ll figure it out. I’m willing to do whatever. Let’s just find a good idea.” 

There’s a blog post, somebody who’s written in 2019, and maybe this list would be a little different now if I made the same one, but it was a helpful exercise at the time to write these things down, and part of it was coming off of the level experience. I could tell some of these are a reaction to that because I felt a little burned by some of the things that I experienced through that, but I’ll just read it off real quick. 

I have these filters, right? The filters were the market must already exist, so I’m not inventing a category. MVP must must be shippable within a few months. Level took a long time. I spent, I think, nine months on it before I was able to get it in front of anyone, which was way too long. I way over engineered it. The product should not be mission-critical. It should be important, obviously, high value, but not something where if we have five minutes of downtime, we’ve severely impacted someone’s business like processing high volume e-commerce payments or something like that. Making a sale shouldn’t require more than a few decision makers because with Level it was like, “Oh, you have to get buy-in from the entire company.” Yeah, that’s not great. Native apps shouldn’t be a minimum requirement. I wanted to be able to focus on web and maybe a progressive web app or something, but not have to build a mobile app. 

I think this is kind of another level thing too. People wanted to be able to access messages across all platforms with native apps and it’s like, “Okay.” Well, that adds a whole ton of development time to get something minimally viable. Then lastly, the market should overlap with my existing audience because I wanted to be able to leverage as much of my unfair advantages or whatever that I had. So I wanted to use my audience as kindling and not just go into a completely foreign space where no one knows me, and those were my filters.  

Rob Walling:
Derrick Reimer dropping knowledge bombs as always. It’s great to have you back on the show.  

Derrick Reimer:
Great to be back.  

Rob Walling:
If folks want to keep up with you on Twitter, you are Derrick Reimer and, of course, if they want to use the best scheduling link on the internet, savvycal.com.  

Derrick Reimer:
That’s it.  

Rob Walling:
Thanks again to Derrick for coming on the show. Thank you for listening this week and every week. If you’re not following me on Twitter or X, however you refer to it, I am @RobWalling. Let’s connect. This is Rob Walling signing off from episode 718.

Rob Walling:
If you’re looking for Startups For the Rest of Us, you’re in the right place. I’m Rob Walling, and today I talk with Marie Martens about bootstrapping her form building SaaS to 1.3 million in ARR and 300,000 free users. It’s a great conversation, and what I love about what she and her partner have done is really go against the odds of launching something with a massive free plan, very generous, really low price point, and yet still being able to get to 1.3 million ARR in the span of just a few years. 

Marie is going to speak at MicroConf Europe in lovely Dubrovnik, Croatia. Tickets have just gone on sale, the event will sell out. It is being held October sixth through eighth at this amazing venue. It is literally one of the best, if not the best venue that we’ve ever had any MicroConf at. And I mean any MicroConf, a US, a Europe. Really gonna be an amazing event. So if you want to hear more from Marie, if you want to meet me in person and hang out with about 125 of your favorite bootstrapped founder friends, grab a ticket at microconf.com/europe. That’s microconf.com/europe.

Before we dive into the episode, I wanted to let you know that it’s your last chance to apply for MicroConf Masterminds. Applications close on June 12th at midnight. Finding the right founders to surround yourself with can feel like an impossibly hard task. Over the past few years, our team has successfully hand-matched over 1000 founders into mastermind groups by looking at your revenue, team size, strengths, goals, and a few other data points to make sure your peer group is the right fit. Once matched, you’ll also have access to our mentorship series, a three-month program where you can connect with some great minds in sales, business development, marketing, and more. 

If you’re looking for accountability, honest feedback about your business and the opportunity to make new friends that care about your success, you can learn more and apply today at microconfmasterminds.com. Applications are closing soon, so make sure to get your application in by June 12th. Again, that’s microconfmasterminds.com. It’s a great conversation. I hope you enjoy it. Let’s dive in. 

Marie, welcome to Startups For the Rest of Us.  

Marie Martens:
Thank you so much for having me.  

Rob Walling:
I’m excited to talk to you today about Tally and that’s at tally.so. Your H1 is the simplest way to create forms, say goodbye to boring forms, meet Tally, the free intuitive form builder you’ve been looking for.  

Marie Martens:
Correct.  

Rob Walling:
And you’re quite the success story with the Indie Hacker build in public crowd in the sense that you are one of, I’ll say, it’s a small number of folks who are trying to launch things and be a lifestyle bootstrapper, and you’re one of the small number that has really achieved some marked success with it. Can you give us an idea of where the business is today because you’ve been very public about numbers, I’ve heard you talk about in other presentations, but where do you stand?  

Marie Martens:
Yeah, we now have around 300,000 users worldwide using Tally. Most of them are free. We have around 4,500 paying customers and that results in 1.3 million ARR today.  

Rob Walling:
That’s incredible. And that’s over the course of what, three years? Did you launch in 2021?  

Marie Martens:
Yeah, so after summer it will be four years. Yep.  

Rob Walling:
Four years. Okay. So let’s back the clock up that gives people an idea of where you are. Oh, and how large is your team?  

Marie Martens:
So we’re actually like two and a half people. I would say. We don’t have any full-time employees yet. That will change soon though. So it’s basically me and Filip. Filip is my technical co-founder, but also my partner in life. And then, we have a freelancer helping us out part-time for customer support.  

Rob Walling:
You have 300,000 users and a part-time customer support person. That is incredible. Are you and Filip doing support as well?  

Marie Martens:
Not anymore. We do once in a while, but it’s definitely not our main task anymore, no.  

Rob Walling:
How is it possible with that many users that you don’t have ’cause my last SaaS Drip, we had 12 full-time customer support people by the time we had, I think, it was 30,000 or 40,000 free users. So obviously, different products. Drip is very complicated. It’s marketing automation, it’s a lot more expensive and all that. Is it that just the nature of Tally that it’s so easy to build a form and you just kind of know what you’re doing? How would that possibly not be a full-time job?  

Marie Martens:
Yeah, I think the main ingredient there is that we really try to keep the product simple. So as you read on the website, simplest way to create forms, so the simpler, the easier for people to use. So there’s a heavy focus on that user experience. Besides that, we have invested a lot in documenting, in creating tutorials and making sure that it is self-service. It is worthwhile mentioning that now it’s one part-time person, but we are actually hiring two more people, but they will also work a couple of hours a day basically, but in different time zones so that we can reduce our response time because now it’s like max one day, but it is getting difficult. So that’s an important note there. But yeah, I think why, I think because of the product really, the product itself is pretty intuitive and people can find their own way through it. 

But definitely support has been an important factor in our journey. We can maybe talk about it a bit more later and has come with ups and downs. We have had to implement a lot of new measures to keep it manageable, but yeah, for now it’s one part-time person.  

Rob Walling:
Yeah, and I think intuitive is one thing, but a lot of us build intuitive software. I get the feeling that it’s the nature of the product that if you’re going to build a form builder, you know you’re going to type some stuff out, you’re going to drag and drop something and then you’re going to post it, and that’s it. There’s not a ton of complexity on that. I think of it also like electronic signature, like Ruben Gomez, who comes on the show a lot, has SignWell, and there’s stuff to that product, but really it’s like you sign in, you upload a document and someone signs it or they don’t, that’s the extent of the process. It is just a simpler product than like a CRM or marketing automation. Yeah.  

Marie Martens:
Definitely there’s that and I think where it becomes complex is integrations because forms are usually the beginning of the workflow. So a lot of support is also about that. The moment it gets a bit more technical, you can inject custom CSS, stuff like that. It can get pretty advanced because people build crazy things with no code tools, but at the heart it’s just a form indeed, first name, last name, e-mail, so most people can make that work. Yeah.  

Rob Walling:
Okay, so let’s step back a little bit to let’s say 2021 or around the time you launched. There were already dozens, if not hundreds, of form builders. So what did you do in the early days? And I heard some rumblings about cold outreach that you were doing, which is crazy to me because A) if you have a free plan and B) you’re only paid plan, so folks now is $29 a month, cold outreach doesn’t work at that scale. You can’t make money on a product doing cold outreach at 29. So you were doing cold outreach for other reasons. What were you doing to get it kick-started and to get people to pay attention when there’s already a 150, 200, 300 form builders out there?  

Marie Martens:
So I think there’s two parts. So we’re bootstrapped and we’re a small team and from the beginning, we were very conscious about that. We wanted to keep it bootstrapped, we wanted to keep it small and lean. And so for us, it seemed easier to go in a very competitive market. You know there’s demand, but where we can just grab that small percentage of the market and if we can manage to do that, that’s already huge for us because we’re so small, we don’t have to earn as much as the big players. Of course, downside of that is that we don’t have the marketing budgets of the big ones. So we had to do something different. We didn’t have any network in the space. So we mainly launched in the beginning in no-code communities and on Indie Hackers. And to basically get the first users, we did cold outreach because that was the simplest way to do. 

We would go on Product Hunt. On Product Hunt, we would look at people that have uploaded similar products like ours or no-code tools, so not necessarily form builders. We would make lists of them, hundreds, thousands of them, in a Google sheet and find manually, at the time, their contact details and reach out to them. So that’s basically what I did, I think, for four or five months nonstop every day while Filip was building and improving the MVP. And by doing that, we found our way into some communities. One of them was No-Code France, which is pretty big in Europe and Belgium. The whole no-code movement was not really happening yet. They helped us a lot in the start, promoting us, sharing us in their community, and that’s how we found our first thousand users by simply DM’ing people.  

Rob Walling:
That’s crazy. Talk about doing things that don’t scale, right? Paul Graham talks about that. Again, I don’t know if you’re cool with I lump you into the Indie Hacker built in public space. Is that what happened?  

Marie Martens:
Yeah.  

Rob Walling:
Do you identify with that?  

Marie Martens:
Yes.  

Rob Walling:
Yeah, so most Indie Hackers that I see want to post on Twitter and then build a huge following and then launch stuff to them, but not do the grind, the cold outreach. Were you a free tool? Were you cold outreaching to get people to come use a free tool or did you have recharging? So it was free?  

Marie Martens:
It was free.  

Rob Walling:
Wow.  

Marie Martens:
We just wanted to get people on board. We had our TallyPro, our subscription, our paid plan after a couple of months, but we didn’t have any in the beginning. And actually, one of our first users said, “Oh man, I really love this. Where can I pay?” And we didn’t have, you couldn’t pay it and then, that was for us a very early sign of, “Okay, we might be onto something.” He’s actually still, we then made this $5 a month and he’s still on this plan just to have them support us. I guess that’s the success formula of Tally is that we’ve given so much value for free and we’ve built a product that some people really love to use and so it becomes a no-brainer for them to pay for it once they can.  

Rob Walling:
Right. And I do want to call out here for listeners because a lot of people try free and I would say 9 out of 10 who try it, doesn’t work, maybe 95 out of a 100, it is a lot of lot.  

Marie Martens:
Yes.  

Rob Walling:
And Ruben Gomez has these four markers that I often quote, I actually put them in my book, “When freemium can work and if you don’t have all four of them, you probably shouldn’t try freemium.” One is that you have almost zero support and we’ve already covered that ’cause again, if you had to go free and you have 10,000 users and you need to support them, catastrophically expensive if you’re scaling up. The second is there’s no real incremental cost for new users, meaning a new user signs up.= let’s say I had an SMS app where I’m sending text messages, very, very expensive to send SMS, very expensive. AI, very expensive. There’s certain, even e-mail is not very expensive, but there’s a little cost to it. So really having zero, almost zero marginal cost, which it sounds like you do. 

The third is that folks can self-onboard and they can get very quick value from the product. So back to my earlier example, electronic signature has a free plan, SignWell does. If you’re going to have someone e-sign a doc, what do you do? You log in, you upload a doc, they sign. It’s very quick to value. With a form builder, I bet I could build a form in Tally in 5 or 10 minutes if I half-ass knew what I was doing and post.  

Marie Martens:
In less, and we don’t even require to sign up. So you can literally go to the website and do it.  

Rob Walling:
So super quick to value, so this makes sense, versus a CRM, marketing automation e-mail where you’re like building workflow, it’s a different type of tool. And the fourth one is some measure of virality and if you have a free plan with no virality, it’s usually, don’t do it, it’s not worth it. But you as a form builder, if I set up a Tally form and I share it with people, you have a logo I’m assuming, and some type of, you’re at Tally.so, right?  

Marie Martens:
Yeah.  

Rob Walling:
Got it, got it.  

Marie Martens:
So we have the virality baked in because forms are viral by nature, and that’s why we invest a lot in getting free users because they are the biggest growth engine of our product, basically  

Rob Walling:
That’s your engine and that’s what I want to call out to folks listening is it is the, I’ll say the Indie Hacker dream or the lifestyle bootstrappers dream to just never talk to any human and build a product that does 10,000, 20,000, 50,000 a month and so often, people get pulled to freemium because they’re like, “Oh, well Tally made it work, so I’m going to do free too.” But it’s like unless you have what Tally does, which is a very simple product, which is super elegant, which needs no support, all these things, you really shouldn’t try this. It just doesn’t work. And I see people trying it and failing. 

In fact, when I was, so I sold Drip, which was e-mail marketing automation provider, and the acquirers were venture funded, $38 million in venture. That’s how they could afford to buy us, and they introduced a free plan. I was still there at the time and I was like, “I don’t know if this is going to work, guys. I’m fine to do whatever you want. You’re running the company. I was running product at the time. If you want to do free, we’ll implement it, but I just don’t know.” And it kind of didn’t.  

Marie Martens:
It didn’t work.  

Rob Walling:
It really didn’t because it didn’t have… We had a little bit of virality, right? It was like, “Oh, an e-mail with this, powered by a Drip link.”  

Marie Martens:
Yeah.  

Rob Walling:
But the other stuff was not. There is no support, there is incremental costs ’cause we were sending hundreds of millions of e-mails a month. There was no self-onboarding and quick to value, it was just one out of four at most. So I want to call that out, like you’ve built an incredible business with this approach, but I don’t want everyone listening to think, “Oh, well, I’ll just do the same thing” because you really need, do you agree? I’m sitting here and kind of preaching at you, but yeah-  

Marie Martens:
I totally agree. Yeah, I totally agree. I think for us, one of the main reasons as well is that we made it free is because we had to do something else than the market at that time. Because we are so small and the type forms and job forms, they all have volume-based pricing, and that’s something that we didn’t want to do. So we have to make it free at the cost, of course, of having to support a lot of free users, but we have to do that to differentiate ourselves in the market. And Tally would not be where it is today without a free plan. We have grown organically. Until now, we haven’t invested anything in paid acquisition. So not making it free was not really an option for us.  

Rob Walling:
Yeah. That was a marketing channel. Yeah, well, you can’t invest in paid acquisition at your lifetime value. It just wouldn’t work.  

Marie Martens:
No.  

Rob Walling:
29 bucks a month, even if everyone you acquired upgraded a $29-a-month plan, there are no ads anywhere on earth-  

Marie Martens:
Indeed.  

Rob Walling:
… That you can make that LTV work. So it makes sense that this is your growth engine is the free thing. Now, did you know this going in? All the stuff we just talked about where I was like, oh, free is actually quite hard and it only works 1 out of 10, one out of whatever, 5 out of a 100, did you know that going in and you were really strategic and surgical about it or did you get lucky where it was like, “We’re going to try free? Oh my gosh, it worked.”  

Marie Martens:
We were pretty strategic about it being free. I think we didn’t fully know the power of the virality and how the whole product-led growth system would work, but we knew that it had to be free and that we had to stick to this and that it also wouldn’t always be great. We would make less money, but we had to keep it free in order to grow. And that’s the framework in which we were operating and we were still sticking to that. It needs to be free and needs to be simple. That’s what makes it work for Tally. So we knew that, but we definitely couldn’t predict that it would grow in the way that it did. So it’s not like we knew everything when we started, definitely not. Yeah,  

Rob Walling:
I’ve never heard of anyone doing cold outreach for a free tool with no paid plan. That’s crazy. But you were doing it, just you were trying to get the momentum, right?  

Marie Martens:
Yeah, we were trying to get the word out there like we’ve built something new. It’s a bit different than at the time what was at the market. Also, we launched four years ago. I think the last two years, a lot of people have launched new form builders, but I feel like they were a bit less bootstrapped ones at the time, and we just wanted to get the word out there and find those first users. And we managed, I think we got around a 20% response rate to our cold outreach, which is pretty crazy. Of course, it was pretty targeted. We would really go to founders, people in design, people in no-code, people in product, like people that used Notion because we have a similar interface like them, so that definitely also helped us. And yeah, the cold outreach, it’s something that I would definitely actually recommend and I would do it again because we needed that first batch of thousand users to get the flywheel going and to start product led growth.  

Rob Walling:
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So I’m curious if you’ve heard the phrase shrinking a market. It’s where you come in. So Craigslist did this with classified ads, newspaper classified ads where they came in and they basically were like, “Hey, we’re free,” and newspaper classified ads just collapsed. And then frankly, the newspaper business kind of collapsed because that was their main source of revenue. You see it when Make competing against Zapier where they come in and they’re like, “We’re 80% of Zapier or whatever the functionality is, and we are way cheaper.” And you see this with folks going against Salesforce, where Zapier and Salesforce, they still have the brand names, but competitors coming under them and really underpricing them. And it feels like you did the same thing here with what Jotform and Typeform and Paperform and Formstack and SurveyMonkey and Wufoo and Xeroform, Microsoft forms, ServicePro and there are a lot of them out there, but they charge, especially as they get larger, they follow the pricing playbook. 

This is what we talk about at TinySeed. This is what I talk about in my book of like, “Hey, if people are getting million form requests per month, they should be paying you a load of money,” because they’re getting a ton of value and that the money they pay you should increase with the value. That’s like the playbook they run, and it’s the playbook I run, frankly. But you haven’t done that. You have a free plan and you have a $29-a-month plan, which honestly kills me. If I were to invest in you, I’d be like, “Oh my gosh, A) you need more tiers and B) you need to charge for it.” ‘Cause I know that you could, I know that you could. With 300,000 free users, you could be a $5 or $10-million business.  

Marie Martens:
Yeah, we could.  

Rob Walling:
What is your thinking on that? Are you going to keep this pricing forever or is this something to get ;cause built an incredible brand already, an incredible momentum, and is there a time where you reap that, where you reap what you’ve sown and you do introduce higher price plans or the 29 becomes, even if the 29 becoming a $49 plan, we do the math on that, you almost double the size of the revenue of your business overnight? So tuck me through the thinking there.  

Marie Martens:
Yeah, it’s a discussion we have. Obviously, we have, you’re not the first one saying that we are leaving a lot of money on the table. I think what has worked for us is keeping things free and simple and only having one pricing tier and the fact that it’s priced that low actually a large part of the success of Tally. Imagine we would introduce higher price plans, then we would also, one of our USPs would be gone and the cost of marketing would increase. So that’s how we look at it. We do feel like more enterprises or larger companies are starting to get interested in Tally and using us, and we’re not fully equipped for that. We don’t have the legal team, we don’t have the compliancy. All of that costs a lot of money as well. So we’re heavily focusing on startups, creators, the smaller businesses where a Jotform, Typeform, especially Typeform, they’re only raising their prices. So they’re moving away, they’re moving up market. We are doing the opposite. 

So I think for us, as long as we’re small and we remain a small team, it makes sense to not raise our prices. We have talked about introducing more of an enterprise plan, but that would come with more support as well, compliancy, all the things that I’ve mentioned before. And we’re not sure if that’s the road that we want to take as well with Tally, especially because we’re having a lot of fun doing what we’re doing now. So to be discussed, to be honest. it’s not something that we’re planning to change in the near future because we feel like we can grow a lot more with what we’re doing now, but maybe one day. But it’s not something that is on the table right now.  

Rob Walling:
And that’s the freedom you have as a bootstrapper is you can limit your growth, you don’t have to optimize everything. You can make that choice because the business, the pricing right now is, at least I would argue, it’s not optimal, but you’re making that choice to do that.  

Marie Martens:
Right.  

Rob Walling:
You don’t have to go all the way to enterprise. You mentioned enterprise a few times. When I look at your pricing, I think $29 a month, there could be-  

Marie Martens:
Yeah, enterprise is too far off.  

Rob Walling:
Yeah, yeah, a 1000, 2000, whatever. But there’s a 49 or a 99 and a 149 and a 200 or whatever, that could then have tiers. I guess my question, so I understand your pricing is, if I were to sign up and I had 20 team members, 50 team members using Tally, and we were getting 10 million form submissions a month and we had a 1000 forms out there, would I pay you $29 a month?  

Marie Martens:
No, because we have a fair use policy. So basically when you sign up, you also need to agree to the policy and it basically says that when you exceed a normal usage, so when it causes really, when you would have millions of submissions a month, then we basically draft off a custom pricing based on the volume. So it can be very, very high usage or collecting a very large amount of file uploads, things that cost us a lot of money as well. Then you would be on a custom plan, and that can go from hundreds of euros to more depending on the volume.  

Rob Walling:
Got it. So you do have people, you do have businesses paying you hundreds of dollars?  

Marie Martens:
Yeah.  

Rob Walling:
Okay. That makes sense.  

Marie Martens:
It’s a smaller amount. It’s not really where we focus on as well-  

Rob Walling:
Sure.  

Marie Martens:
… But we do have some kind policy or fair use policy in place.  

Rob Walling:
So let’s say, I was paying you $29 a month, and is it when I go over 50,000 form submissions in a month?  

Marie Martens:
It’s something like that. And if it would need to be consistently, so if it would be like a 100,000 for six months, then we would need to adjust the pricing. Yeah.  

Rob Walling:
Got it. Yeah, that’s where the money is, that’s where the money is.  

Marie Martens:
Yeah.  

Rob Walling:
See, I think there’s a lot of money to be had with that. So 300,000 free users, 4,500 paying. So 1.5% of your free users have become paying customers?  

Marie Martens:
Yeah, it’s a bit more, but it’s like 1.5% to 2% or something like that. Yeah.  

Rob Walling:
Okay. I want folks to understand that ’cause again, we launched a free plan at Drip and I think we went to 30,000 or 40,000 free users over the course of while it existed. It doesn’t exist anymore, and I don’t remember if that was a year or 18 months. Getting to 300,000 free users, even just that, is insanely difficult. That is mad props to you for building that engine. And is that pure virality? Is it really once you got to fly with that is what you’ve banked on, you really haven’t done any other marketing?  

Marie Martens:
No. We’ve built in public, we’ve been active sharing that, but that really doesn’t compare to the impact of the virality of the form.  

Rob Walling:
So virality has been the key to growth to date, but that will take you so far. Typically, if you’re having the success that you’re having, you’re looking at other marketing approaches, A) so you can diversify, but B) so you can grow faster. What’s next on your list of marketing approaches to attack?  

Marie Martens:
So this year, we’re looking at two things actually. There’s influencer marketing and there’s SEO. SEO because we’ve, from the start, made some really simple comparison pages, just to try out what it would do. And we do have some that are pretty successful for us, like free Typeform alternative page, forms for Notion, some very specific ones that are getting us more traffic. So we are now investing in, okay, what should our strategy be? Which contents should we create to grow organic, organic search? And then, influencer marketing for me really matches with the positive word of mouth that we have been having by just really engaged, happy users sharing content anyway about Tally and just the idea of how can we amplify that and how can we make sure that there’s more content being made around Tally, especially YouTube is something that is almost unexplored for us, but that can be, I think, a really good acquisition channel, same like TikTok for example. So that’s something that we’re looking at at experimenting with this year. Yeah.  

Rob Walling:
One thing that we dealt with a lot at Drip because we sent e-mail was we dealt with hackers and we dealt with spammers. It was awful. At your volume, you have to be dealing with spammers. Actually, I was checking you out on Twitter ’cause I wanted to get your Twitter handle and it looks like you’re currently-  

Marie Martens:
We’re in it.  

Rob Walling:
… Dealing, as we’re recording this, this will go live in a couple weeks, but you’re currently blocked on Verizon or whatever. And I’ve had all of this happen too. What is that burden like, how are you working around that and what is the experience like dealing with that constant influx.  

Marie Martens:
It’s the first time that it’s been as bad as this week. So we have abusers coming in all the time. We have to spend a lot of time on detecting phishing, abusive forms. People find all kinds of ways to abuse the product. So that’s definitely a downside of having the free product, but even then, people pay with stolen credit cards and still abuse the system. We have been improving abuse detection, like our systems a lot, but still it requires some manual moderation in the end, which is actually a quite time-intensive job. And since last week, indeed, we have been blocked by several ISPs around the world. We’re trying to figure out why because it’s very difficult to get in touch with them to know what the source is, especially if you’re not a customer. And it’s hard to be a customer with all the providers around the world. So we’re actively trying, asking our users for help. They are also contacting their providers to figure out what’s going on. 

So yeah, we somehow got flagged or blocked, which makes it impossible for people, some people in the States, people in the Emirates as well to access Tally and yeah, it’s the first time we’re experiencing it on this scale and it’s pretty scary because it’s something that we don’t fully control ourselves. It’s not like we can just introduce an easy fix and it’ll be solved. So yeah, we’re trying to reach out to everyone possible to make it go away or have it fixed as soon as possible. But I think it’s probably one of the most stressful weeks in the history of Tally that we’re in right now.  

Rob Walling:
I’m sorry to hear that and I know exactly what that feels like where it’s not in your control. Back in my day, I used to be like, this could be it. We could be done here. All of our IPs, sending IPs got blacklisted at one point ’cause of spammers. And I was like, if we can’t send e-mail, what are we doing? And it’s this crazy existential anxiety. So I am sure that’s going through your mind and-  

Marie Martens:
Yeah, I can relate.  

Rob Walling:
Yeah. Sorry to hear it. I think as a final question I want to ask, there’s tens of thousands of listeners to this podcast and I think someone listening might be thinking, can I take the learnings from Tally. And I’m going to say some of the learnings are start with free, be really low-cut, like just undercut price undercut, keep it simple, whatever, go into a different market to take it and apply. I want to apply this to compete with Intercom or Salesforce or Zapier or just any market that we could pick. What are your thoughts on when this would work and when it wouldn’t because I don’t think it’s going to work against Salesforce, for example, complex products, blah-blah-blah? Have you given any thought to how replicable your success is to a new entrepreneur or a new space?  

Marie Martens:
I think it is as long as you manage to build a product that people actually love to use, and I think word love is important in there because our early users are really the people that really value the interface that we created, for example. A lot of people don’t care how it looks, they just want something that works. But I feel like the small group of maybe even a niche of people that really values that user experience is what got us our first users and they were also the most heavy promoters and they have spread the word around. So if you can tap into that small crowd of early adopters to find first users and then afterwards you can scale, I think you can replicate it. 

I think you can build a very, very simple alternative to an intercom, why not? If it’s cheap, if it’s what people need in the beginning of their, for example, Indie Hacker career, I think it could work, but it needs to be, and I think that’s also a big, big part of our success is, it needs to be built very well and it needs to look good, it needs to be fun to use, and you need to have that virality somehow. So yeah, maybe with an intercom that would be more difficult, but I think the virality is probably the key ingredient. Yeah.  

Rob Walling:
But I think you’re overlooking something, it’s market size.  

Marie Martens:
Yeah.  

Rob Walling:
Form builder, the market size, the number of, I don’t think if I build a cheap competitor, simple competitor to intercom, I wouldn’t get 300,000 free users.  

Marie Martens:
No.  

Rob Walling:
I might get 10,000 and so the numbers wouldn’t work. So that’s a factor I think that people would have to think about and should be careful.  

Marie Martens:
Yeah. Everyone needs a form at one point.  

Rob Walling:
Everyone. It’s a huge market and that is such an advantage that you have, so if you’re going to enter it-  

Marie Martens:
Yeah, definitely.  

Rob Walling:
… It’s got to have, like for you to have 300,000 free users, there are tens of millions of users worldwide, if not hundreds of millions. And how many, that’s a rhetorical question, but how many software markets have that many users? There’s probably electronic signature there. We can think of a few, but there aren’t. I don’t think there are hundreds of markets that are that big. I think there’s tens of markets, so that’s what someone would need. Again, I’m trying to say this to educate folks who are listening to be careful because you can’t just take lessons from your experience and be like, “Oh, I could just apply this anywhere.” It doesn’t work that way.  

Marie Martens:
Yeah, market size is definitely, yeah, is definitely a big factor in it, for sure. Yeah.  

Rob Walling:
But I mean your success speaks for itself and it’s super impressive-  

Marie Martens:
Thank you.  

Rob Walling:
… To have watched your journey. And when I looked back and I listened to a few interviews in prepping for this, there was an interview from whatever, a year or two ago, and it’s like we have 60,000 free users and then there was one where you said a 100,000 and I expected, when you got on today, that you were going to say some number that was slightly bigger than a 100, but to hear 300,000, I’m just like, “Oh my gosh, it’s going faster. The momentum is building.” So it’s really impressive and it’s been great having you on the show today.  

Marie Martens:
Thank you. Thank you so much for inviting me.  

Rob Walling:
Folks who want to keep up with you, you are Marie Martens on Twitter, that’s M-A-R-T-E-N-S and of course, Tally.so if they want to check out an amazing form builder.  

Marie Martens:
Yeah, that’s where you can find us.  

Rob Walling:
Great. Thanks again for coming on, Marie.  

Marie Martens:
Thanks so much.  

Rob Walling:
Thanks again to Marie for joining me on the show and thanks to you for listening this and every week. If you haven’t yet left a review or given this podcast a thumbs-up in whatever player you use or given a five stars, followed it on Spotify, I don’t even know how all that works, I’d really appreciate it. It helps others find the show and keeps me motivated to keep producing it. I’ll be back in your ears again next Tuesday. This is Rob Walling signing off from episode 717.

Rob Walling:
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You are listening to Startups for the Rest of Us, I’m your host, Rob Walling. In this episode, I answer listener questions, some really good listener questions today ranging from how to position against existing incumbents, how to evaluate H1 landing page changes, the impact of a niche tech stack on company valuation and more. I’m actually running low on questions, so if you have a question for the show, you can email at questions@startupsfortherestofus.com or just head to the website, startupsfortherestofus.com. Click Ask a question in the top nav. And of course, as always, audio and video questions go to the top of the stack. I’m planning to have fan favorites back on the show in the coming months to answer questions. Folks like Derrick Reimer, Ruben Gomez, Craig Hewitt, Asia Arangio. So get your questions in if you’d like them to be featured on the show. 

Oh, and I want to make a request. I get a lot of early-stage questions about idea validation, choosing between side projects. “What should I do? How do I launch?” I would love to hear some later-stage questions. If you have 5K MRR, 50K MRR, 5 million ARR, write in with a question that you are facing. You can remain anonymous. I realize at a certain point what becomes hard is you have a team and you don’t want to write in with a question that could potentially backfire on you that your employees could hear, or there’s a lot of things to be concerned about at that point. So this is an open invite if folks send in later-stage question. And I just mean anything after you have some type of product market fit. Think of the SaaS Playbook stages of like, “Oh, I’ve built something and people are generally paying for it, but I want to grow this. Here are some things I’m facing.” I would love to have those questions and bump them to the top of the stack. 

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So with that, let’s dive in to my first question from Mackenzie.  

Mackenzie:
Hey Rob, this is Mackenzie. I’ve been listening to the show for the last couple months and I really appreciate the content. It’s helped me out a ton. I have a question for you about positioning. I just finished up episode 673, and in it you talked about positioning TinySeed against other VC funds and also how you position Drip against Infusionsoft. And I’m wondering if I’m in a similar situation, especially as the smaller guy punching up at larger incumbent competition, how subtle or how direct should I be with calling out who we’re competing against and how we can do better? I’d love to hear your thoughts on this. Thanks.  

Rob Walling:
I really like this question. Thanks for sending it in. The answer is it depends, but I’m going to tell you what it depends on and kind of the decision tree that I personally would go through and went through when I was positioning TinySeed or Drip or HitTail or whatever against a large incumbent. First thing I ask myself is, is mentioning their name going to be helpful? Does everyone else in the industry know that when I say the name of my big competitor that everyone will know who it is? So if you’re competing against Salesforce, HubSpot, Slack, Intercom, Jira, even Infusionsoft in the right circles, everyone knows who they are and everyone, I will say… I’m saying everyone very generally, but a lot of people know, “Ooh, yeah, there’s some issues with this tool.” 

So Salesforce, what would be the complaints? Way too expensive, way too complicated, hard to use, hard to get on board. The sales process is not great. I believe it’s annual contracts. There’s all these things you could list. And if you’re going to be the not that, the anti that where you’re going to have monthly plans, you’re going to be easier to use, you’re going to be a lot cheaper, you’re going to basically the zig when there’s zagging and it’s helpful because everyone will recognize the name, then consider mentioning them. 

Now, I will say this is not legal advice because one thing that you can get into a potential danger point is that obviously it opens you up to a cease and desist of mentioning another company by name. Now, do they have any leg to stand on if you’re being honest and truthful and forthright in your marketing, if you have a comparison page that really does compare the two, honestly? Yeah, they don’t really have a leg to stand on if you’re doing that, but if they send you a C&D and they’re a kajillion dollar company, you don’t have the money to defend from a lawsuit. 

So usually what happens, I’ve seen a few kind of versus pages get cease and desists. Sometimes I’ve seen founders just change the page, alter it slightly. Other times I’ve seen them take it down because it’s not worth a headache. Knock on wood, I have yet to see one actually go to a full lawsuit because it’s just not worth it, because as everyone knows, in lawsuits, the only people that make the money are the lawyers. So that’s a little side jag there of obviously it’s kind of a warning, right? If you’re going to mention competitors by name, this is a danger. I will admit, knock on wood, I have never had an issue. I’ve never received a cease and desist myself. And I did mention competitors, I mentioned really large competitors that probably just didn’t care. So it was like Infusionsoft, it was Marketo, Pardot, Eloqua, Silverpop. These were big, big companies and I just don’t think they were paying that close of attention. 

I also didn’t say much about them. I would say, “If you are tired of expensive, clunky solutions that lock you in for an annual contract like…” And I would list them out. So in my opinion, it was not huge, huge risk to do that. However, in your shoes, if no one knows this company name, if mentioning them isn’t going to send them more traffic than the notoriety that you’re getting by mentioning them, then no, of course I wouldn’t. It just doesn’t make sense. You’re only using it. You can be vague is what I’m saying, is you can say, “If you’re familiar with the big gorilla that does this and has all these bad things about it” that I’ve probably already mentioned, but if… You don’t have to name them by name is what I’m saying. 

All things being equal, I would lean towards naming them if you want to know the truth, but you do have to weigh the pros and cons of potential liability, which again, I think is low, but it’s not legal advice. But I found the more specific you can be about positioning against specific incumbents I think is pretty helpful. So in the end, it’s up to you. It does depend, but those are the factors that I would be thinking about as I made this decision. So thanks for that question. Hope it was helpful. 

My next question is about evaluating H1 changes on your landing page.  

Edward:
Hi Rob, I love your podcast and I listen to every episode. I’m Edward and [inaudible 00:08:40] productivity SaaS. I often hear that many startups are changing their H1 on the landing page very often, and I always wondered how are these changes tested. Are these companies and startups, are they running A/B tests or they simply waiting and seeing what happens? I understand it’s also something like changing your positioning and so on, but I would like to hear about how this has actually evaluated these kind of changes. Thanks so much.  

Rob Walling:
So interesting question. I’m curious what these startups are that are changing their H1 on their landing page very often because that sounds like they don’t know what the (beep) they’re doing. In all honesty, don’t change your H1 often unless you are flailing, things are not working, you don’t have product market fit, your positioning’s off, and then, “Okay, I’m changing it to try to figure out how to drive more trial signups or more customers or whatever.” But once you’ve locked in on something that’s generally working, you don’t change this often because your H1 becomes part of your positioning. And you don’t want to change positioning often because it confuses the market. So I guess that’s my first thing, is if you’re looking at Indie Hackers on Twitter who are launching 12 products to see what sticks and they’re just spinning around changing a bunch of stuff, launch, launch, change, change, they don’t know what they’re doing. 

So look, I’m not saying I actually like the Indie Hackers website and the podcast and all that. I’m not trying to disparage that, but just when I say Indie Hacker, I do mean the dev who’s launching a bunch of side projects hoping that something works and they tend to not know what they’re doing. So this is where you have to be careful about who you are watching, who you’re observing and who you’re taking guidance or mentorship from. Even if it’s not direct, but you’re taking signals from folks who don’t know what they’re doing, that can be confusing. 

If you look at companies that have their positioning relatively locked and they are building a great business and they have some semblance of product market fit, like for example, go to tinyseed.com/portfolio and go through 20 of those companies and just for kicks, monitor their H1s and see how often they change. I would be shocked if any one of those 20 companies dramatically change their H1 in a three-month period. It’s just not something that people do that often. 

Now, with that said, I will say that I’ve done plenty of split tests and there are folks who are especially low touch funnels where it’s high volume and it makes sense that you can actually split test. There are some companies, some SaaS companies that do in fact change their H1 subtly. They don’t change the entire value prop, they don’t change their positioning, but they’re changing wording, phrasing and what have you in the H1 and H2 to see if it drives more people to click through or to sign up for a trial or book a demo. 

If we’re thinking about those folks, and my answer to your question is, if they have enough traffic, they should be split testing. That’s what I used to do. I split tested probably 10 different products websites where I was split testing the headlines or the messaging or all this stuff, but they were high volume plays. If you’re getting a thousand uniques a month, even 5,000 uniques a month, it’s tough. You just can’t get a lot of signal and a split test takes a really long time. 

So for folks who don’t have that much traffic, they are probably just winging it and they’re probably taking their best guess and doing what we call a poor person split test, which is where, “Well, how many trials did I get in the last 60 days? How many do I get in the next 60 days?” Close enough. “Is it perfect?” No. “Is it the best you can do if you only have a thousand uniques a month and you’re selling something that’s really expensive so that your end is very low, meaning the number of people coming through your funnel is low?” Pretty much. So I hope that answers your question on three fronts. One, you shouldn’t be changing it super often unless you are actively split testing. Two, split test if you have enough traffic. And three, if you don’t have enough traffic, you can do what I just talked about with the poor person’s split test. So good question, appreciate you sending it in. My next two questions come from Evan.  

Evan:
Hey, Rob, this is Evan from Seattle. Love the show and have been listening for a few months now. I’ve been fortunate enough to save a year of expenses from working a FAANG job, and I’m about to leave that job to pursue entrepreneurship on my own. I found that my full-time role took too much time and mental energy for me to balance full-time work with the family and also working on a side gig. So I’m doing this without a step 1 business under my belt, but have some scratch my own itch type ideas I’m pretty eager to explore. 

Two questions for you. First, is there a modern equivalent of identifying a niche based off of the 5K spend for a magazine full page ad? With print falling off, I’ve been thinking of what equivalents there might be. Maybe a subreddit community with X number of subscribers? 

Second, I’m starting from scratch. And while I’ll be full-time on my solo work, total time is at a premium since I’ll have only about 12 months of runway, I’m debating if I still want to go through step 1 and 2 of the stairstep approach if I don’t have a short-term goal of building enough money to quit my job since I’ll have already quit it. I wonder if that might pivot my approach to only pursue step 1 ideas that could conceivably expand into my entry to standalone SaaS, or if I skip step 1 and 2 altogether and jump in head first and save the extra time, the maybe three to six months I’d have spent on step 1 projects. I don’t think I’d be as passionate about those step 1 projects longer term, but I also want to make sure that I’m being judicious with learnings since this will be new for me. Looking forward to hearing your thoughts.  

Rob Walling:
Thanks for those questions, Evan. So with regards to the $5,000 rule of thumb, I think Tim Ferriss had that in for a work week. I think I might’ve quoted him in Start small, Stay Small. I don’t remember. I had some loose rules of them in Start small, Stay Small, obviously 14 years old now, so I don’t know. I don’t necessarily hold up over the test of time as things change. The thing to keep in mind is these are all just rules of thumb. It’s just not a hard and fast rule. It’s just guessing at how many people are interested in a topic. 

So I actually really like your idea of finding a subreddit with a certain amount of people. And I’d be curious what you think that number is because I’m not familiar enough with Reddit. I mean, I’m on and I click and look around, but I don’t know enough about Reddit to know if a subreddit with 5,000 versus 50,000 versus 500,000 is a big or small one. 

The other thing to think about is if I’m selling a product for $10 a month versus $1,000 a month, well, you need a lot fewer people. The market doesn’t have to be that large in order to make it work. I do like that idea though of thinking about or seeing a community like a subreddit and looking at the engagement. So I think you’re onto something there. 

Another couple thoughts that I have is you can use tools like SimilarWeb or Alexa. I’m sure I just activated a bunch of people’s Amazon assistant, but it’s A-L-E-X-A.com. In fact our digital Amazon assistant got its name from this website. And from these sites, look, they’re not perfect, they’re directionally correct, but you can estimate traffic to certain websites. And so you would want to look at larger competitors in this space and realize that, “Oh, if a SaaS application’s getting 10,000 uniques a month, it better be a really high price point. If it’s getting 100,000 uniques a month, if you’re a developer entrepreneur building a lifestyle business, could you build a business on that?” For sure. I built really great lifestyle businesses on much less traffic than that. And if a competitor is getting half a million or a million uniques a month, then you know or you at least have an indication that, “Oh, there’s a lot of traffic here. How can I kind of siphon some of that off?” 

You can also look at tools. Say again, competitor research like tools like Crunchbase to see funding raised in employee headcount of competitors. Or if you’re going after what I’m calling orthogonal SaaS… All right, so we have vertical SaaS, which goes after a particular niche. This would be accounting software, but it’s designed specifically for freelance web developers or for psychologists. That’s vertical SaaS. Horizontal SaaS is something that any business can use, and that is SavvyCal, which is the best scheduling link on the internet, which any business can use, or SignWell, which is of course the best electronic signature app. That of course is a horizontal play. 

Orthogonal is where it is raw-based or title-based. So it’s focused on a specific title within a company. So for example, HR software like applicant tracking systems or something that helps you evaluate developers and hire developers which may be targeted at say HR or might be targeted at hiring managers or like software development managers. Those things are aimed at a particular role or a title, and I call that orthogonal SaaS. 

So with that said, if you’re going to be going into a vertical or orthogonal SaaS, you can look, and you’re in the US, you can look at the Bureau of Labor Statistics. And so if you look up how many architects there are in the US or you look up how many hairdressers there are or accountants or whatever, that can also give you an idea of, “Oh, there’s 5,000 versus 100,000 of these types of businesses.” 

And look, if you’re bootstrapping SaaS and you want to get to a million, 3 million, 5 million in ARR, you just don’t need that many. You don’t need that many companies. You’re not building a venture scale business where it’s like, “Well, my total addressable market has to be a kajillion dollars.” It’s like your total reachable market or your term as you’ve been hearing me say on this podcast, it just doesn’t have to be that big if you’re trying to replace an income or build a six or seven figure ARR company. 

So anyways, those are the kinds of signals that I’d be looking at. And I don’t have hard and fast rules about them, but you get the idea. You can start comparing the data from one niche to another from one role or title to another. 

And then Evan’s second question was about having 12 months full-time and should he do step 1 and step 2 businesses. Because realistically, step 1 and step 2 are designed to get you out of employment so that you can focus full-time on your entrepreneurial efforts, and he’s already there. So my answer is, I do think this kind of depends. I don’t have a hard and fast rule or strong advice for you on this. What I will say is step 1 and 2 businesses tend generally to be easier to grow quickly and get to 5K a month or 10K a month. Building a full-blown SaaS, it just takes so much longer. All the stuff, it’s just, I won’t rehash the stairstep method here. But a step 3 business, a standalone SaaS, it usually just takes you a lot longer because you’re not injecting yourself into an ecosystem. It takes you a lot longer to iterate. It takes you a lot longer to build and just get the thing out the door because it’s more complex, there’s more functionality and there’s a lot more to it. 

So that’s the pro and con. In my book, I’d be thinking, “Okay, by 12 months I need X amount of revenue per month coming in, or I need to get a job. What’s the quickest way there?” And I would really be thinking about my, if I have any unique advantages like, “Do I have an audience? Do I have a network? Do I have a unique set? Do I have a unique knowledge of a space?” And it’s okay if you don’t. That just kind of helps. Decision making gets easier when you have some constraints. But for me, I think I’m on board with your idea of, “Hey, maybe I’ll do a step 1 business, but I make sure that it can probably get to whatever my revenue goal is.” Let’s say it’s 10K a month, that’s something you can live on in most cities in the United States anyways. Then maybe using that as a constraint of like, “Well, I’m only going to go after step 1 businesses where I think they can get to that.” I don’t think that’s the worst idea. 

And in your shoes, I probably would veer more on the step 1, step 2 approach of kind of get something out quickly, get it into a marketplace, see where there’s traction rather than building a standalone SaaS, which as we know just takes a lot longer to iron out all the kinks and to find product market fit. So thanks for the question, Evan. Hope that was helpful. 

My next question is from Gio about the impact of the tech stack on company valuation.  

Gio:
Hello, my name is Gio. I love the show. My question is about using more of a niche technology to build your SaaS and how that affects things when it’s time to sell. How might a potential buyer evaluate a company that’s built with more niche technologies that they aren’t as familiar with and that aren’t quite mainstream? 

So for instance, people usually use JavaScript, Python, Rails, maybe Java and other mainstream technologies to build their product and to build their business. But for example, I’m a closure programmer and we are a niche community. We are very healthy, smart, vibrant community, but we’re not exactly mainstream, although it’s used in many companies, it’s [inaudible 00:21:11] tested, it’s a very robust language. A potential buyer may not be familiar with it. Commonly, they’re not familiar with it, so they might have questions like, “Will I be able to hire for this? Is this a risk, basically? Is this a technology risk?” 

And while from my perspective, me being familiar with the community, with the language, it is not. And maybe even I would consider it an advantage in a certain sense. From another person’s point of view, from a potential buyer’s point of view that might be a disadvantage. So, provided that the business is actually doing well, might the technology choice of the business impact things when it’s time to sell? I was wondering if you had any thoughts on that both in the context of a micro SaaS as well as a more full-scale SaaS, let’s call it. I was wondering, so how a choice of a niche technology might impact a buyer’s valuation or decision to buy or not to buy? Thank you very much.  

Rob Walling:
All right. So once again, the answer of course is it depends, but here’s what I don’t do on this podcast. I don’t say it depends and then just waffle and kind of give a generic advice. When I say it depends, I try to then say, “Well, what does it depend on and what are kind of the buckets that it would fall into?” And so in this case, it does depend. It depends on the exit price, I think in general. 

A rule of thumb, a generally directional thing is that if you are selling an app for under 100,000 dollars or under 250 or some number that’s low six figures, you are likely selling it to a technical individual because at that sale price, there’s not enough money to hire full-time developers. So even like micro private equity or an investor or someone who doesn’t want to day-to-day be in the business is going to be very unlikely to acquire that business. 

It may even go up to, I’m trying to think, it depends on multiples and all this, but let’s say it’s up to a quarter million, 350,000 or whatever. Oftentimes it’s going to be someone who needs to write the code themselves. And so in that case, I think the tech is going to be very important. And if closure, as you say, is a niche technology, I think it’s going to be a major disadvantage. 

I think if you are selling in the half a million to, I don’t know what number would this be, 10 million, 20 million, I think it becomes a concern, but it becomes less of a concern because I think your buyers at that point are going to be strategics or private equity and they care more about the business fundamentals. But here’s the thing they’re going to be concerned about. The biggest thing, it’s what you brought up. They’re going to say, “Can we find developers for this tech?” So if it truly is some crazy niche, I know closure is not this crazy niche, but imagine some tech that if I said the name of the stack, I said the name on this podcast, most people don’t know what it is. That would be a problem. Because if a private equity is going to spend 5, 10, $20 million, they want to be able to maintain that. And if they just can’t find people, that’s a problem. 

So the question here is, how many closure developers are there and is it a growing technology or is it a mature technology that is sunsetting? Because every technology has its lifespan and its lifecycle that it slowly rides over the hump. So if it’s a dying technology and you’re building it now, or it’s not super popular technology and you’re building it now, will it be less popular 2, 3, 5 years down the road when you go to sell, making it even harder to find developers? That would be something I’d be thinking about because I think that’s going to be your big concern at that point. 

Now, let’s say you’re selling for the sake of argument. I don’t think it’s relevant here, but hey, anything can happen and I wish you the best of luck. Let’s say sell for $100 million or 200 million, a huge, huge nine figure exit. At that point, the tech matters a lot less because think about just saying, “I’m going to spend $100 million on the business.” You’re buying the tech, but really you’re buying a lot more than that. You’re buying the user base and probably the revenue stream and you’re buying the brand and you’re buying the team, and you’re buying all this stuff that’s actually worth more than the tech. Unless you’ve built OpenAI, if you’ve built a CRUD SaaS app, the tech can be rewritten at that point. 

And there is a certain price point where that just flips, right? And again, I don’t know. It depends on the buyer, it depends on the process, it depends on what you build. It’s all these depends. But at five or 10 million and it’s a small app that can be rewritten in three months, then how much does it matter if it’s in closure? But if it’s super complicated and it’ll take two years to rewrite, that number has to be higher. The exit price has to be a lot higher before someone’s like, “Cool, we’ll buy this and we’ll just rewrite it and migrate everybody over.” 

So I hope that my thought process there is helpful at kind of these three different exit multiples or exit prices and how they impact it. I want to tell you a little story. I purchased an app called HitTail. It was a SaaS app, SEO long-tail keyword tool. And that’s the one that I grew into the lifestyle business. It was pretty life-changing in terms of making 30 grand a month more money than we’d ever had or ever seen. And that was written in classic ASP. And it was built in ’06, which should have been built in Dot.Net, but it was built in ’06 and I bought it in 2011. Classic ASP. Think about this. Think about this 11-year-old web technology, VBScript. I happened to know it. I had coded ASP for a year back in 2000, and so I was in there fixing bugs and changing things. 

It was, as I said, a certainly sub $100,000 purchase and I was going to be in the code. If that had been written in closure, I probably wouldn’t have bought it. But with ASP, I got a good deal on it because I knew ASP and not a lot of other people did. So then I grew it to 30 grand a month and I started thinking about selling it. I talked to a few people and no one wanted to buy it. They said classic ASP is a deal breaker at this size. 

So once Drip started getting going, I hired a couple developers and I had one of them rewrite HitTail in Rails. That instantly made it a much easier sell. Now, I paid a developer, I don’t remember how many months it was to be honest, three months, maybe four months. I paid them as a full-time dev to do it and migrate the data. One day we pointed the DNS and the design look the same. We didn’t have to even have to inform… I think we informed customers there’ll be downtime while we do a switch, but we tried to exactly replicate everything in Rails. And that made the business infinitely more sellable. I did wind up selling it in 2015 as Drip was taking off and I couldn’t focus on multiple things. So for what it’s worth, that’s been my firsthand experience dealing with exactly this question. So thank you for that question, Gio. I hope it was helpful. 

My last question of the day comes from Riley.  

Riley:
Hey Rob, my name is Riley. After 15 years as an army doctor, I’ve swapped my stethoscope for the startup scene. I’m a huge fan of your podcast and have turned others on in the SaaS Playbook. So thank you for all the insights. 

My co-founder and I are launching a freemium platform aimed at tackling the bias, paywalls, and inefficiencies plaguing health and scientific publishing. It’s a space where clinicians and researchers can collaborate peer review and publish globally with premium features for those diving deeper. We’ve got monthly plans starting at $15 a month and higher plans for those who want advanced features. My question is, do you see us as more of a B2C or a specialized content service? Eager to hear your perspective. Thank you as always.  

Rob Walling:
The way I’d think about this, Riley, is if the clinicians and researchers are going to be paying out of their own pockets using their personal credit card, then yeah, you kind of are selling to consumers. This is a nice to have and it’s coming out of a personal budget. If you are in fact selling site licenses or multi-seat licenses, doesn’t sound like that’s what you’re thinking of, but you’re thinking about selling it to actual clinics or universities or places where researchers work and you’re selling to the actual businesses, well then you need to charge more, and that would then be more of a B2B play. 

I’m not going to dive too deep into my thoughts around doing freemium. I’m not sure if that’s the right play. I just don’t know this space well enough and I don’t know exactly what you’re doing so it’s hard to say. Maybe freemium is the best play, maybe a free plan, a time-limited free plan or a usage-limited free plan. But if you’re thinking freemium of like, “Oh, you can read up to three articles per month for free, five articles per month, and then it’s paywalled,” it’s fine. I don’t have a major aversion to that in this case. $15 a month is rough, though. That is going to be, you’re going to have some pretty high churn. You can’t afford to market at 15 bucks a month. You can’t afford to do ads. You can’t afford to do anything except for free things. You can’t afford to go to in-person events. You don’t have the money. You don’t have the lifetime value or even the annual contract value to be able to afford to do anything. 

So that’d be the biggest thing, is it’s like, can you do a bunch of free online marketing and convert people? Freemium alone probably isn’t going to be it. But you know your space a lot better than I do and you know your reach. I don’t know if you have any competitive advantages, you have this massive audience in the space or big network with a bunch of people who are going to promote you. It changes things depending on where you’re starting from. 

You say you do have higher plans for those who want advanced features. Maybe that said, I would be thinking about selling, certainly having a dual funnel if I was going to do that. Meaning you have the $15 a month plan and then you do have an enterprise Call Us plan where it’s like, “Get a license for a thousand seats of this.” That’s where most of your money in my opinion is going to come from, at least based on looking across my 192 SaaS investments. So thanks for that question, Riley. I hope it was helpful. 

If you have a question for the podcast, head to startupsfortherestofus.com, click Ask a question in the top nav. I really encourage you to send in some later stage question. Not even that later stage. Anything, I don’t know, a couple grand a month and up to millions a year in ARR. I’d love to hear those again, can keep you anonymous if you prefer. Thanks for coming back this week and every week. If you keep listening, I will keep recording. This is Rob Walling signing off from episode 716.

Rob Walling:
[foreign language 00:00:01] Rob Walling. And in this episode, I’m joined by Dr. Sherry Walling, where we have a great conversation, it’s fun. We move from the best uses of the internet. We tell a couple recent stories that have more relevance to us as humans than we talk about, Sherry’s recent circus show and her desire to do that. It’s as much of an entrepreneurial venture as anything is given the amount of time and focus and money and energy it takes to put that on. I asked her why she does it, and I think there’s some lessons to be learned from her journey and what we all do as entrepreneurs. And finally, we talk about our new book, which I say new book, I mean we’re probably still six months out, question mark, from launching it, but it’s a book about selling your company, about thinking through whether to sell it, things that could change, that would make you consider selling it, the mental side of the process, dealing with all the humans involved. We haven’t talked anywhere else about the book in this depth as we do in this episode. 

Before we dive into the episode, I wanted to let you know that our MicroConf Mastermind Program is open for applications. I’ve talked a lot on this podcast about how important masterminds have been to my entrepreneurial success, but finding the right founders to join up with can be hard. Over the past few years, our team has successfully hand-matched over 1,000 founders into mastermind groups by looking at your revenue, team size, strengths, goals, and a few other data points to make sure your peer group is the right fit. Once matched, you’ll also have access to our mentorship series, a three-month program where you can connect with some great minds in sales, business development, marketing, and more. If you’re looking for accountability, honest feedback about your business, and the opportunity to make new friends that care about your success, you can learn more and apply today at microconfmasterminds.com. Applications are only open until July 12th, so make sure you sign up before then. Again, that’s microconfmasterminds.com. With that, let’s dive into our conversation. 

What’s the difference between a light bulb and a startup founder?  

Dr. Sherry Walling:
Something about screwing?  

Rob Walling:
Oh my gosh. Light bulbs stop working when they burn out.  

Dr. Sherry Walling:
Founders never stop working.  

Rob Walling:
No. Burnout. [inaudible 00:02:37] I figured is-  

Dr. Sherry Walling:
I love burnout jokes.  

Rob Walling:
Isn’t it fun? Is burnout-  

Dr. Sherry Walling:
My whole life is like a burnout joke.  

Rob Walling:
Something to joke about. Well, thanks for coming back on the show. Dr. Wallings, great to have you here.  

Dr. Sherry Walling:
It was a pleasure. Mostly you didn’t have anybody else, so you’re like, “Hey, will you be on my podcast?”  

Rob Walling:
Did you just say it was a pleasure as if the episode’s down? I just think, “It is a pleasure?” Kind of checked, we’re 48 seconds in-  

Dr. Sherry Walling:
It was a pleasure to be asked.  

Rob Walling:
Oh my God, it was a pleasure just to be nominated.  

Dr. Sherry Walling:
I’m happy to be here.  

Rob Walling:
Oh my goodness, we’re off to an amazing start. Okay, so I want to kick us off. We’re going to dive into all kinds of fun stuff today about motivation, about the exit book we’re talking about, maybe even talk about a circus show. But I want to kick us off with a story from you: the best use of the internet. Tell us this story.  

Dr. Sherry Walling:
This is a good story related to this aforementioned circus show.  

Rob Walling:
That you hosted.  

Dr. Sherry Walling:
That I hosted. So I wrote and produced and starred in…  

Rob Walling:
Geez.  

Dr. Sherry Walling:
… sounds very pretentious, a circus show in honor of Mental Health Awareness Month, so using movement art to really depict what I think is a core idea about human flourishing. We’ll talk more about the details later. But anyway, so I’m putting together this show, I’m doing a lot of promotion for the show. Basically everyone I know or is connected to me on social media is probably overhearing about this show. But one of the things that I was doing was looking for visual images to depict the ideas and the characters in the show. And so, of course, like a good tech person, I go to Dall-E and get some cool images that depict this idea of the mind, body, and soul in this certain color scheme that we’re using as characters in the show. 

I think that’s a perfectly fine way to go. The images are fine, they’re okay. But I got a message from a woman who is a local artist, a tattoo artist and a painter, and also dabbles a bit in circus, so I know her peripherally. She sent me a message and she was like, “Hey, just so you know, a lot of visual artists are really struggling with AI-generated art. We’re triggered by it. It is replacing us. We’re getting a little lost in the story of AI-generated art.” I was like, “I completely understand.” She said, “Basically, you might not know that it might be upsetting to some people in your community that you would use images like this.” And then she said, “I know you’re doing this show, I know it’s really important to you. I wonder if I could help you create some art for it that is really from a thoughtful, soulful, non-artificial intelligent way.” 

And so we talked about how I don’t really have budget for that line item for the show. We talked about some other ways that I could in kind reciprocate. But anyway, she made this really beautiful art for the show. I actually have it right here. I think it’s really beautiful, really captures the spirit, really colorful. I loved the best of the internet story because she saw that I posted something that bothered her, not deeply made her, but just bothered her, and she doesn’t know me very well, but she took at the time to write me a very thoughtful note, gave me the benefit of the doubt, wasn’t accusing, wasn’t like, “Hey, you’re clearly aligned with the robots and hate all artists.” It didn’t make it this polarizing discussion, but she just spoke her truth about it in a very thoughtful, respectful way and then offered to help, offered this collaborative, kind solution. 

I know that not every AI-generated piece of art is going to generate that kind of warm human interaction, but I really loved the way that she handled it as opposed to all of the potential ways that could have been much more inflammatory. It also really gave me a space to super celebrate her artwork both on the internet and in 3D, and it was a big poster for the show. So I like the story.  

Rob Walling:
Yeah, there was some nuance. There’s nuanced thinking of like, “Oh, it’s not all bad or all amazing.” And also it sounds like she came in with a posture of questions, of genuinely seeking to find out your thoughts on it, offering a solution instead of just raising… How many people approach you-  

Dr. Sherry Walling:
It just wasn’t a rant.  

Rob Walling:
Yeah, it’s a rant. How many people approach me about my businesses or stuff I publish or MicroConf, it’s just, oh, problem. “Did you know there’s a problem here? Oh man, there’s a problem here. You should really fix that problem.” And it’s like, “Oh, what are you doing to help fix that problem?” I think as a community, we could all fix that problem. She wasn’t saying, “Oh, you created a problem and you should fix it.” She’s like, “How can I offer to help?” That’s great. I love that story. 

I have a best use of the internet story as well, not at all related to startups or entrepreneurship at all. But little known fact, I set the record at my high school for the 300 meter intermediate hurdles. I set it back in 1993. I don’t think about that at all. Obviously it was something that I probably should be proud of. It was a great moment. I remember the moment it happened. I remember qualifying for the state meet in California that year, which is hard to do. And I remember breaking the record. But since I left school, I just haven’t thought about it. My track coach from that year pings me every five years or so on Facebook Messenger and says, “You still have the record, no one’s beat it. You still have the record.” So he thinks about it more than I do because he’s involved with it, it’s a point of pride for him. It was his first year of coaching. 

And so I get this Facebook Messenger message from a guy I went to high school with, and I have not talked to this guy since the day we graduated in 1993. He says, “Someone just broke your record, 31 years.” And he said, “My son runs for our same high school we went to, and is a really good friend of his. I’ve watched this kid go after your record all year, and he just broke it.” He said, “I think there’s a video of it too. I can send it.” I was like, “What?” A, I was like, “Are you trying to scam me out? Do I need to wire you money?” This is so out of the blue. Again, I haven’t thought about this in forever. 

And so he sends me a video of the race, and this kid, I mean, he’s a seventeen-year-old, he’s junior, he’s way ahead of the rest of the field, just destroying them. My friend said, “It makes me realize actually how much of a badass you actually were.” It was such an odd comment, but it just came out of the blue. He says, “Seeing how dominant this kid is and to know that you were running this in the ’90s, that’s a big deal.” So it impacted me a lot in a way, all positive. I was not upset. I was not sad. I don’t think like, “Oh, my record.” All I thought of was, “Good job, kid. Good job. Super proud of you.”  

Dr. Sherry Walling:
I love too that you know this kid was gunning for you.  

Rob Walling:
He was.  

Dr. Sherry Walling:
You know that he knew the number and he knew that you said it, and he’s like, “I’m going to get Rob Walling’s record.”  

Rob Walling:
And my name and number, they have all the records, so my friend said, “He was gunning for Rob Walling’s record.” That’s just such a trippy thing because, again, I don’t think about it that way, but he has no idea who I am. I’m wondering if my friend ever told him that he ran track with me. Maybe he did, maybe he didn’t, but I’m just some amorphous person who ran this 39.30 time in the hurdles. So I thought about it-  

Dr. Sherry Walling:
Until…  

Rob Walling:
Yeah, until he broke it by three… well, 2500ths of a second. I was really impacted by it in a way. It made me nostalgic, but it also made me super proud of myself for being 18 and doing that. It also made me really, really happy for this kid. Just really happy that he could share in that joy. I don’t need the joy anymore. You know what I mean?  

Dr. Sherry Walling:
You’ve accomplished some things.  

Rob Walling:
Yeah, I don’t need the joy of being the record holder. It just doesn’t matter. So I sat down and I recorded a video, a three-minute video on my iPhone, and I said, “Hello,” insert kid’s name here. “My name’s Rob Walling. You probably know…  

Dr. Sherry Walling:
You know my name.  

Rob Walling:
“You know my name.” Oh, it was so funny. And I said, “You just broke my record, and I have nothing but incredible respect for you.” And realize the rarefied air, like our school was… It’s a high school, I think it was started in the ’70s, and the record I broke was set in the ’70s. So I was either the second or maybe the third person to hold it. So now you have this kid who’s the third or fourth person to ever hold this record. And it’s fast. He’s either going to beat his own record or I think it’ll be decades again. This is a hard record to beat.  

Dr. Sherry Walling:
He’s a junior, right?  

Rob Walling:
He’s a junior, he’s 17.  

Dr. Sherry Walling:
He is not done yet.  

Rob Walling:
Crazy. And so I recorded this video, and it was just like, “Mad respect for you. Super impressed. Welcome to the club.” There’s three of us, four of us. Obviously we don’t know each other, but it’s pretty incredible. And then I told him, “I’m pretty old now, it’s been 30 years since I broke that.” And I told him how much track and being an athlete has meant in my life, how much it taught me about hard work and about…  

Dr. Sherry Walling:
So you gave this kid a three-minute, old guy lesson.  

Rob Walling:
A little bit. But I tried to be really authentic, like, “This is the rest of your life in the sense that this-  

Dr. Sherry Walling:
Matters a great deal.  

Rob Walling:
That’s what I was trying to say, “This matters so much.” I still remember the day I broke it. I still remember the accomplishments that I did in track. Even though I don’t think of them that often, once I do, it’s a big part of my life. So anyways, I sent that to his parents because I had their info, and they showed it to him and he was like, “Whoa, this is crazy.” And then the parents were like, “Oh my gosh.” His dad was like, “You just taught him more in two minutes than… I’m trying to teach him all this stuff, but he’s willing to listen to you because you and he are like the only people that have done it.”  

Dr. Sherry Walling:
You’re in this special club that I’m not in.  

Rob Walling:
Just crazy. Anyways, that’s my best use of the internet, because without the internet, I wouldn’t have found out about it. It would’ve been months. I couldn’t have sent him a video. Just so many things coming into play of that is really cool, and I hope this has a big impact on him maybe just for a day, maybe for a week, or maybe, like me, for the rest of most of his life.  

Dr. Sherry Walling:
I love the impact that it’s had on you, on the sense of connection to that part of you, that 18-year-old version of you. And since this has happened, you’ve gone back and you found the video of the race where you set the record, and we watched it together. You showed it to our son who’s just beginning his track career. I think the ability to connect both with other people that you wouldn’t necessarily interact with, but also to connect with this past version of you feels like quite a gift. Thanks, internet.  

Rob Walling:
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So speaking of a past version of you, just a couple short weeks ago, you were hosting, producing, starring… And you sound like Sylvester Stallone, “I wrote the movie because they wouldn’t let me be… I wanted to be the lead.” I mean, this circus show was an event. It was to how many performers, hundreds of attendees, three different performances, a lot of moving parts. Talk us through what it entailed and why you did it. Why do you do something like this that’s hard?  

Dr. Sherry Walling:
So this is the second circus show that I’ve created. It involves 20 artists, and we had 400 attendees over three shows. One of the shows was a continuing education class for licensed psychologists, marriage, family therapists, social workers living in our state, which in and of itself is quite bizarre that the boards of those different entities have to approve an educational activity like this. So they approved a circus show, which I think is pretty cool. 

So the shows that I’ve created, both of them, have been an attempt to bring into the 3D, bring into physical artistic expression some deeper observation or truth about human functioning and human flourishing. So it’s a little bit like Cirque du Soleil meets your therapy appointment. So if you could imagine your therapy appointment being acted out by a Cirque du Soleil troupe, that’s our show.  

Rob Walling:
That’s a heck of a tagline.  

Dr. Sherry Walling:
I only starred in this one because I needed a couple extra acts and I didn’t have any more budget. So I was like, “I guess I’ll do it.” Truth, actually. But I get to work with these extraordinary performers. I think I love doing this work because so much of my work is so intellectual, it’s word-based, it’s thought-based. It’s doing this, it’s having one-on-one conversation with founders, which are hopefully of deep service to them and very helpful to their ability to lead and flourish and function well. But there’s also a whole part of my life as a human and of all of our lives as a human, which is not cognitive and it’s not word-based. And so if we can find ways to have collective or shared experiences together where we’re engaging a topic or learning something or tackling something but not necessarily with this prefrontal cortex, word-based language, I think that people are pretty hungry for those kinds of experiences. It’s what going to a concert does. It sort of sweeps you out of your mind and into the music and into the shared experience of the music that you’re hearing alongside other people. And so, creating a show is about making collective a set of emotions and a set of ideas.  

Rob Walling:
And you put a ton of work, time, energy, effort, money into it. What do you get out of it?  

Dr. Sherry Walling:
I think I get out of it a sense of I’m doing a bit of what I was called to do. I know that’s maybe a weird, maybe philosophical or spiritual way of thinking about things. But many of your audience members may know I lost my dad and my brother in close proximity to each other, so I’ve worked through grief pretty deeply. We have in our lives in the past few years. One of the things that I just have absolutely taken away from those experiences are the fact that words don’t account for everything that’s important and that art and creativity and movement are absolutely essential to human wellbeing. And so, I can talk about that and I write about it and I tell everybody, but to show it and to invite people into an experience of it is a way of having people know something, not just with their minds, but with their cells, with their whole bodies. 

So that’s just part of my mission in life. So when I do something like this or invest all this time and energy, I feel like I’m following marching orders from whatever, the universe, the divine. I also really love to shine a spotlight on other artists. You and I have accomplished a lot in our lives, and I’ve had a lot of opportunity to be on a stage, I’ve had a lot of opportunity to get my ideas across, but to have the opportunity to really cast the focus on other artists feels extremely satisfying to me. I think that’s part of the second half of life work, which is how do we really spotlight people who have something to show and something to say, in this case, the language of movement. So that feels important and meaningful to me. Also, it’s just a thing I think should exist. I think we should have more deep level, meaningful engagement on meaty topics in the creative ways. So that’s what I’m about.  

Rob Walling:
Yeah, it sounds like a really nice compliment or in alignment with life’s mission, life’s passion. It’s nice to be able to do something. And that’s where you’re willing to do something hard and invest time, attention, and energy and do something that is mentally and physically and psychologically challenging, but it’s worth it, maybe like playing a sport, being a founder.  

Dr. Sherry Walling:
Yeah. It also feels in balance. I talk to a lot of founders who spend a lot of time in their heads, and that’s the job, your value is in the functioning of your brain and your creative ideas and the way that you communicate, the way that you see the world. That’s the unique asset that a founder brings to their company. But I think that there’s a vulnerability to get too heady. And so I talk a lot with founders about hobbies, about passion projects, about legacy work, about having a cause or a thing that you think matters and having that be really important in your life. Not to take away from your primary focus on your business, but as a supplement, as a balancing out of the neural circuitry in your brain so that it’s not using the same things over and over, but is diversified in its ability to see and function and problem-solve and feel like you are in the wholeness of yourself. I can’t tell other people to do that if I’m not willing to do it myself.  

Rob Walling:
I want to mix it up and talk about the book that we’re working on about exits, The Psychology of Exits. I haven’t talked much about it on the podcast. I’ve hinted around about it, but…  

Dr. Sherry Walling:
Your marketing strategy is like my marketing strategy, which is write a book and then see if people can find it.  

Rob Walling:
Hey, can you find it based on some… I used a pen name too, so you can’t even use my real name.  

Dr. Sherry Walling:
It’s like a scavenger hunt.  

Rob Walling:
Yeah, it’s great. No, but I was just looking in the document, and we have 16 chapters and seven chapters have a first draft. We have 27,000 words, which puts us on pace to be exactly a Walling book, which is right around 200, 250 pages. All the books we’ve written have been that. I guess Touching Two Worlds is a little longer. 

But yeah, I want to give people an idea of what’s in the book. Chapter one is Why Is This So Difficult? Chapter two is When Is It Time To Go? So obviously that’s thinking through things that might change or come into play to have you move on. Chapter three is Exit Options. Four is What Does An Exit involve? Then it’s Walk-Away Mindset, Getting The Deal You Want, Why Do You Need A Support Team, Collateral Damage, Minimizing Negative Impact, Who To Tell When And How. And then that’s only the first eight chapters. The rest is dealing with the process and managing it afterwards, and you have your team and all this and that. So why did we decide to write this book? What’s the need? Why are we good at this? Why do we know what we’re talking about? No, but why does the world need this? You and I both came to this conclusion that the world needs it and that you and I are as good a people as any to write this.  

Dr. Sherry Walling:
I think we’re the perfect people to write this. You know how bad I am at marketing. But I think we are the perfect people to write this because you’ve been through the exit directly. I’ve been through the exit as your partner, so indirectly, but definitely on the bus for all of the roller coaster of emotions up and down and left and right and upside down. Stop with that, with your face.  

Rob Walling:
It was fine. It was easy and fine, best memories of our life.  

Dr. Sherry Walling:
So we’ve been through it. And then if we take it a level back, in your work with TinySeed and your work with Discretion, in your work with MicroConf, you’ve been on the periphery/the supportive guiding function, the counseling function for a bunch of exits over time. And in my work with founders, I’ve been on the mindset side like, what’s happening? How do I decide to pursue an exit? How do I get through the exit process? What do I do with myself after an exit? 

So we know this topic from every layer imaginable. I think it’s extraordinarily important because it is a thing that people get so stuck on so often, but there’s very little language about that. I mean, again, best-case scenario, an exit is phenomenally successful. Someone walks away with a pile of money, everybody’s happy. That founder is often in the midst of a great deal of emptiness and lossness that is very, very difficult to voice. So anyway, exits are way more difficult than people recognize, give them credit for. You and I know that on all the levels of possibility, and I think I have some really interesting ideas about what to do about that and how to make it strategically preventable to have some kind of… You don’t have to have an implosion around your exit.  

Rob Walling:
Yeah. I remember a couple of years ago on this podcast, it was probably three or four years ago, I said, “Look, an exit, you might only do it once, especially if it’s a seven or eight-figure exit. You might only do it once in your life, and so if you’re at a point where you feel like spending 30 minutes talking to someone who has some experience, knowledge, and advice to give on this, ping me directly and I’ll talk to you.” So I talked to, I don’t remember, 15, 20 founders over the course of six months all at different stage. I mean, some of the exits were, “Oh, I’m at sale for 750K.” Other people were like, “There’s a $10 million offer on the table.” All of this is life-changing, and some of it is never-have-to-work-again money. What I realized through those conversations, and you’ve had a lot more and more in depth than I have had, those obviously aren’t the only ones I’ve had, but I just remember it being a very compressed time, I got to see that, “Oh, there’s a lot of commonalities.” 

I started saying about 60, 75% of the same things over and over, where I was like, “Oh, you’re in… ” There’s a lot of commonality. And that was when I realized, “Oh, someone should write a book that talks about this side of it.” I told them a little bit of like, “Oh, you should get an M&A advisor or a broker, a great one, a great SaaS one is run by Intervals at Discretion Capital, but there are others out there, certainly quite light and a fee and all that we talk about, but M&A advisor. But then there’s mechanics of it of like, “Ooh, I think about it this way.” But then there was a lot of the mental side of it, of just thinking through, “How do I think through? How am I going to deal with this when I’m in the middle of it? How will I deal with it at the end?” 

And there are other books on this topic, right? We know Dan Andrews… Is it Before the Exit, After the Exit? I forget which one it is, but After the Exit. John Warlow’s written three books on this stuff. But we have more to say. In fact, we talk about all those books in the book, like they’ll be in an appendix of like, “Hey, here’s further reading,” but we have our own additions to make and our unique takes and our unique advice. I really feel like there is a gap in the market for this type of book. Look, it’s not going to focus just on SaaS or on tech companies. We obviously have a lot of experience with that in the network, but you also know folks who have tried to move out of agencies, service businesses, even trapeze schools or circus stuff. There’s still real businesses that you can sell. Just because they’re not SaaS doesn’t mean that we won’t include them. And hopefully, what we have to say… I think what we have to say is really pretty valuable.  

Dr. Sherry Walling:
It’ll be interesting to see how the book reads because you’ve got two people with different expertise and different ways of thinking and different voices. We’re trying to weave it together to feel seamless, but I think your deep procedural knowledge about exits and your just ways of thinking in decision criteria, to sell or not to sell, you think about, “Okay, if I’m making this much at this point and this much ever this time… ” You make it like a word problem, like a math equation. I just approach that question very differently. I think both are really, really relevant and both are important. So if we nail it, which I have some hope that we will, I think the fullness of the perspective will really, really be an asset to people who are reading it.  

Rob Walling:
Yeah, I think about it as a spreadsheet. You think about it as an intuition or there’s a lot of heart and mind going into it. I think about it as an escape room, solving a puzzle.  

Dr. Sherry Walling:
You think about an escape room, I think of it maybe as an existential philosopher.  

Rob Walling:
Totally.  

Dr. Sherry Walling:
What’s the meaning behind this?  

Rob Walling:
And that’s what I hope we can bring to this, is there’s a bit about mechanics, a tiny bit, but that’s already been covered in other books, how do you think it through? Here’s the thing, if there’s any criticism someone can give me about The SaaS Playbook or Start Small, Stay Small, any criticism that I will accept because it’s how I write, is it’s like dense. It tends to be succinct, terse. I give maybe an example here or there, but it’s not filled with a bunch of anecdotes about stuff. And, one could think it might be a little dry. I feel like, “Look, I’m very practical about things.” It’s informational, right? Yours is certainly informational, but from a different perspective. I think you drive a lot of, “Oh, here’s a story. Here’s an example. And here’s,” like you said, “an existential question,” rather than, “Are you doing math in your head, or are you really thinking about all the people involved?”  

Dr. Sherry Walling:
Ultimately, exits are both, right?  

Rob Walling:
Yep.  

Dr. Sherry Walling:
They are a math problem of what numbers make sense and they are like, “What is the nature of what is important in my life?” kind of problem. So that’s where, again, I get really excited about this book. I think other people have talked about aspects of that, but probably not with the fullness with which we’ll tackle it.  

Rob Walling:
So I’m excited about it. We have about three quarters of it mapped out really well and obviously half of it written, so hopefully coming, I don’t know, later this year.  

Dr. Sherry Walling:
What are we launching this book?  

Rob Walling:
Don’t know yet, but I do-  

Dr. Sherry Walling:
My chief of staff was asking me, “Well, what’s your timeline on this?” I’m like…  

Rob Walling:
“Yeah, writing this summer, try to get it done.”  

Dr. Sherry Walling:
Because you have a few other things that you’re launching.  

Rob Walling:
I have another book.  

Dr. Sherry Walling:
So we’ve got to launch all our things. I also am going to do a deeply revised update of The Entrepreneur’s Guide to Keeping our (censored) Together. Well, we are.  

Rob Walling:
Totally. I think it could use it, right? I mean, that’s a six-year-old book. It’s held up well, but we have so many more stories, anecdotes, and thoughts. When I read through it now I’m like, “Oh, this is cool. It’s a little light.” I have a lot more to say.  

Dr. Sherry Walling:
Yeah, I have so much more depth now.  

Rob Walling:
And then, of course, The SaaS Launchpad, which is my precursor to The SaaS Playbook, the early-stage stuff, that book, I keep saying it’s written, but now as I go back and read it, I’m like, “Ooh, this is like 80% of the way.” I need to rewrite a lot of pieces, and I think… Not a lot, but I need to rewrite some pieces. I’m doing a video course through MicroConf called The SaaS Launchpad. I think that’s going to be the next thing I launch. SaaS Launchpad itself as a book I think is behind The Exit Playbook, depending on timeline.  

Dr. Sherry Walling:
In terms of launch timeline?  

Rob Walling:
Yeah, I could see SaaS Launchpad being next year.  

Dr. Sherry Walling:
I do love how you/we are going to be able to speak to the whole life cycle of SaaS business. There’s the launchpad, which is like, “So you’re thinking about making a SaaS company.” Then there’s The SaaS Playbook, which is like, “Here’s what you’re going to do.” And then there’s The Exit Book, which is like, “Here’s how you wrap it up nicely, take your bucket of money and go.” And then The Entrepreneur’s Guide will help you not lose your sanity or your family while you’re doing said books one through three.  

Rob Walling:
I’ll tell you what, they have the Star Wars trilogy, right? They have the Unholy trilogy, which is Kevin Smith’s… Was it Clerk, Mallrats, and Dogma I think? Or maybe it’s Clerk, Mallrats, and Chasing Amy. And we are… What is this? A quadrilogy now?  

Dr. Sherry Walling:
Quad, yeah.  

Rob Walling:
Yeah.  

Dr. Sherry Walling:
Unless you wanted to be a trilogy, and then The Entrepreneur’s Guide is like Silmarillion.  

Rob Walling:
It’s the lore.  

Dr. Sherry Walling:
Here’s what’s really going on in your head.  

Rob Walling:
Oh, boy. It’s the deep lore. If you want to read Elvin or Elvish, whatever-  

Dr. Sherry Walling:
No, don’t say that. It’s very, very approachable.  

Rob Walling:
Oh, boy.  

Dr. Sherry Walling:
Yeah. I’ve never, obviously, relaunched a book before. I want to do it that way to retain the title. There’s a lot of reasons to do it. Because it’s not a totally new book, but I’m aiming for 30 to 40% new, which is a chunk. So if you’ve purchased it before, please consider purchasing it again.  

Rob Walling:
Oh, yeah. We will make it so it’s worthwhile. And we’ll re-read the audiobook because the audiobook quality is so-so.  

Dr. Sherry Walling:
Yeah, and we’re going to do it together, right?  

Rob Walling:
I mean, I don’t know. That could be interesting. We’ll have a lot of off-the-cuff moments, arguments caught on tape.  

Dr. Sherry Walling:
Remember that big fight we had in chapter four?  

Rob Walling:
Yeah, that’s great. Let’s talk about this. Boy, let’s relive some… While we’re at, give me some paper cuts and pour lemon juice on them. This would be great.  

Dr. Sherry Walling:
I’m curious, maybe people in your audience know, are there audiobooks that are co-written or co-read by the two co-authors? Because we’re co-writing two books and…  

Rob Walling:
Yeah, I have heard some. So if you’re listening to this and you’ve heard it done well, please let me know. I’ve heard some where it’s basically the two authors trade-off chapters. They don’t actually read it together. I can see why that’s the case, because reading it takes a long time, and who wants to sit and stare at each other through an audio or a recording app for that long? But if you’re interested in any of these books, then be sure to go to robwalling.com, enter your email there. I don’t email very often, but that is the hub where all my book stuff comes out. And while you’re at it, head to zenfounder.com to get Sherry’s weekly newsletter, about twice a month, founder mental health and… No, it’s just the right amount.  

Dr. Sherry Walling:
It’s not too much.  

Rob Walling:
With that, I know that you have to run off to a track meet. I have to take someone to the airport. We are heading on our way. Ready, Break?  

Dr. Sherry Walling:
Go team.  

Rob Walling:
So thank you again so much for joining me today. Folks who want to follow you on Twitter, you are @sherrywalling. And any other place you want them to go to find out more about what you’re doing?  

Dr. Sherry Walling:
I mean, if you are on Instagram, my Instagram’s pretty cool because it’s a cool mix of entrepreneurship and circus. Who doesn’t love that? So that’s @dr.sherrywalling.  

Rob Walling:
Thanks again for joining me.  

Dr. Sherry Walling:
Yeah, my pleasure. 27 years in.  

Rob Walling:
27 years. Each day better than the last. 

Thanks again to Dr. Sherry for joining me on the show, and thank you for joining me this week and every week. [foreign language 00:34:47] Rob Walling, [foreign language 00:34:53]. Wow, that’s a lot harder than it seems.

Rob Walling:
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Have you ever looked at a schedule, say, of a recurring publication? Maybe it’s a launch deadline, a date that you have to submit a manuscript by or push your code to production, launch anything and realized, “I thought that was next week.” That’s actually tomorrow. Well, that’s the situation I found myself in late yesterday when I realized that I thought I recorded an extra week of Startups For the Rest of Us, but it turns out I owe an episode to my editor this week. 

I’m Rob Walling, the host of Startups For the Rest of Us, and this episode is being recorded with a handheld microphone. It’s the same microphone I use at home, but I threw it in my suitcase and hoped that it would work when plugged into my iPad, which is usually what I travel with. And I’m currently recording from a hotel room in San Diego, California at the TinySeed batch 14 kickoff. This is our kickoff for our America’s batch and things get started in just a few hours, but the show must go on. I ship an episode of Startups For the Rest of Us 52 weeks a year and have since 2010. 

Before we dive into the episode, I wanted to let you know that our MicroConf Mastermind program is open for applications. I’ve talked a lot on this podcast about how important masterminds have been to my entrepreneurial success. But finding the right founders to join up with can be hard. Over the past few years, our team has successfully hand matched over 1000 founders into mastermind groups by looking at your revenue, team size, strengths, goals, and a few other data points to make sure your peer group is the right fit. Once matched, you’ll also have access to our mentorship series, a three-month program where you can connect with some great minds in sales, business development, marketing, and more. If you’ve looking for accountability, honest feedback about your business, and the opportunity to make new friends that care about your success, you can learn more and apply today at microconfmasterminds.com. Applications are only open until June 12th, so make sure you sign up before then. Again that’s microconfmasterminds.com.

Today, I’m going to answer a few listener questions. I may get into a couple solo topics that I’ve been thinking about as well. My first question is from a listener who asked to remain anonymous, and the question to paraphrase was, “I’m thinking about acquiring a competitor. What should I expect and how should I transition the customers?” My first question was how many customers are there and how much revenue is there? Because the thing with acquisitions is there is a cognitive load. There is a legal load. There is a transitional load. There is an adoption and absorption load. There’s a lot of work into getting it done. So if you’re going to acquire a competitor doing a couple of thousand dollars a month, I’d really question if it’s worth it. Even if let’s say it was free and their competitor is going to shut down, and they literally were to say, “I’m just going to give you all the assets of this business,” I would still have to think about it. 

Now, it might be worth it. I would evaluate how many customers, where am I at, this and that, but the opportunity cost or the time investment to learn their systems, to talk to their customers, to transition them, that alone is a big deal. This is why you’ll sometimes see really large companies, they need to make big acquisitions in order for it to make a difference for them. And this is why you see really large companies, when they acquire really small companies, they just shut them down. They’re acquiring them for the talent, for the people, for the developers, for the product people, for the marketers, for the team itself. And trying to merge that tech into their business, it just isn’t worth it. You have to buy something at a massive scale when you are at massive scale. So that’s the first thing that I’d be asking myself in an acquisition like this. Is it even worth doing? 

Let’s say for the sake of argument that you are doing millions a year as a SaaS entrepreneur and you find someone who is doing low to mid six figures a year and they are willing to sell to you at a price that makes sense. Maybe it’s an all cash deal. Maybe there’s a seller note that you pay off over time. Maybe you pay them in some equity from your company. There are all types of creative ways to structure this, but let’s say it makes sense. There’s two questions this listener asks, what to expect and how to transition the customers. What to expect is that it’s going to be a ton of work and that you’re going to want the support of the seller to try to transition those customers. 

I’m assuming it’s implied in the question that you are not just going to run two separate applications, that your competitor has their own code base, their own app, their own interface, their own login, their own billing, and you have yours. So the first question is do you want to combine those or do you want to become a two-product company? Imagine if you acquired a competitor that did most of the same things that you do and you just ran both products. That would be quite a mess actually. There’d be a lot of effort managing its marketing, its sales, its support. You duplicate. You have all this duplicated effort. 

So at that point, I’d be thinking about, okay, how do I transition their customers into our product? I would really be looking for a recommendation from the seller on how to do that. I mean, I have my own ideas. Of course, you communicate with the existing customers and you say, “This product has been acquired and we have most of the same functionality. We’d like to migrate you over.” Now, as I’m saying this, I’m realizing that if you’re going to do a deal like this, you may want to make, if possible, parts of the sale price, part of the multiple in essence, contingent on how many folks migrate over, what percentage of customers. Because could we think of a range that’s 30% up to 80%? 

It’s a wide range, but there’s probably a bell curve of this of the most common percentages that will literally sign up for a new app, create a new login, get their team onboarded if they have multi-seat accounts. There’s all types of things to think about. Can I see it being low as a third of your customers, meaning that you lose two-third of the acquirer’s customers? Possibly. And can I see it being as high as, like I said, 70, 80% where you only lose 20%? Maybe. I mean, that feels very high, but it’s a pretty wide berth there. So that’s an interesting thought is there’s a pretty big range, and should you bank on it being 50% right in the middle? I don’t know. You could certainly run numbers at different, your best, worst, and in-between case to see what it might wind up. 

The other thing you could do is ask people to migrate, and even if they don’t, you keep the acquired app running. You don’t shut it down, but you don’t market it. You basically shut down signups, and the public marketing site, all that would redirect over to your application, the one that you have in the millions of ARR, and you just kind of let the revenue, the MRR of the old one, just churn out over time. Even with pretty low churn, you will get down to the point of only having that customer base be 20, 30, 40% of its original size within a couple of years. So that’s another way to think about it. Is it like a melting ice cube and you’re just trying to keep it from melting? You’re trying to take the revenue from those who don’t want to switch and you’re trying to take the customers who do want to switch and get them onboarded on your new application. 

But you can see, it’s pretty technical. It’s pretty complicated. It depends a lot on the apps, right? Let’s say it’s something relatively simple. I’ll put this in quotes, “simple,” and maybe not simple but an app that has low switching costs is probably a better way to think about it. Let’s think of an app like a scheduling link. Even if you have integrations set up, it’s not a ton of work, relatively speaking, to move from one scheduling app to another versus moving your CRM, if you have a team of five or 10 salespeople and you have all this data or moving marketing automation or email marketing platforms. Ton of work. You have workflows. You have subscribers. You have all that stuff. So there’s a bit of it depends in here, but I think what to expect is it’s going to be more work than you think, so make sure that it’s worth it. Make sure that it’s worth the effort, not only the money. Depending on the purchase price, the money can be secondary to the time and the opportunity costs that you have to invest in order to make a successful transition. 

My next question is about startups that require HIPAA and other compliance. This is from August of last year, so what are we looking at? Maybe nine months? That gives you an idea of how far back we are on text questions. Question comes from Paul Frieden and Paul asks, “Hey, rob, I’ve been watching your YouTube videos for a while. Thanks for the great content. I’ve been working on an idea and I have what I think is a pretty solid MVP. Unfortunately, the idea probably requires HIPAA compliance to sell to many or most of the potential customers. I’m afraid to even start trying to get customers on the MVP without compliance. Even getting an answer on if I can sell and to whom would require expensive legal advice. Any tips? I’m a solo developer, no business entity and totally pre-revenue.” 

I was on board with this question until that last sentence. Even getting an answer on if I can sell and to whom would require expensive legal advice, it’s an interesting phrasing. Is expensive a thousand dollars or $10,000 and do you have a thousand or $10,000? That’s really the question. I guess without knowing it, I have a tough time if I can sell. I have to talk to a lawyer before I know if I can sell this SaaS is just a puzzling statement to me, so I’m not sure that I can comment on that, other than how much is it going to cost and do you have that money because if you don’t, this is all a moot point. 

Now, to whom you can sell, I think is an interesting question for a lawyer. But really, the thing is if you think it needs a HIPAA, it probably requires HIPAA, then get it HIPAA-compliant. HIPAA compliance is not out of the realm of bootstrappers. Now, if you want SOC 2 compliance, that becomes pretty pricey pretty quick. HIPAA compliance is different. Of course, this is not legal nor HIPAA advice that I’m giving you, but I have known many bootstrappers, even folks who were on tight budgets who read the HIPAA guidelines and became compliant. It is something that one can do. So if I were to build an MVP and then be HIPAA-compliant, you can do it. Right? It’s possible. The thing to think about is if you’re HIPAA-compliant, you need to charge a lot of money for this. 

I’ve seen SaaS startups that are charging… Let’s make up some numbers. $20 for the cheapest plan, then a 50 and then a hundred dollar plan. And then the HIPAA-compliant plan is $500 a month or a thousand dollars a month. It means it’s that much more. Those are the price points minimum that I’d be thinking about. And frankly, if you’re going to be doing cold outreach, let’s talk a minimum of a thousand dollars a month or $2,000 a month. These are the numbers that I would be thinking about to make it worth it. The big question I have is not can I get HIPAA-compliant? The big question I have is, does anyone need this? Can I solve a problem people are willing to pay for and can I reach them at a scale and will they pay the price that I’m asking to make it worth my while? 

For more information on becoming HIPAA-compliant, sign up for MicroConf Connect. I’m sure there’s a compliance channel or there’s got to be a channel that focuses on something like this and just ask, who here is HIPAA-compliant and what process did you use? What documents did you use? Did you just Google Search? There are ways to find this. I mean, I would go to Google or ChatGPT. Even though ChatGPT hallucinates things, I would not use it as the final arbiter, but I would use it as a guideline to get me started to understand what I might need in place to accomplish this. Thanks for your question, Paul. I hope that was helpful. 

My next topic is not a question, but it’s something that I started thinking about when I heard someone else on a podcast talking about TAM, total addressable market. This is a term that venture capitalists throw around and they are concerned about having billion or decabillion dollar total addressable markets, meaning the entire market of what everyone is spending on the software in this category is billions or tens of billions. This is dangerous for bootstrappers to think about. I’m going to use a phrase and I want you to hear me, bottom up versus top down. TAM, total addressable market, is top down. It’s coming from the MBA at Harvard saying, “Well, we could capture 30, 50, 80% of an entire market, and then it’s worth decabillion dollars. That’s top down. When you are bootstrapping or mostly bootstrapping, I think in terms of bottom up, so I call that term, total reachable market, TRM. 

The reason I call it bottom up is you’re not looking at a huge survey from Gartner and doing math where you’re kind of just guessing the worldwide value of GDP of some small country. You are saying what is the search volume for this term each month, the total search volume? What do I think that I can reach if I owned most of the Google searches for these terms, realizing that you won’t own most of them from the start. But if I own most of the Google searches, if I rank number one in Capterra and G2, if I owned, so to speak, all of the answers on Quora or Stack Overflow or Reddit or wherever this is being talked about, what would the reachable market be assuming that I am going to be doing online marketing? If you’re going to be doing offline marketing, we have to get a little hand-wavy. Offline meaning are you going to in-person events? I don’t mean buying billboards and radio ads, but that’s what I would be thinking about. 

When I go through all the marketing purchase in The SaaS Playbook, I would be asking myself which one, two, or three of these do I think will work best or will I start with and what’s my guess? What’s my estimate of how many people are in these channels? Let’s say, I can own a chunk 40, 50% of each of these two or three channels over the next six months, what is the TRM of that? What is the reachable market that I can feasibly reach as a bootstrapped or mostly bootstrapped software company? It’s hand-wavy and it’s guesstimaty, but it’s something. It’s not TAM. TAM does you no good. I was actually asked this. 

I’m remembering now where this came from. I was asked this on a podcast and I was answering it and they were saying, how do you look at TAM of TinySeed companies? And I said, “We kind of do, but we kind of don’t because look, if a TinySeed company can get to $5 million ARR and they can sell for $30 million or $50 million, that’s a great win for us and it’s a home run for that founder. It’s life-changing.” So how big does the TAM have to be to get to 5 million in ARR? I mean, you could feasibly have a $10 million market and if you get to half of it, you’re $5 million, and with a $50 million market, you only need 10% of the entire market. So that’s where TAM just doesn’t translate to bootstrappers in the way that you might think. It’s not that it doesn’t impact it at all, but I feel like it’s an unhelpful number. It’s an unhelpful way to think about it. 

In addition to the ways I just talked about with the bottom up of trying to guesstimate how many people might be seeing different things, the other way to think about it is in terms of your category of the tool that you are building. So if you’re building scheduling links or email service provider or electronic signature app, what do you think is the switching volume and the new entrants that are coming into the space for this type of tool in a given month? The switching volume would be those switching from competitors and the new entrants would be people brand new. They need e-signature. It’s like, “Oh, it’s a brand new realtor just getting set up. It’s a brand new whatever, a psychologist or a new startup, and they need electronic signature,” versus how many people are switching away? What is the churn, if you think about it, from a bunch of your competitors? Right? 

Again, if they’re public competitors, you can take guesses at this. If they’re not, you can still take guesses at it. But I asked this from the MicroConf stage. I was giving an example of a very small market that TinySeed invested in, where there are a total of about 1500 total customers in the US, which is where this company focuses. And I asked the audience, I said, “How many people in a given month do you think are switching from an old existing tool or maybe our new entrants in the space?” And the funny part was the founder of that company was in the room and he held up three fingers. He said three. Approximately, he was giving me about the right number. Now, is it exactly three every month? Of course not, but you get the idea. In a market that small, it is literally a handful of people that are in that most aware category that are ready to buy. 

If we turn to let’s say email marketing software, could it be 3000 or 30,000? I don’t know, 30,000 feels high to me, but could it be 3000 or 5,000 in a given month? Sure. That are kind of poking around? 10,000? There’s some number. It’s not a million. There are not a million people or businesses in a given month that are looking for a new email service provider, either from switching or from starting a new company. Right? We won’t get within 10%, but we can get within a hundred percent. We can get within an order of magnitude of these things. 

That’s what I’m talking about with TRM is it’s this total reachable market. Just how many people in general are switching? And then let’s think about how we can get in front of them and that can give us an idea as founders and as marketers and as folks who are trying to add customers, it gives us some type of sanity check so that we’re not expecting, “Oh, I’m going to get a thousand new customers a month,” when there’s probably, in a lot of markets, only hundreds who are really ready to buy and switching from other tools in any given month. So TRM, not TAM folks. Should I get a shirt that says that? No, that would be a terrible idea. No one would get it, and even if you got it, you’d be like, “This is dumb.” So TRM not TAM, I will say it, but no T-shirts, please. 

My next question is from an anonymous asker who says, “Hey, Rob, I have the product idea and I know the market, but I’m not a developer. I came across your podcast and I’m really learning a lot, even though I only have a vague understanding of what you’re talking about at times. I see the opportunity to disrupt a multi-billion dollar industry. Where should I look for a developer who can help bring my product to life?” I have a couple thoughts here. I think if you’re looking for a developer to work just for equity, don’t do that. It just rarely, rarely works because developers have built up a skill set that allows them to charge a lot of money per hour, and having an idea and knowing the market isn’t enough. It’s just not that valuable. As weird as that says, the idea plus knowing the market is not that valuable. 

Now, if you have concrete marketing skills and sales skills and you know directly how to reach the market and you have 10 people lined up to consume the software, to buy the software, to try the MVP that you’re going to have built, that’s something. Still not a business, but at least it’s something. It’s some type of validation. If you have an email list with 500 or a thousand people who are super interested in this and you’ve been marketing and pounding the pavement and talking about this idea and the value prop, that’s something. It’s a lot more than having an idea and knowing a market. A lot of people have an idea and know a market. 

On the flip side though, if you are looking to pay a developer, this is a challenge actually because I can tell you to go to Lemon.io or DevSquad. These are sponsors of this podcast and they have developers that you can hire. The thing is most developers don’t know how to build products. They know how to write code, and much like if you were to go to build a house and all you hired was a carpenter, you’re not going to get a very good house because really, you need an electrician and you need an architect and you need a carpenter and you need someone to… There’s HVAC. There’s all these different trades that go together and collaborate to build a house. With a software product like SaaS, as complicated and as many moving parts as there are, in most cases, you need multiple people involved. 

It is very rare and we call them full-stack developers. I’ve also heard them called unicorns frequently because they kind of don’t exist. Of course, they exist. I’ve worked with them. Derrick Reimer is a full-stack developer, can build it soup to nuts, top to bottom, but you’re not going to be able to hire Derrick Reimer. That’s the thing. You’re not going to find it. Derrick Reimer is not on the open market. He has his own company. And back in the day when he was young and thinking about starting up, he was working with me and I brought him in as a co-founder of Drip. That’s the level of person that a full-stack developer… That’s what they can command. 

So it’s that thing of if you go to Lemon.io or DevSquad or Trustshoring or anyone where you go to hire developers, just getting a developer, they can write code. They can build screens. They can build web pages that do things. But who’s going to tell them how to build it? Because you can say, “I want to solve this particular problem,” but there’s a translation layer there in terms of the UX, the design, the product, how it functions, how it can be intuitive, and how the flow should work. What’s the onboarding like? What’s the login like? There’s all this stuff that is not taught in college when you get a CS degree, or if you read a book about programming, this stuff is not taught. Not only that, but it is just very hard to build a SaaS without a technical co-founder. 

I know that I have some quote, unquote, “rules or rules of thumb,” on this show where I talk about don’t do B2C, don’t do two-sided marketplaces, and I’m pretty serious about those. 98% of the time, you shouldn’t, 99%, almost a hundred percent. This thing I’m about to say is not in that camp. It’s not a 99%, but maybe it’s an 80% don’t do is don’t start a SaaS without a technical co-founder. The reason that I say that is most of the companies that I see, the bootstrapped and mostly bootstrapped companies, I’m specifically talking about bootstrapped and mostly bootstrapped. If you raised $5 million, you can totally hire a CTO level person or a director of product and engineering who can write code, hire people. You can build a staff out. 

But if you are the bootstrapped and mostly bootstrapped like I’m guessing you are if you listen to this podcast, the vast majority of folks I see trying to do this without a technical co-founder really struggle. The vast majority, I would say it’s 80 or 90%, struggle with the tech side, and their biggest headache the whole time is that they’re able to market and sell, and the product doesn’t keep up. The product doesn’t scale. They need to rewrite their code base every… I know of a technical co-founder who rewrote their code base three times. I know of others who’ve rewritten them twice. It’s just the constant struggle of that. This is across TinySeed, MicroConf, and just everybody I know who does it. I believe across TinySeed, the percentage of companies that we have funded that do not have a technical co-founder are… I think it’s around 15%. I know it’s between 10 and 20, but I think 15 is about where it stands. 

Again, I’m not saying don’t do it because that’s a pretty big number, and if we’re funding them at TinySeed, then they are obviously having some traction. But I will say several of the folks that we have funded there, they do definitely struggle with just the engineering side of things and the product and the scaling, and it sucks to not have a founder level person owning the fundamental part of your business. This is like me starting, I don’t know, a toy company and I don’t know anything about toys. I don’t know how to make toys. I don’t know how to design toys. I don’t know how to source or manufacture toys. I can start to learn it and I can ask people and I can hire people, but are they going to give me the best advice? 

Here’s the other thing. With SaaS, building software is like building a building a little bit, in that you get the foundation in and you start building rooms, and that (beep) is hard to change. Versus if I was starting a toy company, the advantage I would have is that if a manufacturer doesn’t work out, I could start over with a new one. It would be a restart, but switching cost is… It’s just the thing. With SaaS or with software, you have legacy code. You have code that nobody wants to spend the time to learn or fix, so they just want to rewrite it, or it doesn’t scale and everything’s buggy and every time we push a new thing, there’s bugs and that doesn’t go away. Right? That is really hard to fix once you’re in that spot. 

So I guess what I’m advising this question asker is, I mean, you kind of need enough resources in my opinion to find a co-founder who’d be willing to go in on it with you. And if you have a co-founder who is really up on the idea and you’re both willing to put time in nights and weekends, that’s one thing. But don’t send the co-founder off to build for six months nights and weekends while you don’t do anything. You should spend hour for hour. Whatever they are doing, you should be selling, marketing, learning the market, doing SEO, learning pay-per-click ads, doing outreach, building a launch list. I joke a little bit with the hour for hour, but that’s what it should be. 

Why should they go spend six months nights and then weekends while you’re waiting for the product to be done? Realistically, the best way to do this is to have funds. It’s to have the money to bring a co-founder level person on. Look, even if they only have 10 or 15 or 20% of the company and they’re called a founding engineer or they’re called a co-founder, with the expectation that they are in it to own the code base and to own the quality of that, but you have the funds to pay them a salary, to pay them what they’re worth, so to speak, that’s the way to get a sustainable relationship or to build a sustainable startup in these early days. 

The other way is to do it yourself, right? It’s to learn to code. That’s what so many of the folks who are bootstrapping, I say, on Twitter, in MicroConf for making it to TinySeed, so many of the folks do put in just sweat equity because they have that skill or they develop the skill or they do no code and they build stuff and scrap their way to making it work. But if you really do want a technical person and you’re not technical, that’s fine. It’s just know how you’re going to go about it because the bootstrap startups that I see crash and burn pretty hard. There’s a chunk of them that have this weird expectation that a developer who can bill $150 an hour consulting is going to work hundreds and hundreds of hours for free for you, for equity in something that is really unlikely to work. Right? 

Because most startups and even most bootstrap startups just don’t get to product market fit. So that’s a big risk that you’re putting on someone to basically say, “I want you to risk tens of thousands of dollars in in-person hours, in order to maybe build this thing that you might own 50% of.” So with all that said, I mean, if you’re looking for a developer, that’s what MicroConf is. It’s a community of developer entrepreneurs, and some of them are looking for marketing/sales co-founders, but you have to bring the thunder and you have to bring a skill set. And if you bring an idea and you know the market that you’re a subject matter expert, that’s not enough. Thanks for that question anonymous. I hope my thoughts were helpful. 

My last question of the day is from Jacob. The subject is SaaS app store spending. Jacob says, “I’m reading two of your books, Start Small, Stay Small and The SaaS Playbook.” Those are two good books to read, I think. Start Small, Stay Small, feels like it’s marketing for developers and it’s mindset stuff, and then some outdated advice on doing keyword research, but it really pushes market and marketing over product, which I think a lot of devs need to hear. And then The SaaS Playbook is much more modern take, all the knowledge that I have today about building, launching, and growing a bootstrap SaaS company. So thanks for reading those. Thanks for buying them. Jacob says, “One question comes to mind. Is there public information somewhere on revenue and spending on different app stores, as in which marketplace has users that are most likely to buy the non-free version?” 

As an example, it would be very useful when choosing to either make, for example, a Slack app or a Jira app. Good question, Jacob. The answer is no. There is no public data I know of. The only thing that you could potentially look at is if the company is public. I know that Shopify, for example, is public. I know that Atlassian who makes Jira is public. I know that Salesforce that owns Slack is public. So you can go to their public filings, S-1, I think is what it is, where they post revenue, where it comes from and all that stuff, and look for it. What I don’t know is if they break it out. Sometimes they just have an item that says other revenue and they bucket a bunch of stuff into it. There is certainly not going to be an easy Google-able Excel spreadsheet of all the app stores. 

We actually have a list of 71, I think, over on the MicroConf website, 70 or 71 of these app stores that I talk about. When you’re going to build a step one or a step two business, think about building it in an existing ecosystem, so that you don’t have to learn all the stuff at once. And then step three of course is building a standalone SaaS. But we have a list of those. I’m guessing, what? Five of them maybe are public. 10, 15? I mean, it’s not a huge number. I would go to their filings. Oh, another one is HubSpot. Right? HubSpot is public. Rackspace is public, and I think doesn’t Rackspace own Heroku? So you could look at the Heroku market space. 

Again, it’s going to be some research. There’s no magic formula. There’s no hrefs for organic search just like this cheat code, it’s a tool. There is no hrefs that I know of for this purpose, so I think you’re going to have to do some digging, and that’s okay because if you’re digging, it means other people aren’t and it means there may be a moat around the knowledge that you learn and establish. But no, there is no single source, easy source of the data that you’re looking for, but I do like the way that you’re thinking about it, so thanks for that question. I hope that was helpful. Thanks for joining me for this shotgun episode, a mix of text questions and solo adventure topics. Glad to be able to get it into your earbuds this week, coming to you from the sunny shores of San Diego, California. Thanks for joining me. This is Rob Walling, signing off from episode 714.

Rob Walling:
Can you believe it’s time for another episode of Startups For the Rest of Us. As always, I’m your host Rob Walling, and in this episode, Arvid Kahl joins me to talk about our five key takeaways from MicroConf US 2024 that happened just a couple days ago as of this recording in Atlanta, Georgia. It was a great event and I don’t just say that as someone who ran and organized it. The feedback, the positivity, the energy, I tell you, it brought me back raring to go, ready to get stuff done. 

My guess is as you listen to this conversation between Arvid and I, that you will feel some serious FOMO and you probably should because the event was, it was that good. If you know me, you know that I have a tough time talking up the things that I do too much, but this really, really was a special event, so you don’t want to miss future events. Head to microconf.com, sign up for the email list. We have another flagship event happening in Dubrovnik here in October of ’24, and then next spring, probably April we will have another US event and you won’t want to miss it. And with that, let’s dive into our key takeaways from MicroConf 2024. 

Arvid, thanks for coming back on Startups For the Rest of Us.  

Arvid Kahl:
An absolute pleasure now that I’m awake.  

Rob Walling:
I am trucked. Punch drunk was the expression I use. So we are two over-caffeinated, very tired geeks home from MicroConf Atlanta.  

Arvid Kahl:
That’s right.  

Rob Walling:
And I believe this was our… I was trying to figure out, I think this actually was our 10th US event. Because we started in 2011 and we skipped two for COVID. So I think that’s how it works out. I actually, I’m too tired to do the math right now and I think this is going to be a great episode y’all. I’m so punchy and then I think it’s our 24th if you include the Europe flagship events, which I do. So coming up on, I mean it’s a lot of events. There were 218 attendees from 15 different countries and the shocking stat was, I think, it was like, what, 75% had revenue, but that 28% of the attendees had more than a 100K of MRR. That was really-  

Arvid Kahl:
That is crazy.  

Rob Walling:
Yeah.  

Arvid Kahl:
You just look to your left, you look to your right and statistically one of these people is just making millions a year just from their business. That is bizarre, but equally awesome. Where do you ever get that? That’s crazy.  

Rob Walling:
I know. It’s crazy and that’s why being in the MicroConf room is just unlike any other room I’m in throughout the year. It was a good crew this year. How many MicroConfs have you been to?  

Arvid Kahl:
This is my, or has been my third. The first one was in Dubrovnik, the European one just before the world changed forever. And then last year, Denver and this one, my third. I talked to so many people and asked them what their number was and anything above 12 was like, “I forget.” People were just there for 20 some and they just stopped counting because they didn’t care. It’s really great.  

Rob Walling:
Yep. Patrick McKenzie’s like that, he’s been to a lot of them. Mike Tabor, Brennan Dunn, he didn’t make it this year, but he is got to be approaching 20 MicroConfs. And I don’t know, that’s a testament to the specialness of that room, I think.  

Arvid Kahl:
For sure.  

Rob Walling:
So we are going to do our top five moments, our top five, it’s not takeaways necessarily, it’s just the top five things.  

Arvid Kahl:
That’s right. Even that is not specific. That’s too specific. Top five vibes, I don’t even know. There’s just something there.  

Rob Walling:
Five things we thought about before we jumped on the mic. So as the guest, do you want to kick us off with your first one?  

Arvid Kahl:
Oh, thanks so much. I’m going to do something slightly boring and pick a talk. But I’m not going to pick it because necessarily of the talk itself, but more like what it did to the room and that’s by Dr. Sherry Walling, your wife’s wonderful talk on motivation. I mean as somebody who really cares about mental health in entrepreneurship and all that stuff, I care about this. I talk to a lot of people about this and I read a lot about it and all that. That was my talk to begin with. I really wanted to be there for that. That’s kind of what I came for to hear just how we deal with things, where things come from. 

And, man, what this talk did, people in the room and we were seated around these little round tables, groups of four, groups of six just by default, which was great. You could just start talking to the neighbors on your table and stuff and it was so incredibly interesting when we talked about where our motivation is sourced from. Sherry kind of gave us these seven different archetypes of where motivation for founders comes from and once we talked about it, I realized that everybody has their own little story. I knew it before, but that kind of calcified it. 

It was like this guy really has to fight against people telling them they can’t do it right. This guy really has to make sure that they show their parents or they show their friends that entrepreneurship is something they can do. And here I’m sitting, I’ve always been super supported by everyone, so my motivation is something completely different. Turn to the next guy, they do it for the money next guy. They do it because they love building a product. It’s so crazy to think that we all are so differently motivated, yet we all have the same dream and we all are on the same path. That was such a cool both dividing and unifying thing that Sherry did by allowing us to explore this with each other. I really love this and you have to be there to experience this. I think you can kind of experience it probably from the recording of it, but in the room right there in that moment was like, okay, I’ve learned something here that I did not expect to learn and I did. It was really cool.  

Rob Walling:
It’s one of my favorite talks that she’s ever given, this one about motivation. I love how she broke down motivation into micro and macro. And micro is the day to day, hey, I’m going to cold plunge or I’m going to crank Eye of the Tiger. She threw me under the bus on that one and said-  

Arvid Kahl:
Yeah, she sure did.  

Rob Walling:
“I hear Eye of the Tiger playing in Rob’s office at times,” but Smells like Teen Spirit, whatever. There’s punk music. That’s the micro stuff of day to day, how you say mode about macro. She had, like you said, seven archetypes. And I loved that as she went through them, I remember she obviously showed me the talk before she gave it and I was like, “Oh, I’m those two.” It was just really obvious to me. And then she said, “And what were you 10 years ago?” And I was like, “Oh, I was these other two different,” it changed over time.  

Arvid Kahl:
That is really cool. We did that in our group as well and we all had a story attached to that change. For me, it was selling the business. Now all of a sudden money’s maybe not that important anymore. What came and replaced it, something I didn’t expect, was being a people person, that kind of stuff. It’s so cool to have terms to put it into just something that you can actually internalize instead of just having it wishy washy around it. It was really cool.  

Rob Walling:
And it’s concrete and the moment I saw the slides, I was like, this needs to be a chapter and whether we redo the Entrepreneur’s Guide to Keeping Your ShTogether and update it and add this, or if it goes in another book, there’s just no reason that framework should not be in a book. 

So my number one was the last talk of the event. It was from Steven Steers. His talk was about sales scripts and about how having a script when you’re doing demos and refining that over time not only helps you essentially build an SOP, a standard operating procedure, but it helps you yourself improve even if you’re going to do the sales for six months or a year. He had almost an entire script memorized. At the end, there was a Q&A of someone saying, “Well, how would you do this part of it?” And he just recited it and you could tell he just recited it. He had memorized it was super impressive.  

Arvid Kahl:
It was absolutely incredible. The Q&A was like, he had it ready. Every single thing you threw at him, he had a picture perfect eloquently phrased thing he gave you, for free, that you could then immediately use. That was so awesome. I really enjoyed it too. And the fact that he dropped off his book as well. You could just grab a book and read all of these things later at home. That was so, so cool. That was a great talk. It was very polished, let’s just say that. I think it was more than the talk. Again, I guess that maybe a theme. It wasn’t just the talk, it was way more than that.  

Rob Walling:
And he has a book that is either, I mean we had physical copies at the event, so that was great. But it’s called Superpower Storytelling: A Tactical Guide to Telling the Stories You Need to Lead, Sell and Inspire by Steven Steers. So that was definitely one of my highlights. Oftentimes the sales we usually have… We try to have a talk about sales. It is a very common thing in the MicroConf community, and usually those are, I’m not a salesperson and I tend to find co-founders who do sales or I build businesses that don’t need sales or whatever. But I was just really impressed with that talk and I think I liked Steven’s delivery and I liked the information that came with it.  

Arvid Kahl:
Yeah, there was a lot of sales-centric stuff that people really wanted to know more about. You could feel it from the audience, you could feel when people ask questions, they had things just queued up for an expert to help them with. People they have to sell and I mean, I don’t want to generalize it, but I don’t like it either. I have to because everybody has to. So you have these issues that are always kind at the forefront of just your mind at this point. So having somebody on stage, both with him and the attendee talk that was just couple hours prior to that, was also about sales conversations. So it was a pretty strong theme during the conference just to be open and talk about sales, which was nice because you kind of have to.  

Rob Walling:
How about you? What’s your number two?  

Arvid Kahl:
My number two was something that happened on stage as kind of a life event as well. It was the life valuation of a business by the folks over at Quiet Light. It’s really cool to see people who deal with M&A all day, all week, just really tear into in the best way possible a business and the numbers that it presents. It was really fun. The founder went on stage. They had prior given all of their, I guess stripe metrics or something to the Quiet Light folks and they just looked into the numbers, they asked questions about the business, the market and all that. It was super interesting because you could feel how in your own mind as a founder, even just listening to a question coming from an M&A professional make you think about, hmm, this is something I don’t know. Or this is something that I should really optimize because if that’s something they ask, I should have an answer and I should have a good one. 

So it was really cool and I talked to the founder that was on stage after the conference when we had our last reception there, and I asked him, “Well, do you want to sell now? Do you want to keep it? What do you think about it?” And that started another conversation just really about, well, how much work goes into this business? Is this something that I have to sell to get where I want to go next? Or is this something that I actually have to keep to get where I want to go next? So it was just such an interesting thing to do this live and then have access to everybody involved that also made it very, very special event. It wasn’t rehearsed or anything, it just happened and you could really see how the founder was thinking about stuff, how he made logical connections between things. And I think this is something, it’s just an example of something super helpful for MicroConf because everybody has their own questions, but they all are going in the same direction. That was really cool. Really love that.  

Rob Walling:
This is the second time we’ve done that. And I was, dubious is not the right word, but I was like, is this going to be entertaining? Is this going to be engaging? And I always think about that if we’re going to put someone either in a workshop or on the main stage. Both times, it’s been both of those things I just named where I’m like, oh, this is fascinating. And every business is different. And you hear the thought process. Like the one MicroConf Europe in Lisbon, I believe it was country specific, their SaaS was. And so it was in Danish for example. And so he’s like, “Here’s how that’s going to count against you.” And it’s like, oh, of course. I kind of thought about that. But he actually was able to almost put a number to that of this is going to probably lower your multiple a little bit, blah, blah, blah. Here’s all the factors. 

And at the end he’s like, “I think you’ll get between,” whatever the number was, “four and six X or five and whatever X. Therefore your valuation is about this. And if I would’ve really peg it, I would list it at this price.” And I was like, “That is so cool.” And they’re experts. They’re just such experts.  

Arvid Kahl:
And you can feel that the kind of tacit knowledge that they have that they probably can’t even codify because it’s tacit, because it’s something really internal that is implied that comes out. It comes out in these little moments and then you get it that you get to be there in the moment when it happens, when it comes up, when it clicks for them and for you at the same time. That’s just life and workshop. That is where this comes from. I think you can’t do this if you’re not doing it in front of an audience. It’s really fun.  

Rob Walling:
So my number two were the micro excursions. And here’s the thing, I didn’t even go on the micro excursions. I actually took the time to kind of decompress and just have an hour or two to myself. But the reason that I like that we started doing these is because it really does follow this through line of MicroConf slightly pivoting away from, oh, it’s a bunch of education, it’s nine talks in two days, eight talks in two days. To where it’s like there’s four or five main stage talks, there’s some attendee talks, there’s workshops, blah. 

But it’s really about relationships. It’s about the founders being able to connect with one another. And that’s what the micro excursions, they’re just an excuse to go do adult big wheeling with each other, to bake biscuits, to do graffiti. I mean, fowling was the other one where you take a football and you throw it at bowling pins. It’s not the activities, it’s that you’re doing it with founders. You’re like, “Oh, hey, I kind of know you. I recognize you from Twitter.” Let’s have a conversation while we’re throwing a ball at some random thing of bowling pins.  

Arvid Kahl:
Yeah, that’s what I did the fowling. And it was really funny because in the beginning you could see all these founders, they weren’t really sure, do we want to play this? Do we just want to chat? Do we want to have a beer? But then people started playing that. People started playing ping pong. It was billiards. People just hung out outside in the sun because it was a beautiful day in Atlanta, so it was probably the best day for this of all the days that we had. And you could see little groups of people were just chatting about something, other groups were just enjoying the game. It was so flexible in particular, and you could have a nice drink with it. It was a really cool atmosphere, I got to say. And that just opens up communication as well. You’re not stuck in some meeting room or something, you’re in a place with beer. So it’s not the alcohol that does it, but it’s the atmosphere of the place. That was pretty cool.  

Rob Walling:
For sure. What’s your number three?  

Arvid Kahl:
It kind of is very much related to this, and I think all of these are obviously related the same event. But to me it’s the hallway track outside the venue and that includes the excursions, but it’s so much more. The excursion is kind of the organized, getting people together and having them do stuff with each other, which is really nice. But it happened organically through Slack, through the MicroConf Connect Slack and through private messages on Twitter and all that stuff, people were going for coffee in the morning before the conference started. We literally did a 15 minute walk or something to a coffee shop that was supposedly very good and then turned out to be actually quite good. We were having dinners with each other. Almost everybody went out with a group of people for dinners and had a chat late into the night, which is not necessarily smart, but it was a lot of fun. 

People did morning runs, they just gathered to run. They did bible readings in the morning. There was so much going on where people just organically and intentionally willingly congregated and just kind of let their lives intersect beyond just a professional thing. Just be together, talk about whatever they wanted to talk about. And that created a very diversity of people, people at different stages of their journey, people with very diverse, different backgrounds. I personally met my customers there. I met listeners of the podcast there. I met my heroes there. I met my peers. I met so many different kinds of people from all walks of life. The conference, what you said, the educational stuff that is really cerebrally, interesting. But emotionally, relationally interesting is everything else. And it never stops. You get on the elevator, some other MicroConf person is in there and you start chatting, you cannot stop. It’s really, really cool. It’s quite exhausting, but it’s awesome.  

Rob Walling:
So my number three is basically the same. Mine is nothing beats being in a room, which is what you’re saying, it’s the hallway track. It’s being in a room with other individuals to where you can just have these lingering conversations and then some person floats into it and someone floats out and so the conversation changes. You learn about their business. To your point of people getting together for coffee and dinner, I saw a comment on Twitter, I fly in tomorrow, meaning Sunday, which is the event starts Sunday evening with the reception. And he said, “I didn’t realize so many people would be getting there on Saturday.” And it’s like, I don’t know. I don’t know if it was the majority, but it was a lot of people. I mean a lot of people got into on purpose.  

Arvid Kahl:
Yeah, that’s right.  

Rob Walling:
To get in there. How many conferences do you show up a full 24 hours, 36 hours before? Not many. But you know that the MicroConfers are going to be there and that you can do the coffee and you can do the dinner. The other thing, I just want to tack onto this while we’re on it, I loved the FOMO that I was hearing of people who have been to MicroConfs and they’re like, “I’m not going to go this year.” I mean the FOMO was deep. It was both on Twitter, it was in the TinySeed Slack. And I could see people like, “I so regret not going.” And I’m like, “Here’s the law. If you don’t go to a MicroConf, there’s going to be FOMO. You’re going to regret it.” So just don’t not go to MicroConfs. That’s the deal.  

Arvid Kahl:
Yeah, I think this year in particular, but I think it’s just getting better and better over time. Not just the conference, but also the communication around it. It just a very organic, honest sharing of what people enjoy. You don’t force it. I mean obviously on stage you tell people, “Here’s our hashtag if you want to use it and all that.” But that’s more like a cosmetic thing than anything else. People just take photos of their friends, like selfies with the people they like and they share it. They talk about the things they learned. It becoming just a normal thing to talk about it. And obviously that induces FOMO in people who would’ve kind of maybe come at this point. It’s nice, I really enjoyed it. 

Also, one thing I noticed now that you said it coming on Saturday, I arrived on Saturday as well like so many others and didn’t even make it to the hotel counter before somebody talked to me. I didn’t even check in the hotel before I had my first MicroConf related chat. This is how present people were at that point.  

Rob Walling:
Yeah, something similar happened to me. And as you said, every time I got on an elevator, I’d be like, all right, now I’m going to chill. “Oh, hey, you have a MicroConf badge on. We haven’t met yet.” It was cool. We didn’t quite take over the hotel, but it felt like a little bit. 

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So with that, what’s year number four?  

Arvid Kahl:
Well, it also, again, related. And I’m going to start with a little story here I guess because the elevator is where this happened. I was just taking the elevator down. It was on the 21st floor down to the lobby because it was the middle of the day or whatever. And there was a woman that was not there for MicroConf for something else, and she was like, “Hey, so what is MicroConf? Because I’ve been seeing so many people and they’re all so nice, they’re all so friendly, they’re all so happy. What are you guys doing?” It was like some professional, some surgeon or something, and she was like, “What cool conference is this where people are so much enjoying their presence and then being together?” 

So I explained it to her and she’s like, “Oh yeah, I guess it’s a very tight-knit community of very friendly people.” And that’s kind of what I think. It’s this flat hierarchy between people. I can talk to you, anybody can talk to you. Somebody who’s done it four years is super successful and you just treat them like a peer, because they are. Everybody is a peer and we treat each other just like that. There’s no hierarchy. There’s no kings and queens in here. If you walk up to somebody, you have a chat. No matter if they make millions or nothing, it really doesn’t matter. That is so liberating. Because you can just have a chat. You don’t need to queue up or hope for a good introduction or whatever. Nobody is really pitching their stuff on you. Nobody is trying to recruit you or anything. It’s just people who are there for the same purpose. 

And that is the flat hierarchy is something that I have never, anywhere else, seen to this degree. In other conferences, you have a lot of stars and then they run away. Here, the speakers actually stay for the conference. Asia was around the whole time and she was just commenting on stuff and just talking to people whenever there was a coffee break. Where do you get this? MicroConf.  

Rob Walling:
That is dead on and it’s something that we did by accident the first year in 2011. And everybody stayed because we had Heaton Shaw, we had Andrew Warner, we had Ramit Sethi, we had a bunch of people and they did just that. They mingled. There was only a hundred of us. It was a small event and everyone was commenting on that. And so we said, “Oh, from now on, let’s invite…” We don’t force our speakers, but we invite them. “Hey, it would be great if you could be around, interact.” And for the most part, most of them do. There’s certain folks I think we’ll get to on our number five who zipped in and out, but he has a lot going on, you might say. Yeah. That’s always been a hallmark, I think, of MicroConf and something I really enjoy about it. 

On the MicroConf team, we actually had a new team member start just like three or four weeks ago. And so this was her first opportunity to, aside from being in Connect to meet MicroConf people, MicroConf community members in the flesh. And the first day she said, “Wow, everyone’s so nice and supportive and they want to help each other genuinely, and they’re offering advice and they’re asking for it.” And I was like, “Yeah, what did you expect?” And she’s like, “Well, some business events you go to, everyone’s grumpy and everyone’s kind of mean to each other. Or they’re trying to sell each other or they’re trying to put the other down or show how they’re better or whatever.” And she’s like, “That’s just not happening here.” 

And I guess I take it for granted, it was surprising to me. I was like, “Well, what is the other option?” And it’s like, oh, I guess that people are mean to each other. That just wouldn’t… Look, I wouldn’t run the event if that was… I run MicroConf because it’s an event that I want to attend and if people are going to be mean, I don’t want to attend that event. 

All right, so my number four is Liana Patch’s talk. It was about her copywriting swipe file, and she went through a bunch of very specific examples of how you can make subtle changes to copy, whether it’s the we-we problem, you don’t say we on your website, you should say a lot of you and talk about your customer. There were just a bunch of really tactful, helpful rules that could be applied pretty much to any website, anyone, whether you’re selling SaaS or whether it’s our MicroConf TinySeed website. I started thinking, oh, how often do we make these mistakes? So very highly rated talk. And of course Liana Patch is amazing. She’s funny and smart and a great copywriter. She’s written a bunch of copy for us. And I did a show of hands in the room, who here has hired Liana to write copy? And a lot of hands went up. So I really enjoyed her talk.  

Arvid Kahl:
So that was great. And again, it’s examples. This is a workshop. It was effectively a workshop disguised as a talk and also disguised as a comedy routine. So all of this together is just so amazing. Yeah. I hope one day to be one of the people raising their hands as well. It feels like she just has it figured out. So it was very noticeable how helpful this was to people and I really enjoyed it too.  

Rob Walling:
Here we get to our number five. We almost should do five down to one because this for me is my number one, the moment for me of the event. And I think we share it. So why don’t you lead into it?  

Arvid Kahl:
I mean, it is hard to lead into something that you have been working on for a good decade or so, but the fact that Ben Chestnut finally graced the community with his presence on stage and immediately was the most likable person in the room. That was incredible. I have many words to describe the moment, anywhere from awesome to adorable. I know. But he had such a presence and he was one of us that was so unexpected from somebody who sells a business for billions. You don’t necessarily expect that he is just like everybody else in this room. But within seconds he had people’s attention and trust and it was a wonderful conversation to see you have with him as is kind of finally, finally this happened after so many years. Please do explain the story of this and the history of that.  

Rob Walling:
So Ben Chestnut is the co-founder of MailChimp, and they started it in 2000, 2001, and they sold it in 2021, so just about two decades. And they sold it for $12 billion. It’s considered by all measures, the most successful bootstrap startup of all time by both revenue and exit. So I started emailing Ben back in, I was trying to remember the year. I bet it was 2012 to get him to come to the second MicroConf. I don’t know that I thought about it in 2011. I guess I could just search email. And he was always very gracious. 

And here’s the thing, the first time I emailed him, I’m like, “Hey Ben, you probably don’t know who I am, but I run this event for self-funded startups, bootstrap startups.” And he’s like, “Oh yeah. Hey Rob, you blog at softwarebyrob.com. I used to read your blog and a couple other bootstraps.” And it just showed me how small the community was in the early days. He read it. He was saying from like ’05 to 2010 or whatever, which I stopped blogging after that. But it was really neat that he responded every year that I asked him and very gracious. And sometimes it was like, “Oh, I might be able to make it pencil me in, but don’t announce me.” And then, “I forgot it’s my birthday that weekend or something’s come up with MailChimp.” He’s running this company that by 2021 is 1,200 employees and sending, I believe it was sending a billion emails a day. What an incredible business. 

Anyways, I continued to email him every year and he would politely decline or whatever. And then eventually we did do a MicroConf local and we brought it to Atlanta because that’s where he lives. And I said, “I want to get you on the MicroConf stage,” the locals, there was like 30, 40 people, but let’s just have a chat. And the first time I met him, I was like, “Oh, you’re one of us?” A lot of us are kind of accidental entrepreneurs. We want to be entrepreneurs. But he and his co-founder just built a thing and then people started paying him and then they’re like, “Well, we’re getting too many checks, so let’s try to figure out how to charge credit cards, and then should we charge a subscription for this?” Because there was no SaaS, this is ’01. And he was engaging and he was respectful of everybody in the audience. He had been in the shoes of all of us. And that’s the thing is, as you’re saying, he’s a billionaire several times over, but you didn’t feel that on stage.  

Arvid Kahl:
Yeah, I do wonder about this because you got to interview him. Did you feel like starstruck in a way? Like a little bit.  

Rob Walling:
Yes. But I try to get that out of the way before I interview them. So he and I have had a couple conversations to where I’m like, “Oh my gosh, I need to act super professional here because I run Micro…” But I’m also like, “Oh boy, this is a big deal that I’m talking to him.” Same thing happened. I talked to Jason Fried on stage. I talked to Patrick Collison and John Collison. And as I said at MicroConf, those four make up my Mount Rushmore of, I’ll say, bootstrappers. Obviously the Collison brothers with Stripe raised money, but really their ethos is that it’s that practical, pragmatic charge for things and be that way. 

So yes, I always feel a little starstruck, but I frankly feel that way even with some of my friends now. They’re friends that I respect so much that I’m like, you execute. So yeah, when we were up on stage, that wasn’t on my mind. It was more like, how do I make this interview amazing? And here’s the thing, you could ask the same questions that I asked of 10 entrepreneurs and nine of them would’ve just had so-so answers and just every one of Ben’s answers were intelligent, funny. We’re going to have a video of it. I assume we’re selling the videos after the event, but it’s for sure one of my highlights of the entire conference.  

Arvid Kahl:
I did not expect to have something so relatable in that conversation, but it was on every single level. And it was really, really cool. And I also liked you were a competitor to him. That was a fun part when you talked about how Drip, you asked if it was even on their radar at all, and even that sparked a really, really gracious and kind exchange.  

Rob Walling:
The one where he called me a bastard for starting a competitor to him? He’s like, “This bastard, I thought we were friends. This bastard…” Like that. And people just ate it up. I was like, yeah. Those are facts. What you’re saying is a complete fact. I was like, were we a nat or a rounding error? I was going to get to the point of did you spend more on toilet paper than Drip’s entire ARR? But I didn’t want to derail the conversation.  

Arvid Kahl:
Yeah. You got to keep it on a professional level. I get it. It was a lot of fun. Yeah, that was great. That was a wonderful moment. And hey, for somebody who’s never, ever anywhere, even just gracing us with an hour or so of his time, that was great for the community and it was great for everybody who was there and who gets to watch it, so it’s perfect.  

Rob Walling:
Yeah, I was very grateful because as you said, he just doesn’t necessarily like the limelight. He doesn’t really do podcast interviews. He’s done a hand… Not even a handful over the years. And he doesn’t travel really for interviews. Because he doesn’t need to, he can do what he wants. So that… Yeah, it really [inaudible 00:29:37].  

Arvid Kahl:
Isn’t that a lifestyle business?  

Rob Walling:
For real. Talk about the ultimate lifestyle business, where for the rest of my life and my kids’ lives and their kids’ lives, we could do what they want. Pretty amazing.  

Arvid Kahl:
It was a great conference, man. You’re doing a great job at hosting these and making these happen. I really appreciate it. Always fun. I cannot see myself skipping any one of them anymore, so there you go.  

Rob Walling:
Thanks, man. It means a lot. I really appreciate you coming back each year and for spreading the word. Like you spread the word on Twitter on your podcast, and 100% that helps. Because we can’t, with MicroConf, I can’t go run Facebook ads and Instagram ads and sell tickets to it because you have to know. You have to know. Why would I spend a thousand, $1,200 whatever tickets for? Why would you spend that much money on an event? Because you have to know it’s really, really good, and people trust you and other attendees when they say it is unlike any other event that you will attend,  

Arvid Kahl:
Well, thank you. And then they come to the event and then they notice that they’re actually supposed to be there. That was something, and you said this, and I think Rand Fishkin said it too, the people in this room, they belong here. The people that come to MicroConf, they are founders, and even if you’re just an wantrepreneur or whatever you want to call it, the fact that you’re making the leap to go into this community to learn from people, you don’t need to raise VC. You don’t need to do whatever other people tell you to do. Just be around the people that are aligned with you and you will learn from them and you belong in that room. You made that absolutely clear. 

And I talked to people after you said this and after the whole event, and they felt like this was the right choice, like coming here, I’ve put this off for years. I thought I wasn’t ready. But then they came there, talked to two guys and half of or one of them would say, “I’m also not ready, but I’m still here.” So it’s really taking the step is the step you need to take in that regard.  

Rob Walling:
That’s right. I’m glad you brought that part up because I’ve been starting to become pretty deliberate about it because I realize the amount of imposter syndrome that I think a lot of us feel. And if you’re in the room at MicroConf, you belong in the room at MicroConf. That’s the tautology.  

Arvid Kahl:
It’s a good one.  

Rob Walling:
That was fun. I tell you, if you’re listening to this, if you saw the tweets, if you experienced FOMO while we were doing it, don’t miss out on the next one. There’s one in October in Dubrovnik, and then one next probably April ish again, back here in the States, we haven’t signed final document, so I don’t want to announce a location, but show up. I have never had someone tell me they regretted attending a MicroConf. And I’ve never even, whether in surveys or whether anonymously, maybe someone wouldn’t tell me to my face. But it’s just something that, and I’ve never regretted, which sounds weird. It’s like, well, aren’t you the host? You’re running it. You have to attend. It’s like technically, I guess, but I go because it’s the event that I want to attend every six months.  

Arvid Kahl:
Yeah, if you do something for 10 years straight or 12, I guess, and you still love it, that’s kind of an indicator.  

Rob Walling:
It’s like this podcast and MicroConf I did as a hobby on the side while I was doing everything else. So that tells you something. I didn’t have to do any of the either of those things. The podcast and the event.  

Arvid Kahl:
That’s right.  

Rob Walling:
Arvid Kahl, you are a scholar and a gentleman. Thanks so much for waking up. It’s not even that early, it’s just we’re conferenced out. It’s the extrovert hangover.  

Arvid Kahl:
That’s right.  

Rob Walling:
If folks want to keep up with you. You are @ArvidKahl on Twitter, you are the Bootstrappedfounder.com, and what do you doing these days? You have your Zero to Sold book folks can check out. Anything else that you’re… Oh, Podscan.fm. Of course, I am a paying customer of Podscan.fm. How can I forget? So you want to tell folks just elevator pitch, what does Podscan do?  

Arvid Kahl:
So as a media monitoring, alerting, it’s Google alerts for podcasts. You have a key phrase or a word or a name or whatever you want to see, if people mention it, that’s what Podscan does, sends you notification. Also exists as an API. So if you’re a founder who wants to get every podcast out there and get all the transcripts, because I transcribed millions of these behind the scenes and you want to use it for your own products, API exists as well. But thanks for mentioning it. I met customers of Podscan. I met people who are interested in Podscan at the conference as well. Didn’t pitch, didn’t have to. People just came up to me and talked about it and it was so much fun. Yeah, MicroConf has all the layers. It was so cool.  

Rob Walling:
Thanks again for joining me, sir.  

Arvid Kahl:
Pleasure.  

Rob Walling:
Thanks so much to Arvid for taking the time to join me again on Startups For the Rest of Us. And thank you for listening this week and every week. If you keep listening, I’ll keep recording. This is Rob Walling signing off from episode 713.

Rob Walling:
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Welcome back to another episode of Startups of the Rest of Us. I’m Rob Walling. Today, I’m going to look at a couple of the predictions that I made three or four months ago. Just revisit them because I feel like we’re a third of the way through the year and I had a few thoughts on them. And I also want to give you an update on my situation. I’ve talked over the past really nine months, maybe a year, about how I was experiencing some burnout last spring, and then it hit me really hard in the fall. I want to revisit that and also give you a general update on the inside baseball of my world, Startups for the Rest of Us, MicroConf, TinySeed, maybe my books, SaaS Playbook, and the new ones I’m working on if there’s time. 

So this is definitely an inside baseball episode. I know some folks love these and other folks skip them, and that’s okay. I like to have a variety of topics and guests and formats on the show to keep you interested, but everything is focused on helping bootstrapped and mostly bootstrap SaaS founders get to where they want to go faster. And if in each episode I can have some type of nugget or wisdom to help multiply the world’s population of independent self-sustaining startups, then my work is complete. 

So I want to kick it off by looking at maybe two of the predictions. I think I had seven predictions for SaaS Bootstrappers in 2024. This is episode 697, released in mid-January, and there are a couple of them that I have additional thoughts on because we’re now four months past. The first one is that there is opportunity in vertical SaaS, and obviously horizontal is where you cater to all industries. Vertical is where you focus on a specific industry or niche. And in a YouTube video I released about a month ago, I coined the term orthogonal SaaS, which is something that it was on my radar in the back of my mind, but I didn’t have a good name for it when I recorded the podcast episode. But Orthogonal SaaS is this third type, it’s horizontal SaaS that is focused on a specific role or title within a company. 

So think of software that helps HR or people ops, recruiters obviously that can be used by almost any company around the world to help them find new people or onboard them. Think of an ATS applicant tracking system, but it’s focused on a very specific role or title. It’s not a true horizontal play, much like think of Savvy Cal, Signwell, and Castos, which can be used across industries. And if you think about those tools, you could have one of many titles using electronic signature or a scheduling link. So those are not orthogonal, they’re just horizontal and it’s not a better or worse situation. But what we’ve seen across the TinySeed companies we’ve invested in is that horizontal plays, true horizontal plays get really competitive and there’s often a big player that you’re fighting against, which is okay, but it can make marketing and sales more difficult if you don’t have that specific title to focus on. 

And so the nice part about going vertical is oftentimes you pick an industry, it’s accounting for hair salons or whatever. That’d be a terrible idea by the way, don’t do that. But accounting for whatever niche industry you want to pick, and you don’t have to be the best marketer in the world, you just have to be the best marketer in your space. Similar with orthogonal SaaS, you have this product and you know exactly who your end user is. So you can go to in-person events, you can target them with cold outreach, you can go where they hang out. Are they on Quora? Are they on SEC overflow? Are they in private Facebook groups or private Slack groups? It really lends an advantage if your ICP is actually categorized with a title or a role at a company. And I just wanted to add that on because in the episode, I talked about opportunity in vertical SaaS and I was pitting vertical versus horizontal as if it was a bimodal. 

But really there’s this third category of orthogonal. I want to tack that on here that some of the more successful companies we are seeing with TinySeed are vertical or orthogonal. So I’m excited to see what 2024 brings for those types of companies. The second prediction I want to touch on is I predicted that Twitter changes hands in 2024? 

And I don’t know about you, but does it feel like the writings on the wall that Twitter is going to be snapped up by someone at a deep discount? Obviously there’s rumors about this happening. There’s no updated news, but as the months go on, I’m more and more convinced, especially with recent Tesla decline. They just did a big round of layoffs. I can imagine that the lack of focus, Elon trying to run all these efforts could lead either him to sell it or someone to swoop in and want to acquire it. 

So I mean, there’s ridiculous rumors or even just people speculating on Twitter about Yahoo buying them or Microsoft, or it could be any one of a number of players, but I still think this is totally going to happen, and I double down. A lot of the predictions that I’ve made over the years haven’t happened for two, three or four years. So I would be off by a few years, but I have a feeling that the clock’s ticking on this one. 

All right, so now an update on me, what I’ve been up to, how I’ve been feeling. So about a year ago, I think it was April or May of last year, I started talking about how I was experiencing pre-burnout. I started feeling like just a lack of desire to go to work every day. And that’s weird for me because I love what I do on a day-to-day basis. 

And over the summer it had decreased and in the fall it came back with a vengeance. We did, I don’t remember how many, but it was… I think I took seven business trips in 12 weeks or something. It was crazy. Some of it was MicroConf, some of it was TinySeed, and some of them were speaking engagements around my book, the Sass Playbook. And what I realized as I hit the end of the year was I was pretty deep into burnout. I stopped being able to show up and be present when… I was shipping YouTube videos and shipping podcast episodes to the best of my ability. But there was just no spark there, no desire to get up and do it. It was purely because the show had to go on. So what I did, I talked about this four months ago. What I did was I was able to back off from some day-to-day responsibilities just for a few weeks. 

It was probably about two weeks that I took almost completely off. I still recorded YouTube and podcast episodes because I had to, and I did some thinking and a little bit of writing. But really I didn’t go to any meetings. I didn’t show up day-to-day for work. People could reach out to me and I handled it, but I was “off work” for about two weeks. And then the week before that was Christmas and I went to Cancun with my family and the week before that was the week before Christmas, which is always pretty slow. So I wound up having a month of relative downtime in quotes. And I also made the decision that I just cannot travel this year nearly as much as I did last year. And so talked to the team and everyone else felt the same way. That was the good news. 

So there are some TinySeed events that I’ve gone to in the past that I won’t be going to this year, and we decided to shelve the MicroConf Locals for now. So MicroConf Locals are where we swoop in for a three-hour event and we bring MicroConf to you. And the toll that it was taking on not just me, but my whole team and the level of effort and cost and time for a relatively modest turnout, it just wasn’t worth it. It wasn’t moving the needle in the way that so many of our other efforts do. And when you’re doing, we have six or seven major efforts in MicroConf. If you think about it, TinySeed is one. State of independent SaaS. There’s the YouTube channel, there’s this podcast, there’s Mastermind Matching, there’s MicroConf Connect, our subscription community. There are in-person events, there are remote events. We do a lot with MicroConf and some of them are beloved and amazingly successful. 

And obviously so, and some of them you get a kind of lukewarm reception. And so when we would fly to Miami and there’d be 30 people, 35 people in a room, producer Xander who flew in from Hawaii and me from Minneapolis, we were kind of asking ourselves, is this worth it? If we can get 75, 90 people in a room, that feels good. But when 30, 40 people show up, it started to be like, is this the best use of our time? And so we’re shoving those for now. What that means is I’ve only had one work trip in the past three, three and a half months. And with MicroConf, we’re only doing two in-person events this year. It is our flagship event in Atlanta, which happens probably as this is going live. Actually, I believe it happened last week based on the publication day, but MicroConf flagship in Atlanta and then MicroConf Europe, which looks to be in Croatia in early October. 

And that’s it. And that’s great. It feels good. It’s kind of like getting back to how we used to do it a little bit. I mean, we certainly experimented and I don’t regret doing that. I mean, we had planned to do Locals 2020 and then COVID happened and we did some in 2021. I think we did three or four at the end of the year, and then we did eight in 2022 and between six and eight in 2023. And it feels like an amazing accomplishment that we pulled those off. But at a certain point, as an entrepreneur, you have to make the decision of where do we put our focus and our efforts. As I’m recording this, of course, a couple days before MicroConf in Atlanta, and I’m stoked. I hope I am able to see several of you there. The event last year in Denver was just a smashing success in terms of engagement and ticket sales and all the folks who showed up. 

So I hope to see you there. On less happy news, you may have heard that producer Xander, who has produced MicroConf for 10 years is moving on to his next adventure. And for the first five years he worked with me on MicroConf. He was a contractor that just ran the two flagship events. And then about five years ago, we decided to really double down. This is when MicroConf went from a hobby to a full-time project for me. And Producer Xander came on full-time and had been running the team for the past five years and doing an amazing job of it. And if you’ve been to any event, you know how good he is at what he does, and MicroConf would not be the same without him. So it’s obviously bittersweet to have him move on, but 10 years is a long time to work on a project. And obviously I wish him nothing but the best, and I hope that you are able to give him warm wishes on his way to his next adventure. 

Update on this podcast. The numbers continue to grow slowly over time. That’s what podcasts do. It’s not like YouTube where everything goes up into the right so quickly. The April Fool’s episode was a ridiculous hit. I had no idea how many comments and how much feedback I would get on it. And no, that does not make me want to do another one next year. I think part of the reason it worked is because we’ve done two or three in the history of this show, 14 years, 711 episodes, and this was the third time, and I think it’d been six or seven years since the last one. So I am just happy that folks got a kick out of it. 

I’m sure there’s someone out there who’s disgruntled about it because they’re a grump and don’t like April Fool’s, and that’s fine. But I personally don’t like April Fool’s either, and that’s why I don’t do April Fool’s episodes very often, but I really did. I cringed as I recorded that episode. It was fun to push live and it’s so fun to see the responses. I’m still getting them. It shows you the delays of podcasts. It’s two, three weeks later and I’m still getting emails. I’m getting comments on Spotify. I’m getting comments on the YouTube channel. I don’t know if you knew this, but there’s a little known YouTube channel that we don’t promote that is just the startups for the rest OS feed. It is audio only with a logo because producing video is just expensive enough that we push the audio only, but a lot of engagement on all the platforms and it’s always striking the things that resonate with people are the things that get people’s attention. 

And I guess on April Fool’s episode and going back on things that I’ve been saying for a decade was surprising enough that folks wanted to weigh in. So I appreciate it if you reached out to me about it. Oh, I realized I tangented off of burnout and just how I’m feeling when MicroConf started for the rest of us, but it totally recharged me, taking that time off and just looking ahead at the next year, meaning 2024, re-energized me on my mission and for the team and for just everything we’re doing. It made me so excited and I came back all guns blazing and the excitement to record this podcast, the excitement to work on a new book, which I’ll talk about in a minute, returned. Just everything clicked for me. And by mid-January, I was through it and it hasn’t come back. 

And I am very thankful for that because I’ve been in burnout before where it’s just off and on for months and months and months and it sucks. And I’m glad I was able to get ahead of it this time. Glad I was able to notice it and glad I had the luxury to be able to step back, that the timing kind of worked. I will admit I was going to take time off in February or March, and I eventually just said, I’m going to take whatever time I can off now and just try to get it done. And so I’m feeling so much better overall about how things are going. And when your outlook is positive and ambitious and optimistic, it changes everything. It changes every day, it changes every effort that you make. 2024 has already been a pretty amazing year, aside from obviously Xander moving on. 

There’s just been a lot of stuff that continues to work. TinySeed, the funding arm of MicroConf and the startup accelerator that I run with my good pal, Interval Set. So we have just made all of our offers for, I believe it’s 13 and 14, we’ve actually lost count, puts us just over 170 companies that we will have invested in all B2B SaaS, and it puts my total to a low 190, so almost 200 companies overall. That continues to be a relatively unique vantage point in the world. I don’t know how many people have insight into that many startups, much less SaaS startups. It’s not thousands, I think it’s hundreds if I were to say. And so as a result, it allows me to see patterns across many companies, to see trends and not just wonder is it an anomaly? If I’m looking at one company or five companies, the N is very small, but approaching 200 starts to become pretty… I mean, I would say it became pretty statistically significant even in around a hundred, 150. 

But so much of what I’m seeing becomes fuel for content on this podcast or fuel for the SaaS Playbook. A lot of that came out of TinySeed experience or fuel for my next books that I will talk about in just a minute. So I continue to feel like I’m kind of serving my highest calling by doing MicroConf TinySeed in this podcast. And TinySeed feeds my entrepreneurial desires and drives in a way that I hoped it would, but I wasn’t sure. That was one thing when I said I’m not going to start a SaaS app again, which my wife, Dr. Sherry Welling told me that’s bullshit, but I have not started another one. It’s been eight years. And one reason for that is that Microconf and TinySeed keep me in the game, so to speak. They keep my head in the entrepreneurial game because I’m around founders. I’m giving advice to founders, I’m thinking through founder level problems pretty much every day. 

And so it feeds that part of me, the desire to accomplish. And I live a little bit vicariously through the founders that I’m invested in and advising. And it’s the desire to just be in the game, and I still feel like I’m there. So that’s good because I know when I first started TinySeed, what was this? October of 2018, so going on six years now, someone said to me, it was an acquaintance, but he said, “How long are you going to do this? You’ve never stuck with anything more than three years or whatever.” Drip was three and a half years from start to sale and then another almost two years. So about five and a half years of working on it. But he was kind of trying to call me to the carpet, but also pointing out a factor that I do tend to bounce from one thing to the next. 

And obviously that was on my mind of if I start TinySeed, how long do I have to do it if it gets to the point where I don’t enjoy it? Because if I do it for a year and then bail, that’s going to suck because we have this fund, we’re investing and all that. And I realized that that hasn’t happened, and it’s probably the first job I’ve ever had in my life that I haven’t gotten really tired of and wanted to move on from. I just haven’t really had that desire. Aside from when I was burned out, I was like, I don’t want to do anything. But I knew that that was temporary and it wasn’t TinySeed. It wasn’t MicroConf. It wasn’t the job. It was, I just didn’t want to do any work. And that’s what, of course, burnout can do to your mind. So I’m very happy to be past that. 

One other big win on the TinySeed front and then I’ll move on to my books is that we ran our first annual Tiny Fest. While we didn’t know it was going to be annual, it was an experiment. It was an event that was for TinySeed founders only. It was in Cancun in January, and it was the first work thing I did after coming off of my few weeks of vacation. And it was a great time. It was awesome to get founders together from different batches and different years that had seen each other in our Slack but had never met in person. So my hats off to Tracy Osborne and Alex Mccuaid, part of the TinySeed team for pulling that together. And we are already talking about having another one later this year. So if you’re curious to learn more about that, actually it was a super fun event and you can search for Tiny Fest and they did a write-up with photos on the TinySeed blog. 

Oh, one other update before I get to my book. Some folks have asked me about TinySeed Tails and whether that is continuing. Yes. So season five of TinySeed Tales, which appears on this feed is in the works, the Founder that I’m interviewing had to completely reboot, basically do a massive pivot. And so it’s almost a restarting. And so as a result, there isn’t really a season story arc to put out. We’d kind of be leaving it dangling if we published what we have now. So I am slowing down the recording pace. Usually it’s every four to six weeks, but now it’s about every two, two and a half months as the founder is making progress. I’m doing the same documentary style recording that we have done in the past where I talked to a founder over the course of a year. In this case it’s going to be maybe 18 months. 

And then we compress that into seven to 10 episodes to show their whole journey and has voiceovers and music and all that. So that is in the works. We’ve also ran into some issues with editors and producers, and so we are working to get that resolved, but hope to have season five of TinySeed Tales here in maybe the fall of 2024. All right, last update for today is on my books. So the SaaS Playbook has continued to sell really well, and I don’t know if I should be surprised, but it is quickly going to outpace Start Small, Stay Small, I believe Start Small, Stay Small, my closest estimates have it selling around 30,000 copies, just over 30,000. And for a self-published book published by a guy with a quite small audience 14 years ago, that’s good. It has had a life much longer than I originally anticipated, as you can tell by some of the examples are a little bit dated and many of the links don’t work. 

But the Gestalt, someone read it the other day for the first time and said, oh, 80% of what’s in here is mindset and it’s still as valuable as the date was written, so I really appreciated that sentiment. But just over 30,000 with Start Small, Stay Small over 14 years. The SaaS Playbook is almost at 24,000 and it’s been out less than a year, and it continues to sell over a thousand copies a month between 1,000 and 1,200 copies, I believe. And I guess that kind of makes sense, right? Start Small, Stay Small, it is a niche. It’s like that cult film that gets a following, but mainstream folks would never pick it up, partially because the cover’s so ugly and partially because it’s just very focused. What’s the subtitle? A Developer’s Guide to Building a Startup. So if you’re not a developer or you don’t consider yourself building a startup, you’re just not going to pick it up, versus the SaaS Playbook, build a multimillion-dollar startup without venture capital. 

I just think the appeal is so much broader and I’m really pleased to see that all the hard work. I mean, I put a lot of time and money and effort into writing the book, then having it edited, then having it designed, then having the cover design, then doing the Kickstarter and on and on and on. And it is very gratifying to see that into the hands of literally tens of thousands of people. And again, my mission is to multiply the world’s population of independent self-sustaining startups. And the SaaS Playbook is yet another way to do that and a way to do it relatively cheap. I enjoy giving stuff away for free. This podcast, the YouTube channel, and SaaS Playbook might be viewed as the next rung up the ladder. You can get it for $10 in PDF from SaaSplaybook.com or $10 in Kindle from Amazon. 

Or obviously you can get a paperback copy and Audible and all that. But it’s a nice way to be able to offer what I hope is a lot of value in a compact package for not a lot of money. And so it is very gratifying to have a lot of people reading it. And that leads me to my next two books. So my wife, Dr. Sherry Walling, is a psychologist and a founder and entrepreneur coach who runs a successful consulting firm at ZenFounder.com. So many of her clients have exited, are thinking about exiting, are agonizing over exiting, are in the middle of the exit process. And I, of course, having my own stories, but also secondhand stories of dozens of founders that I’ve talked with given advice to and just learned from the agony of it. So we are writing a book and I would say we have about half or three quarters of the content kind of outlined and in play, but it’s not actually written. 

So I would say book’s probably 20, 25% done, and we’re looking on… We’re hitting it hard over the summer, but it’s really focused. There’s a little bit of the mechanics of exiting and there’s a lot about the mindset about before, after, how to think about your team, about how to mentally prepare for it, about thinking through whether you should sell, about whether you’re going to have regrets, about just on and on and on. And the cool part is just everything’s taken from our experience of talking to founders who have done this, are doing it, are agonizing over it, got screwed, have regrets. Whatever it is, is going into this book. So I don’t want to say it’s the Psychology of Exits because that sounds a little academic, but it is definitely a different take on selling your company. It’s not necessarily focused on SaaS. 

Obviously there’s a lot of SaaS examples because of my network and the folks we’re interviewing around it, but Sherry’s clientele has some SaaS in it, but there’s a lot of just business owners that own brick and mortars or that own consulting firms or agencies or some variation of a business that sells. And so we hope that it has a little bit wider appeal than even say the SaaS Playbook, and we hope when it comes time that you will check it out. Last update is a book I’ve mentioned offhand a few times, but I’ve since decided on the title. 

It is called the SaaS Launchpad, and I just got a cover designed, the manuscript is complete, but I need to reread it and rewrite some pieces of it. It goes out of date so quickly, even if you try not to or really my thinking changes or I have better examples and better thoughts and better ideas around certain things as I create more content on this channel, more content on the YouTube channel, do thinking, speaking and writing. And I’ll revisit the book and be like, oh, I don’t necessarily fully agree with that anymore. Or there’s a better way to say that now is what happens a lot. 

So I started reading through it the other day and I was kind of like your software’s never finished, and frankly, books are never finished. You eventually just ship them and you give into the fact that a week later you’re going to look at something and say, ah, I wish I’d said that differently. I wish I’d added more. But I’m excited about the SaaS Launchpad because it is kind of like a prequel to the SaaS playbook. So the SaaS Playbook is about bootstrapping and mostly bootstrapping multimillion dollar SaaS companies. It starts, you have a product, you have some revenue, and you have what I call weak product market fit. You’re kind of figuring it out. You’re at an early stage. How do you strengthen product market fit is an early topic, pricing, marketing, building your team mindset, all that stuff. The SaaS Launchpad was almost a harder book to write because it is the earlier stages. 

It’s like, how do I come up with ideas? How should I think about competition? How do I validate ideas? Can I pre-validate ideas? How do I think about building a launch list? What does it look like to launch? How do I think all this through? The challenge is you can’t be as prescriptive because there is no blueprint for this early stage ideation stuff. There is kind of a blueprint. The SaaS playbook is pretty prescriptive about a lot of things because I do think there are best practices, rules of thumb that can guide you to get to the next level. Obviously, every company is different, every startup is different, but if you flip to the early stage, it’s a lot of wandering, but at best you have a compass. It’s not a map. And so at best it’s like directionally, this is kind of where you have to go. 

And so that’s what I was trying to do and hopefully have accomplished it in this SaaS Launchpad. And I don’t know when I will publish it because there’s a bunch of other stuff going on. I’m actually recording a video course for MicroConf right now, and you know how it is. It’s just priorities. I also don’t want to launch three books within 12 months of each other because I do think that it can become a little oversaturated. But that’s in the works. Obviously, if you’re interested in this book, keep listening to this podcast. You can go sign up. Oh, I should tell you StartupsForTheRestOfUs.com, the email list, if you sign up for that, obviously you’ll hear about my books, but you’ll also get an email every week with detailed show notes of each episode, and you will get two never before heard episodes. 

One is called Eight Things You Must Know When Launching Your SaaS, and the other is 10 Things You Should Know As You Scale Your SaaS. And not only do you get those episodes, but there are PDF guides that come with them. And in addition, there is a PDF we created of the 5:00 PM Idea Validation Framework that you’ll get if you sign up for that list. So a lot of bonuses there. Startupsfortherestofus.com, sign up for the email list and you’ll hear about my new books as well as all the stuff I just named. 

That’s all I have time for today. Thanks for sticking with me through this update. I hope this was interesting. Certainly feel free to weigh in if you have thoughts, cheers, advice, questions, anything like that. You can always email questions@StartupsForTheRestOfUs.com or head to StartupsForTheRestOfUs.com and look for the ask a question link in the top navigation. I’ll be back in your earbuds again next week. This is Rob Walling signing off from episode 712.

Rob Walling:
Welcome back to another episode of Startups For the Rest of Us, I am your host, Rob Walling, and this is the podcast for bootstrapped and mostly bootstrapped founders to change their lives through entrepreneurship. This week I have fan favorite, Ruben Gamez, back on the show, and we talked through several listener questions, really good listener questions this week. And I’m not just saying that, people sent in video and audio asking questions like, so if I build a SaaS with no audience, how do I find people to talk to? If I build in no code, should I be concerned that I can’t export my code? Thoughts about going horizontal versus vertical, building a prosumer SaaS and more. 

Before we dive into that, you should check out MicroConf Connect at microconfconnect.com. This is our online community and forum. We host it in Slack and we’re approaching 7,000 members. They’re bootstrapped and mostly bootstrapped SaaS founders. Recent conversations in Connect, including a debate about magic sign-in links, how long you should spend diving into a niche before deciding on the product offer, how to safeguard your product from misuse during free trials, at what point in your journey should you invest in a conference booth, and more. It’s a vibrant and highly moderated community. Very high signal-to-noise if you’re looking to find and hang out with other misfits like you and I, head to microconfconnect.com. And with that, let’s dive into listener questions. 

Ruben Gamez, welcome back to Startups For the Rest of Us.  

Ruben Gamez:
Thanks. Great to be here.  

Rob Walling:
Yeah, it’s always good to have you, man. We have some really interesting listener questions today, all audio or video. As always, if you want to submit a question and you want it to go to the top of the stack, make sure to send audio or video, text questions do still get answered now and again, and let’s dive in to our first question from Jay Lee.  

Jay Lee:
Hey Rob, my name is Jay and I’m from LA. Loving the pod, so thanks so much. I had a quick question about how and where to talk to your first users, especially early on in your app’s life. So recently, I saw your post on X about how you don’t need an audience to start a SaaS, and that in fact less than 5% of the companies you invest in have any sort of audience at all, and it makes sense. So my question is then, assuming that you’re a programmer with zero audience, starting from scratch, what does your strategy look like? For example, let’s say you want to build software to help people run in-person conferences. Do you just go to some r slash conferences Subreddit and start posting questions? Do you just join some Facebook group and post, “What problems do you guys have?” Or do you cold DM people on LinkedIn with any conference manager title and ask them questions? So what would be your specific strategy and approach here? Thanks again and love the work you do.  

Rob Walling:
So I like this question because it’s fun. I’m Mr. Don’t Build An Audience If You’re Going To Build A SaaS, or it’s not don’t build an audience, but if you don’t already have an audience and that’s not an amazing gifting of yours and you really want to do it and all this and that, don’t do it. Don’t listen to the advice. And I come back to the less than 5% of all TinySeed funded companies, which is just 170 now, less than 5% had any kind of audience when they started or even have any kind of audience today. And it’s fun to me though when I say that and then Jay Lee writes in and says, okay, so then what? Because that’s kind of cool, right? It’s like, oh, someone’s listening and they buy into it, but it’s like, so then what do I do? Help me with the next step. So with that, I’ll kick it over to you Mr. Guy with an incredibly successful business and no audience. How do you think about the questions he’s thinking about?  

Ruben Gamez:
Yeah, it’s funny because you would think based off of what you see on Twitter and all that stuff that everyone has an audience and that’s how they start their business. But most of the people that I talk to and just like you’ve always said, they don’t start that way. So I’ve done it twice without an audience. I feel like that’s good because that means it’s the default. So the way that he phrased the question was interesting to me. It’s like, okay, he said in person, people who run in person conferences, you reach out to them and all that. How do you start to get those? How do you start to market those? I feel like that might be a little bit of a dangerous way to approach it. I’d start with the research side first, and I say dangerous because you could be in the right community. 

Let’s say you find a community, and I did this with Bidsketch back in the day, found a community of designers, a couple of community of designers for trying to validate the product, trying to see if there was interest there in buying, and then got nothing. And that was a negative signal. I think one of the things that a lot of people don’t talk about enough is that if you can have the right type of person, but the context could be wrong. They could be, the reason why they’re in this community might be a topic that doesn’t align with your product. So you might get, there are always segments of a type. So people that are running conferences, there might be people who are running conferences in a certain way or certain types of conferences that won’t make for good customers. That might be an issue. 

Or if you’re using ads and you have some bait, like a lead magnet or something like that, if that doesn’t align well with the type of product that you’re selling, like if you’re selling something on the money side, software for people who run conferences for monetizing conferences, but the bait that you use has nothing to do with that, that might also be a bad signal that you get there. So I’d start with the research side and I think about it in terms of talking to people who are potential customers. So yes, reaching out through LinkedIn, reaching out to Twitter through these communities, however you could find them, tell them that you’re researching a problem and not talk about the solution. Some of them will talk to you, some of them won’t. Also, I like to talk to founders who have sold into the space, who have the same type of product or had it in the past, failed or succeeded with it. 

I did this with SignWell. Talk to people who were in the electronic signature space as founders and get their perspective. The other side of it, like how hard it is, how they sold, what things are effective. And then sometimes talk to in slightly bigger companies when they have sales and marketing specialists, talk to somebody who’s done that role and try to learn from them. Not going too big because if I’m talking to somebody, in the early days, I did this, I talked to somebody, two people that one did growth and one did marketing for e-signature companies, but the companies, they were successful and they were larger than I’d be starting, but not so large. They weren’t DocuSign or something like that, which wouldn’t really be that relevant to me. And you get, I feel like a really good perspective on price points, on channels that work, on trade-offs, things that are good that are not so good, all that before you start marketing and then just are more informed about how to go approach your marketing.  

Rob Walling:
And it sounds like you would, if you have any kind of network in this space, you’d start with that because that’s easy, right?  

Ruben Gamez:
Definitely.  

Rob Walling:
If I know I happen to know five or six people who run conferences because I run conferences, but if I was going to build a product for in-person events, I would instantly go to them and I would ask them questions and “Hey, who else do you know who I can talk to?” Right?  

Ruben Gamez:
Yes.  

Rob Walling:
That’s the next, it’s the star.  

Ruben Gamez:
That’s a great way of doing it.  

Rob Walling:
Yes. But if you don’t know anyone, so you know zero, you have no network in the space. Well, you do exactly what you said, cold DMs, there’s LinkedIn, there’s Twitter, there’s Facebook, there’s Instagram, there is cold email, whatever way you can do it. And I do think, I mean Jay mentioned, do you go into a Facebook group or a Subreddit and start asking, “What problems do you have?” Or whatever. No, I wouldn’t. I would lurk.  

Ruben Gamez:
Right. See what naturally is brought up.  

Rob Walling:
Yep. I would want to see what’s brought up because look, people want to bitch about things and they bitch about… You know what I mean? So it’s like you don’t need to ask. You’re going to just notice. I have a few hobbies. I collect high-end vintage, Silver Age and Golden Age comic books. I play Dungeons and Dragons, and so I’m in those Subreddits and Facebook groups and this and that, and it’s the same shit every week. Someone complained about this grading company and someone complaining about Wizards of the Coast, the maker of Dungeons and Dragons doing the same thing. Again, you don’t have to ask anyone what the problems are or what their opinions are, they’re sharing them. And I feel like in-person event operators are going to have a similar thing. 

Now maybe they won’t complain as much as consumers whining about a tabletop game they should take way less seriously than they do. But if people who run events, we have similar problems and they’re just going to be talked about on a regular basis, maybe not every week, but you know that once a month, the same topic that’s bugging everybody and hopefully it’s like, “Ooh, does anyone use…” I’m going to bring up makeup example. “Anyone use Eventbrite? Oh my gosh, their fees are so awful and their software is terrible and it doesn’t do dynamic coupon codes.” And then I’m like, “Wait, what?” So now I’ve been part of this thing, checking in on it every day for a week or a month, and I get the tone. You start to understand just the gestalt and how people talk and how they interact. 

And then you chime in, “Oh hey, here’s a…” Either you can DM them on Reddit, I believe like private message or you can chime in thoughtfully. Not, “I’m selling something.” But you can say, “I’m a software entrepreneur. I’m researching something. I’m actually in the press of potentially building something that could blah, blah, blah.” You got to watch the tone of some Subreddits are so anti-marketing yourself that you may just need to PM, private message or DM people that you literally can’t. Like, you post a URL to your thing and you’re kicked out of the Subreddit. I’ve heard of that. So it depends, but you just have to be sensible about it and tactful.  

Ruben Gamez:
Yeah. The last thing that I forgot to mention related to all that was competitor research and looking at reviews and seeing the negative reviews and what people are complaining about there.  

Rob Walling:
Whether it’s like Capterra, whether it’s going to Google, ask ChatGPT, anywhere, any of the review and rating sites, just take them all with a grain of salt. But I agree, you start to get a picture of what people are upset about and what they don’t like. And here’s the thing with in-person events, I know that Eventbrite’s huge, it’s the 900 pound gorilla and therefore there’s a bunch of stuff they do poorly because that’s what big companies do over time, it just happens. So that’s actually an interesting space. 

Now there are, how many ticketing platforms do you think exists that ARG’s taking advantage of that? I mean, there’s got to be a hundred, literally a hundred. So then you start to think, okay, so am I looking for a unique position? Am I looking for an angle no one else is covering? Or am I looking for an angle? Think something that people are complaining about that they can’t find a solution to. So again, am I trying to be unique that no one else is doing? Or am I willing to compete with a couple of the others in this space if I think I can execute better and market better? How do you think about that?  

Ruben Gamez:
If you are trying to be unique and do something that nobody’s doing in this space, then just I think that’s a valid approach. But I also think it’s higher risk because no one’s proven that people will pay for that thing. So it’s just to understand where the risk is and then approach that first. I’d prove that out as true or false first before trying to approach distribution or marketing or anything like that. Because that’s the highest risk that no one will pay for this thing and it doesn’t… Like you reaching the right type of people won’t matter in that context. So I tend to prefer having competition. If it’s too competitive, then the risk becomes like, can you get distribution? And that’s the thing that I really focus on.  

Rob Walling:
Can you out market them?  

Ruben Gamez:
Yeah.  

Rob Walling:
Right. Then you look at what your skill set, what you think you can do. I want to say just two other things about how I might do this, find people. One is you have no audience, that’s fine, but still, if you have a Twitter account, you have a Facebook account, you have an Instagram account, whatever you have, post on there and say, if you’re following me, I’m an entrepreneur and I’m looking to talk to anyone who runs an in-person event, big or small, if you are or you know them, it’d be amazing if you… You know what I mean? It may do nothing, but it does, it takes three minutes. And so it’s like just promoting it. You say you have no audience, you probably have at least a hundred people that follow you somewhere. So that’s another way to do it. It’s not a silver bullet, but it might get you something. 

And then I’m curious for you, you started with SignWell, which is the best electronic signature app on the market. You started doing SEO way before you had a product, you were generating traffic. But my question for you is, had you already done all this research before that point when you started the SEO?  

Ruben Gamez:
The very first thing that I did was research on the distribution side, research different channels, SEO, and then, I’m trying to think of the timing. I felt like I started all that almost at the same sort of time. Once I felt good about distribution, then it was like, okay, let me better understand this. And it was not a case. So if I did something on the SEO side, it’s maybe I started with a couple of things that I felt were easier and I could start to get the right type of traffic, the right type of leads. But at the same time or very close soon after that, it was literally talking to all these people and understanding what I was getting myself into from as many perspectives as I could. So even though I felt like, okay, people are paying for this type of product and all this stuff, and the risk was on the distribution side, I still wanted to better understand why people buy and what distribution looked like. So I don’t know if that’s how I approached it.  

Rob Walling:
Yeah, that makes sense. Well, the reason I was asking is because 10 years ago, SEO was, I think it’s inarguable that it was easier. It was simpler than it is today. There were times when I was trying to validate some ideas that I never built. I was going to build some software for coaches, not more like sports coaches at universities, this whole thing. I never did because the validation didn’t come through. But I actually just, there were terms that had so little competition that I threw up a landing page and I built some links to it, which again, easier to do, but maybe it was like 12 years ago, you could do one of the private blog networks. Remember the PBNs? Is that what those were called?  

Ruben Gamez:
Oh. Yeah. That was fun.  

Rob Walling:
So I could literally get a page to rank in a week or two for terms, you know what I mean? And so would do that with a landing page that captured email, and then I would reach out and say, what are you looking for? Blah, blah, blah. So that was my way of doing it. Now, it’s not that easy today, but I still think if I were to launch a SaaS today, I would get a landing page up very early for me because of course, I’m always talking about it on podcasts. With Drip, I was spending a non-inconsequential amount of money, maybe a thousand a month, maybe more on Facebook ads when-  

Ruben Gamez:
Yeah, I remember you were doing Facebook ads.  

Rob Walling:
It was just a landing page. There was no SEO to it, and you could do AdWords. So here’s the thing, if people are searching for it, you do AdWords. If not, and you know the type of role then you run ads on, it’s either Facebook or LinkedIn is tougher to make it work. It’s just the way their tech isn’t as good, their AI isn’t as good, so you have to do a lot more manual stuff. But there you can target job titles and that’s the key. If you know the job title, you go there. If you know the demographics, psychographics, you go to Facebook. And if you want intent and there is actual volume, then you go to Google if you have any money to spend. 

So zero audience, but you can still drive people and look, could you drive them a landing page and say, opt in to learn more? Yes. Could you drive them to a landing page and say, I’m thinking about building this thing. It’s me in a little video. “Hey, my name’s Rob. Click the button below and just book a time with me. Here’s my Savicat link. And just book a time on my calendar because I want to talk to you.” You’re just trying to do stuff to get into conversations.  

Ruben Gamez:
Yeah, I did that with Twitter ads for SignWell, Twitter ads to a, I don’t remember the exact hook that I used. It was something related to costs for e-signature or something like that I think. And it was going to a survey and then I was pre-qualifying them on the survey just trying to find out if I wanted to talk to them. And if I did, then I’d offer them an incentive because this was cold, to talk to people it’s harder, super cold, especially off an ad like that. And if not, then I just added them to a list. So back then, especially when I did it, it was expensive, it was too expensive, I wouldn’t recommend it. But there are so many different ways of doing it.  

Rob Walling:
And to be clear, you’re not going for any type of ROI on these ads. This is a research cost.  

Ruben Gamez:
Exactly.  

Rob Walling:
Yeah. You’re not trying to make sales at all. You’re just paying for the privilege of speaking to folks.  

Ruben Gamez:
Yeah, you’re paying for the data.  

Rob Walling:
All right, so that may go down in history as the longest Startups For the Rest of Us question, but it’s good and thorough, dude, honestly. So probably the next book that I’m going to publish is called the SaaS Launchpad and it’s like a precursor to SaaS Playbook, what we just said needs to go in there. I literally made, the manuscript is quote, unquote done, but it’s not locked down. So I think I’m going to go back through what we just said and try to pull out a section. Because this is very, that’s the most in-depth, I think I’ve ever talked about this topic. So thanks for doing that with me.  

Ruben Gamez:
Yeah, it’s cool. And it was cool seeing you do it for Drip because I do remember that. I thought that was a really interesting approach that you had.  

Rob Walling:
Just scraping and clawing, trying to get people to pay attention. 

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Next question is about no code, code export.  

Ashish :
Hey, Rob, Ashish here. I’m calling you from Dubai. Relatively new listener to your podcast, maybe a little over a year, really enjoying the topics and the conversations. Thank you for what you do. I’m a non-technical person. I’m a marketing guy, but I want to build something and I don’t have a technical person. So I came across these no-code tools like Bubble, and I’m trying to see if I can build something out on Bubble, but I also, I came across this video on YouTube that talked about how Bubble does not allow you to export its code when you need to scale or when you need to move servers. 

My question to you is how much of that is an issue? Should I be paying attention to that right now? I don’t even have an MVP to show for. So is this an important discussion right now? Should I just try using Bubble, build a product, see how the market interacts with it, and then tomorrow if I need to scale, worry about that then? Or should I be worried about this right now from the starting process and look for tools that will allow me to export code? I kind of like Bubble because it’s comprehensive. The learning curve is there, but I think I’ve kind of got a hang of what is there. The other tools don’t seem difficult to learn, but yeah, I just wanted to know what your opinion on this is. Thanks.  

Rob Walling:
I like this one. No one’s ever asked it. We’ve talked about platform risk and no-code platform risk specifically about relying on a single platform and your entire business is built on it and how they can raise prices or they could go out of business or whatever. But the idea of, hey, if I can’t export the code from Bubble, should I consider building on it? What’s your take?  

Ruben Gamez:
The one thing I wasn’t clear about was exporting the code from Bubble, does that mean it gets to a certain scale, people are paying for it, then export it because now we’re going to have developers work on that or something like that?  

Rob Walling:
I was thinking two reasons. One, what if Bubble were to 10x their pricing tomorrow or go out of business and just disappear off the internet or which you said, which is a year down the line, six months down the line, I need to move to code. Is there a migration path or do I just have to build it from scratch? So I think either of those would be factors that you would consider.  

Ruben Gamez:
I feel like I would not worry about the scaling part of it, and this is even if you’re writing the code, I wouldn’t worry about it too much unless you have experience and you kind of know both the market and the product and all that. I think of it more as almost like an MVP or first version and I’d expect it to be rewritten or maybe rewritten from scratch from code. The harder part really is like, will people pay for this? Can I get distribution for it? And those are the things that I’d be focusing on. And it’s funny, about a year ago I talked to somebody that had a no-code app that was in the e-signature space. It didn’t do the whole thing, but it was pretty aligned. I was like, “Oh, this is interesting.” It was focused on some forms and they’d gotten some paying customers, but they were stuck and they wanted to sell it. 

So I looked at buying it and I did not buy it because it was no-code and the no-code stuff was super complex. It was like the app itself wasn’t that hard, so it wasn’t that complicated. The UI wasn’t doing all this sort of tricky stuff. It was just like there were so many, if then else, so many different conditions, so much stuff in the no-codes for away and it was super verbose, and it was hard to understand. It wasn’t like I could go in there and be like, oh yeah, I can get somebody that can quickly understand this. So I just didn’t, feel like it would be more like I would buy and have to rewrite from scratch, and that’s kind of like even if I’m starting it from no-code, I’d think about it almost in that sort of same way when scaling.  

Rob Walling:
Well, I agree with you on the answer that when I heard this question, I thought if I’m going to build no-code, there is no-code export. There’s no platform that lets you do that. So you either do it and accept that risk or you don’t and you hire someone to write code or write the code yourself if you know how. I feel like it’s pretty straightforward decision and you just had a cautionary tale around building a no-code, but I don’t think you’re saying don’t build something in no-code.  

Ruben Gamez:
No, no.  

Rob Walling:
Yeah, because I’m not either. I mean folks have heard my take. My take tends to be a balance, like no-code is a tool, know what you’re getting into, much like venture capital and funding, bootstrapper funding is a tool. Know what you’re getting into. There are pros and cons to it and I have entire episodes of both of this show dedicated to that as well as on the YouTube channel because an extreme view of never no-code or always no-code, I’ve talked to people with both and I’m always just like every example you’re bringing up for the never is actually not, or the always is this, the one that drives me nuts of anything SaaS, everything can be built with no-code and you should. 

And I’m just like, “No, that’s a factually inaccurate statement.” So like anything, there’s a nuance, but thanks for that question. So the end result is don’t consider this an endorsement, but in my shoes and in Ruben shoes, if we’re going to do no-code, that’s one of the factors you have to take into account when you’re going to do it. And so I would not be bothered by the fact that you couldn’t export the code. Our next question is about going horizontal or vertical as this OP spins out an existing app that he’s built for consulting clients.  

Dean:
Hi Rob. I’m Dean, I’m a freelance software developer. I’m Dutch, but I live in Madrid. I was recommended your podcast by two friends who both have successful SaaS businesses and also have been to MicroConfs. So before I raise my question, I would like to give you a bit of context. For the last four years, I’ve been building this SaaS product for a client. It’s a tool for historic and geographical research that allows researchers to create and navigate relational and geographical data in one map center tool. And I built and designed this SaaS product from scratch with my client and we started an MVP, then we got some important clients on board and after four years it became quite a feature rich application and a good few high-touch customers with five-digit subscription fees are on board now. So think of governments and utility companies. So it will probably give me a steady stream of income from consultancy work. 

But now I’ve seen this was a success, I would like to have a bootstrap size of my own. And I would like it to be a spin-off of this SaaS, I learned a lot of tricks of the trade. I cannot copy the product, but I can use concepts and technology. My clients are happy with that to build something similar. So knowing that the original is a high-touch vertical SaaS in a very niche market, a lot of its success depended on the context and knowledge that my client already had. My question is, should I try to find another vertical in another niche possibly with a partner that has context in that niche, repeat a trick or should I extract some of the features, simplify them, go for a horizontal low touch approach? I have to say, I prefer the latter. I think it’s more bootstrapable, but I’m curious to know what you think. Thank you.  

Rob Walling:
So this is a super interesting question. What do you think about it, Ruben?  

Ruben Gamez:
Yeah, it is. I’m curious what your answer will be.  

Rob Walling:
I can go first if you want.  

Ruben Gamez:
Yeah, why don’t you go first. I’m very curious.  

Rob Walling:
So my answer, what he’s really asking, he’s saying should I go into another vertical where it is, he’s implying that will be higher touch sales, higher ticket price and be more of an enterprise mid-market sell or go horizontal and only pull a couple pieces out and make it this self-serve. I presume 10, 20, $40 a month, whatever self-serve is, make it this low cost, he said more bootstrapable thing. And I don’t necessarily agree with the premise of that framing even. That acts like there’s only two ways to go and I don’t think there are. You could go with horizontal and just make it expensive. You could go horizontal and still do sales calls and do demos and close. The horizontal and the vertical is separate from the other factors. I think they’re less reliant on each other. In my head, if I were to do it, it does depend on exactly what… I’m struggling a bit because I don’t know exactly what the software does, so I almost want to know more detail. 

To me, if it worked in one vertical and you can stay in a vertical, a different vertical, that’s where you can charge the most. And although it will be enterprise sales and onboarding and this and that, to me I would go for high ticket price if you want to grow this to a million or multi-million dollar SaaS company. Those are the patterns that I’m seeing in the companies that I’m invested in. Now with that said, I am a marketer. Me personally, everything I’ve ever built, the starting ticket prices, like Drip was $50 and that was the most expensive SaaS I ever sold. That’s the starting price and obviously the average revenue for account was much higher than that. But I’m not a salesperson and I wouldn’t love starting an enterprise company where you get five new clients a year or 20 new clients a year and it’s 2000 AC, no 2000 per month each. It’s like what a… That’s just not my gifting. 

And so in his shoes, I would either not do it or I would figure out how can I make this horizontal and how can I make it more of something that I can market? But that’s not self-serve either because self-serve implies that it’s low annual contract value or low average revenue per account. So I’d be wondering, is this generalizable? Is the big question. Is anyone looking for it? That’s probably the first thing I do. We just talked about doing research. Everything we said for the very first question I would do for either a vertical or a horizontal play. Horizontal is a lot harder to do it because now who are you contacting? You reaching out to the world? Are you going on Hacker News and Reddit? You know what I mean? That’s the hard part. It’s like does anyone need it? 

Because if I’m just going to go, if I have code and I have ideas and learnings and I’m going to say, cool, I’m going to launch this new novel thing that really no one else is doing right now. It’s this cool thing that can do geographic with historical stuff and I’m going to try to sell it. I think of ancestry.com because there’s history, right? Well, that’s basically a B2C play, isn’t it? Or B to prosumer at best. I’m not going to be in that game. There’s no way. So if that’s the model where this works, then no, I’m not doing that. I’m going to go for the high ticket vertical enterprise play. That’s my thinking. I realized I’m thinking out loud, but what do you think about all this?  

Ruben Gamez:
So my thinking is pretty similar to that except that on the vertical versus horizontal… So it’s tricky. The way that he’s framing or saying, going horizontal is I agree, is implying a lower touch, lower price type product because he said simplify, sort of strip out the stuff. And when you do that, that’s basically what you’re aiming for. So in my space with SignWell, we sell to the low end of the market. We sell also to mid-market going towards enterprise and for our core product we have an API and then we have the core product. So for the core product, for us to be able to be horizontal and sell more towards mid-market and going towards enterprise, we needed to build more. We didn’t need to have a, we couldn’t do it with a simple product because larger companies and enterprises, the ones that are going to pay more for the product, even across verticals just have all sorts of different needs and the sophistication levels just higher. 

So the product needs to be more sophisticated, needs to do more. We had to also do more on the compliance and security side and I feel like it’s a harder thing to do. I feel like it’s probably one of the hardest things to do to be horizontal and go for the enterprise. I think it’s easier. It’s all kind of hard, right? Different types of hard. I think it’s a little easier though to stick with enterprise and a higher price or mid-market or whatever and go after a specific vertical, especially if… So in his case, he’s already done it. He has that experience. This is another thing, it sounds super easy to just be like, oh yeah, we’re just going to go with, and I hear this from time to time, with this more simple product, go self-serve and all that stuff and that, there’s a lot that seems great about that, but the reality is it’s a different game. 

It’s like different company and team DNA, it’s different founder, DNA. It’s a different skill set. And you need much bigger numbers. The way you approach things is just different. And if he already has the experience and the skill set to do it for one vertical, I’d kind of leverage that and take a similar approach for another vertical.  

Rob Walling:
That’s how I think about it too. The higher price, typically the lower the churn, the faster the growth. We see this in the state of independent SaaS when we ask about churn and lifetime value and ticket price and then we compare it to growth, it’s obvious that the higher [inaudible 00:32:26] value, lower the churn and higher ticket price, the math just makes that make sense, but we see it in TinySeed too. We see that, like I have a list of all the companies that are doing seven figures in ARR that are in TinySeed, and it’s a good list. One commonality you’ll notice is almost all of them, some of them have lower priced plans like SignWell where you can sign up, is it like $12 per person? But they also have a thousand dollars a month plan, a $2,000 a month plan, a $5,000 a month. There’s one of them that literally has a couple of contracts, ACV, quarter million dollars, and those are harder to sell. 

They take longer. You know this. You’re doing sales calls right now selling this stuff, but those are the ones that grow you quickest. Even with Drip, I talked about it being $50 starting price point. Most of our growth, especially as we got later, were folks paying us between $500 and $2,000 a month. It was the big lists that made them moved the needle for us. And that’s the pattern we see over and over. So the indie hacker dream or the bootstrapper dream of course is to have a $20 a month product, self-serve, everybody just handles it. You got a KB, there’s no support ever. Everything just [inaudible 00:33:33] on a beach in Bali or whatever. And that does exist, but that also plateaus pretty quickly. If you want to build a three, four, 5 million dollar business like that, it’s few and far between.  

Ruben Gamez:
Yeah. The numbers that you need are just so big. I think people underestimate the scale that they need to get to that when you’re talking about a $10 a month type of business.  

Rob Walling:
So thanks for that question. Hope it was helpful. Our next question is from Francesco, how to approach a prosumer product.  

Francesco :
Hey Rob, it’s Francesco from Berlin. You are always advise against business to consumer product as they’re difficult to monetize and recommend in start building B2B SaaS. I totally agree with this, but I think there is also sort of a third category in between. There is the business to consumer or business to professional that we rarely discuss about. I want to get your thoughts about this space and I want to understand how would you approach such a business to clarify, I mean this kind of product like Notion or Linear or GitHub that they offer both a team or an enterprise plan but also the targeted for the individual use and they might be paid or free for the individual. 

I wanted to understand whether you see meaningful changes compared to a classical B2B SaaS and eventually which ones? And specifically if you were to build such business, if you first optimize for an individual to sign up and start using it and then potentially selling them to a team plan or the opposite, if you would go first after the company, the team’s plan and then eventually allowing the user to sign up and use it for a personal use. Thank you very much.  

Rob Walling:
So I feel like Francesco is talking about two different things. He talks about B to prosumer, B2P as we can say, and I do think we can talk about that, but he also gets a little bit into product-led growth and dual funnels. So I think we can talk a bit about both of those because those are not necessarily, those don’t have to be the same thing. You can make most of your money from enterprise and have a dual funnel so you’re serving prosumers or VSMBs or consumers for that matter. And then also have product-led growth and it can all be present or it doesn’t have to be. So I guess to start with, he asks about B to prosumer and he agrees he doesn’t want to do B2C, but I think he’s asking what is the difference? Is B to prosumer more similar to B2C, or is it more similar to B to SMB? 

And I’m actually going to, before I kick it to you, I want to go through a few things. I know I often say B2C and B2B, that implies there’s two, right? It’s a dichotomy. That’s not at all what it’s like. There’s B2C, there’s B2P, prosumer, which is, I will say it’s people who are making money from something but usually not doing it full-time. That’s how I define it. Like, photographers, lot of wedding photographers are like this, doing things on the weekend. A lot of fitness coaches are like this, B to prosumer. I think most indie hackers are this, where they make full-time living from other stuff and they’re building stuff on the side. I know a lot of interior decorators are interior designers who do it as a part-time thing. I think folks selling stuff on Etsy, most of those are prosumers where they’re making money, but it’s not their full-time income. 

There are a handful, but it’s like anything, it’s a power law. There’s a small number who are doing it. Then there’s, B to very small business. VSMB, B2SMB, B to mid-market, B to enterprise, B to government, B to schools. Each customer type is different. And in fact, at TinySeed I believe we’ve invested in companies who do every one of those, except I do not think we have anyone who sells to consumers. I mean we are B2B SaaS, so it makes sense we didn’t do that. I can’t offhand think of anyone selling to prosumers, but I do know folks in the MicroConf Community like Nate Grahek who’s been on the podcast and attended MicroConf, he has StickyAlbums which goes after photographers. And I’ve talked to him quite a bit about the challenges, the ups and downs of selling into that space. So with that preamble, Ruben, what are your thoughts on this question?  

Ruben Gamez:
Yeah, the whole categorization of what’s prosumer and business and all this stuff is interesting. To me, I think of it a little bit differently than you do. So B2B, like business to business, to me, anyone in a business context, if they’re making money off is a business. So that would include freelancers and photographers and all that stuff. A prosumer to me is somebody like, and Craig from Castos I feel like sells to multiple, right? Somebody with a hobby that spends on software. So podcasting software is a really good example or podcasting hosting because there are a lot of people with podcasts that do it as a hobby, like founders or I listen to video game podcasts, all sorts of different MMA podcasts sometimes to where it’s like they’re not really making money off of these things in a business context, but it’s something that they’re spending and photographers sometimes fall under that category. 

Some of them are like they have clients and some of them are like, no, I’m spending money on this equipment and the stuff for me and for my own hobby and uses. So I don’t know that it matters too much, but I think the part that matters is that these are all different segments and how you approach them really makes a difference. What type of product that you build and how you get distribution. So if you’re, and let’s use Castos is a good example. So if you’re bottom of the funnel type content, buyer intent content will bring in a mix across all of these groups. So something like ranking for best podcast hosting will bring in everyone from somebody who’s doing it as a hobby but needs podcast hosting, somebody who’s doing it part-time, somebody who’s doing it full-time, a company that needs a podcast, a publication. 

And then once you start to move away from that, you kind of often need to understand the different segments and where they live, where they hang out and how to approach each of the different ones and how to do the messaging for them. So I feel like it’s sort of relevant from a distribution standpoint and from a building a product standpoint, they’re two, a couple ways of, I prefer, my preference is to start with bottom of the funnel and get a mix of the different types of segments so that I could talk to them and see them as customers and understand what I like better, what’s my preference as far as, not just who’s paying more, but who’s excited about the thing that I’m building in the way that it’s positioned maybe or if I see an opportunity to serve a certain segment. And I just like that variety early on and that’s kind of how I would approach it. 

It’s hard to approach it from a general marketing sense of just getting a bunch of tension and people and going really broad across all these segments. If you’re not going bottom of the funnel or by your intent, by your aligned sort of way of getting leads and traffic and customers, then I’d be very deliberate about picking a segment and starting with that. I think a lot of it has to do with personal strengths. Going back to the original question of how does this work, how do people sell, how do these different segments buy the software? And then what’s the opportunity I see and what do I like?  

Rob Walling:
Yeah, I think that makes a lot of sense. The way I think about prosumers is they are very similar to consumers. They are price sensitive. They churn at higher rates because usually it’s either, as you’re pointing out, you were putting hobbyists into prosumers, right? And whereas I was saying you have to make money. So we have a slightly different definition of it, which is fine. They’re going to churn way higher than businesses. They’ll churn similar to consumers. I don’t know if it’s exactly, I mean I’m sure it depends on the space, but know you’re going to have a high churn, low price point, high price sensitivity, therefore you are going to need a very wide funnel. Lot of incoming traffic as you said, SEO content, whatever it is. You’re not going to be able to buy Google AdWords and market to prosumers. I say not. 

I never want to say you can’t. I just am very, very skeptical that you’ll be able to attract folks in the prosumer space at any type of volume that will make it make sense with Google AdWords. So prosumer businesses, I know multiple founders who have built, definitely mid-six figure ARR SaaS companies for prosumers. I actually know multiple who’ve done seven figures and everything I’ve just said checks out. They’re like, man, quite a bit of support. Man, the churn is really high. I tried to raise my prices and usually they’re unable to raise prices the same way we were with enterprises. But what they do is they wind up adding a bunch of, you have this thing and now you have a thousand or 2000 prosumers, and then you have your email list of another 20,000 or whatever. So then you just build a second product alongside it and a third product or a module that you can charge. That’s how you get more average revenue per account. You can’t just do the typical B2B playbook of raising prices, charging annually, all that stuff.  

Ruben Gamez:
This just reminded me of who was it, Buffer, I think it was Buffer that ran into this problem. So they were able to build a very successful business with big numbers. They got there and they were still got to a point of where they were struggling with, okay, how do we grow this more and trying to increase the average revenue per customer and never really did, never really got there, really smart people working on it. It is a hard thing to do.  

Rob Walling:
Yeah. And they came out, who’s the founder that’s still there? Is Joel?  

Ruben Gamez:
Joel. Yeah.  

Rob Walling:
Joel’s the one that’s still there. Yeah. He tweeted within the last month where he was like, we kept trying to, and they’ve been declining for three years in revenue, but I mean it’s still like 17 million ARR or something. It’s a boots start company. But he was saying they kept trying to fight the churn and they were trying to go up market and do this and that, and they eventually decided we are for makers and creators, which are solidly prosumers usually because most of them not doing it full-time want to do it. And so he said, we just embraced it. We know our churn is going to be this and we either will widen our funnel or we’ll just ride this out because they will plateau in a good way. They’re going down now. So you want to plateau in that point because you want to level out and he’s saying, we think we’ll level out this year in 2024, and I’m sure the number’s going to be 15, 16 million ARR. 

And look, that’s not a bad business. It’s not a business… I personally would get bored with that. I need something to be going up into the right, otherwise I lose motivation and I’m sure, and it’s hard to hire really good ambitious people because they don’t want to work on a declining product or a flat product, but I’m not going to throw shade at Buffer or anything they’ve built because it’s a hell of a business.  

Ruben Gamez:
Yeah, it’s still a nice business. That brings up another interesting point too is that sometimes, so it’s super easy to just be like, well go after businesses because the retention is better and they pay more and you just need less customers and all this stuff. But the reality is that sometimes the opportunity is just kind of maybe on the lower end or maybe in a business like Buffer where it’s like a lot of prosumer, a lot of freelancers, and that’s the easier path. But then just kind of know what you’re getting into, what kind of issues you might hit.  

Rob Walling:
I had Christopher Gimmer on the podcast. He’s spoken at MicroConf a couple of times. Snappa.com. Yep. It is exactly this. It’s a high churn, relatively priced sensitive audience, but he and a co-founder bootstrapped it to, he’s pretty public about their numbers. I think they’re doing a million and a half or something like that and in that range, totally bootstrapped. And they just eventually realized, “Hey, we can’t grow this business anymore.” But they’re basically split. I mean, they’re super profitable and now they’re launching a second product and they just accept that there was a great opportunity that they took advantage of and they can’t outrun that churn, but they don’t need to because now they have this cash flowing business that can help them do the next thing and the next thing and the next.  

Ruben Gamez:
Yeah, great example.  

Rob Walling:
And I think the part of the question he asked about Notion and GitHub having these free or super cheap plans, I think I pay $4 a month for GitHub and I have for years. I just don’t even know if I cancel it if I’m going to lose anything. So I just don’t ever, I’m just like, yep, every month I get billed four. I literally have no idea if there’s a repo that I need, but it’s like I can’t be bothered to go check the account for four bucks. And I’m a little bit like, I bristle a little bit when entrepreneurs ask about this because when people use Steve Jobs as an example, or Basecamp or these outlier folks, I feel like GitHub and Notion have how many hundreds of millions of dollars in the bank. And I don’t want to say we can’t learn things from them because we can. 

Like, HubSpot’s amazing. And I know we learned a lot about marketing, inbound marketing SEO from them, but I think it can be dangerous to look at a company like Notion and GitHub and say, well, if they’re doing it, then I also am going to have a free plan or a $4 a month plan because you don’t know how their economics are actually working. And if you don’t have the dual funnel, but at the same time, I’m not saying don’t do it, but I’m saying SignWell and Castos both have plans that are, well, yours I think starts at $12 a month and Castos lowest I think is $19 a month. So it’s somewhere around 20.  

Ruben Gamez:
We’re 10 and eight.  

Rob Walling:
10 and eight. All right. So low and that’s per seat. So feasibly if one person’s there. But yeah, this is very much low. You need a lot of customers to make it. But both of you have dual funnels and Castos has higher end hosting, but they also have the Castos Productions, the editing service that I think in production service it’s 500 to a thousand or 2000 a month. And SignWell, you have your API. We’ve talked about it on the show.  

Ruben Gamez:
Yeah, even on the core side, we have just companies with a lot of users that we sell into.  

Rob Walling:
And so, I don’t want to speak for you, but my guess is if we looked at the amount of MRR that comes from $10 plans for you and the amount of MRR that comes from people paying you a hundred and up or 500 and up, that it’s probably significantly more that are in that latter bucket. Is that right?  

Ruben Gamez:
Funny enough, it is actually weirdly, and I say weirdly because it’s usually not the case, equally distributed.  

Rob Walling:
Is it continuing to be that or is one catching up and out running the other, or do you think it’ll stay 50-50? Because you’re right, that is very-  

Ruben Gamez:
We are really strong on the lower end. So they’re growing kind of equally, the now, especially on the API side, that’s starting to increase. But yeah, it is a bit of a weird distribution because that’s typically not how it plays out.  

Rob Walling:
So listeners and Francesco, if I were thinking about this, just to be clear, most of, I have insight into a hundred ninety-something companies and most of the companies with this type of dual funnel, we have either free on the bottom end or super cheap, and then you have people paying you 500, a thousand, 2000 and up, they make the bulk of their revenue. Oftentimes it’s 70, 80% of their MRR comes from the higher end, sometimes more than that, to be honest. So if Francesco’s talking about that, about a GitHub, Notion type thing, and oh, my guess is too, I don’t know, is GitHub public? Because we could look at their S one and figure out where their revenue actually comes from.  

Ruben Gamez:
I feel like they are, but I’m not sure yet.  

Rob Walling:
And Dropbox is the same way where it’s like, oh, they’re like a B2C player, aren’t they? No. Have you ever looked at how much all their revenue is business? Not all, but you get the idea. So if I were to put that in context then, as Francesco’s thinking about prosumers, can you have these $4 plans, $10 plans, $20 plans? Yes. But if I were going to do it and I wanted to actually build a great business, I would make sure that this product that serves Prosumers also has an enterprise customer base, an enterprise use case and enterprise and by enterprise look, mid-market, whatever, 500 and up, 300 and up, like some number. 

I don’t literally mean enterprise because that’s actually massive contracts, but that’s where it can be dangerous to assume that since GitHub and Notion are doing something that I can do that too without knowing that the second part, which is, but you also need the high end. Because if there’s no use case for them, if you’re building something for individual fitness trainers for five bucks or 10 bucks, I don’t know. Are there places that are large enough that will pay you $2,000 a month for the same software if there’s team functionality? That’s the question. That’s the kind of thinking that I’d be looking at if I were thinking about this kind of business.  

Ruben Gamez:
Yeah, I agree. The Notion and GitHub, somebody, I think it was like, was a podcast from Brian Balfour, I forget its name. They were talking about like a lot of these businesses that seem like they’re B2C or seem like they’re lean consumer, they’re actually enterprise or enterprisey businesses. That’s where most of the money comes from.  

Rob Walling:
That’s what we see too. Well, sir, it’s been amazing having you on the show today. If folks want to keep up with what you’re up to, they can see your spicy hot trolley takes on Twitter at Earthlingworks, and of course, signwell.com for the best electronic signature app on the market. Thanks so much for joining me.  

Ruben Gamez:
Great being here. Thanks.  

Rob Walling:
Thank again to Ruben for joining me on the show again this week. Hope that was insightful and helpful. There were actually, I really did like the listener questions this week, especially that first one. There’s a reason I let it go 15, 16 minutes because there was a lot to talk about there. 

Thanks for listening this week and every week. This is Rob Walling signing off from episode 711.

Rob Walling:
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Welcome back to another episode of Startups For the Rest of Us. I’m Rob Walling, and today I go through listener questions and listener comments. I received several comments regarding episode 704 where someone had written in with the question, “I really like my day job. I don’t have a burning desire to be an entrepreneur, but I would like to be one. Do you have advice for me?” 

And I gave advice like, well, I had a burning desire and most of the entrepreneurs, actually all the entrepreneurs I know who’ve had success, had that burning need to do it. So if there’s a listener out there who is struggling with that motivation or who didn’t have a bunch of motivation and found success, please write in. I also said maybe just try some things and if you get lucky, great, and if not, it’s a win-win because you can keep the day job. So I have responses to that as well as a couple comments about the now infamous April Fools episode. And of course I’m going to answer listener questions. Stay tuned. 

Before we dive into that, you should check out MicroConf Connect at microconfconnect.com. This is our online community and forum. We host it in Slack and we’re approaching 7,000 members. They’re bootstrapped and mostly bootstrapped SaaS founders. Recent conversations in Connect including a debate about magic sign-in links, how long you should spend diving into a niche before deciding on the product offer, how to safeguard your product from misuse during free trials, at what point in your journey should you invest in a conference booth and more. It’s a vibrant and highly moderated community, very high signal to noise. If you’re looking to find and hang out with other misfits like you and I, head to microconfconnect.com. 

So to kick us off, I received a response to that episode, 704, around do you need a burning desire in order to be successful? And this first one, I’m going to keep anonymous. He wrote a really well-written and well-thought-out lengthy email, so I’m going to summarize it. 

He says, “That caller’s question really resonated with me, and I kept pushing the rewind button on my walk and listening to that snippet over and over. It’s just one data point, but I believe I support your general experience with startup founders. I’m a previously bootstrapped founder with a successful exit through a strategic acquisition.” 

And in summary, he and a co-founder built an app that they sold for 10 times ARR. And it’s a life-changing amount of money, but it’s not enough money that he never has to work again. And so he said, “It’s been hard for me personally post exit, trying to find my place again. I’m consulting 20 hours a week making great money, so I’m fortunate, but I’m also kind of miserable because,” and I like this quote, in quotes, “my volume is turned down to a two like you mentioned.” 

So I must have … maybe I said that in the episode. I know that as an entrepreneur, the volume’s always at, what, 11? And then you go get a day job. I remember 15 years ago or whatever, I would be consulting or I’d be launching products and it was super exciting, but it was super frustrating and scary and uncertain. And then I would say, “I want to go back and get a day job.” And I would get a day job and I would be so bored and so frustrated. And so I think that perfectly encapsulates that my volume was turned down to a two. 

And so back to the email, “I have another bootstrapped product that I’m spinning up and I have multiple other opportunities, but I haven’t committed to any of them. I desperately miss shipping valuable products to users, that dopamine hit. I want to fly again and have that feeling of same day turnaround fixes for users, new features to solve real problems, et cetera. I’ve considered going back to a day job, but instead I think I’m going to use this time to hit it harder on my startup projects while I’m consulting part-time.” 

And then he wraps up with very kind sentiment, “I hope you get some level of satisfaction from how life-changing your podcast is on so many levels. For every person who writes you, there’s probably 20 others you don’t even know about.” That is actually very meaningful to me. So thanks, Anonymous, I really appreciate the insight. 

And he’s basically talking about without the motivation, it’s been really hard to get back in the game. And I think that can be a second-time entrepreneur, or if you have a great day job that you love, it can be hard to find the motivation to do the grind. So thanks so much for writing in. 

The next email is on the same topic and it’s from Paul. 

Paul: 
Hey Rob,  I’m a co-founder at WonderProxy, and a scatter-shot listener to Startups For the Rest of Us. WonderProxy has been around for over a decade now, we do over a million dollars a year in sales, full time staff beyond the founders. We’re doing okay. Back in episode 704 you had a question from someone with a comfortable job who wasn’t sure about making the leap. You talked a bunch about the burning desire or need, and wondered if it was a requisite for starting this sort of thing. I don’t think my co-founder or I ever really had a “burning desire”, neither of us is particularly passionate about the space. We help people test their website from around the world, we’re not curing cancer. I think we had two things going for us that let this work for us. First, we both loved building things: I’ve loved programming since childhood, my co-founder has loved working on servers since college. Working on the company was something we liked doing in our spare time. I was excited to come home from work and keep programming. Second, 0ur day jobs could give us the space to let the company grow at its own pace. We didn’t have a full time employee for the first five years. New customers let us expand the service, or pay ourselves some amount of money. So there wasn’t any passion or burning desire, but there also wasn’t any pressure. Our day jobs paid us well. The company grew slowly over a period of years until we made our first hires. Then, things accelerated and I eventually went full time, but was able to do so without risking my salary (which was handy, by that point I had a kid and a mortgage). My suggestion for your listener would be to find a problem out there they think they can solve by doing something they enjoy. Stick that solution out there, and invest just bits of money and time into it. In my view the super power that comes with this approach is that giving some change (like a new landing page, or ad copy, or whatever) a month or two to work is easy (You’re busy at work!). Where fully invested founders act like hampsters on speed, changing things daily, never giving their product enough time to actually see results. Hope this helps them, thanks, can’t wait for the next episode.

Rob Walling:
Ooh, see? I actually want to dive in here. I didn’t say a burning desire about the space, I said a burning desire for freedom, or a burning desire to be an entrepreneur or to start your own company or to own your own thing. That’s the burning desire I had. Many of the early products that I owned, I didn’t necessarily care about the space, but there were opportunities for me to make enough money to quit the day job. And I felt as long as I did that ethically in a way that provided value for what people were paying for that that was fine.  

So thanks for writing in. I think it’s an interesting take and I do think that it’s an example of folks who put it on autopilot. Now do I think you’re less likely to find success that way? I do. I think that if you’re driving day-to-day and you have this burning desire to get to some end result, he’s right, you are a hamster on speed, but that can be beneficial when you’re an entrepreneur and when you’re trying to get to an end goal. 

And do I think you flail a bit and you probably waste some cycles? Probably. But do I think that focusing on a product and … I did at nights and weekends. So I worked a 40 hour a week day job and then depending on the week, and it was before we had a kid. And then after we had a kid, it might be between eight and 20 hours of nights and weekends that I could put in. 

And of course that was not getting enough sleep and it was not working out. It was doing all the things that you don’t want to do. But that allowed me to start building up side-income to the point where I actually did back off to four days a week at my day job. And I think in the end I was working three days a week, so like 24 hours a week and building products on the side. And so I love the fact that folks wrote in with their experience and I really appreciate their thoughts. 

My next email is on the same episode, but it’s on the ideal or the right trademark tech stack. And Daniel writes in, “When I started working on Codelantis, which is a code review app, I chose a tech stack that I knew and that is reasonably scalable, front and back end in different languages. Only later I realized this wasn’t an ideal choice.” 

“The best choice for an early stage product like mine is one that lets you iterate quickly and easily. I’ve switched to a single language repository,” so for him it’s TypeScript and Node.js, “a couple months back and the difference in development pace is like night and day, which also means that I’m not only shipping faster, but that my motivation stays up too. And this is arguably even more important for a nights and weekends project.” 

“So my TL;DR is don’t worry about scalability, worry that you can’t iterate fast enough, lose motivation, and no one will be using your product.” So thanks for writing in with that, Daniel. I think you need to worry about both. I don’t think I agree you don’t have to worry about scalability. 

There’s this weird balance of back in the day when I was a contractor writing code for third parties, some of our developers on my team would, we call it gold plating, and it’s over-engineering everything. And they would say, “Well, it’s for this big bank and maybe they’ve got a kajillion users.” And we had to have a balance. We couldn’t fall over when there were five users, but we couldn’t plan for five million, and we had to have a reasonable, pragmatic approach to making these things work. 

And I think picking your tech stack is similar, have a reasonable pragmatic approach. Will it scale well enough and will you be able to iterate quickly? I know that there are tech stacks that can do both, and I already weighed in on this whole topic. I appreciate Daniel’s insights on choosing the right tech stack. 

All right, so the April Fool’s episode, I have received more tweets, DMs, and emails about that episode than perhaps any other episode in the history of the podcast, so I really appreciated it. I did not think it would get that kind of response. 

I will give you some inside baseball that I had a real difficult time recording that episode because if you know me, I tend to be what? Pragmatic, logical, I tend to tell the truth. I try to tell you how I actually feel about things. If I don’t know the answer, I try to say, “I don’t know.” If I’m pretty certain about something, I try to say, “90, 95% certain.” And to say something that is just not what I believe and to actually steel man the arguments was challenging for me. 

I don’t think I’ve ever done this before, but I came into my office, I didn’t hit record, and I just recorded the whole episode without recording it. I just did a monologue in my office to figure out am I capable of doing this episode with a straight face? I did the whole thing and I thought, “You know what? That wasn’t that bad.” So then I hit record and recorded it. I still struggled when I listened back. I can hear myself acting a little bit, but it’s so cool that it didn’t come across like that for most people. So people were shocked. 

What I really appreciated were folks who wrote in and said, “You had me until you said this.” And for some people I think like Derrick Reimer said, “The moment you said that, I’ve rethought my stances based on thoughtful conversations on Twitter and Hacker News, I knew this was bull (beep). And Ruben Gamez, who has been a many-time guest on the show said, “The moment you talked about lowering prices, I was like, ‘Ah, he’s making it up. And this is a special episode, it’s got to be April Fool’s.'” He knew it right away. 

Most people, it seemed to take five to seven minutes. I think the entire diatribe was about 11 minutes before I gave it away. So a lot of people made it halfway through. And one such listener, Jakob Ericsson wrote in and said, “At first I was all for it, ‘Hell yeah, finally Rob is seeing it my way with consumers being great evangelists for products, B2C is fun.’ Then I started thinking, ‘Hey, he’s really having second thoughts on a lot of things. I wonder what people will think about being told things in such a convinced tone when it’s really the opposite of previous talking points. Churn is a good thing now?’ That broke the illusion for me.” 

Yeah, it was either churn or two-sided marketplaces. There were certain points that just became kind of ridiculous. So I appreciate you being a good sport if you listened to the episode and liked it and reached out. I haven’t done an April Fool’s episode in I believe six or seven years, so I felt like it was time to do it. 

All right, now let’s dive into a listener question from Mike. Mike says, “I started a company last year to address a sell shovels dev tools problem for this AI wave. I’m getting a consistent message about the features users need for me to be a viable option. My only pre-existing competitor has begun building for this use case and a new VC-funded competitor has entered the race. Realistically, there will be more coming.” 

“I take the competition as a sign I identified a real need, but I have strong doubts I’m going to be able to compete given how the ecosystem is shaping up. It’s a challenging problem in a complex and ever-evolving space. Lacking funding, revenue, and co-founders, my options seem limited. How should I handle this situation?” 

Yeah, so this is the double-edged sword of entering a, quote, unquote, “hot” space is, it’s inevitable if you’re in a space with a lot of opportunities growing quickly that a bunch of venture dollars are going to get poured into it. That doesn’t mean you’re going to lose, it’s just going to make it harder. I talk a lot about this in Start Small, Stay Small and probably should have talked a little more about it in The SaaS Playbook to be honest. 

But in The SaaS Playbook, I talk about why niches and verticals are usually so much better for solopreneurs who want to lifestyle it. A big mistake I see folks making is thinking I can build a venture-scale business or I can build a business that will probably need a lot of funding, but I can just bootstrap it. Or I can build in a market where there’s going to be a ton of funding and probably just bootstrap it. And while it’s possible, the odds are stacked against you. 

And so if it’s your first time, you can either do the step one business or you can restart small, stay small and look for out-of-the-way niches where no venture money is going to enter it. And am I saying go somewhere where there’s no competition? Of course not because there probably doesn’t exist a market of any size at this point that you can launch a software product into. But this is the double-edged sword of oh, there’s opportunity and there’s a bunch of people talking about it, therefore there’s going to be a kajillion dollars brought into it. 

Now can you still win? Can you still beat venture-funded competitors? Of course. If you know what you’re doing and you’re experienced, I would compete against venture-funded competitors. In fact, I did. Drip was, what, the 300th email marketing application? 

And our competitors who, I think VentureBeat did a top 10 marketing automation providers, maybe it was top 15, and we were number, I honestly forget the number, 10 or 11, and everyone ahead of us had raised a minimum of $20 million. Some had raised hundreds of millions and yet there we were in a little closet in Fresno, California at the time with five employees just scrapping. 

So yes you can, but I was an experienced entrepreneur. I had put 150 to $200,000 of my own money from my other projects into building it. I knew what I was doing, I had a network, I had an audience, I had blah, blah, blah. I had all these unfair advantages and if you don’t have that, it really becomes an uphill battle. 

So back to Mike’s question, how should I handle this situation? There’s a bunch of things you could do. You could look to get acquired. You could throw your flag out. Now here’s the thing, you’re going to get acquihired. They’re going to want to hire you as an engineer, probably pay you a bunch in stock, but if you can get … 

I saw someone who had 70K ARR, maybe it was 75, and they got acquired for 10X ARR. So they got three quarters of a million dollars for a fairly early stage product. If you don’t have that kind of money in the bank and that is life-changing for you and you have to work for a year or two in order to get it, I don’t know, that’s something I would have done in my younger years. So in thinking about acquihire, often that can cut both ways. It can be a good deal or it can be a crappy deal. 

You mentioned you have no revenue, which I think that’s probably the biggest problem here, is if you’re going to build, if you’re going to bootstrap, please go towards revenue. Don’t do the free plan. And if you’re entering a space where everyone has a free plan and therefore you need it to compete, think twice about whether or not you want to bootstrap in that space. I feel like a lot of folks, I’m not saying Mike’s doing this, but I do see folks entering these hot spaces and not realizing that the competition is stacked against them if they don’t have revenue co-founders and funding. 

So anyways, back to my answer. You could look to get acquired, which is harder than it sounds because if you go out looking to get acquired, then you look desperate and people are going to want to not pay you very much. But build and get on the radars, and if they approach you, you say, “I’m not really looking to get acquired really early, but sure I’m open to talking about it.” You play coy and then you go along with it as it evolves. 

Another thing you could do is just walk away, do something else. You could take what you have and focus on a vertical where there isn’t necessarily VC dollars. I don’t know. Without knowing a bit more about your space, I don’t know if there’s a vertical or a way that you can position down and take a corner of the market that they are not going to go after, but that your tech can translate to really easily. So to make up an example, instead of building the AI CRM for everyone, you build the AI CRM for realtors or for freelancers or for salespeople at SaaS companies. You get the idea. 

Another option is to go raise funding, fight fire with fire. And either go to something like a TinySeed, go out and try to raise angel money, go try to raise venture. If venture’s going into the space, it’s not as hard as you think to be able to raise funding. And yes, gasp, Startups For the Rest of Us, Rob the bootstrapping podcaster talking about raising venture funding. Well, I’ve been saying that for 15 years. It’s just a tool and if you need that tool to succeed in your space, then of course I would consider raising it. 

You have a big decision to make, Mike. Obviously this is a tough choice with a lot of things at play, and of course it depends on the specifics. I can’t even say, usually I say in your shoes, here is what I’d do. And really without knowing all the details and just sitting down and talking about the ins and outs for 30 minutes, 45 minutes, I don’t know that I could even weigh in on what I would do in your situation. But I hope all the options I’ve laid out for you are helpful. Thanks for writing in. 

Our next question is from Reid Alexander, subject line is, “Is Learning to Code Dead?” Reid writes, “Hey, Rob. Thanks for putting in all the work making Startups For the Rest of Us a great show. My favorites are the listener question episodes, which is why I’m writing. I’m currently in the process of selling my small online business with the hopes of further exploring the ins and outs of software development after its sells. I’m extremely novice when it comes to programming, so I’ve been looking for the best ways to quickly learn what I need to know to develop software myself thinking of becoming a full stack developer.” 

“So I guess my question is in three parts. Number one, is learning to code still relevant?” Yes, it is still relevant. I view AI as augmentation, like a little bit of a co-pilot is a great example. Having a co-pilot, having something that does autopilot, you still need humans involved to fly an airplane. So is it still relevant? Yes. Do I believe it will still be relevant in 5, 10, 15 years? Yes, people will still be making software. 

Now we may not be making software in the way that we do today, much like if we flash back to the ’50s. Now, I think in the ’40s, you would program a computer by moving vacuum tubes. And then eventually we got the integrated circuit, which was what, the ’50s or the ’60s. You’ll have to forgive even though I have a degree in computer engineering, I do not remember my history of how computers evolved. But I think it was in the ’60s we had the integrated circuit and therefore programming became typing ones and zeros, literally binary. 

Then there was assembly language, which were these short, usually three letter instructions that would generate the binary. And at that time people said, “Well, it’s going to be slow. Well, you’re not going to need programmers anymore because everyone’s going to be able to do assembly language.” And if you’ve ever seen assembler, it is an absolute nightmare to work with. 

And then it goes on and it’s like, well, C is a higher level language. Well, now everybody’s going to be able to program. And then they build C++ and then they build Ruby on top of that, and then they build whatever else. They build no-code on top of that. It’s all code. And at every movement, at every big shift, when those new languages came out, people would say, “Well, now you can just type human English instructions into a computer and it’ll just do the thing, and so we’re not going to need developers.” 

I see AI as the same thing. It’s another abstraction layer, it’s another augmentation layer, but there are still going to be brilliant developers, brilliant makers, brilliant product people who are better than others at it. Do I think it makes it easier to get on board and easier to learn? Probably. Do I think it makes it easier to be a crappy developer and build things that are not going to scale and that are going to break and that are going to have bugs? Yeah, probably. So is learning to code still relevant? In my opinion, 100%, yes. It’s going to change, but it’s still relevant. 

“Number two, if it is still relevant, which I believe to be the case,” the OP is saying, “what’s the best way to go about learning to code in a shorter period of time? With all the new tools, like ChatGPT, Replit,” which I haven’t heard of, “et cetera, is learning the traditional way, a waste of time?” 

I don’t know what the traditional way is because coming up, I read books. I was eight years old, there was a book called How to Speak BASIC to My Apple. I read that, I learned how to speak BASIC to my Apple. So is that traditional? Is going to four years of university traditional? I certainly don’t think that’s the way to code by the way, much cheaper, much faster ways. Is going to an online coding boot camp traditional? Is going to an in-person coding school traditional? Probably not, those things are newer. And then there’s also sites like Boot.dev and Frontend Mentor, which is, Frontend Mentor’s a TinySeed company, Boot.dev, Lane, the founder, was on this podcast just, I don’t know, in the last six months. 

I would say, which way do you learn the best? Any of those ways can work. If you learn from books, which most people don’t. For some reason I did, and I don’t know why, but I guess it was because it was the only way I had. Imagine me, eight years old in the 1980s trying to learn to code. It’s like, what were my options? There was no internet, there were no online coding schools. And it was intriguing to me that you could type something and a computer would do it. And I was like, “Well, I’m the youngest of four kids and everyone orders me around. I want to order something around.” So I learned how to speak BASIC to my Apple to do it. 

And then as time went on, there were in-person schools, in essence there were trade schools. But then there were even just these in-person boot camps where you can go for six weeks or six months and learn the basics. Figure out what modality works for you. If you’re the person who needs to go somewhere and be sitting there to not be distracted, then look locally. 

If you can do it online, that’s probably cheaper and you can probably find a better school because you have the whole world now as your option. Or again, Boot.dev, Frontend Mentor, there are a kajillion of those online. I think those are two good ones that I know about, but there are probably at least 50 more sites that can help gamify it and help you learn how to do it. That’s how I would think about it. 

Tools like ChatGPT are just augmentation. ChatGPT in my opinion, is not going to teach me how to code. It’s not designed to do that. But can it help me as I go along? It’s like I remember at a certain point in either high school or college, they allowed us to start using calculators. And they just said, “Look, doing basic math isn’t the thing anymore.” 

But when you’re in fourth grade through eighth grade, it’s like, “Well, you have to learn to do the math so that you know it.” At a certain point, they were just like, “Take the calculator and use it to do the basic math because the hard part is figuring out the geometry or the equations or which equation to use or how to do something that’s a higher level function.” 

And that’s how I see ChatGPT, it’s like the calculator. It’s just a little assistant that can help you if you get stuck. It can write a bit of code for you and it may or may not work, and you need to know how to debug that and integrate it into a core application that’s actually going to make sense. 

“And the third part of the question is are there certain languages or specifics I should focus on learning to become a full-stack developer who can create my own software and web applications, hopefully utilizing LLM within my projects? Thanks for all the advice you give and have a great week, Reid.” 

So are there certain languages? I mean, we talked a little bit about this, right? A lot of people use Node. We just heard someone write in and say, “I want it to be all JavaScript, therefore I only have to learn one language and I use some type of JavaScript framework on the front with Node on the back.” People build startups out of that. 

If I were to start today, I would probably go with Ruby on Rails or Python Django. I know another really popular one is PHP Laravel and there are these amazing SaaS starter kits that, again, I talked about these a couple episodes ago. I don’t want to rehash all that, but that’s what I would do. And maybe go to Stack Overflow or to Reddit or Quora and just Google this exact question and look to see what people are saying and just make a call. 

The thing is learning one language allows you to then learn other languages a lot easier. And I know switching ecosystems, it can be a pain. But I was teaching myself Python three or four years ago just for fun on weekends because I had never coded in it. And I knew PHP and I had seen Ruby on Rails because it was what drove Drip, but I was never able to code in it. But I was like, “Python seems pretty elegant and I really liked the ideas behind Django and it seems like you could get something going pretty quick.” 

And I was going to start building just some basic web apps to do whatever crazy things and I wanted to get into a little bit … This is before the LLMs come around. But I liked the idea of semantic analysis and such, and I was like, “Who has the best libraries for semantic analysis?” It was Python. 

And so, literally in a weekend, now I have an advantage of course, because I used to be a developer so I could translate the paradigms. But that’s what I’m saying here is if you pick one that’s generally accepted and a bunch of web apps are built in and then later you realize, you know what? I really should have picked this other one, it’s like making that transition is a transition, but it’s not as painful as just getting started. So thanks so much for those questions, Reid. I hope that was helpful. 

I do not believe learning to code is dead. Let me just underline that. People say this for the sensational headline of it to get clicks and stuff. Will it change? Yes. Will driving change as self-driving cars come around? Yes. Did making garments change when the automated loom was invented? Yes. Did transportation change when cars were invented? Yes, but it’s like these are all advancements in technology that we can work with that make our lives better, make us more productive. 

And as long as we aren’t acting like an ostrich with our head in the sand imagining, “Oh, it isn’t coming, I’m not going to update my skills. No, I’m just going to be the same old developer I always have been.” Well, then I think you probably have a problem because there is a paradigm shift occurring right now. 

It’s like some of the developers in the early 2000s who I knew who were either desktop developers or they were still developing in COBOL and just older systems and didn’t want to learn even Perl or ASP or PHP stuff that was really evolving in the early 2000s. And I was like, “Look, that’s your choice, but realize there will be fewer and fewer jobs for you in the coming decades if you don’t update your skills.” 

My last question for today is from Patrick Bowman. Patrick asked about product protection, “When developing and researching a SaaS product, what is the risk of potential IP theft?” So the idea of someone stealing your intellectual property. “On a scale from 1 to 100, where would you rate this as a concern? Would you recommend an NDA or similar for the early adopters or testers who are testing a SaaS product? How would you recommend founders and developers protect their product if it is a substantial concern?” 

So here’s the thing, an idea for a product is not IP or it’s not something that you can protect against. Copyright protects the actual code. Trademark protects your mark that you’re using in trade, so your logo and the name. And patents can protect the specific way that you’re doing something. I’m looking at a patent law here. 

But realistically, if I come up with an idea for an app that does exactly some very specific AI thing for realtors and someone comes along and mostly replicates the exact same interface and tries to compete with me, unless I have deep pockets, you send them a cease and desist and they can ignore you. And what are you going to do, sue them? Again, unless you have deep pockets, IP protection is actually very, very hard. It’s a lot more complicated than people think. 

There’s difference between law and justice and when people have copied me, I’m always like, “(beep) this sucks.” It’s not just. But can I go after someone who recorded a YouTube video and basically used the same outline I did? Probably not. I mean, I could try, but is there any … Do I want to go to court and spend years and tens of thousands of dollars to try to get someone’s YouTube video taken down?” It’s just not worth it. 

And so what I thought this question was going to be about is people you hire to actually write the code for you, and of course you should have them sign an IP agreement they’re not going to steal your stuff. That’s just law. If they’re overseas, so you have a developer in the Philippines and they decide to steal it and try to compete with you, well, that sucks. Are you going to sue him in a Filipino court? It’s like there are risks you have to take I think with this kind of stuff. 

On a scale from 1 to 100, where would I rate this as a concern, especially with early adopters or testers who are testing a SaaS product? I don’t think I’ve ever thought about it. So it’s like if I say it’s a one, does that mean it never happens? Certainly it’s happened. It has to have happened, I just don’t hear about it. 

I talk to TinySeed companies, I talk to MicroConf companies, I talk to listeners of this podcast, see people at events. Every once in a while I’ll hear, “Oh, an employee took a piece of our code and went and did X, Y, Z and tried to compete with us.” It does happen now and again, but for me personally, it’s just not something I have ever been concerned about. 

I feel like if my customers are a bunch of indie makers or indie hackers who are really scraping looking for an idea, then yeah, maybe I’d have them sign an NDA. I am not sure how I would enforce that. But if my customers or early adopters or testers are realtors or lawyers, do I think that they’re going to go try to build a software product to compete with me? No. Could it happen? Yes. Is it likely to? I don’t think so. 

It’s just one of these things. It’s, as you’re saying, I like that you said 1 to 100 because it really is risk tolerance. It’s like at this point you have testers and early adopters. Do you also have general liability insurance or errors and omissions insurance at this point? Well, why not? Because isn’t there a risk that your software could do something, someone could sue you around the software? Of course, but the risk right now is astronomically low. So you’re not going to spend the time or the money worrying about it. 

I think similarly, do you have an LLC or a C corp set up so that you are not personally liable if anything happens to the software? You might, but a lot of people don’t. I didn’t have an LLC for the first five years of … I had all these products. This was from ’02 to ’07, 2007. I was a freelancer, I was a contractor and I was making money from software products, six figures from all this stuff. 

And I was still a sole proprietorship, meaning someone totally could have sued me personally for any of this. And for me it was just not worth the headache to get that corporate entity set up and to get all the stuff set up. And so am I saying everyone should follow my path? Well, of course not. But on a scale of 1 to 10 or 1 to 100, I guess as you said, it’s very low. It’s very low on my list to be honest. 

And the third part was how would you recommend founders and developers protect their product if it is a substantial concern? I guess not showing it to people that I was concerned about. I guess having them sign an NDA. That’s it. I mean, that’s what an NDA is for. You can’t take this and do anything with it. You can’t even tell people about it. That’s it. 

Yeah, I don’t know where else to go with it other than that’s what NDAs are designed for. And if people don’t sign NDAs, you’re going to let them check out your product? I guess that’ll be your choice if you think it’s a substantial concern. Typically, this is more of a concern that’s in people’s head than it is in reality. So thanks for that question, Patrick. I hope it was helpful. 

Thank you for joining me today. If you have a question for the show, you want to hear me or me and a guest answer it in a future episode, you can email questions@startupsfortherestofus.com and you can send a Dropbox link to an MP3 file or a video file, you can attach an audio file. Or you can go to startupsfortherestofus.com, click Ask a Question in the top nav, and then you can record right there on your phone or on your computer, send in video, audio. 

They always go to the top of the stack, except for … I say always. Most of the time they go to the top of the stack. Every once in a while I dig through the text questions because I still have a question from June of last year. So we are, what is that? 10 months. I’m starting to feel guilty a little bit, and I did go through several text questions today. But as a rule, the video and the audio are the ones that go to the top of the stack. 

One of the reasons for that, it’s just really cool to hear from people in the community and to know that there are other humans listening to this podcast. Because if you’re listening to it solo, do you know how many listeners there are? Are there five listeners? Are there 50,000 listeners? When you start hearing people writing in with their own concerns and you hear their voice and you hear the intonation of the question, there’s just so much more fidelity to that experience than it is sending a text question in and me reading it. 

Of course, still send text questions in if you want to. They still work out really well, as I think today’s show was hopefully helpful for you and certainly fun for me to record. And with that, I wish you an amazing week of productivity and progress on your entrepreneurial journey. This is Rob Walling signing off from episode 710.