Josh

Rob Walling:
This podcast is brought to you by Mercury. I’ve been banking with Mercury for years and whenever I set up a new account, I’m reminded why traditional banking feels stuck in the past when our previous bank faced solvency issues, we needed to spin up new accounts quickly that could handle millions in funds across multiple businesses. Mercury had us up and running almost immediately. I manage half a dozen different Mercury accounts across a wide range of companies from my personal single member, LLC to MicroComp, our seven figure global events and education platform to TinySeed our venture fund and accelerator. Mercury easily handles them all. The interface is elegantly simple for daily banking, paying invoices, and sending and receiving international wires, yet powerful enough to handle the multi-step approval processes we needed to put in place. When funding founders with large transfers, anytime founders ask me who they should set up their accounts with, I send ’em to mercury.com. 

Check the show notes for more details. And note that Mercury is a financial technology company, not a bank. It’s another episode of Startups For the Rest Of Us, I’m your host, Rob Walling, and in this episode, Derek Reimer and I sit down and we answer listener questions. We answer a question about the impact of new AI coding tools, talk about user experience and how much time you should or shouldn’t invest in the early days. Talk about racking your own servers versus cloud hosting the trade-offs between those two things, email deliverability and reliability risks around that. And we handle another topic or two if you can possibly believe it. We packed it in to this amazing episode, and if you stick around until the hidden track at the end, you’ll get to hear Derek Reimer get ambushed by my trivia questions. Before we dive into the episode, I want to let you know about some exciting updates to the SaaS launchpad course. 

It’s my nine and a half hour video course that walks you through the process of going from no idea to your first paying customer. We’ve just added a new module that dives deep into what founders should think about before adding AI to their SaaS. It’s actually a private conversation I had with Arvid call. He’s been integrating AI into his own SaaS POD scan fm. We talked through the landmines and tricky spots that founders are hitting right now so you can avoid some costly mistakes. And here’s the thing I’m really excited about. If you buy and you complete the course material in the next 30 days, you’ll be entered for a chance to win a 30 minute one-on-one chat with me. We can talk through your SaaS idea, any roadblocks you’re running into or just brainstorm next steps together. If you want to test drive the content first, grab the free sample module at SaaS launchpad.co. It’s a 28 minute video all about the DNA of a great SaaS idea. As a bonus, our team is giving away a free copy of the full course to one person who watches that video by June 1st. And for loyal podcast listeners, use promo code launch at checkout to get $150 off this course. Get all the details and access the free sample at SaaS dot co. And with that, let’s dive into listener questions. 

Derek Rimer, welcome back to Startups For the Rest Of Us. Always a pleasure. It’s great to have you back. So we are going to dive into listener questions today. I have hand picked several that I think are well-designed for you to answer. Before we do that though, you’ve been working on some pretty awesome stuff with Savvy Cal, you want to tell folks, give ’em a hint, give ’em a teaser, and maybe a little call to action if they want to reach out to you.  

Derrick Reimer:
Yeah, I think this actually might be the first time I’m publicly talking about this, but yeah, we’ve been working on some interesting new product lines around appointment scheduling. So Savvy Cal has historically been sort of a Calendly competitor. That’s mostly for meeting scheduling. You need to take a sales call or just book something with a colleague or something like that. So meeting scheduling has its own dynamics and appointment scheduling. It’s something that has come up basically the entire time we’ve been in business people inquiring about using Savvy Cal for scheduling appointments for more service-based businesses. And we’re just now starting to work on kind of a second product line that repurposes a lot of the goodness that we’ve developed over time with Savvy Cal meetings, but for the appointment scheduling use case. So right now we’re kind of partnering with one agency who’s using this for a cool new project, but I’d love to have more conversations with folks who are sort of in the space of building sort of custom flows for service-based businesses, whether it’s telemedicine or whatever, and need kind of lower level scheduling infrastructure. Very interested in having those types of conversations.  

Rob Walling:
Awesome. So how can folks reach you?  

Derrick Reimer:
Yeah, you can hit me up at derek@savvycal.com over email and I’d love to hear from you.  

Rob Walling:
And that’s D-E-R-R-I-C k@savvycal.com. All right, let’s dive into listener questions. Our first one is from Zach, and his question is about the impact of new coding tools. He says, Hey Rob, I just finished your book and I’m feeling inspired to get started on my next startup Rocketship emoji, which I love. One thing I was curious on is your take on the new wave of AI coding platforms, cursor lovable, et cetera, and the impact of these specifically on the micro startup. Does your 300 hour rule still hold up if you can build an MVP in just a few hours? And so I believe he’s referring to and start small, stay small. I used to think, I thought I said four to 600 hours, but whatever. I wrote that book 15 years ago, so maybe I said 300. It’s approximately directionally correct, right, of like, Hey, I have the 2 2200 framework even these days, which is two hours to if you’re trying to validate an idea to do some research and to go to Google and to go to look at keyword volume and other HFS and other things. 

The 20 hours is, hey, maybe I’m going to put up a landing page, have customer conversations, and then if I make it past both of those points with an idea, maybe I do spend the 200 or 300 or whatever that number is to build that MVP and get it in the hands of folks. But AI coding tools do in fact change that timeline. I think it’s significantly shortened. Now, I don’t know if a few hours feels a little, I don’t know, it feels a little exaggerated. I dunno how maintainable that code will be and beyond that, but let’s kick it off. Are you using AI coding tools? Have you found them to live up to the promise that people are talking about of, Hey, I’m a non-technical and I can build everything in three minutes? What’s your experience and thoughts here?  

Derrick Reimer:
Yeah, so I have become a pretty deep user of AI coding assistance tools. I kind of came late to the game. There’s been GitHub copilot, which was launched, I don’t know, two or three years ago I think. And I just never really caught onto that mode back when it initially came out, I think because the models weren’t as good. And so the kind of autocorrect as you type was just a bunch of bad suggestions. And these days it has gotten considerably better, especially if you’re in certain languages that the LLMs really know well. Like JavaScript, Python, it knows Elixir decently well, and that’s what I mainly use. TypeScript. I regularly now use Windsurf, which is similar to Cursor. These are kind of the big two AI assisted code editors. And then I think you mentioned also V zero and lovable, and I think those are more specific products from companies that allow you to kind of type in, here’s the app I want you to build for me, and it just spikes out an MVP based on what you tell it. 

And yeah, I think it’s really interesting how these tools do considerably shortcut a V one. Now the question is how long are you expecting to use this V one is this purely for validating something? Think of it like a working mockup wireframe thing that actually persists things to a database and you can show flows off. It can get you to that place really quickly. I am skeptical about the maintainability of some of these code bases that were generated from scratch fully by ai. I haven’t found the code that it generates to be good enough for, I’m trying to imagine someone who doesn’t know code at all using this to try to maintain an application for the long haul. And I don’t think we’re there quite yet. We might get there. I mean, this might be a horribly outdated take even in six months, not sure, but at the present moment, it makes a lot of mistakes that if you’re not technical, you may not catch it and that would not serve you well in the long run. But for sure, for the purpose of proving something out and being able to demonstrate something, I think it has radically changed the game.  

Rob Walling:
I would agree. And is an, it depends to all of this, and the it depends is are you a developer and are you a senior developer or junior or not all? And I do think that AI coding tools, I think of it as almost like a Mex suit, right? You think of Alien or did they have many aliens do anyways, A Mex suit makes you super powerful if you know how to use it. But imagine getting in it for the first time and letting it run on autopilot question mark. It’s like, right. And the analogy breaks down because you don’t have to maintain a ME suit five years from now and have infrastructure and spaghetti code or weird bugs that nobody can really find because there’s been machine generated code for 40, 50 years, I mean for a very long time. And back in the day, I actually was a contractor at L-A-D-W-P, Los Angeles Department of Water and Power, and I was a developer working on T net stuff there, and they had a system, I think it was in cobol, and they had generated code in the seventies to do a bunch of stuff, and it was machine generated and no one wanted to, I didn’t know cobol, but they had COBOL contractors who are like, everyone’s scared to touch it. 

It is a complete disaster and people are scared. It was like a payroll system or maybe it ran the grid, the electrical grid in LA for all we know, 

And that’s just the state of affairs sometimes with government systems. But I remember being like, wow, they generated code and no one can touch it. That sucks. What’s the point then? I mean, it works until.dot. So I’m not saying AI code is that bad, but I think that’s the big concern is you and I were having a conversation a couple of weeks ago when you came over for DD and I believe he said, you given instructions and then you go through that code to really make sure that it is not screwing around and it makes mistakes, right?  

Derrick Reimer:
Yeah, I would say I’ve still found this to be true even in my few months of using it aggressively. Now that it is best at writing test code and test code is just, it’s usually kind of an afterthought when you’re trying to move quickly and especially earlier stage. You want to make sure stuff is kind of baseline sanity checked, and you have some support for preventing regressions and stuff, but we don’t love spending a ton of time writing tests if you’re just trying to deliver value quickly. And I have found it is very good at analyzing your code, figuring out all the different permutations that should be tested, and then writing that test code for you. And ideally it writes it in such a way where you can pretty quickly, easily read through it and see, all right, this is the setup, these are the assertions that looks correct, and then it’ll run it. And if it fails, then it’s pretty good at least helping you start to think about how to solve the bug. But it’s not always perfect at that. But even just having those test cases where it’s actually rigorous and does every single kind of important permutation, that has sped up my process a lot. It made me feel like I have a stronger foundation of tests  

Rob Walling:
Faster and better, more thorough than you would care to do yourself. 

And I think really getting back to Zach’s question, because we’ve talked about AI and how it generates code and the dangers of that, but really he’s asking, so what if it makes me twice as fast, 3, 4, 5 times as fast? Can I get it done in a day? What used to take me a week or two days? It used to take me a week and in the future, will it be even faster? How does that change all this methodology? It’s really interesting to think about because one of the reasons that I talk about that 2 2200 framework, the reason that framework exists is because I don’t want you to spend 200 or 300 or 400 hours building something that no one wants. So that’s why there are those steps before it. But he’s asking question I think, what if it doesn’t take me 200 hours? What if it takes me 40 hours to do what it used to take 200 hours? 

Should I just build more stuff more quickly without doing all the validation? Here’s the thing for me, as I said, the two is doing research online looking competitors and SEO traffic and interest in demand and blah, blah, blah. To me, I still want that. If I’m starting, I’m going to spend a few hours plugging away. If I have a list of 10 ideas that I’m thinking about, could I feasibly go and build all 10 of those ideas in a weekend? Probably not now, but let’s say you could and I could just, I don’t want to do that without knowing there’s some demand. I don’t want a product if there’s no search traffic or if there’s no, I can’t find anybody who wants this. It’s not solving a problem. So I still want to do the two part. And then the 20 part is either it’s a landing page or customer interviews conversations or both, frankly, which is usually what I recommend. 

I still want to do that too. Now maybe could I shortcut? Can I build mockups really fast with AI or can I build kind of a clunky click through paper prototype thing with AI that’s not maintainable and build an MVP in order to do the 20 maybe? I think the danger, I mean it could cut both ways. If sometimes the danger is you’re getting ahead of yourself on giving too much specificity to someone of here are 17 screens with text boxes and buttons to click through, and it’s like, is that what they need to know if it’s worth it? Or are you basically saying, Hey, I’m going to solve this problem. I’m going to build a system that manages your entire business and allows people to log in and log out and click and audit and this and that, and is that what they need to hear? Especially if they’re non-technical. And sometimes I think they maybe do need to see a few screens of like, ah, I get it. But other times I think presenting them with completed software could actually be a detriment.  

Derrick Reimer:
Yeah, I think that that’s a really good point that the process of building a product for a particular market segment entails that you are actually speaking to that customer set and figuring out what needs to go into that product because it’s hubris to assume that you have all those answers from the get-go. So building something based on a bunch of assumptions that you haven’t actually confirmed by working with customers means you’re probably going to miss the mark if you come with this fully built out product. I mean, we talk about this kind of new appointment scheduling stuff that I’m working on right now, and a big part of this is getting real-time feedback from the actual end user, the clinic who’s going to be using this product on a day-to-day basis and incorporating that in as we build stuff. I can just make a bunch of guesses and try to envision what they need. And that’s certainly a big part of it is just trying to get into their shoes and think about what they would need, but that’ll only get you so far. You need to actually talk to the real customer to figure out how do you really nail it for all of their workflows and use cases and that kind of stuff. AI can certainly help you workshop some of that, but I think ultimately you’re still selling to humans and you need to accommodate human needs. So getting the actual human data is pretty key there  

Rob Walling:
Still selling to humans for now, Derek, for now, until AI starts, this  

Derrick Reimer:
Also might be an outdated  

Rob Walling:
Take two years from now. People are like, guys, AI buys everything now. So anyways, yeah, I appreciate the question, Zach, and I hope Derek and my takes were helpful. Next question is an audio question from Arthur Ky.  

Arthur :
Hi, Rob Arthur here, an aspiring entrepreneur living in Denver, Colorado. I have an idea for an app that I’ve recently started developing after validating the concept with potential customers, it seems like a strong business opportunity to move forward on. As I work on building this, I’m realizing there are various ways to approach the app structure, pages and user interactions. My question for you is how do you approach the user experience when bringing an idea to life? A traditional UX designer might create user profiles, wire frames, prototypes, conduct user testing to uncover pain points and follow other structured steps. I have a college background in graphic design and now work as a software engineer. So part of me wants to go through this formal process, but another part of me feels I should focus on quickly building an MVP to prove the concept and refine the user experience later. When in the process do you believe it’s most essential to focus on user experience? How do you typically approach UX for a new idea? I think a great user experience can make or break an idea, so I’m very curious about your perspective on this. Appreciate what you do. Thanks so much.  

Rob Walling:
Alright, Derek, as one of the best UX folks that I know that exists on the internet today, what is your take on Arthur’s question?  

Derrick Reimer:
So obviously I come from a place of being biased towards wanting to solve problems from a UX first perspective, it’s something that I really value in the products that I buy and in the products that I build, consider myself a crafts person and this is what I really care about. However, my answer to this trying to be objective is, I think it really depends. Are you staking a big portion of your value proposition on better ux? When you compare yourself to the rest of the landscape, what does your buyer actually care about the most? I tried to think about some examples in my own stack. So I use linear for project management and they’ve been around for, I dunno, three, four or five years, something like that. And I think their main differentiator, I guess is that they’re trying to be Jira but with better UX experiences that people actually like to use. 

But it’s kind of solving the same underlying problem that Jira is, which and Jira kind of has a bad reputation for being a little bit of a nightmare to use. And so for them, in order to deliver on this promise, they have to be executing top-notch user experiences. Otherwise people will just use Jira because if it’s no better, no different than Jira on the UX front, then why bother savvy Cal? We’re promising to be a more delightful user experience for the scheduler and the person who’s configuring the links. So you should be able to go in and fine tune your availability faster, more efficiently than you can in the other tools. So I think for us, the customers we attract are the people who are looking for those better user experiences. So I would say in these cases it matters a lot for other products. I’m just trying to think of examples, like software for  

Rob Walling:
Construction firms,  

Derrick Reimer:
Yeah, where you, you’re logging in, you’re doing stuff, there’s screens with forms and you’re viewing reports and charts and things, but the level of UX attention that a lot of the products that a lot of us use, linear is just probably not as important. What you’re doing is you’re driving a different kind of value. I think of even more stark examples like hit tail back in the day product that we worked on was SEO keyword tool. So you could log in, you could get reports on these are the keywords you should be targeting in your content. And the setting screen in that app was not very important that it was top notch ux, like it’s form fields and buttons, and you have the basic essentials. It had to be obviously navigatable, but the core value prop there was the keywords it was giving you. So let’s say in an app like that, the quote user experience of the product mattered a whole lot less. The user experience was really like is it delivering the right keywords? And so I guess that is essentially a different kind of user experience than what we classically think of as the way that you lay out menus and form fields and things like that.  

Rob Walling:
I don’t know that I have much to add to that. That was pretty much my take was it depends, and it depends specifically on is this your advantage or one of your advantages or not? And there’s certain spaces that just don’t know the difference. And again, I think of construction firms or maybe someone, an owner of a gymnasium of a fitness gym, a fitness studio, are they going to know the difference between linear and Jira? They could tell the difference, but are they going to be like, Ooh, this is good ux. They don’t really even know what that is, right? So I think the big thing is you end user, do they care? And not only do they care, but do you want to invest the time to make this one of your advantages? I personally would, I would tend to enter spaces just like you where the users do care, but probably most software doesn’t matter. If I think of most B2B SaaS software, I shouldn’t say doesn’t matter at all. You can have catastrophic us and then UX and then everyone hates it, but it doesn’t matter nearly as much as I think  

Derrick Reimer:
I have often opined why is the most successful software out there, the crappiest software, how does this actually happen? But I think there are plenty of examples where it’s kind of that adage of it’s always safe to buy IBM kind of thing. Like Salesforce is known for being quite painful to use, but it’s Salesforce and they have staked this incredible position in the market of this is one of the two tools. Maybe HubSpot and Salesforce are the only big two that any serious business of a certain size will be on one of these platforms and the people buying them don’t care about the user experience. There’s a whole bunch of other things that cause them to make that buying decision. And so I think it would also, this is a trap that a lot of times people fall into where you look at a successful incumbent and you say Their UX is terrible, I can do better ux. 

And you ignore the fact that the actual person buying it, maybe the actual person buying it doesn’t even use the product, but they’re charged with buying it because a VP at some level and they’re the one who has to make that procurement decision and they buy it because their peers are buying it or because companies of our level of importance buy this software. And so there’s just different motivations, but I think that often causes kind of a mismatch and the entrepreneur who thinks I can build a better version of this thing when in reality the market doesn’t care.  

Rob Walling:
And I think that’s a good distinction you just made, which is the further your buyer is from the user of said software. I think the worse your UX can be because the buyer doesn’t care, the buyer’s usually going to buy based on market and brand and reputation rather than easy to use. So thanks for that question. Hope it was helpful. I wanted to jump in here for a second and invite you to Microcom Remote, which is happening live tomorrow, May 21st from 10:00 AM to 1:00 PM Eastern Time. The event consists of three presentations, talking about early stage SaaS sales. In addition, we have a founder by founder, which is like an online version of the hallway track at our in-person events talks will be recorded in case you’re listening to this event after to get access, head to MicroConf dot com slash remote. 

Next one comes from Louis Mertons and Louis asks a question about on-prem versus cloud hosting. He says, Hey Rob, I really enjoyed the book and I’ve listened to it twice now on Audible. I think SaaS Playbook, if I’m guessing. I also love Linus Tech Tips, and they recently built a server and said that these days it’s cheaper to run on-prem. And many people were moving back to on-prem rather than the cloud. I love proclamations that many people. It’s like, all right, yeah, there’s five of them. I wonder if you could talk through the pros and cons of cloud versus on-prem. I suppose it would avoid vendor. What do you think about this, Derek? I mean he’s basically saying getting a physical server in a cage somewhere and getting it in a, we used to do this 15, 20 years ago. We also used to charge one time for our software. Should we do that as well? No, I’m just kidding. You can tell my opinion on this, but what are your thoughts? Because you as an operator could totally, you could probably save monthly hosting cost if you spun up a physical database, go buy a Dell, buy a database server and then go buy your, I say this, I remember doing this 25 years ago with clients with big e-commerce clients and going and racking the servers in a place.  

Derrick Reimer:
I mean, I have seen a lot of talk off and on in our space about this, about exiting the cloud. And I think a lot of it’s driven by DHH. Maybe there are others that have done this, but I think he’s been the most vocal lately who’s been talking about doing this. And basically 37 signals looked at their cloud spend and they said, Hmm, we’re paying, I dunno, it was like 10 million a year for S3 or something. And then there had EC2 instances that were probably similar orders of magnitude. I think they were probably looking at their staffing and saying, well, we have all of these DevOps people on staff who were kind of bored and I think we could, this is the key. And so we have the talent on staff, we’re not necessarily shipping a bunch of new products, so we have extra capacity and we could probably stand to save some money and pull this stuff in-house. 

A very mature business, and they understand their traffic patterns really well. So they know Basecamp, I’m sure just kind of mostly chugs along at a very consistent rate. And if they get a bunch of new customers, it still doesn’t really move the needle so much. So they just have very strong understanding of this is how many servers we need and maybe in six months we’ll need to buy one more server, but we can anticipate that we can predict it. So yeah, I think for them, they’re at such a stage of maturity with so much in-house expertise that sure have at it do it, but I think, I guess I wouldn’t say a hundred percent of us, but for 99.9% of the rest of us, this is not a good decision. With platform as a service, you’re effectively getting all of those site reliability engineers and DevOps people at your platform of choice. 

You’re getting all of them as a functional extension of your team for metered cost. Usually it’s like an extra $10 for the next size up server. And so you’re getting this incredible amount of expertise for very, very low marginal cost. This is just close to a miracle for us people at a smaller stage being able to start out crack open a fresh application and you have close to $0 a month in cost, and then as you get more customers, you can just incrementally expand your resource usage at your platform as a service. This is just, I think, a no-brainer to stay in these systems. And yeah,  

Rob Walling:
You and I are on the same page with this. It’s the old thing where I say, don’t use Steve Jobs and Apple as an example, unless you are co-founding with a guy who invented the personal computer, Steve Wozniak, and when you’re 20 years old, you’re worth 1,000,021, you’re worth 10 million, 22, you’re worth a hundred million. It’s something approximately that I think that was Steve Jobs situation and you’ve started this incredible company, great. Then you can take Steve Jobs advice of not listening to your customers. They don’t know what they want until you give it to them. Or if you started a SaaS that is, as you said, 20 years mature has nine figures, hundreds of millions in revenue, we would guess tens of millions a year in profit, which is confirmed. Jason free confirmed at MicroConf, and you are so bored, I’ll say that you’ve rewritten the app multiple times. 

They have a Basecamp V two and a Basecamp V three. And when I say bored, I have a ton of respect for DHH and Jason Freed, and I think they’ve done a lot for SaaS and a lot for entrepreneurs. They are TinySeed investors, they’re TinySeed mentors, so they’re in our circles, but I think that they’ve been successful in spite of a lot of the advice they give when they to say, we don’t do marketing, we don’t track analytics, we don’t track opens, we don’t have any type of web analytics or conversion tracking on our website. They used to say that, I don’t know that they do anymore. And it’s like, yeah, and if you built a SaaS in 2005 and we’re one of the first ever, and you also don’t need that, but none of us are in that position. So just really take the stuff that they do with a grain of salt, these outliers. 

And that’s what we’re talking about here. In fact, if a TinySeed company, if I was interviewing a TinySeed applicant and things were going well, and they told me that they were racking their own servers, it would be a major red flag for me that I would dig into and I would say, why are you doing that? And they would better have a damn good reason. And I believe of all the TinySeed companies, 204 investments we’ve done, there was one founder who had physical servers, and the reason was is it was like three years ago and he was doing AI and needed physical GPUs. It was way too, he built his own model. It was before the chat. GPT became a thing right about two years ago. And he convinced me in a R because a R has a PhD in science and I know my way around a keyboard. And we dug into that with him. I Wait, what? And he was like, yeah, and he kind of showed us the cost and we’re like, ah, you actually, that is the right choice, but that’s it. He’s the one out of 204 that we’re like, okay, yeah, physical, alright, fine, cloud is more expensive, but it’s not as expensive as hiring your own SREs and DevOp folks.  

Derrick Reimer:
Yeah, and I think, I don’t know, even over the years, cloud’s kind of started out as a virtual private server, whatever, where it’s just like it’s an on-prem server that they will make sure to keep the power onto it, but everything else is managed by you. So you’re still doing a heavy amount of DevOps and some people choose to go that route. But even that, it would be so hard for me to justify just getting a digital ocean droplet and just trying to rotate my own server logs and doing all this stuff where you just don’t have to deal with that anymore. And you can get so much more reliability by going with a more modern platform as a service where you have a docker file that describes what your server should be and your host would ideally allow you to just say, deploy servers that follow this spec and they manage all other aspects of it. This is the way to go unless you’re planning on investing in having your own people on constant on-call rotation and doing a bunch of DevOps work. Some people are passionate about that, more power to you. But if you’re just starting out especially, you do not want to have to be responsible for that portion of your reliability.  

Rob Walling:
Your most valuable asset as a founder is your time. And anytime you spend not building value for customers, not selling, growing the business, even if you enjoy it, it is detrimental to the business. And your number two asset is money, but only because money buys you time. See number one, you know what I mean? And so let’s say you are truly bootstrapping. If you’re around with DevOps, that’s a catastrophic mistake. And let’s say you raise a million dollars and you hire a DevOps person to run your servers out of that million and you save the same amount of money or something, just you have another person on your team that really you probably don’t need, I just can’t justify it as you said, 99.9, so maybe one out of a thousand or one out of 500, there’s some number where this is probably appropriate, but otherwise don’t make this mistake. And it is a little bit of, yeah, it’s cargo cotting in a way. It’s kind of like it’s listening to advice from the wrong folks. It’s just also like don’t follow Silicon Valley founders and see how they grow their company and then as a bootstrapper think that’s how you’re going to do it because usually their advice doesn’t apply. So thanks for that question Lewis. Hope it was helpful. Our next question gives me some PTSD Derek, so I’m going to let you weigh in first. This is from Kyle.  

Kyle:
Hey Rob. Name is Kyle. I’ve listened to the show for a long time. I’ve actually had you answer one or two of my questions on the show, I think in the past just to kind of get straight to it. Basically, we are a client and project tracking tool for tattoo artists that also allows them to schedule appointments and send appointment reminders and whatnot. So my question really is about that last piece of the puzzle. Think of like a Vagaro acuity or Schedule Lista. There are lots of them out there. One of the issues that we’ve heard from artists that we’ve talked to so far that they have on those other platforms is emails getting sent to spam or not delivered or similar issues. And what I’m trying to figure out is just kind of steps or steps I could take or tools I could use to help limit that risk. The plan is to use SendGrid for all those automated and customized messages that come out of the platform to our artists’ clients. But yeah, any insight you might have on how we can help mitigate that risk just from day one would be greatly appreciated. Thanks in advance. Hopefully you get time to hit this question and keep doing the good work. You’ve been a great help to me so far, as well as countless other founders and hopeful founders. Thanks Rob. Take care.  

Rob Walling:
So Derek, having never managed email, sending infrastructure nor dealt with blacklists and deliverability, would you care to weigh in? Should we give folks background who don’t know that we started Drip, which was sending, I don’t know by the time we left. So we sold it in 2016, left in 2018, I believe, and it was sending 150 million emails a month maybe by the time we left. We started what with Mandrel and then we used Mail Gun and we used Send Grids, we used multiple sending providers. But to our point from the prior question, we never did spun up our own email sending servers. You know what I mean? That’s kind of equivalent. It would’ve been way cheaper. I mean, our SendGrid bill by the end, it was a lot of money and I don’t remember exactly, but certainly tens of thousands of dollars a year might even have been six figures. And so could you justify hiring someone in gives service? Maybe I would do it. All that said, this is about email deliverability. What are your thoughts  

Derrick Reimer:
Here? Yeah, so I mean taking the point that even running Drip, we never endeavored to do our own email sending. I mean, I think point number one is definitely use a mature provider in the space like SendGrid Postmark is another good one that’s been around a long time. I use them for Savvy Cals sending, I think Amazon has a service. So yeah, there are a handful of these out there that their sole purpose is to manage pools of IP addresses and sending reputation with all the major email service provider or ISPs. Postmark just recently had an incident where a bunch of their emails coming out of their system were getting flagged by Google, I think. And at a certain point, a status page post came out and they’re like, we are actively talking to Google to mitigate the issue. And within a few hours the issue was mitigated. 

And can you imagine if you were responsible for getting your stuff into people’s inboxes, not using a middleman that, are you going to call up Google? No. So I don’t think that’s what our asker here is asking. He obviously knows use an email sending provider, but I just wanted to underscore that point that you definitely want to use a SendGrid or something like that. Beyond that DRC has become a very important part of email authentication these days. I think all the major email providers look for a strong DMAC policy, so you can Google that or chat tot that to get more details about it. Look to your provider of choice for instructions on how to make sure you have that stuff dialed in for their system and of course your D Kim and all the DNS level authentication stuff to make sure that your own domain is in a good place. 

And then I think the other couple other big pieces here when you’re sending email, so it sounds like this is similar structure to what Savvy Cal does, where we send new appointment emails and reminders and things to people who schedule through our system. So we have a lot of emails going out to people scheduling into the system. And so you need to make sure that any place where an email address can get in, so that’s through the booking pages that you have good spam protection there because if you have people, malicious actors hitting those and putting junk email addresses through your system, that’s going to reflect back on your domain’s reputation. And that’s the biggest thing with email deliverability. Point number one is always like, well make sure you have high quality sending. And it’s like, well, easier said than done in a lot of cases, but the biggest thing you can do is make sure that you’re protecting all the places where emails can get in. 

I also these days, like to use an email validation service, I use emailable, and you can run email addresses through it and it’ll confirm to the best of its ability, whether it’s a valid email address and that keeps your bounce rate low. And just make sure that the less invalid email you attempt to send on your domain, the better for your reputation. And then also MX Toolbox, that’s kind of an oldie but goodie tool. We used it back in the day with Drip and it’s still around and you can use that to just kind of keep tabs on your email sending reputation and just make sure that you’re not ending up on blacklists.  

Rob Walling:
There it is. That’s a clinic. We should make that into a course. The five minutes of you talking there, I don’t have much to add, although I thought of a couple things. We used mandrel and their deliverability was phenomenal back in the day and they allowed marketing email at the time and then they kicked everyone off sending marketing email, and it’s only transactional. Now these days, if you were to ask me who I would use, it’d probably be mandrel. If it’s purely transactional, I would verify that and check with other people and this and that. But I remember, I mean MailChimp’s infrastructure is so good and they’ve had it for so long that Mandel is an extension of MailChimp, so definitely add that to the list of the postmarks and the sends grids. The other thing is there is a TinySeed company that kind of helps with all this. 

They’re called Sky Snag and they help with D Kim and they monitor all this stuff in monitor phishing and this and that. So if you’re listening to this and you’re like, man, I don’t really know what I’m doing, sky snag.com is probably a place to check out. And the last thought is, I agree with everything you said, and I think that’s great advice. The other thing is this is why a lot of folks, have you noticed how many are asking for phone numbers and doing SMS now for reminders, my haircut place only does SMS, and it’s because they know inboxes are full. And there’s the multiple inboxes. I don’t use these in Gmail, but where it’s the promotions tab, reminders get in there, and SMS is more direct. Now your RSMS inboxes, so to speak, are getting crowded, and so then we’re going to have to move to WhatsApp or something. 

But that’s the other thing to think about is in certain areas, especially appointment reminders and stuff, most of the ones I receive now are via text. And so that doesn’t remove the need to comply with stuff. There’s a bunch of regulations around this. We have, I mean, gosh, there’s got to be, there’s at least 10 probably TinySeed companies where SMS is their main focus and their main value prop. And then there’s probably another 20 if not more, that actually send SMS. And so there are some hurdles there, but if you use the equivalent, if you use a Twilio and you don’t need a dedicated number for each of your customers and you just have a few, I think it’s significantly less complicated than one might think. So thanks for that question, Kyle. I hope it was helpful. Our last question for today is for Mike.  

Mike :
Hi Rob. My name is Mike. I was listening to your A MA for the SaaS launchpad course, and you made a statement that for enterprise or other companies selling to the enterprise, you’d want the salesperson. And for somebody targeting lack of a better term, SMBs, you’d want the marketer on your team. Can you expand on your thinking between the differences and how does that affect what your choices are in terms of what kind of business you might want to start or how you give advice to people deciding what kind of business they want to start, and then how critical is it to have either skillset on the founding team or can for example, the sales side for the enterprise, could that be learned from something like founding sales book by Pete Kanji? Thank you for everything you do.  

Rob Walling:
I think the first question maybe is sales versus marketing. What’s the difference? Just very fundamentally, and the way I think about it is marketing is generating demand. So this is going out and getting in Google search results or running ads or doing any of the 20 B2B SaaS marketing approaches I have in the SaaS playbook doing integrations and having someone else talk about you to their audience, any of these things that gets you and your app and your value proposition in front of them, and that is inbound. And then people come to your website and they either book a demo or they sign up for a free trial or whatever. That’s marketing, it’s spreading. The word sales is a couple things, like sales is often outbound, right? It’s approaching on LinkedIn, it’s all the cold emails we get on a typical day. It’s the Twitter dms and all that stuff. 

And then it’s doing the demos face-to-face in essence, right over Zoom. It used to be in person obviously years ago, and it is trying to close a sale. So just marketing versus sales. Those are two things. They’re complimentary. Sometimes if you have a low touch, no touch funnel, you don’t have sales at all, you don’t do any outbound and you don’t do demos. And so it’s purely a marketing driven SaaS, and that is kind of the bootstrapper indie hacker dream. It’s pretty rare. And in fact, those tend to need lower price points, so then they have higher churn and they don’t grow into multimillion dollar businesses. It can happen, but it’s often bringing sales in, doing demos and closing the $2,000 a month deal versus the $200 a month deal or the $20 a month deal that really kicks that engine into growing into that seven or eight figure mark. So I want to kind of want to level set that with some definitions, but then beyond that, enterprise versus SMBs, what do you think?  

Derrick Reimer:
Yeah, there’s also kind of different levels inside of here. The definition of a small business. Some would say a small business is up to a hundred million a year in revenue or something. And it’s like that’s usually not what we mean by that. When we say small business, we’re usually talking much, much smaller, maybe a team of 10 people or something like that versus, and we often qualify enterprise as capable of buying at a higher price point. Basically, the grass is always greener on the other side. I will say this is kind of a choose your paying. If you go with the higher price point product and you’re able to do sales for it, then you typically have longer cycles. There’s more involved, more investment involved in order to make a sale. Cost to acquire a customer is often higher, but you can offset that with a higher price point. 

But I’ve talked to plenty of founders who get frustrated with this motion and needing to have all these conversations and make it through procurement and all of the kind of sucky things that come along with that piece. But on the flip side, when you’re going marketing driven, you generally have a lower price point. People are more price sensitive, churns higher, and it can be really difficult to move the needle on these lower price point businesses. Don’t ask me how I know that asking for a friend because each individual customer is only paying you a little bit of money and you have to be really good at getting a lot of distribution and showing people who care enough about the differences between you and maybe a bunch of other options on the market. Why should they pick you? And some of this just comes from being around for a while. 

It just takes a while to build up reputation where you’re showing up in conversations and making it onto the lists where people are comparing different products and making it into chat GPT so that it starts recommending you who the hell knows how to actually do that other than just be around. So there’s so many things involved with the marketing driven approach where, and obviously if you’re a master marketer, you will have better success at building up a business with this approach. But I guess all that to say, both of these approaches take a certain amount of expertise, and I think typically the more sales driven approach is something where you can kind of brute force it a little easier, I guess, than the marketing driven approach, which is like you just have to get really good at generating a ton of traffic in the right places. And that is a bit of a dark art for many of  

Rob Walling:
Us. And I like the way you put that. And it’s not just two, it’s not a dichotomy. There’s small and medium sized businesses, which I think of like, oh, is there one decision maker? Usually oftentimes is the decision maker also the user of the software. So maybe that’s even solopreneurs or prosumers. And they’re extremely price sensitive because they think of the money they’re spending as their money. So they think of it almost like consumers and then SMBs maybe a notch up. And then there’s, there’s enterprise and there’s this whole spectrum of it. But generally the tough part is if you get these big, big contracts, let’s say you’re selling $250,000 a year, which we have some TinySeed companies that’s their contract size, but they only close a deal every quarter or every six months, and it’s just brutal and agonizing and there’s no momentum and it’s super, it’s spiky in a way that’s just not that fun. 

And as you said, months in procurement, but they close these really big deals and they have this negative churn. Everybody’s expanding. That’s great, except for it’s kind of agonizing as the founder. On the flip side, you’re charging 15 bucks a month and your churn’s really high, and it’s hard to outrun that churn. You need a really massive funnel. I’ll say it’s impossible to outrun the churn of a $15 a month business if you want to become, let’s say a 10 million or 20 million business. And that’s why when we started Drip, it was $50 a month, a hundred of one 50. I think those are the price points, but we soon realized people were reaching out with really big email lists and they were like, oh, I would pay you $500 a month based on my list size or a thousand dollars a month, or I think when we left, there were people paying us two or three grand a month. 

And these are not enterprise in the enterprise sense, but for us, they’re enterprise. It’s anything over 25 KI kind of think of as a bootstrapper enterprise plan. And that was pretty interesting. And I call this a dual funnel. It’s where you have folks paying you no churn and paying you a lot of money on the top end, and you do have some folks doing sales demos and procurement maybe, but then you have this nice low touch funnel that usually has higher churn and more price sensitive customers on the bottom end. And this only works in really, I think, pretty big markets. It doesn’t work in these tight niches, but that’s a nice way to even it out to get a little bit of the best of both worlds if you can swing it. And we’ve seen like Ruben with Sewell has that type of fun and Riverside or squad cast has that type of funnel. And it’s not always possible, but it is a way to even out the agony of, oh, we close a deal every three months. This is fun. This is so great.  

Derrick Reimer:
And I can imagine just if it’s that extreme where it’s like hundreds of thousand dollars from individual customers, and I’m sure there’s a bit of cost involved with maintaining those, so it’s like you would want to make sure you have the people on staff to maintain that. But if one of those churns and it’s like, oh my gosh, we have to replace them or else crazy. Yeah. So yeah, having a bit of diversification is probably ideal where you don’t have too much customer concentration to the point where you’re like potentially have to lay someone off from your team if a customer cancels or whatever, but it’s business. Yeah,  

Rob Walling:
You got to do it. So thanks for that question, Mike. And Mike actually sent in another question, but we don’t have time to get to it today, so I will answer that in a future episode. Derek Rimer. Folks want to use the best scheduling link on the internet head savvy cal.com, and as a reminder, if you are an agency or a freelancer consultant and you are building solutions for folks who are booking appointments, this is like service businesses and other types of folks, you should reach out to Derek to find out what he’s building. I’d love to chat.  

Derrick Reimer:
Yeah,  

Rob Walling:
D-E-R-R-I-C k@savvycal.com. Thanks again for joining me.  

Derrick Reimer:
Thanks for having me.  

Rob Walling:
Thanks again to Derek for coming on the show and a reminder SaaS launchpad.co and use the code launch to get $150 off the course as well as MicroConf Remote is happening tomorrow. That’s MicroConf dot com slash remote. Thanks for listening this week and every week. This is Rob Walling signing off from episode 775. Derek, I have four fifth edition Dungeons and Dragons trivia questions for you. Order, oh boy. From easiest to hardest. The first is in Combat in fifth Edition, Dungeons and Dragons. What determines the order in which characters act  

Derrick Reimer:
You roll for  

Rob Walling:
Initiative? There it is. Alright, that’s one out of four. Alright, second question. If you attack a prone enemy with a melee attack, what do you gain  

Derrick Reimer:
Advantage.  

Rob Walling:
You do indeed gain advantage. Two out of four. All right.  

Derrick Reimer:
Capital A, advantage  

Rob Walling:
A. All right. This one, it’s getting harder.  

Derrick Reimer:
Oh boy.  

Rob Walling:
When attacking a creature you cannot see because they’re invisible, hidden, et cetera. What disadvantage do you suffer?  

Derrick Reimer:
Do they have surprise on you?  

Rob Walling:
Incorrect? What disadvantage do you suffer when you attack them? If they’re invisible?  

Derrick Reimer:
When I attack. Oh, okay. Okay. Well wait. You can make an attack on someone who’s invisible. They’re there but you can’t see them.  

Rob Walling:
Or hidden, like if thieves or rogues, I guess can hide in shadows.  

Derrick Reimer:
I see, I see. I dunno.  

Rob Walling:
You have disadvantage on your attack roll.  

Derrick Reimer:
No, it kind of makes  

Rob Walling:
Sense, right? I  

Derrick Reimer:
Should have just guessed that.  

Rob Walling:
Totally. Alright,  

Derrick Reimer:
What disadvantage do you have? Disadvantage.  

Rob Walling:
Yeah. It has it as lowercase D. It should be uppercase. And then the fourth and final. That one’s too easy. Oh my god, these are really easy. I asked cha GBT for 10, and I said, make them easy to hard, and I meant like eight, nine, and 10. And they’re just, they’re gimmies. Listen, if you roll a natural 20 on an attack row, what’s special effect occurs if you roll a NA 20 on an attack? Maybe it’s not as easy as I thought.  

Derrick Reimer:
See, this is rare. It’s only happened a few times. Yeah.  

Rob Walling:
Happens now and again. Yeah. So if you were to roll a Nat 20 on a bow attack or a sword attack, what do we do?  

Derrick Reimer:
Do you get an extra attack?  

Rob Walling:
It’s a critical hit is what it’s called. And you roll your damaged dice twice, but you only take the bonus. You know how there’s a damaged bonus? You only take that once, but you roll the damaged dice twice,  

Derrick Reimer:
Right?  

Rob Walling:
There are some dms that it’s all, A lot of this is house rule, but let’s say you’re doing a D eight plus three damage, right? Some dms will just say you do max damage automatically. Some will say you do two dice max damage. That feels like a lot to me. That would be 19 points of damage and others roll it twice. That’s what I do. Roll it twice at add three. All right. Bonus question, what condition occurs if your hit points become negative, equal to or greater than your maximum hit points from a single attack. So let’s say you had 20, your max hit points are 20 and you took 41 points of damage with a single attack, like a dragon breath. What would happen to you?  

Derrick Reimer:
Is that an instant kill?  

Rob Walling:
It’s,  

Derrick Reimer:
Yeah,  

Rob Walling:
You immediately die versus the fifth edition. Freaking death saving throws.  

Derrick Reimer:
I was going to say, you must be extremely dead in that case.  

Rob Walling:
Yeah, I actually played as 10 below. Is that what I did? See? I said if you went negative, I think I’ve been house rolling negative 10.  

Derrick Reimer:
Yeah, I think so. I  

Rob Walling:
Think that’s what I did. Which is interesting. It’s slightly more deadly, but if you have 50 hit points, let’s say, and you go to negative 10, that can happen. Meaning if your max is 50, but as you start to get down and get damaged, going to negative 10 is not unheard of. So I like there to be dead possible man.  

Derrick Reimer:
Yeah. And in our campaign, none of us have ever died yet with that house rule.  

Rob Walling:
No, no. But in the other, the early, the delver one where it was first and second level characters, I lost two. Lost two in one dragon breath. And I was like, oops.  

Derrick Reimer:
I bet you went kind of easy on us on the other campaign that we started years ago. You probably,  

Rob Walling:
I did. I didn’t really want anybody to die. I mean, I didn’t fudge dice rolls, but I always kind of made sure it’s really hard. DMing not really hard. It is difficult. DMing first and second level campaigns, so fragile.  

Derrick Reimer:
Yeah.  

Rob Walling:
Well, Derek Kremer, thanks for playing.  

Derrick Reimer:
Well, that was nerve wracking. Thanks for having,  

Rob Walling:
You did. Okay. You got four out of five, if I’m counting correctly.  

Derrick Reimer:
Yeah, let’s call it  

Rob Walling:
That. Yeah, let’s call it that. He says.  

Rob Walling:
You’re listening to startups with the rest of us. I’m your host, Rob Walling, and in this episode, I talk with Noah Tucker, the founder of Social Snowball, about how he, as a nontechnical founder, has bootstrapped Social Snowball to millions in ARR. And in the episode, he says they’re between five and 10 million in ARR and growing about 30k of MRR per month. It’s an incredible story about overcoming the challenges of not knowing how to hire good engineers and having a code base that’s falling apart and eventually finding very strong product market fit, moving up market, and now he’s in a spot where he has an incredible engineering org in place, but none of it fell into his lap. And it’s really a story of a lot of hard work, grinding to learn new skills, as well as some luck as there always is. Before we dive in to my conversation with Noah, I want to remind you that if you are doing seven or eight figures in ARR and you’re thinking that you might want to sell your SaaS business, let’s say between one and a half and $20 million of ARR discretion capital is the place that I recommend people go. You can reach out to my tiny seed co-founder, who is the founder and the principal of Discretion Capital. Head to discretion capital.com. Or email AR at Discretion Capital if you want to learn more about how they can help you as a bootstrap, or mostly bootstrapped, SaaS founder looking to sell their company. Also, I want to invite you to microconf remote on May 21, it’s all about early-stage SaaS sales, and it runs from 10 am to 1pm Eastern Time. It’s just three hours. We’re gonna have three presentations, amazing talks by Steven steers, Nick debto and Anastasia Kubro, as well as founder by founder, which is like an online version of our famous microconf hallway track. Again, that’s on May 21 and even if you can’t make it, if you get your ticket now, you’ll get all the recordings you can buy your ticket at microconf.com/remote. I’ll be emceeing it, and I hope to see you there. And with that, let’s dive into my conversation with Noah.
Noah Tucker, thanks for joining me on the show.

Noah Tucker:
Thank you for having me.

Rob Walling:
It’s great to have you here, man. You’re the founder of Social snowball@socialsnowball.io. Your H one is scale your affiliate revenue with creators and ambassadors, and then H two is build and grow all of your word of mouth marketing programs from one place. Now, what that doesn’t communicate is that you focus on E-com.

Noah Tucker:
Yes. Yep. Exclusively Shopify brands.

Rob Walling:
And so this is the amazing thing to me about the Shopify ecosystem is you are a SaaS app that is focused on affiliates with creators and ambassadors, and so that’s a niche and then your niche down only to Shopify, and yet that is still a big enough niche to build an incredible business. Do you want to give folks an idea of where you stand today?

Noah Tucker:
Yeah, I mean the Shopify ecosystem is pretty big, but we have about 2,700 customers a bit more. So those are Shopify brands using the platform. We’re a full-time team of 24 and we are between five and 10 million of a RR.

Rob Walling:
Good for you, man. And did you raise any funding?

Noah Tucker:
No, I mean technically it’s very, very small Angel round, which is just friends and family. It was nothing significant. We burnt it all on Upwork developers in three weeks,

Rob Walling:
So you’re pretty much bootstrapped and we’ll get into our in 2021 around social snowballing. We’ll get into that a little bit, but hell of a business man, five to 10 million. When you started it, so you started it between, it kind of evolved, it sounds between 2017 and 2019. As you graduated from high school, you got into e-commerce and you said that you had your own, you had a brand or two that you built yourself and you ran into this problem, right? What was it?

Noah Tucker:
Yeah, essentially, especially I was young, I wanted to grow these businesses, so these are just random products I was trying to sell on Shopify, it’s supplements, electronics, all this. So one of the growth channels I wanted to explore was influencers on Instagram. And the only thing I cared about at the time was driving revenue with those influencers. So I wanted those influencers to create content post on Instagram and I wanted to be able to incentivize them to do that and track their sales. And believe it or not, there was no tool that was perfectly focused on just that. There was affiliate platforms that were more built for publisher relationships, so not Instagram creators. And then there were influencer management tools, but those didn’t really have a lot of affiliate tracking, so there was nothing to really incentivize them to drive revenue. It was more just about incentivizing them to create a post but not track any of the actual performance of the posts. And for me, bootstrapped, I was 17, 18, 19, I was trying to drive revenue, I needed to drive revenue. There’s nothing else that really mattered. There was just nothing that existed that was an affiliate platform for creators and influencers. And that’s essentially how the idea started.

Rob Walling:
That’s interesting. So it sounds like a Venn diagram where one circle is affiliate management, and I’m familiar with a ton of those. I’ve had founders of ’em on the show. And then the side that I’m still familiar with, not as familiar with is the influencer relationship side. We’ve had several applied to TinySeed, so I’ve talked to ’em, but I haven’t been as intimately involved in those. So would you describe social snowball as kind of the intersection of those two?

Noah Tucker:
Yes, very much

Rob Walling:
So. Tell me this then. What was missing from the traditional affiliate management packages that social snowball does that they couldn’t,

Noah Tucker:
I mean there’s a lot of product specific things which I’m happy to share, but more big picture, just the entire user experience was not as simple as creators needed to be. Creators are like consumers. Think of consumer SaaS, everything has to be frictionless and easy and intuitive, and those are not our customers, so we don’t have to deal with that. We sell to the brands, but everything onboarding, it’s just signing up, generating link and code, receiving a payout. Everything was just very, very clunky, very outdated. But for a professional like PR or publisher affiliate, they’re used to that. That’s their job. They’re fine with dealing with those platforms and it was built for them. For a creator on Instagram that’s never used a platform that’s more confusing than Instagram, it was just unrealistic.

Rob Walling:
So a big piece of it was influencer ux.

Noah Tucker:
You’re

Rob Walling:
Saying these, your experience. Fascinating. So just to paint the picture, you’re like 19 or 20 years old, right? You don’t know how to code and you’ve run into this problem. What the hell made you think that you should go build this? That’s super ambitious.

Noah Tucker:
I think it was just my naiveness. I didn’t know what to expect, and I was maybe running off the high of thinking, oh, well, I built a few e-commerce stores, how different is a software business? And I really did think that. And looking back, I just laugh at myself, but I genuinely thought that, okay, I know how to run a business. You have a product and then you run ads. And I was like, okay, well, for software, I need to hire an engineer to build a product, and then I’ll just run ads and that’ll be the whole business. I’ll build it once it’ll exist. No one will ever have to log into GitHub again, and then I’ll run ads and be rich forever. And that

Rob Walling:
Was it.

Noah Tucker:
That’s what I thought. Yeah, obviously I learned that wasn’t the case pretty fast.

Rob Walling:
I think that should be so when you’re rich and famous or you kind of are becoming that already, maybe this is going to be your course that you sell on X, Twitter and LinkedIn of just profit, build it once, never log into GitHub again, man. So thinking back, are you just like, ooh, cringe knowing now what you didn’t know? Should you still have done it?

Noah Tucker:
Well, I’m glad I did, but if I knew what I knew now, I don’t even know. It would’ve just been a totally different approach because that is what I tried to do. That wasn’t just my idea. I hired an agency and even though we were going to build an MVP, which turned into a complete disaster, but I had an MVP and then I literally started running ads to it, and then I very quickly realized that this is just not how a software business works, but I really went ahead and executed that idea. I saw that through before I realized that this is not how a software business works.

Rob Walling:
And did you do, aside from you needing this product, did you do any type of validation or have any conversations with anybody to maybe be like, yeah, at least there’s five other people that need it?

Noah Tucker:
A little bit. Honestly, at this point, I had been in this e-commerce community for a few years, so I had just friends that were running similar businesses and I would ask them, Hey, have you tried any of the affiliate apps and the Shopify app store? And they were like, yeah, all of them suck. And they shared similar pain points that I shared. So I didn’t do proper market research validation, but I was really confident in it just from my own pain and just the few friends that I reached out to.

Rob Walling:
And so as you said, you hired an agency to build an MVP, which is, yeah, that’s tough. You can get lucky, obviously. And we see, I see MicroConf, TinySeed podcast listener, founders do this, and I don’t know what the number is. I could make something up. It’s probably 70 or 80% of the time. It’s a complete show.

Noah Tucker:
I would say like 95,

Rob Walling:
It might be. It’s a really high number. I didn’t want to overstate it, but you obviously fell in that bucket as well. So when you say it was a show, what do you mean? Can you give us some numbers, timelines, what exactly happened?

Noah Tucker:
Yeah, so I think they charged me something like 20 5K, and this is just, I didn’t have a lot of money saved. This is almost all the money I had saved up from my previous e-commerce ventures. So they quoted me like 20 5K, and they said it would take about three months for them to get the MVP that I wanted live and approved in the Shopify app store. And I kid you not that it took 15 months before I terminated the contract early with them because we still couldn’t get a working product. It was the textbook agency disaster textbook textbook. And at that point then I hired a freelancer on Upwork who was decent enough to get it approved into the app store, and I thought he would stay on full-time, but he didn’t want to join full-time. He had a lot of other commitments. And then I ended up kind of going back into the wild trying to find developers.

Rob Walling:
And I mean, you’ve heard me say on this podcast that this with single non-technical founders or founding teams that don’t have a technical founder. This is the biggest headwind consistently. And we see it with TinySeed founders as well. It’s like, I don’t want it to be the biggest headwind, but it is the product. SaaS products are complicated. They’re more complicated than I wish they were, to be honest. And so I guess, how did you dig yourself out of this? So you’re in the Shopify app store now, but the quote, quality can’t be good. So you probably have a bunch of bugs. It’s probably hard to add features, a bunch of cruft and legacy, this and that. Did you get, I guess to kind of piggyback on that, it’s like did you get customers early when you were in a Shopify app store? And then how did you deal with this basic technical debt from the start?

Noah Tucker:
So we did get customers. I think the one thing that was my strong suit and still is just marketing and growth. And so at first we just partnered with a bunch of influencers that post YouTube videos and Instagram and whatever about e-commerce. And we actually got to 10 KMRR in the first three months. So we had decent growth. And with that 10 KA month, I was like, okay, I can find some developers to work with. That being said, I still didn’t know how to find a good developer because as someone who looks at code and just sees gibberish, you can’t tell a good developer from a bad developer. So I went back to Upwork, which is another mistake again, and I hired more freelancers and I mean, I’m kind of fast forwarding a year at this point because it really was a year of just hiring and firing, hiring and firing these Upwork developers, everything breaking nonstop, customers getting pissed, hiring again, firing again, just like it was a treadmill of that until I found someone who was pretty good and he told me he wanted to be my CTO.
And to me, this was exactly what I needed because I didn’t have anyone that I really trusted as a leader in the engineering side, this guy proved to be probably the best engineer I’ve worked with so far, and he wants to be my CTO. He said he’d take a huge pay cut in exchange for some equity, and I was like, okay, this is actually exactly what I needed. This is the stars aligning. And so this dude was based in Romania, and I told him, look, I’m going to fly to Romania. I want to meet you in person. Let’s sign the papers in person and do a toast and then kick off this partnership. So that’s exactly what I did. I was already in Barcelona with my girlfriend for New Year, so we just hopped from Barcelona to Romania, met with him, spent time, great vibes, signed the papers, and then I flew back to the US and two weeks later, he doesn’t show up for work one day and I’m just like, Hey, are you okay?
What’s going on? And then he’s like, Hey, can we jump on a call? I got to tell you something. I was like, okay. And we get on a call and he tells me that he has been applying to become a priest and he just got accepted and that he’s going to move to a monastery now and he could only work a few hours a week. Is that okay? Was what he said. And I didn’t say this, but I was thinking, no, that’s actually probably the least okay thing you could have possibly came to me with. You just told me you wanted to be my CTO. I thought we’re going all in on this thing, grinding late night together, getting things done. And he’s like, yeah, this is going to be a side project for me now I’m going to become a priest. So at that moment, I started another search for engineers and I waited until the day before his equity vested to let him go, and I let him go. And then I just had no engineers, just zero developers. I couldn’t even log into GitHub on my own and we just had nothing, just me and one customer support person. And that was probably the hardest part of it all.

Rob Walling:
That was one of the low points it sounds like. Oh my gosh. So you’ve spent a year trying to find an engineer. You finally find someone who wants to be your CTO, and the dude basically pulls a, it’s not a full on ghosting, but it’s kind of just drop the mic and exit. What the fuck was he thinking?

Noah Tucker:
Do

Rob Walling:
Still? Who would do that? It’s just such a weird thing to do to someone.

Noah Tucker:
It’s just one of those things that you would never prepare for your CTO having to become a priest. You just never think of that

Rob Walling:
Or bailing on you at all saying, I’m going to be your CTO. We sign papers and then being like whatever the reason to suddenly only be like, I can work five hours a week, this just makes no sense. It’s like, then why did you waste my time? Oh my gosh,

Noah Tucker:
Dude. Okay,

Rob Walling:
So for a couple months then you have no engineers, you in support. The product has to be a rickshaw with good duct tape and bailing wire where you just bleeding customers. Is everyone pissed off?

Noah Tucker:
So believe it or not, we didn’t lose too many customers because myself and the customer support guy, we were just grinding nonstop to keep people happy and just making promises that it’ll get better soon. Honestly, this was one of the hardest periods of my life. I just remember thinking I was just gloomy. I was just down. I was spending all my time trying to deal with these fires at the same time, find another engineer, and at this point I’d already hired 20 engineers and only one of them was decent, so I didn’t even really know what to do. Everyone I would talk to, I’d be like, is this just going to be the same thing over again? So I just didn’t really know what to look for. And then some of our integration partners were reaching out saying, Hey, your API is sending us thousands of requests.
We’re going to turn off the integration if this doesn’t go off today. And I’m like, I don’t know how to turn that off. It was just bad. And so what I did at the time is I just reached out to one of our previous freelancers that was also pretty good at different one, but also couldn’t join full time. That happened a couple of times and I was like, dude, I will do anything. If you could just spend weekends or nights or whenever you have free time fixing these bugs, you don’t have to build anything else. The codebase you’ve worked with us before, just please fix these bugs. And he agreed to it. And so that kind of got us in a slightly more stable place. And then I was just basically begging him to join full time and he wouldn’t because he had a really high paying job that he was at and we couldn’t beat that. But he told me that his cousin was interested in a full-time job and that his cousin is also a great developer and I just took his word for it. And his cousin joined and his cousin is still with us today, and that was employee number one at social snowball.

Rob Walling:
Wow. First.

Noah Tucker:
Yeah.

Rob Walling:
And that was three plus years ago, right?

Noah Tucker:
Yeah. Yep.

Rob Walling:
Yeah. You know how I often say it’s hard work luck and skill. You kind of finally got lucky because you went through 20 devs and one of ’em was eventually good. Is that a little bit of what happened there? I mean, that’s crazy. The odds of that, of his cousin being around with you that long after churning through so many,
I want to step back a second because I think we glossed over something that some listeners will hear and be like, wait, what? You said, I partnered with some influencers, got to 10 KMRR in three months. Now no one does that. So here’s what I want to do is what do you mean partnered with influencers? Did you know already have a network of influencers? Could someone replicate this or was this only something you could do? And it was like 2019, right? It was like six years ago. I just want to dig in a little bit on that so someone might understand how you got, because even getting to 10 K in three months is something, and even with a crappy product, at least you have some money to pay someone to do something at that point versus if you are at one K after three months, maybe you’d have just punted on this whole thing after grinding for a year. So let’s double click on that.

Noah Tucker:
I would say, well, to answer your first question, it’s absolutely something you could replicate today. I talked to another founder just a couple days ago who is also selling a Shopify app and partnered with influencers and did really well with that, so I know it’s something you could replicate. I definitely had a bit of an unfair advantage because I did know some of the e-commerce influencers that would be super relevant to talk about social snowball, and that was the first few influencers. And then from there, I was just doing cold outreach, reaching out, getting people’s emails from YouTube and just reaching out. But yeah, I just asked, there’s plenty of people on YouTube that talk about e-commerce strategy and marketing, and I just asked the ones that I know and then a few others to make a video about social snowball and to try the app and make a case study with it. Just very simple things like that. And it was mostly YouTube videos. I think some people would post on Instagram eventually TikTok, I think this was before TikTok though. And so yeah, that first 10 KMRR just came strictly from those influencers.

Rob Walling:
Got it. And so tell us how, I mean, obviously I can go to your site and look at your pricing, but when you have 10 KMRR, that is brands that are paying you money, are they paying you a monthly fee plus affiliate commissions? I’ll put in quotes. Is that how your revenue works?

Noah Tucker:
Sort of. So I mean, our pricing has changed a lot. We’ve iterated it probably four or five times since. But yes, high level brands always pay us a monthly fee. And then we used to have more plans that do this. Now we only have one starter plan that does this where we, it’s not that we’re charging the affiliate commission up to the brand. I mean we have the software to do it, but the brand pays the affiliate commission directly through social snowball. We on the starter plan only take a percentage of affiliate revenue. 3%. Yeah.

Rob Walling:
Okay. And you’ve also mentioned to me that you’ve listened to this podcast for many years. Do you remember when you started?

Noah Tucker:
Yes. It was actually in the very, very beginning. Dude. Very, very beginning. One of the freelancers that I worked with that things didn’t work out with said, you should check out startups For the Rest Of Us. And I checked it out, and I kid you not from then until now. I maybe have missed one to three weeks ever. And I’ve listened to every week, and I’m not just saying this, I’ve told this to a lot of people, I say this behind your back, this podcast has helped me as a resource more than any other resource in the world, period. It really has. So yeah, so this is an exciting moment for me too.

Rob Walling:
Yeah, thanks, man. That’s a really big deal. It’s super meaningful to me because you know why I do this podcast now and I could just not, it’s to help people and if I can help you, and maybe someday you buy a book or you become a TinySeed founder or you invest in TinySeed or whatever, great. And you know what? If I had just able to help you, that’s cool too. And so, yeah, no, that’s super meaningful to hear, especially given the success you’ve had. So that’s awesome. Speaking of success in TinySeed, I can’t ignore this. So in 2021, you applied to TinySeed, we interviewed you. I remember talking to you.

Noah Tucker:
You did,

Rob Walling:
And we rejected

Noah Tucker:
You,

Rob Walling:
And this is one of, I’ve told you this in the past, but venture capitalists have what they call their anti-portfolio. So if you say no, if Google pitched you and you said no to them and Facebook Zuckerberg pitched you and you say, no, you said that’s my anti-portfolio, it’s the portfolio. I wish that I’d funded with TinySeed. We really don’t have an anti-portfolio. I think there’s a couple companies that have come along that have gotten quite large that I’ve been like, damn, we should have invested. But usually the signals at that point were not. They weren’t great. And it was like, I don’t regret saying no. Right? But you are definitely at the top, one of the top of the list here in the anti portfolio because doing five to 10 million and growing as fast as you are is just super, super impressive. But my memory was that your churn, I think you said you applied, you were around 20 KMRR, which is

Noah Tucker:
Something like that

Rob Walling:
Great sweet spot for us. That’s why we talked to you, and I’m sure you were growing, you were hustling, but I remember your churn being really high and we were trying to, there’s an influencer thing where it’s like, Ooh, is influencer space going to keep going? Is it really a thing? Again, this is four or five years ago, but also I think the churn was a big blocker. Do you have memories of all that going down?

Noah Tucker:
For sure. I remember talking to you and I was super starstruck, and then you told me to calculate my churn and I was like, oh, no, you asked me what my churn is. And I said, I have no idea where would I even look to find that? Especially because we don’t build through Stripe, we build through Shopify’s billing API, which at the time nothing integrated with. Now there’s a platform called Mantle, which is great, but at the time there was literally nothing. So I remember I spent, I think it was, I’m not even exaggerating, two or three hours going through every single transaction and all we had was this raw transaction history of everything that’s ever happened, and I was using a pen and paper and adding things up. I don’t even remember how I did it, but I figured out how to calculate churn literally by manually adding and subtracting or whatever, every single transaction. And then I got a number and it was something super high back then, like 10% or something. So it makes sense that you rejected me. Honestly, that is really high.

Rob Walling:
It’s a bummer. I do remember, I know when I ask in interviews about churn, and if someone doesn’t know their churn, that’s a weird signal to me as a SaaS founder, it is just like, wait. That is probably the number one number I look at. I looked at as a founder as my MRR, because I just want to see it up under the right, and probably my number two number was churn, and so I knew it by heart all the time, and then I think it was higher than 10. I bet I could go back. I think it was probably 15 or higher, and I remember really? Oh, really? Yeah, and I remember being like, uhoh, this could be an issue, but hey man, water under the bridge

Noah Tucker:
Would’ve probably said the same thing. That’s really high. That is really high.

Rob Walling:
It is. And here’s the thing, our signals, none of us are a hundred percent. You just can’t be got to be right. I talk about this all the time as a founder, do a bunch of shit and be right enough of the time that those ones win and that’s what it is. Just because we said no to you doesn’t mean TinySeed doesn’t work, and it also doesn’t mean we make bad decisions. It means sometimes we’re not correct. Sometimes we can’t see the future or sometimes the information presented doesn’t match the filter that we have. I’m curious now you built an incredible business. So you applied to TinySeed, you got rejected. Was that discouraging to you or were you just like, Hey, I’m going to do this anyways, whether they want to be on board or not?

Noah Tucker:
Yeah, I mean I definitely was a bit disappointed for sure, but I was just like, I mean, it is what it is. I can eat rejection all day. Rejection’s not going to slow me down. So I was just like, all right on where we go. So I mean it was definitely a bit disappointing. It was a big listener of the podcast, but it wasn’t going to stop me,

Rob Walling:
Didn’t change the trajectory. And that’s the best founders is when you’re not waiting for permission, you’re not waiting for someone to anoint you that like, oh, you’re going to succeed that me investing in you means you’re going to succeed and me not means you’re not going to. That’s just not true as evidenced by your story. So flashing forward, then finally have a developer full-time, first full-time employee and you start to pivot up market. Why?

Noah Tucker:
Honestly, it was just maybe partially from your podcast, just resources I was listening to in general just really made that sound like an appealing move. Also, the small segment of users that were a bit more upmarket for us were the best customers, obviously highest paying, lowest churn, easiest to deal with, just the basic stuff that you would expect. I’ve heard

Rob Walling:
That before.

Noah Tucker:
Yeah. So yeah, it was kind of a realization I had at some point and at the I was like, okay, there’s probably a lot of things I need to do to make this a reality. And it was really a pivot of the entire business that honestly took about a year from me realizing that and deciding this is where we’re going to go until I felt like, okay, we’re actually in a place where we can work with these bigger brands more consistently. So it’s a combination of product. The app had to have the features that these bigger brands expected, so that was just a slow building, a certain set of features. It was the pricing. We wanted to start pricing higher, but that was actually the last thing we did because we were like, let’s build all the pieces of this and then increase pricing. So product, customer success strategy, I hired someone to be full-time just onboarding.
I want someone hands-on talking to these brands, really building a relationship and helping answer their questions, not just reactive chat support, but proactive onboarding. And that was a big thing for us. Marketing as well. We were kind of relying on ads and influencers and the Shopify apps were before, and that’s how the smaller brands were shopping for software. We needed to find where the bigger brands were shopping for software, and now we’ve really cracked that code and we could get deeper into this, but it’s a combination of partnerships, events in person and online, content marketing, and then just brand and community stuff. What’s worked really well for us, and that was a big learning curve as well, and sales. I started taking more sales calls and actually talking to brands before they would install. So all of those pieces had to slowly be changed that none of these are overnight changes. Then once I felt like, okay, we’re in a good place, switch pricing, we made the starting plan at a hundred a month at the time, it’s higher now, but it was a hundred month at the time, and growth took off much faster at that point. That was a pivotal moment for social snowball.

Rob Walling:
Yeah, I want to call out something you said that I think some folks could miss is there’s a difference between raising your prices and going up market. Those are two different things. They can be the same, but a lot of times you are just underpriced for the market. You charge on 29, you can charge 49 to the exact same customer base, same positioning, same product. That’s not what you did. Going up market usually means a whole new customer set or subset that you have to, as you said, build features for build a customer success org for which in your case was one person, build a sales force and then raise prices. It’s complicated and it can take a long time. In season one of TinySeed Tails Gather did this, and it took them, I think it was like 12 months, it may have even been 18 to get there. It was somewhere between 12 and 18 months and they thought it was going to be six, which of course you do. And then they get to the 12 month mark and they’re like, we still don’t have all the features the big brands needed. How did you have the conviction to do that? Because to spend that much time and presumably that much money of your profit, you had to feel very convinced that was the right move.

Noah Tucker:
It was just from the data that we already had. We saw that these bigger brands were doing better. Also, affiliate marketing, sometimes smaller brands, they just don’t have the resources or to get it off the ground. It’s not something that you just turn on necessarily. It takes a bit of work, and the bigger brands had the resources, they had the influencers. It was easier for them to find influencers to work with or if they were running a customer ambassador program than they had more customers to bring into the ambassador program. So everything just worked better for the bigger brands, and that was pretty clear to me. So I think that’s kind of what gave me the conviction, and maybe this is a flaw, but something that I still hold onto today is that we can be the affiliate platform for all kinds of brands. So I never felt like I was letting go of the smaller brand segment.
I just felt like we were also allowing us to play in this bigger league. And so today we run what you would refer to as a dual funnel where we have a self-serve flow for the smaller brands. I mean it starts at 200 a month now, but that’s a smaller brand for us now. And then we have the sales led process for the bigger brands, and maybe if we were to shut off the self-serve, we would do better if we get focused, but I don’t know. I kind of like the idea that we can support any kind of brand.

Rob Walling:
So this next question is interesting. I’m trying to figure out exactly how to ask it, but really at the top level it’s like it sounds like you were right most of the time, aside from the tech developer hiring issues, a lot of other things have gone really well, like the early marketing you got there quick even deciding on the idea, the execution on the idea, the marketing, the sales, then the going up market. There’s a lot of things that went right. How did you do that? How did you learn to do all this? Right? You’re 26 now and you manage a team of 24 people. You’ve never worked a day job where you learned management skill, you know what I mean? Just a broader entrepreneur question, how did you execute on this as well as you did?

Noah Tucker:
I really think there’s no secret to it. I think I just was learning as I went and I was just trying to be a sponge and just absorb as much information as possible. So things like this podcast, other podcasts, I had a couple of advisors that just gave me advice, almost like mentors you could say. And then I would just fail all the time, just like the engineering stuff. We didn’t even talk about what our engineering team is now, which I think we have one of the best engineering teams literally possible. And to think about where we were when I had no engineers, I just got back from Romania, I was depressed. My app was completely falling apart to the fact that we have a nine person, Northern California based killer engineering team today. That is crazy. But that’s only just from aggressive trial error.
Just trying, failing, trying, failing, trying, failing. Okay. I learned a little thing there. Trying, failing, trying, failing. Okay, now we got a little bit closer and I think I just applied that and everything. And same with team building, you’re mentioning managing a team of 24, the first 10 iterations of our team, not just the engineering team, but all teams didn’t work. I hired the wrong people in every department. I had to fire people, people quit. Things didn’t work out. This happened across every part of the business. I think the only thing that I had a good knack for that was relatively smooth was the marketing and go-to-market stuff that was less bumpy, but everything else was failing, failing, failing, failing, and then finally figuring it out,

Rob Walling:
Doing a lot of things quickly and most of them worked out is what it sounds like eventually. Wow. So I do want to hear this story about, you said you have an incredible engineering org now, and I have a note here in 2024, which is last year, hired my dream, CTO is the quote, but how did this come about? It sounds like you’re all locked in Northern California engineering team. Does that fall on your lap or what?

Noah Tucker:
Okay, so I mentioned our first full-time employee, who’s that? Freelancers cousin. He’s still with us today. He’s awesome. But he basically helped us hire an engineering team. So we hired a couple other engineers. We ended up building a functioning engineering team. They weren’t the best engineers in the world, but they were good enough and we were moving along. We were slowly fixing debt. Some things were still breaking the app but still go down sometimes we were building new features, but it wasn’t like a complete disaster At a certain point, I guess last year, probably early last year, I realized this is not what’s going to take us to the next level. And it started to feel like engineering and product became an anchor to the ship again. And while marketing, sales, partnerships, customer success, brand, community, everything else was just sailing us forward. I could feel that anchor just pulling us back.
And so it wasn’t that the engineering team was a disaster, it’s just that it wasn’t the level that I needed to be at the scale and that we were in what my ambitions, what I wanted to accomplish. So I did what I usually do when I want to hire someone out of my league. I just literally went to LinkedIn, went to a lot of our competitors, some of our competitors, the big legacy competitors use our tech stack, and I reached out to a lot of the most senior engineering titles that were either currently or previously at those companies. And maybe I reached out to 20 people, got five that were interested. And then this one guy was literally the most qualified person possible. He was the VP of engineering. The only reason he wasn’t the CTO is because there was a technical founder there. So really the top engineering leader at literally our biggest legacy direct competitor that happens to also use our exec tech stack.
He was the third engineering hire there, and he exited during their series B when they had 200 or 300 engineers. He built the whole org. He knew his stuff, he knew the product, he knew the space, he knew how to build a team, he knew everything, and we got along super well, and he was super excited to join and he joined. And then when he joined, he brought on a lot of the top engineers that he worked with at this competitor as well. And he knew who was really good and they were all based in Sacramento because this company was based in Sacramento, in person. So we just have a bunch of really great engineers in Sacramento led by the CTO, and now I feel like we have a great product and engineering team. I think this is what I’ve been dreaming of for the past five years.

Rob Walling:
Yeah, it sounds like it. And it sounds like you kind of earned it, like you did all the hard knocks to get there. As I hear your story, man, it feels to me, I’m curious what you think about this assessment. I’m going to name two things that I think might be your superpower, is one of them that you just do not give up, and is the other one that you are not afraid of failure or rejection?

Noah Tucker:
I would say there’s are traits of mine. I would say my superpower though, with this stuff is getting people on board with my mission. I think I’m a great storyteller. I think I’m great at getting people excited and it’s not like I’m manipulating or being fake. I am genuinely excited about what we’re building and the path forward. And I think I just do a really good job at getting other people on board that mission. And I think that’s how I’ve been able to hire talent that’s definitely punching above our weight.

Rob Walling:
Yeah. How do you do that? Because I’m a storyteller too, whether they’re on this podcast or just to my team or whatever. How do you get someone like that on board with your mission? Is it just that, well, yeah, I’m curious. Do you tell ’em a story? Are you like, this is where we’re going, join us if you can make it, what is in your head when you’re doing that?

Noah Tucker:
There’s no concrete strategy. I literally just get on a call with them and I tell them, this is the problem we’re solving. This is what we’ve done so far, and this is what we can do. This is where we’re going, this is what we’ve achieved so far. And I think it’s just my excitement. I think I just have contagious excitement when I’m convincing someone to join the mission. And I think that’s really it. I don’t think there’s too much actual strategy to it. I think I just, I’m very, very clear on what we’re doing and where we’re going. To me, the vision is crystal, crystal clear. So if they have questions or if they want to just learn about what we’re doing, it’s not like I have to sit and think I know exactly what we’re doing, why we’re doing it, where we’re going, what the future looks like, in my mind at least. And I get really excited when I talk about it because it’s really exciting to me. And I think people just like that energy and they want to be able to build something cool, and this is their opportunity to.

Rob Walling:
And these days, I mean, your growth has accelerated dramatically. Obviously, if you’ve gone from give or take 20 KMRR four years ago and you’re, as you said, approaching between five and 10 million, what’s it like these days in terms of your growth trajectory?

Noah Tucker:
So I mean, recently it’s been really strong. January and Q1 is always a little bit slow for e-comm because there’s just all the sale periods and Black Friday’s over, so there’s always a bit of contraction and churn there. But we’re right back on track after that. And we’re adding something like 30 K-M-R-R-A month on average right now. Geez. Yeah, I think past 30 days it is right around exactly 30 k. And that’s new MRR expansion.

Rob Walling:
Amazing. Congrats man. Hell of a business. I wish TinySeed could have invested, but here we are. Here we are. Noah Tucker, thanks for joining me on the show.

Noah Tucker:
Thank you for having me. This is awesome.

Rob Walling:
If folks want to keep up with you, obviously they can go to social snowball.io to see what you’re working on. Is there a particular social channel that you hang out on? It does not look like you’re super active on X Twitter.

Noah Tucker:
I’m more of a consumer on X. Twitter. I used to post more, but I’m not super active. But yeah, extra Twitter, I do check my dms probably at least once a day, so that would be great. And also LinkedIn. I’m super active on both, so yeah, either would be fine.

Rob Walling:
Awesome, man. Thanks again.

Noah Tucker:
Thanks for having me.

Rob Walling:
Thanks again to Noah for joining me on the show. And I realized that Noah actually is active on X Twitter. He is N-O-A-T-U-C-K, Noah Tuck. I know Noah and Social Snowball have great things ahead, and I appreciate him joining me on the show to share what really is a pretty incredible story. Thanks to you for listening this week and every week. This is Rob Walling signing off from episode 774.

Rob Walling:
This podcast is brought to you by Mercury. I’ve been banking with Mercury for years and whenever I set up a new account, I’m reminded why traditional banking feels stuck in the past. When our previous bank faced solvency issues, we needed to spin up new accounts quickly that could handle millions in funds across multiple businesses. Mercury had us up and running almost immediately. I manage half a dozen different Mercury accounts across a wide range of companies from my personal single member, LLC to MicroComp, our seven figure global events and education platform to TinySeed our venture fund and accelerator. Mercury easily handles them all. The interface is elegantly simple for daily banking, paying invoices, and sending and receiving international wires, yet powerful enough to handle the multi-step approval processes we needed to put in place. When funding founders with large transfers, anytime founders ask me who they should set up their accounts with, I send ’em to mercury.com. 

Check the show notes for more details. And note that Mercury is a financial technology company, not a bank. Welcome back to another episode of Startups. For the Rest Of Us, I’m Rob Walling, and in this episode I talk with Maya Voer. She’s the author of Go to Market Strategist, everything You Need to Reach Product-Market Fit, and her book and her consulting and her writing is all focused on B2B SaaS. We have a great conversation today defining what go to market is, because that’s always a term that I’ve struggled with because it feels very MBA, like feels theoretical in a way that maybe isn’t helpful for Bootstrappers, but I’ve become more comfortable with it over the last several years and Maya has a nice way of communicating that Go-to-market or GTM is really just pricing and positioning and packaging and customer. It’s like an umbrella term for several things. 

So we dig into that. We dig into ECP, which is your early customer profile, which is different from your ICP as well as some early stage scrappy marketing approaches that don’t scale. Before we dive into the episode, I want to let you know about the MicroConf Growth Retreat, a new event we’re launching in London from May 14th to the 16th of 2025. This isn’t your average conference, we’re keeping it intimate with just 40 to 60 SaaS founders joining us for deep networking and invaluable insights. We’ll have focused morning work sessions where you’ll gain clarity on your business challenges, followed by unforgettable afternoon excursions, exploring the best of London, and then we’ll end each night with a reception. Tickets are limited, so head over to MicroConf dot com slash retreat to secure your spot. We will sell this event out. If you want to go to the MicroConf Growth Retreat in London, head to MicroConf dot com slash retreat. With that, let’s dive in to my conversation with Maya. Maya, thanks for joining me on the show,  

Maja Voje:
Rob, it’s such a pleasure. Let’s talk about everything. Go to market today.  

Rob Walling:
Everything go to market. Alright, so I want to ask you to first define for someone who has never heard the term go to market or they hear it and they think, isn’t that something that Proctor and Gamble does with a new brand of toothpaste? It’s very MBA speak. How do you break it down for a mostly bootstrapped founder who is just trying to build a product that people want? By people, I mean businesses of course, and trying to sell market that product. What does go to market mean for them?  

Maja Voje:
Well, that’s our best plan to reach. Early majority, the first customers are not that difficult. These are usually people who come from your phone book or some sort of social media, early adopters group, so that’s not that much of a rocket science. Then in the later stage, once you defend product-market fit, you are facing a big question. So how to build these predictable and scalable ways, how to get customers. These are called go-to market motions, and that in my science is the holy grail of the go-to market stage for startups, how to just stop worrying where our next customer is coming from, that we have some sort of predictable engines to do the work so we can maybe take vacation one day. That’s nice, but I have to emphasize here, and it’s such an important thing because oftentimes go to market is mistaken for marketing or sales or LinkedIn. 

So it’s a combination of different factors and if you are deep into the product, you will probably say, oh, go to market is that, but hear me out first we have to find a very good market market where we have a chance to win. Then we are dealing with just this selection of customers. So what are the customers that will indulge our product and help us grow this business? Later on, after we kind of figure that out, we can return to product and maybe we could be even playing around with different value propositions and different ways. How do we provide value? After we have a little bit of an initial traction going on, initial feedback, then we have to learn what to say, how to present our product. That’s positioning and messaging, and nevertheless, it’s nice that people pay us as well. So we are not doing everything for free. That’s pricing. And later on we bump into the last component, which is growth. So this is how to get customers. Ideally we would build go to market motions. Hope that was clear, but if you have any sort of sub-questions, this is my favorite topic and I cannot shut up about this.  

Rob Walling:
Your favorite topic so much that you wrote a book  

Maja Voje:
That’s right  

Rob Walling:
On it called Go to Market Strategist, everything you need to Reach Product-Market Fit. It is that there’s a hard copy there. You have paperback and Kindle, and of course it’s available on Amazon, and I believe this is how you came across our radar. Folks on X Twitter have been talking about you. And then go-to-Market strategist. The book came across our radar, and I think before I want to dive into this concept of ECP, right? It’s this early customer profile. But before I do that, I guess in summary, saying go to market is really this umbrella term for packaging up and bringing the product to market. And that’s the thing I think that confused me. Even five years ago, whenever I heard go to market, I thought, this is very academic, it’s very theoretical, it’s very big business, and it’s because every example that I read in a book always used Intuit and Best Buy and Target and these Fortune 500 companies, you know what I mean? 

And none of that ever applied, but if you package it up as no, it’s your early customers, it’s the market, it’s the pricing, it’s a plan, right? I think the summary, so I want to come back then to ECP, this concept that I just mentioned. So we talk a bit about on this podcast, about ICP, your ideal customer profile, and especially if you’re early stage, that can be impossible to know, difficult to find. Once a business is more mature, the SAP makes more sense. Maybe you have one, maybe you have two, whatever. What is this ECP concept? And talk me through how, again, maybe an early stage bootstrappers should be thinking about it, why it’s important to them.  

Maja Voje:
Awesome, and this is such an irrelevant question for our audience who’s mainly in B2B, right? Because in B2B, you know how it is. If you want to target big companies, you need to go through compliance, you need to have a couple of badges and everybody will ask you, can you show me 5K studies, seven use cases, and yada yada that you don’t have at the moment. So we have to build our way to the ideal customer profile. It’s very good to have a strong vision. Literally, I’m working with enterprise cloud AI softwares right now, and we are dealing and bumping into the same problem. So the technology is really good, but so far ideal customers have big, big, big considerations just like doing pilots and use cases because it’s not enterprise safe yet. So in order to bridge this gap between where we want to be and where we currently are with our product, our traction, we are using this proxy of early customers in order to strategically generate references and traction so that we can move up market later on. 

And why I like to call it early is literally a very personal reason as well because you need to do something right when you are launching. And of course you can have this big vision that might be true in three years, but where we are today, it’s a little bit different. So you need people who are thinking differently and acting differently. Early customers usually have much bigger risk tolerance, so they are those early adopters. There is a new tool I would like to play around a little bit. Sometimes they’re even inclined to break corporate rules. They are just using it from their personal emails or something like that. So I became obsessed with just this idea how to get early traction. So first in your beta it might be free, and these are not customers, these are users, and there will be huge discrepancy between people who are using it and saying it is awesome. This is why I wanted to differentiate this concept from just early adopters because the essence of customers is that they are paying for it. Meaning not only they are saying they are loving it, but we can actually reinvest in our business. So that’s a little bit of a why I’m so bullish on this early customer profile.  

Rob Walling:
So that’s an early customer. It sounds like ECPs are your early adopters, right? They’re willing to try your product  

Maja Voje:
That are  

Rob Walling:
Paying, that are paying that their customers, not users. This is something I often say on this show. Someone will say, I have 10,000 users, and I’m like, great, zero people paying you. It’s 10,000 customers. That matters. Okay? So ECPs are willing to try your product, provide feedback. Now, what’s the danger here? It seems like it could be pretty easy to make big mistakes. It’s like I’ve seen folks launch, you get 20, 30, 40 paying customers that maybe we could call ECPs in this context and they’re all over the place. Someone’s like, I want this to become this other competitor and I want this feature. And it’s just like 40 different people, 50 different feature requests. I can imagine this being overwhelming. So what are some big maybe mistakes that founders make as they’re trying to build out their ECP?  

Maja Voje:
Okay, best case scenario. You think about this before it happens. So when we are just deciding who is going to be ideal customer for our profiles, we can come up with a couple of hypothesis. And at this stage, I love to use prioritization framework. So I never, ever, ever want to say to people, just select one and let’s live with this for the next six months or something like that. No, your technology, your maybe AI agents could be helping a compliance B VCs, C banks, okay, we have three ideas of the segments. Do we really feel secure that we are just like saying maybe I like VCs, let’s go with VCs and just take it for granted for the next months of our go-to-market operations? No, we need to do validation first. So ideally you would not encounter this problem, but in reality you often do, and especially when you are launching and you are reverse engineering who either retained best or who converted best, which segment with your product, you can come into the very conflicting situation. 

So for example, freelancers love my AI content writer, but agencies would use it if they had this and this and that feature. And you’re like, okay, right now mission critical is to get 50 customers. At this point, I can no longer heavily invest in the product. And previously I have decided that my vision is to help small and medium businesses. So currently I don’t want to deal with this partnerships and with these agencies, by the way, I love to work with agencies. They are great accelerators, but point you have to be true to your vision, to your product vision. And if you have done the market research correctly, the segmentation, if you have done interviews, that could be a little bit easier because you will feel much more confident about your choices. But then another very common mistake with early customers is also how we are acquiring it because in literally the channels that we will choose for launch, terminate, who are we going to attract? 

So it’s mission critical to also do a very solid research on which channels our ICP is. And that’s not that difficult these days because JGPT, clo, what else could we be talking about? So yeah, definitely do your homework and especially if you are dealing in a very, very, very, very strict industries. For example, injection molding or some sort of transportation companies where people are not online, you can literally ask them where do they find relevant tools and information to advance in their career or businesses? So you can get this information from some of your people as well. Don’t just blindly follow this blueprint and I should post on LinkedIn and maybe Hacker News and product hunt launch if that’s not relevant for your audience, that’s a big mistake that we have to avoid.  

Rob Walling:
I like to dive into examples if we have them. Do you have any really good B2B SaaS case studies for ECP implementation?  

Maja Voje:
So I will not throw in the names of the companies right now. Some of the founders are public with this one, some are not. But yeah, let’s talk through a couple of ones. We have an AI content writer, a typical staff for repurposing a little bit better train that you could in your projects. And it was super, super, super interesting because we just launched, we thought that it is going to be a very broad product that everybody, every marketer and let’s say salesperson, business developer who needs to post on LinkedIn could be benefiting from this. That was our initial assumption. But once we saw the results from the traction, I mean users was always okay, but customers who were the first segments that were converting, rightly it was founders. So that was a big surprise. We anticipated that this is going to be very interesting for marketers, but we ended up serving founders and we literally had to pivot the communication of that one because just like for marketers, the value was not that convincing. 

We could not differentiate it much nicer than copy AI or what you can do in Jet GPT, but for founders it worked amazingly well. We have another example from an analytics tool and analytics tools. You know how they are, they’re a little bit heavier to sell, right? It’s a big investment like CRM, you have to learn it, you have to commit to using it for a longer period of time. So these types of launches are specifically interesting when they are done on the red ocean market. So when there is a lot of competition, and usually we go with vertical positioning, meaning that you narrow down to one specific audience, one specific persona and go all in to get early traction. Well, for this one, the situation was very similar. Again to what you’re saying the tool got, I kid you not 50,000 users from Reddit, an additional form and everybody was like, yay, this is so cool, yada yada. 

Product managers were playing around it. So far monetization was a pain in the arts. So what happened there was that initially they went with this idea to be serving in the developers and yada yada, but later on they figure it out that the real customer for them are just small and medium businesses, B2B businesses. So that was a huge one as well. I mean, I can be going on forever, forever, forever. It happened happen on to my launch because there is another fallacy that is kind of dangerous here. As a founder, you have this vision and usually the vision is to be helping everybody and to make your product super horizontal and useful in all different perspectives. And I was kind of the same. And there is another fallacy, so I literally envisioned that I want to serve growth people and marketers, people just like me, AKA eating your dog food. But in reality, just like after seeing the response from the market, these ideas of segments, who is actually my target customer refined probably 11 times since I am operating this GTM strategist venture. So end of story, even when you nail it, market changes, technology changes, go back to the drawing boards, make sure that you are always, always, always on point with that.  

Rob Walling:
Yeah, there’s a lot to that. You have done a tremendous amount of writing specifically and maybe you’ve also done speaking in podcasts, but I’ve seen your book and I’ve seen these articles that you’ve written@gtmstrategist.com, one of those that really caught my attention. The title is Go to Market Actions, do whatever it takes to get Customers 12 proven ways by Unicorn Companies and how to apply Them Now. And the thing that I find really interesting about this is again, if folks who are familiar with GTM or Go-to Market go-to Market Motions, that’s usually the term everyone hears and that is actually bringing the product to market. It’s doing, I think you said five things earlier, right? It’s like pricing, packaging customers, blah, blah blah. Yeah, but you’re talking about GTM actions go to market actions which happened before go to Market Motions, much like ECP is before I-C-P-G-T-M actions are before GTM motions as far as I’m reading into it because this is the first time I’m hearing of all this, but we’re going to link this article up in the show notes for sure because you have this great diagram that we won’t have time to go into in an audio podcast, but you have the 12 different GTM actions versus go-to-market motions. 

I want to talk about a few of these because they really remind me, frankly, they remind me of what a lot of our listeners do, which is our listeners. They are almost all of them start bootstrapped. Most of them probably start nights and weekends. Some of them have the luxury, they have a spouse or they’ve saved some money and they’re able to quit their day job and do this and some of ’em raise money, 10, 20%, probably 20% of our listeners wind up raising some type of money. So it’s not about bootstrapping versus not, but there’s a certain level of scrappiness, there’s a certain level of doing things that don’t scale and not saying if I want to be a $10 million company, I have to act like a $10 million company today. And if you act like a 10 million company today, you’re probably making a mistake, right? Much like a unicorn. If you want to become a billion dollar company, you don’t act like that today. You do these scrappy early stage things, which I think, am I summarizing it correctly? That’s kind of what you’re talking about GTM actions, they may not scale, but they get you your first 5, 10, 50 customers.  

Maja Voje:
I love it. No, seriously, your founders are heroes. You totally understand the sentiment of doing this. Why? I mean, when you are just like this founder and you have marketing growth, sales and fundraising and product and HR and accounting, this portion of energy that you can devote into this, it’s critical, but it’s not like your full day job. So I saw a lot of people just like being so burdened, so burned out by I should be posting on LinkedIn five times a week. I should be writing a weekly blog post. I should be doing this and this and this and this and that. Why? Because the big companies are doing this. But methods, actual techniques, how to get first customers doing things that don’t scale is a very nice comparison of it. I have literally talked to tele, tele is this loom like video recorder, but they have raised 2 million before and in the article it is mentioned that okay, they were with a Y Combinator and the first batch of customers were just like their peers from the incubator. 

So it was nothing fancy. Then they did outreach. And you don’t have to build full fetched marketing and sales machines. If your job to be done is to get 50 or 100 customers, you can do stuff which are much, much, much easier, often very inexpensive, even for free. But you have to go out there and this is the biggest obstacle, Rob right there. People are so afraid to just send out a couple of messages post on a couple of forums. I don’t know why. I’m sure that it is psychologically and I’m not an expert, but yeah, those actions are easier than you think.  

Rob Walling:
Got it. And I did want to touch on a couple of these. You have 12 examples again in this article. What I like too is that you kind of starred a lot of these are things that I’ve talked about on this podcast. These are super practical things.  

Maja Voje:
Awesome. Which one is your favorite though, Rob?  

Rob Walling:
Well, I mean, so your third one is warm outreach. So relationships or credibility. You also then have a cold outreach with a hook as two separate things. And I’ve talked a lot about this concept of concentric circle marketing, where at the center or people that know me, that’s the warm and then people I have relationships with and then it’s my audience is probably the next one and then it’s my network and then it’s my network’s audience. You got concentric circles and that’s what you’re talking about here.  

Maja Voje:
I love this concept. I would love to see a visual, but just going back to our previous discussion about ECP, you have to be intentional because even people from the second cycle who could potentially do this introduction to let’s say more distance cycles, you need to have good use cases. You need to have good case studies and just like traction. Because if you are pitching that, you have these accounting software for let’s say high schools, then if I work in construction, I’m not interested in this because I would be much more inclined towards seeing references, case studies from my vertical. So whenever you are starting out and doing this segmentation work, think really hard. Are these companies attractive for case studies? Will I be able to move up market if I do this business? If your discrepancy between early customers, the one you can close today and ideal customers, you should really, really, really be intentional about what type of businesses are you serving or white gloving.  

Rob Walling:
And another one that I like is fishing on forums and online communities.  

Maja Voje:
Are forums still a tin crop are still a thinkink? Which forums do you need?  

Rob Walling:
They are. I only go to forums when they mention something I have an alert set up for. But Reddit is going to be forms in Hacker News. It used to be Cora, but Cora. Cora kind of went bye bye. It’s still around but people aren’t using it as much. But I call these hangouts where people hang out online and oh, Facebook groups. I’m not on Facebook, but Slack, private Slack channels and everything. I call ’em Hangouts. Where if I’m going to target electrical contractors, people who are in construction industry, they’re going to be on Reddit, they’re going to be on Facebook, they may have a private Slack channel, probably not. There are some places my brother runs an electrical contracting business in California. And so I know there are places he hangs out online. It’s not a ton and it’s not like Hacker News where everybody’s on there all the time, but I would want to lurk and embed and start offering value. 

And look, it’s not a shortcut. And this is the thing, I was interviewed on a podcast a couple months ago and someone was asking me about these things. How do you get early customers? And I was listing all the things that I say, right? I have my standard big five approaches, there’s SEO and content and forums and warm outreach, cold outreach, blah, blah, blah. And they were almost treating it pretty transactionally. And here’s the thing, 5, 10, 15 years ago, you could go into online forums and you could be kind of transactional because not everyone was doing it, but marketers ruining everything. They’ve ruined everything, right? That’s what’s happened. That’s happened. A producer, 

Producer, Ron just sent me a screenshot of a completely random niche brick and mortar forum on Reddit. It’s a sub Reddit. And one of the things, it’s like posting rules, don’t be racist, blah, blah, blah. And one of ’em said, we don’t want to hear about your stupid startup idea. Don’t ask for it and give feedback. We will remove it and why they have that because a bunch of people have come and basically spammed kind of spammed it. And so you really have to walk this line of am I actually going to come in and contribute value? Am I actually going to become part of the community a bit or am I going to jump in and just try to weigh in and link to my stuff? And I don’t know if you have examples or experience with any of this.  

Maja Voje:
Tons. Tons. So a colleague, he was not a client, he was just like This dude that I hang out in afternoon hours because he’s built equal stuff all the time. He built AI for lawyers. He literally put one country’s registration and it was such a nice interface, you could literally ask a question, is it legal that my neighbor has this car partner? And it produced really good answers. So he got, I kid you not 8,000 users from posting in 12 different communities, like random communities here locally. And I was just so taken aback. Two days after he launched, one of the political parties called him if he would be interested in data exchange. He was all around the news. Why? Because his stone of communication was really, I build this, it does this, the that it’s not perfect. If you are sick and tired of paying for lawyers, just take it for a spin and tell me what’s wrong. 

I’m not saying that this is the formula, how should you be doing this? But it was just like this authenticity. It was just like this not promoting stuff or something like that, but it was just like, look, this is it. I think it’s very cool. If you think it’s cool as well, you can use it. Whatever. It’s for free. I’m not taking your data by now. So yeah, you can still get in. But as you said, the technique when you are just like there and developing a little bit of credibility and trust before you go full on and spam literally makes me think that less is better. So surgically choose the communities that your ICPs or ECPs are active in. And freedom as a tour Fremont project. I mean I was working with communities a lot when I was in my crypto times. Literally had to manage a telegram of 40 K people or something like that. 

It was ludicrous. And you can feel it as somebody who’s on the count that is there with a banner, with a hammer. As an admin, you can fill this stuff from a distance and if the community act, the member is active, you would support them. Literally you are developing a different type of sentiment towards them as an admin as well. But I wouldn’t place all my bets into that basket. I would definitely combine it with a little bit of outreach. And what I like to use these days a lot, especially with B2B softwares are influencers because people and LinkedIn, that’s just crazy. Five years ago and just like this B2C influencer game started to show up in ads and it became an official UGC, like small counter generation stuff. I think that we are approaching these days in B2B and I just love these type of tactics because the audience of micro creators usually has a lot of love and credibility towards that. So yeah, that’s the one that I sneak in as well as AKA community slash influencers.  

Rob Walling:
Very nice. And we’ve talked about three or four of the 12 examples that you give in this article. And if folks want to keep up with you, I mean you have a ton of resources@gtmstrategist.com, you have a book checklist masterclass, as well as obviously the article that we will link up in the show notes. Maya Voer, thanks so much for joining me on the show.  

Maja Voje:
Oh my God, it was such a pleasure. And guys, when you are launching and just like these GTM plays in 2025, everybody’s screaming like SEO doesn’t work tomorrow. I’m publishing how a company got 200 K users for just programmatic SEO. They’re saying that outbound is that they’re saying that inbound district or something like that, forget this stuff. Just first informed choice that you have to do is where your audience hangs out. That was a time that I took from Rob. The second thing is that you are there with a genuine message that you are contributing value, that you are not there pitch slapping them. And the third thing is just be consistent, right? Because oftentimes things don’t work the next day or the next week. Sometimes, especially with inbound, when you’re producing content, you have to go all in for two, three months, sometimes even like six months and just observe the progress. So that would be my best way how to say goodbye and thank you.  

Rob Walling:
Love it. Thanks again for joining me.  

Maja Voje:
Yeah, my pleasure.  

Rob Walling:
Thanks again, Maya, for joining me in this episode of the podcast. And thank you for listening this week and every week. This is Rob Walling signing off from episode 773.  

Rob Walling:
Thanks for joining me for this episode of Startups. For the Rest Of Us, I’m Rob Walling, and in this episode I’m joined by Anthony Pierri. He’s the co-founder of Fletch, which is an agency focused on B2B SaaS positioning and Fletch has helped over 400 startups discover their ideal product positioning. Anthony and his co-founder joined us in New Orleans just a couple of weeks ago at MicroConf, and he did a talk about positioning about their really detailed, I call it a framework, he calls it a methodology for defining and describing your positioning as a B2B SaaS founder. I love the conversation we had today because I got to start off by having Anthony define positioning in his words because if you know anything about positioning, it’s that everyone seems to define it just a little bit differently and then we dive into their methodology. It’s a great conversation. 

And before we dive into that, at TinySeed we are raising our third fund, TinySeed Fund three mentioned it on the show here before. If you want to index across hundreds of early stage B2B SaaS companies, in my opinion, TinySeed is the best place to do that. You can head to TinySeed dot com slash invest to find out more. And if you are an accredited investor or equivalent and you want to put a little money in a place that is not the public stock markets and it’s not invested in crypto, but it’s in an asset that we’ve seen do quite well over the past five to 10 to 15 years, you can add a TinySeed dot com slash invest. And with that, let’s dive into our conversation with Anthony. Anthony Pieri, welcome to Startups For the Rest Of Us. Thanks so much for having me. Super excited to be here. Great to see you again after your awesome talk. In New Orleans, one of the highest rated talks of the last several micro comps. How does that make you feel? Is this the moment where you’re like, I’ve done all these things in my life, I’m part of an amazing band on Spotify, you have a family, all the achievements, one of the highest rated talks at MicroConf, you cashing it in.  

Anthony Pierri:
I mean, this is a great moment for sure. It’s so funny too because we live in the LinkedIn sphere of things and it does feel like the Bootstrapper world is a different group of people who we don’t always run into, but philosophically, me and my co-founder align so much more with the MicroConf way of thinking and the books you’ve written are exactly what we tell people to do. And so it was very much like me and my co-founder, we’d meet these different founders who are incredibly niche and specific in what they do, solving real problems, and we’re like, we found our people. This is amazing. And so actually, it’s funny, I came in awareness of MicroConf way later than I would’ve liked. I would’ve loved to have known that this existed five, 10 years ago. And so I was blown away. This is amazing. This is what we always preach to everyone. There’s a whole community. They already exist. And so yeah, it was really cool though. Really great experience.  

Rob Walling:
You guys fit right in. I remember seeing you talk to founders and I was like, oh yeah, these are your people, man, I love you. Just kind of made it, not even an analogy, but a categorization of who’s on LinkedIn, which SaaS is on LinkedIn, and which SaaS is on Twitter, right before we hit record, and I’m not sure that I had thought of it this way, but you want to tell folks what you told me?  

Anthony Pierri:
Yeah, I mean I think that a lot of the companies that will work with us will be venture-backed. And so that’s one criteria that put you in LinkedIn land because you want to do that post and you want to show everyone else in your professional network, look, we just raised $30 million and Twitter people are doing fundraising announcements on Twitter too, but that’s one aspect. And then a lot of times it’s people selling to marketing teams or sales teams making technology, MarTech, sales tech, and it seems like to gravitate to LinkedIn because that’s where most of their buyers are. So we get the companies that have a lot of thought leadership cache and are talking about what they’re doing for that specific group. So I would say most of the companies we work with are in those two buckets. We rarely get design related companies like developer tools related companies, we’ll get some, but it feels like that group of people, they don’t really sell to people who are living on LinkedIn all day. So for them, a lot of them have grown their audiences or have sales pipeline coming from people on Twitter. And so it does feel like we work with potentially the less creative and kind of more boring side of the house over with LinkedIn. So I’m like, should we start an X account and start getting followers there? But you had just said maybe the platform’s dying. I don’t know.  

Rob Walling:
I don’t know mean this is the debate. We actually have a $1,000 bet between Tracy Osborne and Einar Vollset. You didn’t meet a R because he was sick this year, but you met Tracy and they bet on this podcast a thousand dollars that a R says Blue Sky will not be successful in three years from the date. And Tracy said it will. And we defined that I think it was at a hundred million act, a hundred million registered users because when we made the bet it was 25 or 30 million. And so that’s a push for Blue Sky. A R thinks it’s going to stay with X. From what I’m seeing, just the engagement is not, it’s just all over the place. And Blue Sky’s maybe threads, probably not. It feels like engagement bait. So it really is up in the air right now and my hope is that we go to a post social media world because I think social media has been a net negative in general. 

But all that said, let’s get to you. Let’s get to your baf fetus. So fletch pmm.com. If folks want to see the agency that you’ve run with your friend and co-founder Rob and your H one is let’s fix your confusing positioning. Fletch has helped over 400 startups discover their ideal product positioning and bring it to life on a newly crafted homepage. And listeners of this show know that it’s very, very rare if at all, that a consultant comes on this show because we get authors and consultants who want to come on because they want to sell the stuff. The reason you’re here is because you brought it at MicroConf producer, Sonya found you somehow, and then you and I did a call to say, Hey, you guys do positioning, a lot of people do positioning. Tell me what you have the MicroConf audience because I’m really particular about who gets on stage there, just like I’m really particular about who gets on the show. 

I said, tell me what you have. And you said, well, I have this framework or methodology I think as you refer to it, and it blew me away. I was blown away not only by the methodologies is the simplicity and the specificity. It’s like do this and frame it this way. And I was like, I love, this is such a good MicroConf talk, right? And then you showed up and blew it away and as I said, it was one of the best talks of the last few years. So with that intro, so positioning, what is it? Why is it important, how do you think about it? And then we’ll dive into your methodology as much as we can on an audio  

Anthony Pierri:
Podcast. Yeah, for sure. So I think one insight from the beginning when we got into this was we realized how unspecific a lot of these phrases are, and a lot of them are used interchangeably. And so I would say one of the first things that Robert, my co-founder and I would spend multiple hours per day for months on end, was trying to carve out the definitions of these different words so that they were mutually exclusive. And we started with product marketing messaging that you would see in a positioning mad lib where it would be like we help blank customer with blank problem and we do this by blank feature, which leads to blank benefit. And so even just those types of things, what really constitutes a customer segment? And a lot of people will fill that in with, oh, it has to be the industry, whether you’re talking about FinTech or you’re talking about logistics. 

But we very quickly realized that’s not always the case. There’s tons of products that are not industry focused. And so a lot of times when people work with positioning experts, they’re like, you have to niche down, you got to choose an industry. And it’s like, well, I can think of 50 companies that didn’t do that. And so the definitions of all these words were very loose, which left a lot of ambiguity in the way that we talk about these things. So our current definition when we say positioning, what we are actually talking about is product positioning for a specific market segment. What we’re not talking about is brand positioning where you would say, what does Apple stand for? What makes them different? Well, they stand for things like innovation, creativity, breaking boundaries, that’s like brand positioning stuff. And it’s sort of like no matter who you are in any type of buyer, you could all view Apple and have kind of the same understanding of their overall brand positioning. 

Product positioning is much more specific and is a lot of times aimed at a particular group of people. And so any company will have many, many, many different product positionings. And so what we don’t do is let’s map out every single positioning for every single segment for you that would take us years. What we do say is we say, let’s help you figure out your primary product positioning for the primary market segment that you’re going after. And then even one step further, we live mainly in B2B land. So a lot of the stuff I’m going to say is going to be business related software. This is not a framework for everyone for B2C and all that stuff, there’s some overlap. But in the business world, it’s not just for the primary positioning for the primary segment, but also for the primary we would call it like buying champion, which is usually someone in the role who’s not the end user, it’s also not the executive. 

If it’s a multi six figure deal or even if something’s more than 10 K, you’re going to have multiple stakeholders. So we’re not actually mapping out positioning for what is the executive, how do we position for executive, how we position for end user? We’re mainly figuring out what would we need to say to the buying champion. And we’ve seen this in the data that we know people who run qualitative studies and quantitative studies that basically most B2B software purchases are championed by one person and likely there are a manager or a director level. They’re not going to be a vp, they’re not going to be a C-level, and they’re not going to be like an intern or someone low. So what we’re really talking about when we say positioning is framing the value of our product against competitive alternatives related to the specific segment and specific person and getting that into a simple cohesive message. 

And then most positioning experts stop there, which is cool strategy work, really fun. And there’s people who’ve made a lot of money doing strategy work where you walk away with a multi six figure PowerPoint deck. We always found that companies, when they get those strategy decks, it’s easy to make a decision in a boardroom and very difficult to actually actualize that across the business. And so we said, is there a place we can document this strategy decision that will be a forcing function to get everyone to actually bring it to life? And what we have discovered is the homepage is a great place for this to live. So if you can answer these very, very trade-off related prioritization questions of who really is our most important buying champion in our most important segment and what would they compare us against and what would our value be to them? 

If you can get a group of people to agree on the answers to that question in a business and then rewrite the homepage, even just made the first hero section to reflect the answers to that question, the whole company will be so much more likely to be pulling in the same direction. And ideally, that customer segment is driving the most revenue for you is the most important to win over, tells most people about you and will see themselves in it. And what that means is kind of deprioritizing a bunch of these other different segments, maybe relegating them to lower parts on the homepage to different go-to-market plans, maybe not calling them out at all. So that’s kind of like at a high level hopefully sort of tactical, but that’s how we’re thinking about, it’s really answering those questions. Who is your product for? What really is it? And then what does it really replace?  

Rob Walling:
Got it. And I’m on your website now. As I said, it’s fletch pmm.com and you have, well, a content library they want to call out. I’ll probably mention it again later, but folks can pay $50 one time to, you haven’t written a book on this yet, and this is the closest thing you’re telling me too, a definitive thing. There’s notion templates, figma templates and other stuff if folks want to dig deeper. But I’m also looking at your before and after, which is you’ve done these 400 engagements and I just kind of picked one randomly. It’s called user evidence. And the prior H one is turn happy customers into your best sellers and generate verified competitive intelligence product stats and ROI data that credibly proves the value of your product. And the after is don’t beg for case studies, get customer proof at scale. So this is running a process. 

You have a methodology that took them from there to there. The reason I’m bringing this up is I want people to understand the specificity of your methodology and what it spit out after. When I say don’t beg for case studies, get customer proof at scale, I’ve pretty good idea what that is. And the prior one is Turn happy customers into your bestsellers. It’s like, I don’t know, I’m kind of confused by that if I’m being honest. Do you want to comment at all on what you did with user evidence or you can just dive into the methodology and kind of talk us through what it is, how you think about it, how you get there.  

Anthony Pierri:
Since it is an audio podcast, I’ll try to do it in the most audio friendly way because a lot of, if you see our stuff, if you look around in our content or whatever, it’s a lot of diagrams and colored boxes with arrows and stuff. So I would say the two biggest insights that we don’t see represented in other positioning work is two aspects of your target customer segment that don’t really get normally expressed when we think of who is your target customer. We usually think of firmographics demographics sort of things. You could build a list in LinkedIn ads or buy a list of it on the internet would be, well, we work with companies of excise that have X amount of revenue that are doing X amount of whatever your criteria of a perfect customer looks like. That’s usually as far as people go. 

And so they say that’s our ICP. We have realized that with software particularly, what is actually more important than any of those firmographic things is the actual use case or workflow or activity or business process that is being done, or it needs to be thinking about being done by the group of people you’re trying to sell to. And so there’s the phrase jobs to be done. We avoided that phrase from the beginning because there’s really a lot of schools of thought of what that means. People will say, I want to grow my business or increase my revenue is a job to be done. And in certain ways of defining it, that’s true, but we take much more of a functional workflow approach. So we would say if you’re selling cold email software, you might have a company that meets every single criteria of the software itself that you would want to sell to them. 

But if they are not doing cold outbound, if they don’t have the workflow that your product supports, they’re not on your ICP. And so to put it as even simpler, right? All software for B2B is workflow software. And so the most important way to segment a market is by segmenting it by actual workflows that are being done by real people in the business. And so you can think about a job description that when you think about an account executive and a sales team, there are bullet points of activities that they need to do. And so those types of ways of segmenting a market by those actual activities, that’s the most important thing that you can really land. Take something like the user evidence example that you pulled up. I’ve got it up here in front of me as well. Turn happy customers into your bestsellers. 

It is a message that is devoid of a workflow. And the way the litmus test is, if you imagine two people asking for recommendations on a software vendor, one example is they would say, do you know someone who can help us collect case studies? That’s a workflow that would be on someone’s job description. A customer marketer, that’s one of their job description is collect case studies. So you could say, Hey, we think we need to increase this or do that or whatever. And we think getting more case studies will help us. Do you know anyone who could help us collect case studies or do you know of software that automates the collection of case studies? That’s a workflow, that’s a real conversation that two people might have. It’s much less common for people to ping their network and say, do you know someone who can help me turn happy customers into your bestsellers? 

That’s an outcome laid in language, but it’s not how people shop. People shop. They refer at the level of workflows. Do you know the best way that we could collect customer’s case studies? And so really a big thing that we’re helping people do is narrow down to the very specific workflows that the software would help them do because people buy software to help them do their job. And so telling them, what part of my job are you going to help me with from 1:00 PM to 3:00 PM on Tuesday, here’s what I do, will you help me with that? And a lot of times, especially in business software, we’ve been trained to just speak in outcomes. We say, no one cares about the product, they just care about the outcome. Just tell ’em you’re going to increase their pipeline, but they actually want to know, if I’m going to buy this software, what part of my life will you help with? 

So the big thing that I would say the biggest insight for us with companies is helping them build these workflow based segments. And then on the flip side, the other aspect, which is never in there is what is the competitive alternative? There’s lots of flavors of this, but collecting case studies, let’s say that’s the workflow, a competitive alternative could be another software platform or it could be like a manual process. And when we went through this process with them, they realized that no one was really using software for this, so to say, we’re the best customer feedback collection tool on the market. We’re way better than all the other tools that would not resonate because their target market actually is just begging going around one by one and asking people for them. So it’s really figuring out which market do you want to play in. It’s loosely tied to that workflow. And then the competitive alternative way of accomplishing the workflow and building your positioning, your segmentation around those, and not just building it around firmographic based segments.  

Rob Walling:
I want to take a minute to let you know about the MicroConf Growth Retreat, a new event we’re launching in London from May 14th through the 16th of 2025. This isn’t your average conference, we’re keeping it intimate with just 40 to 60 SaaS founders joining us for deep networking and invaluable insights. We’ll have focused morning work sessions where you’ll gain clarity on your business challenges followed by unforgettable afternoon excursions, exploring the best of London, and then we’ll end each night with a reception. Tickets are limited, so head over to MicroConf dot com slash retreat to secure your spot. We will sell this event out. If you want to go to the MicroConf growth retreat in London, head to MicroConf dot com slash retreat. And remind me again since we are on audio mode and I’m trying to remember the questions in a diagram, this is really easy to see and obviously folks can go. I want to refer to your LinkedIn actually, Anthony Pierre, P-I-E-R-R-I. You’re putting out this stuff. If you ever write a book on this, it’s probably going to be a compilation of your and your co-founders LinkedIn post. I cleaned up because you put out books were the content on this, but remind me again, were there three questions that we’re asking?  

Anthony Pierri:
There were, yes. So that first question is who is your product for? And so answering that question, not just with it’s for sales teams, like a department, not just answering it with, it’s for people in mid-market B2B SaaS companies, some sort of firmographic. It’s saying who are doing this workflow, who are collecting customer case studies would be in that example, the segment, who is my software for? It’s for customer marketing teams and B2B software companies that are collecting case studies workflow. And then that last piece is competitive alternative. How are they doing it today? And it might be for them begging for customer case studies one by one. That right there is a marketable position segment that you could really go and write a crystal clear message for if you take out the workflow, if you take out the competitive alternative, you’re left with a very broad, make your life better and make your business more successful type of message. 

So getting it down to that level. And the other thing that’s tricky about this is workflows can be very big and broad or they can be very, very small. And so a very broad workflow could be doing sales or doing marketing. That’s a workflow that’s multifaceted, very, very broad. And so if you say, well, how do you do marketing today? What’s your competitive alternative, generic marketing agency or something like that, you’d be like, well, we do it ourselves. You’re dealing in this muddy. If you pick too broad of a workflow, your message is going to be so unclear and not sharpened and all that stuff. And so you have to abstract down levels of specificity to find the one that is like this is actually what our software does. It really helps you collect and present case studies in all sorts of interesting ways. And so that’s where the level of positioning actually makes sense is to segment that who is it for question, not just by the firmographics, but also by what do they have to be doing and what would they be considering in related to doing it that way? 

So that’s the first question. Who is it for? Then the other two questions are, what is it? Which is the product category that you play in? Do you call yourself a survey tool? Do you call yourself a customer feedback platform? It’s really that product category and there’s mature categories that you could just jump right into or there’s really sexy new ones that are emerging and might take and might not. There’s risks associated with whichever one you want to call yourself. And then that last question is what makes you better? And really it’s what makes you better than the competitive alternative? Why are you an improvement on them? And so that’s where you start to talk about your differentiation, what you bring to the table, how do you accomplish that workflow better than the way that they’ve been doing it in the past?  

Rob Walling:
Alright, so my last SaaS app that I sold in 2016, it was called Drip. You can still see it@drip.com, and it started as email marketing, then it became marketing automation. The headline now is totally different than what we had back then, but the headline, the H one at the time, which I would venture to see it was kind of our positioning was lightweight marketing automation. That doesn’t suck. That was H one. A couple of friends of my mastermind said, you should consider something like that. It was not contentious, but it was thought provoking. The word suck kind of drove some people away, but it brought people to us and we had a few different ICPs. It was like SaaS marketers slash founders if they were in my audience and it was info product and course sellers like what today we call the creator economy. That phrase didn’t exist in 2012 when we started building this and agencies, there were agencies and consultants that wanted to manage their email list and they wanted some workflows and they wanted to identify we had lead scoring and other things like that. In your opinion, is that an okay headline and position or do you feel like applying your methodology would’ve been an upgrade or I guess just to get your thoughts on that? It worked for us at the time, but then again, I didn’t try five different headlines. I didn’t try other positioning.  

Anthony Pierri:
And so just some inherent audience selection things that come from that headline that you can sort of reverse engineer. One, you’re choosing a segment of people who A, are trying to automate their marketing, B, are aware of the marketing automation software, category C, have some level of understanding that those platforms are pretty bad, and then D, that you could credibly make a case that drip would be a big improvement. So that is a segment of people doing this workflow with competitive alternative tools in the same category as you. And then you’re coming in and positioning against the category and saying, we actually are a better way of doing this specific set of tasks. That’s one segment and it’s always, for us, what we try to do, it’s less of a conversion rate optimization exercise because for that group you could phrase that 10 different ways, run ab tests and find which one would resonate the most, the types of positioning shifts that we would bring to the table. 

And really we bring them as options. We say, have you considered that you could go after these other groups? You might a see, and this is all dependent on maturity of the market. Are there marketers who don’t think that they’re using marketing automation platforms or are just not shopping for that? Maybe these first time creators, maybe they’re not using dedicated tools, maybe they’re manually stringing together a bunch of stuff. So that’s right there. That’s already a fork in the road segment. And for email marketing or marketing automation, it is a very mature space. But to give you a crazy example, if you think of something like a credit card, say you launch a new credit card and you want to say why you’re the best credit card, you could think, well, the only way I could do this would be to position myself against other credit cards, such a mature category. 

But again, it’s a segment based question. There are entire countries in Africa and places far away from the United States where they call it the unbanked, that there are people who have no bank account, no credit card, no debit card at all. And so for them, the workflow of storing money or borrowing money, the competitive alternative is very different. And you wouldn’t be like the credit card, that doesn’t suck. If I decided to go after the people in the unbanked countries and thought that’s where the money market’s going to be, it would just be a completely different message with a different competitive alternative, different framing, different differentiation. And so it really is a question of segment by saying email attribution or sorry, email marketing, that doesn’t suck. You are making a choice. You’re saying, I’m going after the people who already know what this is experiencing the space. 

And again, is that the best thing for your business? This is where it’s, we get into the bet language, it’s like where do I think my growth could come from? I think of a company like Slack. Slack now sort of assumes that everybody knows who they are. And so when you read their website, it’s a super vague, I think they have a slogan where work happens and they don’t really call themselves what they actually do, which is a messaging app, like an internal communication tool or something like that. They’ve really expanded it and things that, and so you’re basically saying, okay, well you’re making a decision to position for people who already kind of know what the space looks like and the options when you could make the argument that they have said explicitly that their tam, the total number of people who could work with them is a billion knowledge workers. 

And they have I think 40 million users. So they’ve got 4% market penetration. The biggest company in their space, Microsoft Teams has I think maybe 250 million or something like that. They’ve got 25% market penetration. What’s the rest of the people using? Are they using other direct competitors or are most of them using email? And the early Slack positioning was against email. It was a better way to do email, an email replacement, all that type of stuff. To me, I’m like, you might have more of a chance to grow the business by going after the 700 million people or whatever left who are probably still running their companies primarily on email than you would living in this very clearly. We all kind of know what we’re doing and we know what teams is and we know what Slack is and we don’t have to be specific anymore. So those are the types of things that you’re weighing when you’re making positioning shifts. You’re really saying, do I want to keep pointing the company at the same group? Do I want to expand it? Do I want to pivot it? And what would be the implications of any of those decisions?  

Rob Walling:
Yeah, I have this phrase that I say a lot on this podcast, which is being a founder is making hard decisions with incomplete information and people who think they can get all the data and a hundred percent data driven and even data can be twisted. Even at big companies where they have a lot of data, there’s always some gut feel, there’s always some intuition and especially early stage and early stage. I mean, geez, until you’re eight figures, there’s a lot of just like, Hey, I’m going to go with the founder gut feel. I can imagine someone listening to our conversation and hearing you spit out a headline based on your methodology and saying, well, how do I know that’s right? And you don’t know. That’s right. But you do need to read it and say, does this sound good? Do I think that’s reasonable to describe the product? 

Am I willing to test this out for a month or two or three? That’s the idea behind any of this is we’re taking our best guess based on some pattern matching based on some founder gut feel based on the methodology and just putting stuff in place and then gathering data and saying, Hey, is this working? Do we feel like this is better? And I can’t describe how often I will make a decision that I’m like, this just feels right and this other one doesn’t feel right. And it’s hard to teach someone how do you teach someone how to do it? And I’m not always right, but often enough you don’t have to be right all the time, just enough of the time.  

Anthony Pierri:
And the thing to even confound it more is that you can look and say, how is it going? Is it working? Is it not working? Lean startup had that great phrase in the early two thousands, which was the pivot or persevere, do I want to stick with the people that I’ve been going after or do I want to go after a new segment? And so you have these examples of companies like Zoom, where Zoom for many, many years was not doing very well. Zoom was positioned as this video chat solution for businesses, and up until 2019, they were not doing so hot, they’re getting beaten by all the other people. And so you could look at them and say like, man, maybe the positioning strategy is not working. We’re not going after the right people. We’re not using the right differentiation, whatever it might be. 

And then 2020, we have the pandemic hit and all of a sudden it is the right positioning and they’re skyrocket the most valuable company for a while. So that’s the other element is you can look at your existing customer base and say what’s working with them, but it’s so difficult to know. A former colleague of mine would talk about the local maxima or the global Maxima. Am I at the top of a small mountain and there’s a giant mountain right over there that I could be on, or if I really reach, I’m at the top of the mountain of all the mountains in the surrounding area. And so like you’re saying, you can look at Google, look at that list of the Google Cemetery of all the products they’ve sunset. There is probably no more data-driven company in the planet than Google who has more data on their customers, has been collecting it for 20 plus years, and they still will launch products that they would consider failures and are killing them and sunsetting them all the time.  

Rob Walling:
Yeah, none of this is easy, that’s for sure. So as we wrap up, I want to ask, do you have lessons learned, most common mistakes that you see, again, having done more than 400 of these exercises through this methodology, is there something that just crops up over and over that you’re either grown at or some learning you can share with folks?  

Anthony Pierri:
Yeah, I think the biggest learning will come as zero surprise to your audience. It’s that founders who try to do too much will fail and they spread themselves really thin and they try to go after all these different segments at the same time, and they don’t understand the implications that if you target 10 different workflows, the likelihood that in those conversations where someone says, do you know anyone who helps any software that does cold outreach or cold email software, if that’s one of their 10 and they have nine other ones and they have a small team, the likelihood that they could win in all 10 of those markets where when people are referring, they think of, oh, they do that, it’s just not going to happen. And so we work with primarily venture backed companies. For the most part. We still do work with bootstrap companies. 

The bootstrap companies are always more fun to work with because they already kind of believe the same things we believe. And we try to get the venture backed companies to act like bootstrapping companies. We’re like, listen, I know you want to be a million dollar company, right? The path there is not that different than anyone else. You can look at Amazon, they were just doing books for a while, which we all forgot, and then they owned books and then they expanded. Have you dominated a tiny niche yet? And if so, then fine. Now we can start expanding and getting bigger and broader. But most of the people we work with are early stage and have not dominated anything. And so for us, it’s really being very honed in on the positioning hyper-specific to get your initial traction because it’s just hard to be thought of for anything. 

The mental availability concept is extremely difficult. And so when I met a bunch of people at the conference, they were doing things like the one guy, he was doing software for laundromats, like self-service laundromats. And it was like, to me, that’s incredible. And he had built this really powerful business. They were doing great, their margins were unreal. And it’s like, okay, if that was a venture-backed founder, he could probably then start layering on new types of businesses to expand because he had already been dominating in the small one. It’s the same path. And so you don’t have to quell your vision. You could still want to be the unicorn, but for the vast, vast majority of founders, you would be so much better served by we would say, sequencing these segments, right? Don’t go after all of them at once. Pick one, go deep. If it’s the wrong one, you could either pivot or persevere. 

And then once you’ve dominated it, layer on the next one. And one last example, Spotify company, we all probably know they were doing just music for 10 years and then they became the number one market leader and they iPod and then they launched podcasts. And then they did podcasts until they became the number one market leader in podcasts and now they’ve launched audiobooks. That to me is like, and they’re venture scale and all that stuff. Win the small market first and then you can layer around the other ones. And then when you’re the market leader there, go bigger.  

Rob Walling:
Anthony, it’s been great having you on the show, man. So folks want to keep up with you and get this awesome free content you keep putting out Anthony p Ri, P-I-E-R-R-I on LinkedIn. If folks want to see your full MicroConf talk you give in New Orleans just a few weeks ago, they can head to MicroConf dot com slash us and the talks are available for sale there. I think it’s a hundred bucks and they get all the talks, but they can look at this with visuals, everything we’ve talked through today, but with visuals and more examples obviously as a structured talk would have. And then the last thing I want to point out is fletch pmm.com, which is your consulting agency. And not only do you have the content library, I mentioned earlier that folks can buy for 50 bucks, but you have an agency and your prices range from 70, you have 101 time up to 15,000 depending on the size of the company. If someone’s listening to this and they’re just like, look, can you just do this for me? Those are your options. So once again, man, thanks so much for joining me on the show.  

Anthony Pierri:
Yeah, it was a blast. Thanks for having me.  

Rob Walling:
Thanks so much to Anthony for joining me on the show. And thanks to you for joining me this week and every week. This is Rob Walling signing off from episode 772.  

Rob Walling:
This podcast is brought to you by Mercury. I’ve been banking with Mercury for years and whenever I set up a new account, I’m reminded why traditional banking feels stuck in the past. When our previous bank faced solvency issues, we needed to spin up new accounts quickly that could handle millions in funds across multiple businesses. Mercury had us up and running almost immediately. I manage half a dozen different Mercury accounts across a wide range of companies from my personal single member, LLC to MicroComp, our seven figure global events and education platform to TinySeed our venture fund and accelerator. Mercury easily handles them all. The interface is elegantly simple for daily banking, paying invoices, and sending and receiving international wires, yet powerful enough to handle the multi-step approval processes we needed to put in place. When funding founders with large transfers. Anytime founders ask me who they should set up their accounts with, I send ’em to mercury.com. 

Check the show notes for more details. And note that Mercury is a financial technology company, not a bank. It’s another episode of startup. For the Rest Of Us, I’m your host, Rob Walling, and in this episode I welcome Craig Hewitt back to the show and we answer listener questions on topics ranging from what changes as you grow into a multimillion dollar SaaS company, whether AI agents will be the death of SaaS, whether software patents are worth it, and more listener questions. Before we dive into the show, MicroConf remote is coming soon. It is focused on sales. The date is May 21st. It’s an online event. MicroConf remote.com speakers include Nick Desto, Steven Spears who spoke at MicroConf in Atlanta a couple years ago, and another speaker that will be announcing soon. We’ll also have our founder by Founder Sessions, which are like the digital hallway track for our virtual events. The date is May 21st for all the details. And to get your ticket head to MicroConf remote.com. We try to make these events accessible to everyone, so we keep the ticket prices low. I believe the early bird pricing for this event is $65. It takes place all online on May 21st from 10:00 AM to 1:00 PM Eastern time, MicroComp remote.com. And with that, let’s dive into listener questions. 

Craig Hewitt, welcome back to the show.  

Craig Hewitt:
Hey Rob, thanks for having me.  

Rob Walling:
It’s great to have you on the show, man. I’m excited to dive into some listener questions. Our first today comes from Amar and we’ll dive into that here.  

Speaker 3:
Hey, Rob, Amar here with Made longtime listener. First time caller. Heard a lot of advice from you over the years about startups and the early stages and sort of that David Vers Goliath battle. I had a quick question for you on how things change within the company and how you might approach marketing and sales and product differently when you begin to become a little bit more of the Goliath side of the equation versus David. So at ZenMaid, we’re making about two and a half million dollars a year right now, and we’re looking to take that to 5 million and 10 million and beyond. We still have much bigger competitors than ourselves, but we do already have the biggest brand in the industry thanks to our niche. And so I just wanted to quickly hear your thoughts on the mindset and what you would think about differently, what being a little bit bigger and going against folks that actually have less resources than us, what sort of advantages that might give us and how you would maybe keep the startup culture. So just any thoughts that you have on just once you get a little bit bigger and a little bit more successful and kind of how things change. So cool. I appreciate your podcast. Looking forward to this and many future episodes. Thanks for doing what you do.  

Rob Walling:
So Craig, before I kick it to you, I’ve realized that Ammar is kind of asking two questions and one is, how does it change for us as a company competing in our space, kind of the external marketing sales engine, the brand, what advantages do we have and should we capitalize on? And then a second question that he worked in towards the end is, and also our team’s getting bigger, how do we maintain a startup culture? So let’s split this into part A and part B for part A to me at two and a half million, even if you have bigger competitors, if you have the strongest brand, that’s probably the biggest thing I’d be leading into in any Reddit thread or any Facebook group or any conversation about your category. If you have a strong brand, you’re probably the top two that are mentioned, maybe top three, but probably top two, that’s a huge advantage. 

You should and could still go after SEO, generic terms, all that stuff. But you’re at the point now where if people know your name, that’s a huge advantage. And so one thing I’d be thinking about is do you have some type of community ambassador, brand ambassador, someone out there who is attending in-person events, who is frankly monitoring through arvid calls, POD scan FM or CEN monitoring, all the mentions on the Reddits and the, I say Hacker News, I don’t know if Send MA’s mentioned there, but you get the idea on all the socials that you can possibly monitor and being out there among the people because that’s something that when you’re doing five KA month and you’re scraping by it trying to build a full-time income, you kind of do that. I do that myself still for TinySeed MicroConf in my books, but you don’t really have the time to do that. 

If I’m honest, it’s maybe not the best user of time, but as you’re being mentioned by name now, if you go to an in-person event and if you have a booth or just wear the t-shirt, people will come up to you and be like, oh, we know and love you, or we’ve been hearing all about you we’re thinking. And it’s like having a presence and starting to have someone who is consistent and if it can be a founder or it can just be a human. Like Clay Collins at Leadpages, that’s a company that acquired Drip. He hired, and I forget the guy’s name, but he hired a guy to be the face of the webinars  

Craig Hewitt:
Tim Page.  

Rob Walling:
It was Tim Page, thank you. 

And Tim Page would then go to the in-person events and at first it started as Clay was the face, he was the founder, he got it to wherever he got it to, they raise venture money and then hired Tim Page who then became the face of it until he moved on three years later and then they promoted someone else. And it is fascinating in this world of AI and social media kind of starting to be not replaced by ai, but being flooded with ai, the depth human connection that people will resonate with and that you’ve talked a lot about this, right? About how you have moved forward yourself with, because obviously you’re the founder of casts and you’ve done a ton of SEO content marketing, all the blocking and tackling you’ve done over the years, but over the past 12 to 18 months, it seems like you’ve really doubled down on a little bit more of the personal brand side of you being a front facing person.  

Craig Hewitt:
Yeah, I heard it said really well the other day. They’re like, the goal of marketing is to be on the shortlist when somebody is evaluating a new product, there’s the top three, and if you’re there, that’s the goal of marketing. From there, it’s product and sales and pricing, all this. But brand I guess is what we’re talking about just gets you into the conversation. I was having this exact conversation letter founder today who in some circles they’re in that conversation and in some circles they’re not. And they’re like, that’s just the problem. And frankly, that’s a problem we run into In some circles, Casto is at the top of that list or in that top three and in some it’s not. And that’s where we fall short. So yeah, Amar, if you’re there because of kind of this niche that you’ve carved out, dude, that’s amazing. And I agree, lean in hardcore to that as much as you can that will take you a lot of places and give you unfair advantages that the other guys can’t. Pricing power and terms and missing features and things like that, right? It’s like no one ever got fired for buying IBM kind of thing.  

Rob Walling:
The other thing that I think about is if you’re doing north of 200,000 a month, MRR, because he said he’s north of two and a half million a year, you probably have some leeway to take, make some bets and to drop $20,000, $30,000 a quarter, take a flyer, take something that you think might have an asymmetric bet. And what I mean by this is marketing approaches, sponsorships, sales, just whatever. You have that luxury. Now, you didn’t have it when you were doing 10 KA month. You were just scraping by. So that’s the other thing that we did this with Drip the moment I had leeway, we started taking some pets. We’d certainly do it with MicroConf. You saw when we were dropping 15 grand a month on YouTube and it worked. It was a lot of money, but it works for us. And then now we’re spending a lot of time and money on LinkedIn. 

Why? Because we have that ability to take a flyer and if it doesn’t work the business, it’s money. It’s a bummer that I’m spending it, but the business will survive. And if it does work, and I can, like with YouTube, we went from let’s say 10 K subscribers to almost 90 K subscribers in two years. If it does work, if it does that, then it’s worth it. You don’t need every bet to pan out and it’s a luxury you have, you should have at that size. So now switching to the part B of his question, which is team has gotten bigger, and so let’s assume whatever it is, 15 to 30 people, maybe 50 would be a big team for that size, but let’s say it’s certainly not, probably not 10 people at two and a half million. So let’s say it’s some 15 to 30. You can lose your culture, you can lose the threat on it. And I know you’ve done a lot of thought, you’ve given a lot of thought to this, so I want to hear from you on it.  

Craig Hewitt:
Yeah, I think this is probably still that scrappy startup culture kind of phase. I think two and a half million, that’s nothing to sneeze at, right? Yeah, 12, 15 people probably, if you’re profitable and bootstrapped, you still need to own your small business roots. I think the bigger culture and the growing team, things like culture become more important as you’re scaling and hiring more because every time you hire, for me at least, it’s a chance for culture to get kind of eroded a little bit, have this one higher, that’s two degrees one way or the other. And it changes your culture if you’re not really intentional about keeping it culture, I’m going to mess up the quote, but culture is the personification of your values. It’s like what you do every day versus what you say you do as a company. I don’t know Omar, I know of Omar from Twitter and I know that you’re walking the walk and that’s really what culture is. You show up every day shipping stuff, providing value to customers and knowing that everyone else in your company is doing the same thing. I don’t think it needs to give you any more complicated than that and probably anything, but that is this premature optimization to say, Hey, we’re going to get big air quotes,  

Rob Walling:
And I’ll add to that. If you don’t define your culture and model it, your culture will evolve naturally based on the people you hire. And do you want to define it as the founder or CEO or do you want it to define itself? That’s a rhetorical question. The answer is the former. You absolutely want to personify that and it’s good to have that in writing. It’s good to have it in writing somewhere. I would say it’s not required and I’m the guy who, yeah, I know. It depends on the size. If you have 50 people, it has to be in writing, right? 

At MicroConf, TinySeed between us is nine or 10 people. The mission is to multiply the world’s population of independent self-sustaining startups. The culture is what we’ve built and what we communicate by leading. Now, it’s going to get dangerous if we had 15 people and we don’t have it in writing. I think there’s a point between 15 and 20 where if we are not communicating that, if the people at the top, let’s say a R and myself and Tracy and Alex on the accelerator side, if we are not directly doing the hiring and training and it’s people that we’ve hired that are doing the hiring and training, that’s when you need it. It’s that second layer because it’s a copy of a copy. So that is a controversial take. I know that some folks want more process. I’m really process light and I’m very mission driven, but I’m not a put everything in writing. I’m allergic to that until it’s necessary, but it’s just a different perspective. I’m not saying that’s right. That’s how I run companies and that fits within my skillset leader. I’m a way better leader and someone who paints the picture and motivates folks than I am a manager or I can operate, but I don’t like operating.  

Craig Hewitt:
I’ll just for what it’s worth, we didn’t have this until we did kind of a brand refresh codifying some of these things were part of that brand exercise that Francois from our team led us through. And that’s the only reason we have it. We didn’t have it before that we ideally would use those things to make decisions about product and hiring and all this kind of stuff. But yeah, I think there’s, the point of this is there’s a lot of different ways to slice it. And Omar, you probably have your own way and if that’s working for you, that’s great. I wouldn’t take what Rob or I say if what you’re doing works in the way that you’re exemplifying your culture to your team as a leader is working. That’s great.  

Rob Walling:
Omar, if you haven’t watched Omar Zen Homes talk at MicroConf in Dubrovnik, which was just, what was it like six months ago in October? So it was MicroConf 2024. He talked a lot about how as Webinar Ninja grew. So they exited Webinar Ninja, he had a great exit. He and his wife co-founded it, but he talked about how as it got bigger, he didn’t define the culture and they had to unwind that at a certain point and go in and say, look, this is the culture. And they put stuff in writing and one of ’em was being scrappy and being kind of frugal. They were bootstrapped from the start and they were always extremely frugal about expenses. And they got to a point where, and I don’t remember it was 20 employees or something where someone signed up for just a very expensive imagine. It’s like they signed up for Salesforce type thing and it’s like, no, no, no, we don’t use Salesforce here, dog. 

That’s like buying a Lamborghini when a Volvo be perfectly fine. And they had to go back and do that. And so there was a section of his talk that I would recommend. I think I believe those. You can go to micron.com and look around. I think we sell those talks for 50 bucks for the whole package of that, but also something to take a look at. So thanks for that question Ammar. Hope it was helpful. Question number two comes from Dan Delamar and he says, Hey Rob, hope you’re doing well, really enjoying your latest podcast episodes. Your show is one of the few must listens every week. I appreciate that, Dan. He says, one area I think would be interesting to explore is how SaaS can survive in a world of autonomous AI agents. We specialized software takes the backseat to more generic agents that can have a larger span of control and abilities, and then he links to, there’s a Google doc that was trending on Hacker News. 

So I want to start by saying I recorded a video that’s on YouTube now on the MicroComp channel, and you obviously will link it up in the show notes, but it’s called Will AI Agents Destroy SaaS. And so you can hear, what did I have? Nine minutes of thoughtful. I outlined it and kind of put a bunch of thought into how I am thinking about it. Realize these are predictions. There’s no one that’s right right now and there’s no one that knows where this is going. We’re all conjecturing based on past experience and our pattern matching and this and that. And so if you want to go watch nine minutes of that, it’s probably worthwhile, especially if you do it at two x. It’s only four and a half minutes. And I will also kind of summarize it here. But before I do that, Craig, I was going to pass it to you and ask, have you given much thought to this topic because AI agents are killing SaaS. Was kind of the refrain. I mean it was like two or three weeks ago everyone was saying that SaaS is dead, SaaS is dead, SaaS is dead. Where do you fall in this conversation?  

Craig Hewitt:
Yeah, so this has been the conversation on my podcast for the last 10 episodes, probably like my podcast is called Rogue Startups, and it’s all been interviews with SaaS business leaders talking about AI of late. And I think the answer is kind of to me, right? If you are a basic kind of CRUD app that you realistically could get replaced by just dropping a PDF into Claude, you’re toast. You probably were toast anyhow for a bunch of other reasons. If you’re a podcast hosting platform that integrates to Spotify and Apple and does petabytes of data a month and all this stuff, you probably are okay. And there’s an in-between to where yeah, will some of the pricing power and total customer base that’s looking for a solution like yours Change with ai. Yeah. Will it totally kill SaaS? No way. So I think it’s not, it’s going to kill SaaS. 

And it’s not that it doesn’t matter at all, it’s more nuanced than that. And it depends on then your application. How robust is it? How complex is it? It may even if you’re talking about someone’s going to vibe code this up in a weekend, good luck coding up cast us in a weekend. It is a beast. But I use this tool to frame screenshots. So I take a screenshot and it puts the Apple wallpaper behind it and downloads it. They’re probably be hurting. I saw this thing is Canva Toast. Now with the new image generation in chat, GPTI sure have created some images in the last week where I would’ve gone to Canva and I just did it in chat, GPT. So I think it’s chipping away at those edges. I do think we have years at the current trajectory probably,  

Rob Walling:
And I agree, and here’s the thing, someone might say, well, obviously Rob, you’re pro SaaS because SaaS is your whole life and your whole world and it’s what if SaaS starts going down or is negatively impacted. There’s going to be agent businesses that are subscription. It’s just another, it’s software by another name. So MicroConf on this podcast did not focus on SaaS until I got really deep in SaaS. Frankly, it was probably like 20 12, 13, 14. I had two SaaS apps before that. But we looked at mobile apps, we talked about, we had speakers talking about info products. We had downloadable software. We had downloadable web software that ran on the server on-prem stuff because that’s what the world was when this all started. And if I had started a fund and a TinySeed back then it would’ve invested in that. If SaaS goes away or it drops by 80% in terms of the value, something will replace that something. 

It will be software that does something. And so whether we call it SaaS or whether we call it agents, I’ll probably start investing in that and start telling people how to market that. So from my perspective, I’m not like, oh, if SaaS is dead, my whole ecosystem goes down. That’s not true. So take this with a grain of salt. There’s no way SaaS is dying. Just like no code didn’t kill SaaS, no code had an impact on SaaS, but it’s so easy to go to one of the streams and say, well, it’s not going to do anything or it’s going to totally kill it. It’s like, no, it’s going to do neither of those. Same way no-code did. Same way mobile apps. Remember people were saying, well, the web is dead, the open web is dead. There’s no more SaaS, there’s no more websites. Everything’s going to be mobile. 

And it was like, no, it’s not. It was obvious to me back then it wasn’t. And yet there were people saying that, right? That’s how I feel about AI agents and anything else that comes along is, as you said, it will replace I think the utilities, if you have a basic, you talked about basic utility. I’m thinking something that we feed our audio for this podcast in and it does some show notes and some timestamps. It’s a really cool tool. I think it’s called Pod Squeeze and we really, really like it. That will be an agent. But here’s the thing, will pod squeezes just build that agent? They already have the engine, so they just build it. So even if the SaaS dies, if they’re paying attention, can’t they build an agent on top of it? So I think that’s my take is it’s like any of these extreme views. 

It’s like if you’re smart and paying attention, I think you’re okay if you are a big incumbent and your advantage really is just that you got there first and you have a brand and you’re super lazy and you’re not innovating and you’re not paying attention and you are, let me say you were Infusionsoft in 2014 as we started eating their lunch. Or we could probably think of a couple companies today that are kind of resting on their lores and just milking it when the value PE buys them and is just melting the ice cube and trend. Yeah, those guys are going to tank pretty hard I think. But the SaaS ecosystem and really the startup ecosystem I think will, I’ll say be just fine, but there will be shifts, right? It is a transition point. That’s kind of how I think about it.  

Craig Hewitt:
Can I ask you a question? I think it’s related is how do you view these wrapper tools? So like Pod Squeeze, right? It’s just a wrapper, but you’d call it SaaS, you’d call it an AI tool. It’s not an agent, but how do you view them I guess from a TinySeed perspective? Are you investing in wrapper companies?  

Rob Walling:
We get a lot of AI applicants and some of them are developing their own models, like custom models that they’re training. And I’ll be honest, I don’t know how many of those we’ve invested in. It’s a small number, low single digits, let’s say. I think all of them have been decimated because they have their own model and we’re like, well, cool, that’s your competitive advantage. And then their competitive advantage went away with GPT-4  

Craig Hewitt:
0.0  

Rob Walling:
Or perplexity, whatever the, I’m not saying custom models never work, but in our space as bootstrappers, custom models are really, really tough. So then it’s like, okay, so you’re then going to build on a commodity in essence, I would say chat, GPT and perplexity and Llama and deep seek. I know they’re not all the same, but is there’s an infrastructure layer. It’s the same thing. AWS, it’s not the same as gcp, it’s not the same as Azure, but they’re close in terms of the function. The job to be done of those things is the same. And so these underlying LLMs are the same. So then you’re saying, all right, I’m wrapping this thing, would I invest in it? And the answer is, it depends on if I think they have some type of moat, and it depends on if they have something more than just the wrapper. 

Because if you are a genuine SaaS app on your own that you’re doing marketing and you’re getting customers and you’re closing deals, and a good chunk of your functionality is wrapping GPT, I don’t know how defensible is that. It might be, but the ones that scare me are when I see something that’s mostly a wrapper that is just taking off and in the six months of MRR we see it just goes from zero to 10 K 20 K, and the churn is 25 or 30% a month. That scares me. And there’s just no way. There’s no way, right? So I hate to say, oh, it depends, but it really does. It depends on the specifics we dig in of think how defensible do I think this is and how useful do I think it’s going to be? How many competitors are there? There’s some questions we ask around it. How are you thinking about it though?  

Craig Hewitt:
I guess from two different perspectives. One is we are building AI into our product. I won’t say what, but we’re a podcast hosting platform. So all the things you’re thinking makes sense both from a generative and analytical perspective. Like, hey, how can customers understand their own data better? That’s one of ’em, but we don’t view any of that as differentiable or emote. It’s just like we got to have it because you’re going to go use this other tool or you’re just going to expect us to have it. I think that’s the other part is the guys from Reforge just said the expectation of customers is so much higher with ai. They expect it to just do the thing, not to help them do the thing. So I think that’s the lens through which we as mostly conventional SaaS should look at it. But then, I mean to be honest, Rob, I see these wrappers as a quick hit. If you want to go make a hundred grand, that’s about the easiest way I can imagine is you go wrap Claude and you do a thing and you go make it big and you sell it on acquire.com at 15 grand a month doubling monthly. But I would not plan to run that for two years even.  

Rob Walling:
That’s the way I think about it. Yep. It’s opportunistic. It’s a short-term hit of I want to make quick money. It’s like a crypto and NFTA. There’s an opportunity there, but it’s not a five year business, certainly not a, I often think is it a 10 year business? But even this is not a five year business, as you’re saying, it’s not a two year business. So that’s how I think about it. And that’s the difference when people say this is a great business versus not. It’s like, well, it depends on what do you mean by great business? Do you mean it’s a billion dollar venture funded? Do you mean it’s more of a TinySeed funded? Do you mean it’s a awesome half a million dollar a year lifestyle business that I can run for 10 years or do you mean like you said, I can just pump a little bit of pumping up is the way I think about it, which  

Craig Hewitt:
Is  

Rob Walling:
Not wrong. You grow it,  

Craig Hewitt:
It’s not wrong, it’s just different.  

Rob Walling:
It’s not wrong. And it’s what I would’ve done years ago when I was first getting started to get some quick capital to actually build something more sustainable. It’s just not something I’m interested in anymore. So thanks for that question, Dan. I hope it was helpful. Our next question is from Stewart, and Stewart says, Hey Rob, hope you’re well. I know this has come up before on the podcast, although a long time ago, from what I can tell, I’m interested if your perspective on patents has changed evolved at all. I subscribe to Dave Kellogg’s newsletter and I like his writing and he links to an article that says, does your startup need a patent strategy? Why your startup needs a patent strategy? So we get the idea there. As a small self-funded business, I’ve always dismissed patents, but this did make me think particularly as we’re in the process of developing something relatively novel in our software. 

A couple of questions that would be interesting to hear answers to. Number one, in episode 542 of the podcast, Zach, co-founder of Squad Cast said he had two patents pending. Did they get granted? How much did they cost? Why did they go through the process? And then number two, have any of the TinySeed companies had patents or have patents pending? And number three, are patents something F International comes across much? And if so, do they add value to acquisition time? I’m going to give a quick summary of these. Basically I can’t answer for Zach and squad cast. I don’t know why they filed for the patents they are, or they were a tiny C company and they got acquired by script. I don’t know of any other tiny C company with patents. And we’ve invested 192 of them. It’s a very uncommon, they cost 20 to 30 grand each. 

That’s give or take, and I don’t know what is a year, 18 months. It’s a long time with Drip, after we got acquired, since we were acquired by a big venture backed company that had almost 40 million venture raise, I had a list of shit that Derek and I had invented that it was Unpatented in the software space that were novel and new in Drip, and I think I had six of them or seven of them, and I had just been jotting ’em down over the years that we would come up. I’d be like, wow, no one’s ever done that particular thing. And I showed it to the CEO and he said, Hey, we might patent those at some point. And you know what we never did because it just doesn’t matter. So you, Craig and I are not lawyers, so it was not legal advice, but this are two startup founders with opinions on the internet. What’s your take on, especially in our TinySeed, MicroConf kind of mostly bootstrap ecosystem about software patents?  

Craig Hewitt:
Yeah, so hey Stuart, I know Stuart Stewart’s been on my podcast. Yeah, this is not something I would spend energy on. That’s the simple answer. I think the only reason a patent is valuable is if it’s defensible. And I think in software especially, that becomes quite difficult, especially internationally steward’s in the uk. So just gets really tough really quick. I think it’s just not something, like you said, Rob, most of us who are building the dry cleaners of the internet, the little corner bodega, that’s going to provide a nice lifestyle business for us. This is just not where I would put my energy. As for TinySeed, I don’t think any of the TinySeed companies that I know of do this, and I can’t imagine it holds significant weight when you go to sell, unless that’s your moat. If that’s your moat, that’s really something  

Rob Walling:
That is really something. If that’s remote, I’ve never seen that be a mode other than in the big Facebook, Google spaces, then you’re going out and suing.  

Craig Hewitt:
But that would be something is I’ve never seen it. I’ve never even heard of it.  

Rob Walling:
Yeah, we’re on the same page and typically, and I didn’t read the full article that he linked to, but typically when you see an article like this of do you need a patent approach? I’ll just say every time I’ve ever seen an article like that, it’s written by a patent attorney every time. 

And we could probably click through and figure out if this guy has Esquire at the end of his name, but that’s usually what it is, and it’s trying to drum up business and they’re not saying anything that’s not true. They’ll be like, oh, with this, then there’s an asset you can sell at the end. And it’s like usually not in our space, but maybe in bigger spaces. You have heard of patent portfolios being acquired by the big companies, especially like cell phone patents and this and that. So yeah, I think you and I are pretty much in agreement the same thing. It’s like, no, I wouldn’t do it, never have never filed a patent for any software. And I built a lot of stuff that could have, I say a lot of stuff I built stuff that could have been patented and just never bothered with it, and I don’t regret it. It wouldn’t have made a difference.  

Craig Hewitt:
Hardware a hundred percent trademark a hundred percent.  

Rob Walling:
Our next question is an audio question from Javier.  

Speaker 4:
Hi Rob, it great to send you a question because I’ve been reading and listening to your content for quite some time now. I’ve learned so much from everything that you’ve taught on the internet, and I wanted to thank you for that. I’m sending you this from Spain. My name’s Javier, and I’m trying to build a B2B SaaS company. And my question is, how can a bootstrap company compete with a BC funded startup? I’ve found some resources that talk about this when the conversation is about an incumbent trying to beat an incumbent, and that makes sense to me, but a bootstrap company versus a startup, it’s a bit more difficult to imagine. Our strategy for now is trying to focus on other markets, Southern European markets that might be more price sensitive than the price our competitor is trying to push and to try to qualify a lower tier of our segment. But otherwise, we are very similar. So I don’t know. I would love to hear your insights about  

Rob Walling:
This. So Craig, in a way, this is a little bit of a different, it’s almost the opposite of the first question. The first question is not quite the opposite, but it’s similar to the opposite side of the fence where it’s like the first one’s like, Hey, I have two and a half million a RR. We’re a brand. How can we use that to our advantage? Javier is saying, how do I, you’ve talked about competing against incumbents, which I talk about all the time because we did it with Drip and I’ve seen a lot of TinySeed companies do it, but how do you compete against a venture funded company? Now, I want to say there’s some nuance here, and I know I try not to say it depends or when I say it depends, I then try to explore all the possibilities. It depends as a cop out, but realistically, it really depends. 

Venture funded is this huge world. You can be VC backed and raise a million dollars. You can be VC backed and raise 20, 30, $40 million. Those are two very different competitors given their capabilities. The other thing that I think about is someone can raise venture because maybe they got a little lucky, they knew the right person, they had the right idea at the right time, but they’re a very inexperienced founder and they just burned through their money very quickly. They just don’t know what they’re doing. And money doesn’t solve your problems in a startup. It can make them worse. If you don’t know what to do, you can overspend before product-market fit, you can do a lot of negative with it. So what if Mr or Ms, first time founder who doesn’t know what they’re doing raises $10 million versus someone like Jordan Gaal raising 10 million or Ruben Kamaz or you or me. 

So the founder and the founding team and their experience and their ability to execute, plus the amount raised, it changes things and one versus 2 million raised, maybe not, but have we seen TinySeed companies compete against companies that are mostly bootstrapped and then the next day they announce a $10 million funding ground? We have. It’s happened multiple times, and that’s where it’s like these guys can go freemium and they can cut their prices to a fifth of yours and they can survive forever. And so these are the types of things that I kind of want to throw at it in the front of. There is a lot of, it depends here, but with that said, what are your thoughts competing with VC back competitors?  

Craig Hewitt:
Yeah, I think just to add what you said to me, one of the biggest determinants of the potential for a company is I say it’s the boat you’re in. It’s the market and the opportunity and the customers you serve. And so as you are looking at yourself and this VC competitor or VC back competitor, if the market you’re in is that good, then VC makes more sense. If it’s not, then I think you actually as a bootstrapper have more of an advantage relative to the VC-backed company. So I just wanted to say that it’s the amount of money you raised, it’s the founding team and it’s the opportunity. Those three things quantify the opportunity of VC versus bootstrapping. And so Javier, you might be better off bootstrapped. And I think when it comes down to it as a bootstrap company, we have to be so much more focused and that’s our superpower. 

There’s a lot of the TinySeed companies I talked to in my advisor role where I’m like, yeah, you’re going up against the big huge competitor, whether they’re a VC funded or just the incumbent. You have to do something very different and you have to be better at it in some way, not across the board. You don’t have to have every feature, but you have to have this one feature that you do way better than everyone else, and you niche down and focus and position yourself on this thing to a T. And that’s how you can win because the VC backed company is going to try to do everything and have the billboards in San Francisco and be in the Super Bowl and all this crap, and you just can’t do it. And so just like how can you do the opposite of that is how I would think about competing against a mega funded competitor.  

Rob Walling:
I like that they’re going to zig how do you zag and how do you find, what is their Achilles heel where they’re kind of flailing all over the place. They need to grow very quickly. They don’t need to be profitable, but they need to grow very, very fast. So they’re going to be drawn towards the biggest, fastest growing segment of the market. Often with the highest ticket price. They’re probably going to wind up going upmarket, unless it’s a really, it depends on the space. But if it’s a really massive market and they can go freemium and get a huge funnel and start going with virality, that’s one thing that takes, that’s not as easy as it sounds. I’d take a hundred Silicon Valley founders, give ’em each 10 million bucks. There’s maybe five or 10 that’ll make that work. It’s not the majority. So I used to joke because with Drip, we would see new competitors come into the space because email service provider slash marketing automation is a net negative churn business if you do it well. 

So it’s a very, very lucrative business. It’s a very valuable business, a very large space that was growing fast kind of still is, but the heyday I think was 10 years ago or so with that second wave. The first wave was the MailChimps active campaign, even Infusionsoft. And then there was a second wave in the 20 teens that Drip was involved in. But I used to joke with Derek, my co-founder would drip where we’d see someone raise like 5 million bucks and I’d say, all right, let’s count down 18 months till they go out of business and then let’s acquire their assets. And I was right most of the time because that’s the typical path, that is the most common path for VC funded startups is if they go to zero, that’s the whole VC model is that what is it like six or seven out of 10 go to zero and two return two or three x and one returns a hundred x or something. That’s like the most typical model. So you expect 60 or 70% are going to go to zero. Now that’s not always the case. And I have seen mostly bootstrap companies operating and executing well and doing everything and still getting demolished or at least fighting a tremendous headwind against someone. Because 

Again, if someone raises 10 million bucks, if they’re smart, they’re really dangerous. And even if they’re not that smart or not that competent founder, they can live a long, long time. They can just last and they can just fuck it up for the rest of you that whole time as though it’s like, well, why are they a third of the price? Because they can afford to be, and you could say, but they’re not going to be around in a year or two. And people say, great, then I’ll switch back to you. They can really mess it up for you. So it muddies the water.  

Craig Hewitt:
If I could just add one thing about actual go to market is talking about that competitive advantage you could have as a bootstrap company is how you acquire customers. They’re going to go for things like paid and partnerships and paying affiliates 50%, and you’re going to go for things like community and brand and organic, and those are often better customers. So I might look at like you probably have a lifetime value of a customer advantage just as you’re formulating your go-to-market strategy.  

Rob Walling:
I like it. Greg Hewitt, thanks for joining me on the show. Folks want to keep up with you. You are the Craig Hewitt on X Twitter and you’re craig hewitt.com on Blue Sky, is that right?  

Craig Hewitt:
That’s right. Alright,  

Rob Walling:
Thanks for joining me, Amanda. Anything else you want to mention? The Rogue Startups, that’s your podcast you’ve been doing for a decade?  

Craig Hewitt:
Yeah, rogue Startups, the podcast. Yeah, that’s where I share most of what I’m thinking. Yeah.  

Rob Walling:
Yep. And if folks are on YouTube as well, they can search for your name and is it the CAOs channel or you  

Craig Hewitt:
Both? Yeah, Casto has channel. I have a channel where I talk about mostly sales.  

Rob Walling:
Awesome. Thanks again for joining me, man.  

Craig Hewitt:
Thanks, Rob.  

Rob Walling:
Thanks again to Craig for coming back on the show. Thank you for sending in your questions. These episodes only work. If we get folks like you submitting your thoughts, comments, and questions. You can email them directly to Questions at startups For the Rest Of Us dot com or head to startups For the Rest Of Us dot com. Click Ask Question in the top nav and you can submit an audio or video question. Thanks for listening this week and every week. This is Rob Walling signing off from episode 771.

Rob Walling:
If you’re listening to this, you’re an aspiring entrepreneur, don’t do that. Hang around with people who get done. Hang around with people who ship. Hang around with people who say it can be done. And if you don’t know any, then find them on the internet. Listen to this podcast, read the books from people who are getting it done. Welcome back to another episode of Startups For the Rest Of Us. I’m your host, Rob Walling, and in this episode I have a handful of solo topics, one of which is a question I received on X Twitter about quoting revenue versus profit. Then I have a topic about giving up before you should, finding excuses why things can’t work. Then one about having taste and what you might have to do to achieve that taste and potentially another topic or two depending on timing. Before I dive in to the meat of the episode, MicroConf Growth Retreat in London is one month away. 

It will sell out. We’ve sold all our events out for the past couple of years. If you are in London or can get to London, May 14th through the 16th of 2025 for the small intimate event that’s going to foster deeper conversations. It’s going to be about 40 to 60 bootstrapped and mostly bootstrap founders. You should head to MicroConf dot com slash retreat and buy a ticket. It’s going to consist of morning work sessions, afternoon excursions, and all day hanging out with a bunch of motivated, bootstrapped, and mostly bootstrap founders. That’s MicroConf dot com slash retreat. In addition, I wanted to mention the m and a brokerage that I recommend for folks doing two to 20 million in a R SaaS companies in particular, it’s discretion capital. That’s discretion capital.com. You’ve heard the founder and principle of Discretion Capital on this very show and our vol set. 

My co-founder with TinySeed heads up discretion, capital. So if you are considering selling, and frankly if you’re north of a million a RR and you’re thinking, Hey, I want to sell when I get to 2 million or more, that’s when you should reach out a r@discretioncapital.com or you can head to discretion capital.com. They’ve had incredible exits. They only do the sell side of m and a advisory so they don’t help buyers find you. They support founders as they go through their exit. And with that, let’s dive into my first topic of the day. This is a conversation on X Twitter where starts with a tweet from Stefano Montero and he says, everyone’s talking about MRR and a RR, but what’s the point of sharing those numbers if costs aren’t even considered? You can hit 20 KMRR with $10,000 in expenses or 12,000 MRR with just 1000. 

Am I the only one who finds this weird and Ash? Deb says, I would love for Rob Walling to address this. I know it would be epic. I’m not sure it’s going to be epic, but I at least like to weigh in on this. So I’ve bristled at this whole sharing revenue in public thing. Anyways, I think it’s not building in public. It’s a lot of bragging in public, and I really do feel like a lot of sharing revenue. It’s either marketing or bragging or a lot of it’s fake and folks have pointed that out and shown how people fake their screenshots. So you have to kind of take all of that with a grain of salt anyways. But the other thing that has bothered me is I’ve heard folks who are not building SaaS. Let’s say they’re building a brick and mortar or e-commerce or a consulting firm for example, and they’re like, we hit, we’re a seven figure e-commerce business, a 1 million, $2 million e-comm business. 

And you compare that to the MRR or the a RR of SaaS, and it’s a very, very different business where cost of goods sold in SaaS can be 5%, 7%. You think about the hosting cost and whatever else you would throw in COGS and your cogs. If you’re selling through, let’s say Amazon could be what, 50%, 70% if you include all the Amazon referral fees and the FBA fulfillment fees and your storage and whatever else. Obviously if you’re selling direct, there’s a reason that DTC has become such a thing because cogs in e-commerce, it really makes it a completely different business. Having a $2 million e-comm business selling a widget versus a $2 million a RR SaaS company, it’s just night and day, both in terms of the profit you can pull out of it, but also for the exit multiple, that $2 million a RR SaaS company might sell for $10 million. 

It might sell for 5, 6, 7 times a RR and an e-commerce business might sell for what are the multiples three to five x net profit? I’m kind of guessing at that, but you get the idea it’s night and day. So that has always bothered me when folks kind of compare apples to oranges and claim they’re the same. And look, I’m not, am I talking down about E-com businesses? Absolutely not. Great business, hard to do. Mad props to you if you’ve done that, but I just want to call out the building an agency to 2 million in revenue versus a SaaS versus e-comm. It’s just night and day. And a big part of that is the cost of goods sold, and it’s also the value, the exit multiple and the exit enterprise value that you can get for it. But with that, let’s shift to this example that Stefano was talking about where you can hit 20 KMRR with 10 K in expenses, and so therefore you’re making 10 K net profit a month or 12 KMR with is one K, so therefore you’re making 11 K profit a month. 

So it’s lower MRR. Historically, the cost to run SaaS pre AI has been very low. And in fact, if you’re not offering SMS or have a big AI component or big expense or some type of underlying API cost that you are relying on, that really drives up your expenses, then historically SaaS has just been really cheap. It’s just been cheap to run. And so in general, when you say, I have a 20 KMRI SaaS company, most people think, yeah, I bet. And I bet their costs, not the cost of developers and all the other stuff around it, but just the cost to host it is probably five, 10, 15% of that number. Now that has kind of changed lately, and there are a bunch of different ways to not even game this, but just to kind of leave things out and top line revenue just sounds more interesting, doesn’t it? 

And in fact, a R sounds more interesting because it’s times 12. And so saying why say 20 KMRR when you can say, I’m at 240 KARR, I’m at a quarter million dollars because this is just a top line number to kind of brag slash market slash what’s the other purpose of it? So I think Stefano says, am I the one who finds this weird? I don’t know that it’s weird. As much as it’s consider the reason that people are sharing these numbers, they don’t actually want you to know all the things about their business. They don’t want to tell you why they’re successful. I’m guessing they’re not going to tell you which marketing approaches are actually working or how they actually got there. They’re not going to give you the secret sauce. They’re not going to tell you how to compete with them. They’re just giving a headline number. 

So I don’t find it weird at all because it’s basically cherry picking a number that sounds big and that sounds impressive, and that sounds good. And so I guess in my opinion, it’s like if people are going to share revenue, should they share expenses to? I think so. Why not? I think that’s the full picture, but I think the reason a lot of people don’t is number one, it’s probably a little bit more info than folks want to share. Probably makes folks look not as impressive when you’re running a 20 KMR SaaS and you have 19 K of expenses. That doesn’t sound interesting versus the 20 KMR SaaS. Sounds neat. In addition, historically, as I’ve said, if you were to say you had 20 KMRR sas, we can all kind of assume the expenses. And that hasn’t really been an issue until the last few years. 

So thanks niosh for calling that out. Hope that was interesting. For my next topic, I want to tell you a story about a friend of mine that had a friend he had gone to college with and was still hanging out. And this was a few years after all of us had graduated. And so I’m hanging out with this friend of mine and his mutual friends, and one of them had just graduated from film school, and I don’t know if he’d gotten a bachelor’s or a master’s, but we all lived in Pasadena. So we were in Los Angeles, and we knew a lot of folks trying to break into the entertainment industry. And this friend of a friend who I hung out with a few times but didn’t know that well, wanted to be a director, and that’s what he had studied in film school. And I was intrigued by this because at the time I was playing a lot of music and I was in, well, a band or two during that time, which thankfully was really pre Spotify and YouTube. 

So there’s no existence of any video or songs on the internet that you can find. But I was intrigued by it because I’ve just always been fascinated with what it takes to break into the entertainment industry and frankly, what it takes to do interesting hard things. You hear me talk a lot on this show about Paul McCartney or Bruce Lee or Albert Einstein, kind of these realms of genius and the realms of doing, I’ll say it’s like creativity plus maybe some science plus just to me, just it’s magical to put something into the world, whether that is a song or whether it’s a book or it’s a film, whether it’s a theory. So I was intrigued by this guy’s story and I was saying, have you directed anything? Right? And we were all young. We, let’s say we were 25 years old, and he said, no, I graduated and I made my reel. 

I think he made a short film and maybe made a sizzle reel, and he had circulated it to folks and he didn’t get any traction. And I said, ah, cool. What are you doing next? And he’s like, nah, nothing. And I was like, what do you mean nothing? And he said, well, that’s all I can do. And I was like, what do you mean that’s all you can do? This doesn’t sound like all you could do at all. And this might’ve been, let’s say 2005 to level set. And so as I’m saying that, I was definitely not 25. I was a few years older than that. So let’s say we’re in our late twenties, early thirties. And I remember asking him to the point where I think I kind of annoyed him, but to me I was like, if you want to break in, you can’t just say that’s it. 

It’s like the third or fourth web app that I launched back in. This is before SaaS, it was web application or an application service provider back in 2003 and four and five and six. The third or fourth one didn’t work. And I could have been like, yeah, this just doesn’t work. You can’t bootstrap software products. It doesn’t exist. It can’t be done. But instead, I was like, I figure if anyone can do it, I’ll be the first. I’ll keep trying until it works. And I was kind of trying to encourage this guy. I really just, I was so puzzled by his lack of faith that he could pull it off. And I said, well, what about just getting a job maybe as an assistant director? And he was like, no, if you’re an assistant director, you get pigeonholed as an assistant director. And no assistant director ever becomes a real director. 

And I don’t know if that’s true or not, but that was his attitude and everything I came up with, he had a reason why it wouldn’t work. And that’s the thing that was fascinating to me was it was this 20 or 30 minute conversation where I bet he remembers me being super freaking annoying because I wasn’t putting pressure on him to do anything, but I just didn’t understand how he would possibly give up on this dream, how he would go to four years of film school. And again, maybe he got a master’s, so maybe it was six years, I don’t remember, but a lot of years. And I knew that he wanted to do it, and he was talking about how much he wanted to do it. So I knew it wasn’t just some fleeting fancy that he really didn’t care about. He really wanted to do it. 

And I was like, what do you mean you’re not doing anything? It was so interesting. And the other thing was all the reasons he had for why all of my ideas wouldn’t work. And you know what? Maybe my ideas wouldn’t have worked. I didn’t know crap about the film industry, but I had other ideas like, Hey, start a blog. Start something online. I mean, this is before podcast, really, but it just seemed like the asking for permission, waiting to be selected, waiting to be anointed attitude, just it wasn’t going to fly. And that’s what I like about bootstrapping in general, right, is you don’t have to ask for permission. You look at Kevin Smith, you look at Robert Rodriguez, you look at a bunch of the gorilla filmmakers in the nineties and early two thousands who they didn’t ask for permission from big Hollywood studios or from an investor. 

They just went out and they made a movie. Similarly, when I wrote my first book, start Small, stay Small, I didn’t go begging publishers for permission to write a book and say, anoint me, pick me, choose me. I just fucking wrote a book and I self-published it, and I expected I would sell a few hundred copies. And lo and behold, here we are 15 years later and it happens to have sold 30,000, 35,000 copies. That’s not the point. The point is that I shipped it anyways. I shipped that book into the world and didn’t wait for permission. Now making a full length feature film in oh five, obviously you can’t just do this on your own, but here I am 20 years later still remembering that conversation because I was so impacted by the helplessness and the defeatism and the attitude that there was just no way to get this done. 

The lack of belief and that mental model is the one that I hear from some aspiring entrepreneurs who will probably never make it, because if you don’t believe you can do it, and you figure out reasons why it’s not going to work, and you rely on those, now I can call out when we have a new effort, we’re going to launch a new thing. I think about how it can fail. But what I don’t do is say, well, that’s what’s going to happen, and throw up my hands and not do anything. That’s the difference, right? Is if you put something into the world and it fails, at least you shipped something. But this friend of a friend was so memorably defeated before he’d really done anything that it stuck with me all these years later. So if you’re listening to this, you’re an aspiring entrepreneur, don’t do that. 

Hang around with people who get done. Hang around with people who ship. Hang around with people who say it can be done. And if you don’t know any, then find them on the internet. Listen to this podcast, read the books from people who are getting it done. Follow people who ship. You have Jason Cohen, you have Ruben Gomez, we have Heat and Shaw, we have Stelli. Fts been on the show. Any of those folks, you can just listen to the way they think about if there’s a roadblock, I’m going to turn it into a speed bump. That really is the analogy here, isn’t it? This person was turning speed bumps into roadblocks, and if you want to be successful as an entrepreneur, you need to learn to do the exact opposite. My third topic today is about George Lucas, and it’s about his vision and his taste in visual effects in film and also in sound was so far ahead of the industry standard that he had to invent new things. 

He had to start entirely new companies and build new technologies in order to achieve his own vision or to live up to his taste of what visual and audio should be in films. If you don’t know his story, he wasn’t just a director. He wanted to do incredible visual effects, and he started his own effects studio because there was no other effects studio that could do it. It’s ILM, it’s Industrial Light and Magic. They spun off Pixar at a certain point, but I think it was before it was called Pixar. It was called the Graphics Group Inside ILM, and I believe George Lucas was running into money issues, and so sold it off to Steve Jobs basically. And that’s a whole other story, but the idea that if you are a film director and you are a writer and you are an artist in film and you want to start your own effects company like that is very, very rare. 

But Lucas had this vision and this taste that no one else could achieve, and so he had to start his own. And then of course, ILM, now it’s its own company and it does a ton of visual effects work in a lot of films, and they’re known as one of the best in the world. And similarly, not sure if you know this, but TA XX surround sound is something that George Lucas designed himself. He designed the whole thing because theater sound sucked. And his first student film is called THX 1 1 3 8. And so when it came time to name this technology for sound, he called it THX. And the interesting part of this is not how much of a Renaissance man he is because pretty impressive, but it’s that it’s exact opposite of the roadblocks into speed bump story. I just told George Lucas is making these films and he’s saying, I want the visual effects to be better. 

I want the sound in the theaters to be better. And instead of throwing his hands up and saying, well, it’s just too expensive, it’s just too hard. He just said, let’s figure it out. I’m sure he said more than that. I’m sure he had a lot of help. I’m not going to act like he himself designed all the visual effects because he didn’t, but he hired great people and motivated them. And I’m sure he didn’t design all of THX. I’m sure he had some amazing engineers there, but he had the vision and the taste to get them there. And while it’s interesting that I think George Lucas is a terrible film writer, if you look at all the movie, all the Star Wars films he wrote, they’re way worse than the ones that other people wrote, right? So Empire Strikes Back, not written by him, not directed by him. 

It’s my favorite of the first trilogy. And in fact, it may be, is it my favorite Star Wars film? I dunno. I really like Rogue One. I’m going to be honest. I could go down a whole rabbit hole there. I won’t. But realistically, George Lucas had a vision for Star Wars and really is not that great of a writer, and I don’t think he’s that great of a director either, but he did know what he wanted. He had a vision for amazing visual effects and amazing sound, and I love stories like this of entrepreneurial artists. If you think about it, that’s what he was is an artist who’s making film and does not feel the constraint of kind of the box that you’re in in the 1970s and early eighties. Where do you remember theaters back then? The sound wasn’t good. The visual effects weren’t great. 

Look at every sci-fi film that came out in 1976 and then in 77 before Star Wars. They’re catastrophically bad. The effects are terrible. I think Logan’s run might be one of ’em. And there’s a couple others that I’ve watched, and they really, yeah, they’re really not great in terms of the visual effects, and he was so far ahead of his time that he couldn’t just rely on off the shelf technology to do this. So as you’re thinking about building your startup, about building your career, about being a founder and an entrepreneur, I hope today you take away that you don’t have to feel the constraint of the modern technology. You don’t have to feel the constraints that an LLM puts on you or that a tech stack puts on you, but that as you develop your vision and your taste, and if it’s ahead of the tech that’s around you, that in the long term you might be able to turn these roadblocks into speed bumps. 

My last topic for the day is Mike Tyson’s training routine. Back when he was a heavyweight fighter, he would get up at 4:00 AM for a five mile jog, then he would, over the course of a day, he would do 2000 situps, 500 pushups, 500 dips, 500 trucks, and about 30 minutes of neck bridges. He repeated this six days a week. There are sites all over the internet talking about Mike Tyson’s intense training regimen. And as I read this, I thought to myself, if I did the exact same regimen, assuming that I could, or that I could have in my twenties, I still would not have been the heavyweight champion of the world because it’s not just about hard work. He was putting in the hard work, but it is about some luck and some skill. When Mike Tyson obviously had, I don’t know, he had a build that I do not have, and maybe you’d say, well, it’s lucky he had the genetics to have these massive biceps, and if he and I did the exact same workouts, our biceps would be different sizes. 

And he had muscle fibers that twitch in a different way so that he could put a lot of power into a punch and he could move very quickly. So whether we put that into skills that I’m sure he developed over time or the luck of just being built a little bit differently, I ran track in high school and college, so I ran for nine years and I ran with folks where we would do the same workout every day. And for some folks I wound up being a lot faster than them. And for other folks, they were a lot faster than me. And so it’s not all about the hard work. That’s the thing that I think about when I read something like this, is that it takes several things to be amazingly successful. It’s a combination and that to be the best in the world, if Mike Tyson hadn’t done this daily workout routine, his genetics, his skills, whatever else he brought to the table, I don’t think it would’ve got him there. 

I think that’s the thing. To be world class in something, you need all of it. You need the work ethic. You need to put in the time, you need to develop the skills, and you need potentially a leg up from the start. But here’s the interesting thing. To be a startup founder and to build a business to 10 KA month, a hundred KA month, 500 KA month, you don’t need to be the best in the world. You are not competing against everyone else trying to do it where there’s only one winner, like being a heavyweight champion. That’s the beauty of what we do as startup founders, is to try to be one of the best film directors in the world, or to try to be an artist who can support themselves on their art. These are really hard things to do to try to be a musician, to try to be Taylor Swift or Beyonce or another superstar. 

There are very, very few of them, even to be any kind of professional athlete. There are what hundreds of professional NBA players in the world, hundreds of professional, I say major league baseball players, not professional, obviously the minor leagues, but there just aren’t that many. But how many thousands or tens of thousands of successful entrepreneurs and startup founders are there compared to those other numbers? This is where we get a little bit of a pass where hard work is what you can control, and I think you should put in a ton of that. Skills are things that you can develop, and I think you should put in a ton of those. But from the start, we can all start at varying places in terms of our natural ability, your working memory, your ability to focus. How many entrepreneurs do we know who have a DHD or struggle with depression or anxiety or all other types of neurotypical issues and are able to make it work. 

And in some cases, those can be part of what works for them. Those can be superpowers in this game of getting a startup off the ground and building an incredible company. This is one of the reasons why I love entrepreneurship is I think so many of us can be successful at this. It’s not just one heavyweight champion of the world where you have to be at the peak of the peak or folks who are competing in the Olympics. You have to hit things just at the right time, and you have to be incredibly gifted and talented and build incredible skills and train for a lifetime and hope that that one day or that one week at the Olympics, that you’re able to get that gold medal. And what I really like about entrepreneurship is it usually doesn’t come down to just one moment like that. 

And you don’t have to be the best in the world to build generational wealth or have an incredible life building a company that changes your entire life and the trajectory of your family. You can come from poverty, you can come from solidly working class. You can come from a country or a background where no one would ever guess that you would find success. And yet we see it over and over in the stories, in the interviews on whether on this podcast or this week in startups or any startup podcast that you listen to. This is what I love about entrepreneurship and specifically what I love about bootstrapping and self-funding and being able to do it without anyone’s permission. You don’t have to wait for a publisher to anoint you. You don’t have to wait for a film studio to say you’re a director. We loved your sizzle reel, and now you can direct our film. 

You don’t have to ask for permission. That’s one of the reasons why we do this, and that’s one of the reasons why I’ve shipped this podcast for the last 15 years, written five books, started six companies, why I’ve started an accelerator for Mostly Bootstrap SaaS, why I run MicroConf, the community for SaaS founders, because I believe that software entrepreneurship has and will continue to change the lives of a lot of people. My mission in life and the mission of everything I do these days, this entire ecosystem across the podcast and the companies and the books, is to multiply the world’s population of independent self-sustaining startups. And no matter where you come from or what you’re working on, I’m glad you’re here. You belong here. Let’s do this. Thanks for listening to this solo adventure. Hope you enjoyed our time together today. This is Rob Walling signing off from episode 770.

Rob Walling:
Welcome back to Startups. For the Rest Of Us, I’m Rob Walling, and in this episode I welcome Derek Reimer back to the show and we talk through our takeaways from MicroConf in New Orleans, which happened well just last week as we’re recording this, but a couple weeks ago as this episode is released. Before we dive into our takeaways, applications are open for MicroConf Connect and they’re open until tomorrow, April 9th. MicroConf Connect is our online community of hundreds of B2B SaaS founders who are sharing the journey, helping each other out, asking for advice. If you want to extend the MicroConf hallway track to a year-round online community, that’s MicroConf Connect. And if you are accepted, we have an application process. But if you are accepted, you will have access to a MicroConf Connect live session with West Bush, author of product-LED growth, and you can also join me for another, ask me anything that I’m doing, I believe in April. 

You can learn more and apply at MicroConf connect.com. In addition, we have an in-person event coming up in London, May 14th through 16th 2025. This is our MicroConf Growth Retreat. It’s a smaller, more intimate event designed to inspire deeper conversations between 40 and 60 founders will be in attendance. We will sell this event out. It’s going to have morning work sessions and afternoon excursions. Head to microcomp.com/retreat if you’re interested in attending that in London. And with that, let’s dive into my conversation with Derek there. Grimer, welcome back to Startups For the Rest Of Us. Thanks for having me. Yeah, I’m so excited to talk about MicroConf in New Orleans. Took place just last week. This is your 13th. We just lost count.  

Derrick Reimer:
I’m losing count every time I check in. Now they ask me because there’s a little piece of swag you get for being a repeat attender. It’s like how many micro comms? I’m like, I have no idea. Just  

Rob Walling:
Start saying it’s like 15. I don’t know, some number that’s really high. So it was great to see you as well as I guess we had about 230 ish founder attendees and then a lot of those folks brought guests, significant others who attended the evening events. So we were up around two hundred and sixty, two hundred sixty five total people through the event, which gets us almost back to our peak, which is pre covid 2019 in Vegas. The last year at the Tropicana I believe was 300, all told. I’m curious, as someone who’s attended so many of these, the size of the crowd or the audience, however we want to phrase it, what did it feel like to you? Did it feel like a good size? Did it feel smaller than you think when you’re going to Micron, if you have a picture in your head, was it more people than you thought when you looked around or fewer?  

Derrick Reimer:
It felt like a good size. I had my first MicroConf Europe experience last year, so now that’s kind of fresh in my mind to compare the two. And MicroConf for Europe is a bit smaller, right? It was what, 201 60  

Rob Walling:
I think. Yeah.  

Derrick Reimer:
Okay. So that definitely felt intimate. It felt on the small side, this felt like, okay, we’ve got that traditional MicroConf energy back in the room, but it didn’t feel unmanageable to me, so I think it’s a sweet spot.  

Rob Walling:
Yeah, I think it’s all right. I could see, I’d like to get back up to about 300 and north of 300 is where it starts to feel a little big. I can’t really talk to everybody. 

The trippy part, we went through some stats in the welcome deck, 93% of people in the room had a startup with or product with revenue, which is the highest it’s ever been. I mean, we were typically in the seventies or low eighties, 93%. That’s such a great room to be in. Everyone has some revenue. 28% of attendees had more than a hundred K of MRR. And every time this happens, I remember the first time producer Sonia showed it to me. I was like, did they mean a RR? Do we mean a RR? Because that’s a lot. I mean, that’s almost one in three, just above one in four are basically doing seven figures. I dug through, she showed me the list of folks who had reported that, and I was like, oh, I know. Yeah, they’re doing that. Oh, they’re doing that. And just spot checked it. And it’s like again, a great room to be in. It’s atypical to other startup events. And then the other interesting thing is pre covid, we usually had 60 to 70% returning attendees. And every year since Covid, which is now what, four or five of them, it’s much closer to a 50 50 split of new versus returning. And at first that concerned me. I was like, oh, we don’t have as many returners. I actually am starting to like it. I like that it’s an influx of kind of new energy. 

There’s the people who are attending for the first time bring a certain positivity and optimism that us jaded ERs who’ve been to 5, 10, 15 of ’em are like, ah, MicroConf, this better be good this year. But people who are coming new, I say this partially tongue in cheek, but there really isn’t an energy I think to having a room that is not just people who’ve been there a bunch of times. It’s not just the old boys club, so to speak.  

Derrick Reimer:
And I do feel like a lot of the faces I saw there, I recognize from our other circles on the internet, but I haven’t necessarily met in person before. So it also feels like it’s kind of the graduation from just being part of the internet community to making it in real life to the actual event. And so it didn’t feel like, wow, there’s a bunch of people here and I have no idea who a lot of these people are. I’ve at least seen your avatar on X Twitter probably, or in the circle or Slack or whatever. So it felt familiar, but also a lot of fresh faces.  

Rob Walling:
And if you’re listening to this and you’re thinking, Hey, this is a cool event, we’re going to walk through some sessions and talk about some feedback that received. But we have a couple micro comps coming up and we’ve been selling them out now for the past couple years again. And so the next one is a MicroComp growth retreat in London, this May. And if you go to microcomp.com, go to the top nav events, see that, and that’s a smaller event. It’s between 40 and 60 founders and it’s a lot more of a hallway track. There will be some speakers, but it’s more like Tiny Fest. Derek, you’ve attended one or two of those where it’s like, there are talks, but really the focus is on getting us together and doing workshops and excursions and that kind of stuff. And then at MicroConf in New Orleans, we announced that MicroComp Europe is in Istanbul Turkey in late September, and that is actually selling pretty briskly right now, which is great. microcomp.com/europe. If folks are interested, you thinking about taking a trip out to Turkey? I’ve never been.  

Derrick Reimer:
You know what I would love to My brother-in-law’s getting married that  

Rob Walling:
Week. No, we booked it right over your I know  

Derrick Reimer:
That’s so I’m like, I don’t think I can dip out of that, but if not for that, I would definitely be considering it because what a unique location.  

Rob Walling:
Yeah, we’re excited. So I felt like New Orleans, this is the first time we have hosted a MicroConf there. It’s the second time I’ve ever been, it’s been about 20 years since our last trip. And I mean, to give you an idea, my oldest, who is a sophomore in college, was in a car seat. I think they were like eight months old, 12 months old. So that yeah, gives you an idea. Yeah, I thought New Orleans was a really interesting balance. So Vegas, I don’t really want to go back to Vegas of a lot of reasons, but it’s just such a grind. It’s just like this place you go and it’s like, I don’t know, it kind of sticks to you and I walk away dehydrated for the next three weeks. Whereas New Orleans was like, I thought it had a good balance of nightlife, but not so far over the top debauchery like Vegas does. And I felt like our hotel was close to the action, but not in the center of the action. If we were staying in the French Quarter, you just don’t sleep and I want to be energized for the events, for the talks and such. Did you make it out into New Orleans much?  

Derrick Reimer:
I thought I maybe would make it out more, but every year micro on being a very immersive experience where you, I’m trying to see most of the talks and then stand in the hallway for a few hours and then go to the event afterward and then find dinner. And so all said and done, I did end up staying pretty close to the hotel, which I don’t think was a terrible thing. And I did do an excursion in the French Quarter, which we can talk about in a bit.  

Rob Walling:
Very nice.  

Derrick Reimer:
So that got me out of the area a little bit. I don’t really know if this is a problem that MicroConf necessarily needs to solve because really it’s about the people, but I was kind of, when I was leaving, I was like, oh, I didn’t really see a whole lot of New Orleans. And so it’s on my list to go back someday and check out more of the city, I think.  

Rob Walling:
Fair enough. Yeah. I came in, MicroComp started Sunday night and I flew in Saturday and so I did  

Derrick Reimer:
Have  

Rob Walling:
A full day to mid conference requirements for me to be places and I did wind up walking along the waterfront and checking out some good restaurants. So with that, let’s dive into a handful of sessions. So Sherry actually kicked off the event with the opening keynote and two days prior to her keynote, she said, Hey, would you join me on stage? We can do it together. Which of course always works because there’s just chemistry. It’s like you and I getting on the microphone here to record. It’s like we can kind of talk about anything and it’s probably going to wind up being interesting. So Sherry had this talk idea, five lessons that Exits teach us about running our business. And so we wanted to be sure to build on the recent book exit strategy, not to just pull stuff straight out of it and want to make it applicable to folks who are not currently selling, but you’re currently running the business. What we know about exits teach you about running the business day to day. And so aside from Sherry and MA’s matching green shoes, I dunno if you caught it. Oh, I didn’t catch that. The shoes match the cover of the book. Yeah, specifically this is where we’re going now. Every new book I write I got to buy a pair of shoes to match the cover. But all that said, did you have any takeaways from this  

Derrick Reimer:
Session? I mean, I feel like this is becoming a mainstay now where there needs to be at least one talk that kind of addresses the psychology piece of running a business. I mean, I think I could feel it resonate in the room for sure. A lot of light bulb moments for people when talking about being honest with yourself about what you value. Are you the artist? Are you the leader? Are you the entrepreneur? Kind of the relationship that you have with your business. Do you tend to be a firefighter or a manager type or So I think there’s just a lot of helpful nuggets in there to help founders kind of, I guess really get honest with themselves about how they relate to their business, what their tendencies are, and how to push back against some of the unhealthier parts of those tendencies. And I think that kind of stuff is just like we need to hear it over and over again. It’s like you can read the books you as much as you can, educate yourself on this stuff, it’s really helpful to hear it from different angles. So I was thankful for that talk  

Rob Walling:
And I liked some of the things Sherry brought in from her psychology background. She has a PhD in psychology and there is this whole, there’s internal family systems, and she kind of reframed that as internal founder system and I think that’s the entrepreneur leader. And what was the third thing? Artist? Artist. And she started talking about that and we got off stage and I said, that should probably be a chapter in a book. That whole, just that idea should be expanded. We mentioned it briefly in exit strategy, but I think you could have a whole chapter. Then she talked about attachment styles, which are normally for relationships, but realistically we have relationships to our businesses. And so she started talking about that. I was like, that’s another chapter. Each of these things I think are really important for folks to understand about themselves.  

Derrick Reimer:
Yeah, I think you had a follow on, or this was one of Sherry’s notes, but it’s like don’t let your inner child make company decisions. Yeah, big time. Not everything difficult is an emergency, I think especially if you tend to be sort of neurotic and anxious about your business, which I think heads were nodding in that room for sure. People who are in this community just have a tendency, I think, to kind of fall in that bucket. So yeah, that was good to hear.  

Rob Walling:
Yeah, she said that, and I thought to myself, I feel so seen right now. I feel so understood. You’re in my head. 

There was a really good talk by Anthony Pire. He’s a first time MicroComp speaker, and he runs a consulting agency called Fletch, and they help with positioning. So the talk was all about not just positioning, but homepage positioning what you should have, what should your H one, your H two had. This whole formula is not the right word, but a process, like a framework for it. This was one that I was really excited to see and Anthony delivered in spades on this idea. And in fact, I think it was the number one rated talk at this MicroConf, and it was one of the best talks I’ve seen in the past few years at a MicroConf. So I was really impacted by it. And as I’m watching it, I’m thinking we should do this for MicroConf itself, should our homepage positioning potentially not be what we have it today. I want to run it snake chasing its own tail in this way, but did you take anything away from his talk?  

Derrick Reimer:
Yeah, I was also similarly impressed. I mean, we’ve had excellent talks in the past on positioning from April. Dunford is one that stands out. She kind of wrote the book on positioning. So I was kind of like, oh, I wonder if there’s going to be anything new here. And it felt like this was just so typical, MicroConf very actionable, like you said, kind of a framework laid out in a way that I hadn’t seen it phrased or distilled this simply before. And I think, yeah, I’m going to definitely be referencing back on some of his slides. And he gave some examples, some really tangible examples like Loom and a couple other startups that are not like, we’re not talking about repositioning for a Fortune 500 company. These are startups that a lot of us can relate to and see kind of parallels between our businesses and some of the concrete examples that he gave. So I just felt like it was a really good kind of generalized framework with examples that we could resonate with and kind of get ideas from. So yeah, similarly, I want to run through a little positioning exercise myself,  

Rob Walling:
And I could see spending 10 minutes going through his framework and just sketching something out quick. I could see spending two or three hours and going a little deeper or even a day or two with my whole senior leadership team and figuring out where we go. It depends on how far you want to take it, but I really enjoy that one. And if you’re listening to this and you did not make it to MicroConf and you’re like, well, I want to see the videos, we will have the videos for sale here in the next, well, actually by the time this goes live, they might be for sale. So you can go to MicroConf dot com and click the link in the top NAB and we’ll have videos that you can purchase of all the talks. So then the afternoon of the first day was excursions, and I believe we had four different excursions. There was a swamp boat tour where people saw, is it alligators or crocodiles? It’s alligators. Alligators, Gators, right? Yeah, yeah. Because the Florida Gators all, so there were alligators and then there was a food tour. There was a French Quarter tour, which I think you mentioned you did with ghost stories perhaps and alcohol involved. And I forget what the Beignet tour or something, I don’t even remember the others, but which one did you do again? You did French Quarter?  

Derrick Reimer:
Yeah, well, I did French Quarter and it was actually originally going to be a beignet tour, and then it got changed to a full food tour with Beignets at the end. 

Oh, a bonus. Yeah. Yeah. So it was good. I was glad to do that one because like I mentioned, I didn’t explore the city a ton, but this got me kind of into the iconic, when people think New Orleans, they often think French quarter first. So it was good to see part of the most famous part and get a little bit of history about the city and just sit around, move from long table to long table with a bunch of cool founders and you’re kind of loosened up from eating some good food and walking around in sunshine. And it was just another good opportunity to have some of those side conversations that you wouldn’t necessarily have sitting around at round tables.  

Rob Walling:
And that’s the point of the excursions, right? We kind of re-architected MicroConf from eight or nine speakers down to five. We did it in 2020. We then didn’t have the event because of Covid. And then by 2021 we realized afternoon of the first day every time as excursions, and sometimes it’s kayaking and the Adriatic Sea, that was when you’re in Dubrovnik and then Beye tour, and we try to do something that’s local and has some flare if possible. And that’s generally the consensus is like, yep, much better than watching two or three more talks that we really, I don’t know that we’ve seen a single piece of feedback to the contrary that this wasn’t the right move. So then some other highly rated talks, Leanna Patch, of course, she MCed the event, which is great. I remember first giving up mc duties and being like, well, but it’s my event. 

I have to emcee it. You know what I mean? Much like the founder thing. It’s like, well, but I’ve always done this. And then the first time I did an mc, I was like, oh my gosh. Actually at one point during lunch I went and ate and I was super tired and I just went and took a nap and I was like, this is amazing. I want to never mc my event again. I always want there to be someone. But then Leanna did that a really good talk about copywriting and it was called EW Feelings, something about copywriting with emotion, how to bring out emotions. And she walked through six or seven different ways to do that. So what’d you take away from this one?  

Derrick Reimer:
Yeah, I feel like anytime there’s a copywriting talk from someone talented like Leanna or Joanna Weeb or whoever, I always immediately want to go and start editing my copy. It’s the kind of thing where your copy’s never done and it’s never perfect, so there’s always things you can improve. And so I feel like these are always a hit because it’s fun to pick up some extra tidbits from a really talented copywriter. She talked about utilizing frustration and pain. She talked about utilizing skepticism and how to just tap into some of these emotions in your copywriting, but in a way that’s like, I guess that has a refined touch to it. And so I have a whole outline of notes on that, and I will be also breezing through that the next time I go and revise my copy.  

Rob Walling:
Yeah, that’s what happens. It’s interesting because the next talk I want to talk about is Marcus Rivera’s talk on pricing. He runs pricing io.com and has written a book, I believe it’s called Street Pricing. We bought copies for all the attendees, and I started thumbing through it and I was like, yeah, this is really good stuff. I love his frameworks around pricing, but the interesting thing is if you are impacted by pricing and you want to change your pricing, there’s a lot to that. You have to think it through. It’ll probably take you a few weeks to both think it through and then implement it and then communicate it and this and that. Similarly with positioning, it takes some effort, but with copywriting, you can always just go in and start messing with your H one. And I’m not saying you should do that, but it is an easier thing to just dig into and make an immediate change on. 

And so I think that’s one of the benefits of having a discussion around copywriting frameworks. So speaking of Marcos talk, did you take any notes away from his, because I love some of his frameworks. He had the five basic ways to structure SaaS pricing and it was core plus add-ons or it was all in one or it was a couple tiers or he had five different, and when I look at that, I’m like, well, this is obvious, but it’s not obvious. It’s one of those non-obvious things that once he said it, I’m like, gosh, I love this framework. I love just having that. They’re really, I kind of like to know what the outer edges of things are. Like how many B2B SaaS marketing approaches are there? There’s about approximately 20. That’s it. I remember thinking, are there hundreds? Are there thousands? When I sat down to really gather and I went through traction and I was trying to look at TinySeed companies and blah, blah, blah, and there’s about 20, and I like knowing that. 

It makes me feel good to know there’s only about 20, and when there’s only, I don’t know that I’d thought about how many SaaS pricing high level structures there were. And when I saw his slide, I was like, yeah, that pretty much sums it up. Maybe there’s a sixth, but I don’t can’t think of one. And so given that there’s not 50, there’s approximately five. I love that type of thinking. And he had a few slides that in retrospect it’s like, well, that’s obvious, but it’s not obvious until you put it in a slide. So I really appreciate some of those insights. But what were your thoughts on his talk?  

Derrick Reimer:
Yeah, it was extremely dense information, dense talk, and I don’t mean that as a negative thing, just like there’s a lot there. So I felt like it was a good kind of overview on jumping off points for thinking about how to potentially restructure your pricing if you have an existing pricing model in place or start fresh with one, it had some insights. Sometimes your packaging can actually be too complicated. I think a lot of times we assume that as your business matures, it has to inevitably get more complicated, but that’s not necessarily the case sometimes. Sometimes you’re overcomplicating things, and I think it depends on price point, depends on how much tam you’re trying to bite off, how narrowly scoped or flexible and widely scoped your product is. So there’s kind of a lot of heuristics that he gave in there as he talked about that spectrum of simple, just a few tiers all the way up to seat based pricing to having add-ons and packages and metered pricing. 

And so I think there was a lot there to digest in one sitting, but definitely some good kind of overview of the frameworks. And I liked that it was kind of focused on internal strategy. I don’t think he really talked about pricing surveys. For example, we’ve heard Patrick Campbell in the past talk about the Van We Door survey or whatever, and I don’t think he mentioned that stuff at all. So it was kind of from a little bit different angle, which is helpful. I feel like pricing is just such a wide topic in general that it helps to hear multiple perspectives and sort of merge them together as you mature in your knowledge of the space.  

Rob Walling:
And then Colleen Schettler, who listeners of this podcast will know as the Star of TinySeed Tales season. What’s the one that just ended? I don’t remember if that’s season four or season five, but it was great. She told me at MicroConf, I said, are people coming up and saying things to you? She’s like, oh my gosh, everyone. I was like, do you feel like a celeb? You start in this episode of kind of an audio reality show, although I guess reality show gives it a bad name. It’s the real reality, not the manufactured reality that would be in a TV show. But she wound up doing an attendee talk about LinkedIn outreach and you had some thoughts on that I believe.  

Derrick Reimer:
Yeah, this one was, I mean, it was just a 10 minute attendee talk just kind of briefly introducing the idea of, well, the thesis that LinkedIn is where it’s at for B2B SaaS right now, and I think that resonated. I saw that a lot of light bulbs go on in the room when she was talking about this because I think a lot of us like to avoid LinkedIn, see it as sort of a skeezy place where there’s a lot of, it’s awful. And that is certainly all there. And she acknowledged that in her talk and also pointed out that there is just a lot of engagement happening on that platform right now as all social media platforms are sort of going through their growing pains right now and algorithm shifts and ownership changes and all of that. LinkedIn is a place that just happens to be a hotspot for people who are actually doing real business. And so she talked about a just a few tactics and strategies for thinking about doing cold outreach on LinkedIn, but I think a lot of people came away from hearing that talk thinking, alright, fine, I will have another look at LinkedIn and I will set my profile up properly and I will manage my inbox properly.  

Rob Walling:
Yeah, I give up.  

Derrick Reimer:
You  

Rob Walling:
Convinced me. Yeah. What’s interesting is I mentioned on this show before, but we have switched our focus from YouTube. I’m still putting out a video every other week, so it’s still a lot of effort and a lot of content and we’re still having success there, but we kind of have tapped out the audience, if I’m being honest, of what we focus on, which is B2B SaaS founders who are thinking maybe not on the traditional venture track. And so we’ve shifted a lot of focus and effort towards LinkedIn, and the more I get in there, the more I’m like, you know what? This isn’t the worst. This isn’t as bad as I thought it was from the outside. And there is good content, there are people, Rand Fishkins putting out great content. Actually Marco Rivera who spoke at this MicroComp has really good content and obviously I’m putting out the best content that I can and we’re experimenting with things, but it’s really interesting to see a lot of the heads turn towards it, turn towards LinkedIn as it’s kind of been just in the background for it. It’s like I remember setting it up 20 years ago and then not doing anything with it, but it is, I think especially as Twitter is kind of going through what it’s going through, it’s like where else are people? So I appreciate the sentiment  

Derrick Reimer:
And I think actually don’t know how much, because I don’t spend a lot of time today on LinkedIn. I don’t know how much politics there is on there and stuff, but I know just the other social media platforms are just so overrun with that noise. And so maybe it can be a little bit of a reprieve from like, alright, let’s just talk about business stuff over here that maybe that’s partially what’s driving people to maybe spend a bit more time on there.  

Rob Walling:
So it was great seeing old friends. There were a lot of past Microcom speakers who they buy a ticket and attend folks like Arvid Call and Josh Kaufman, Patrick McKenzie, Asia, Gio, and there were a few others. So I was able to hang out and chat with all those folks. And I think you said this before we hit record, but you were like, yeah, it’s kind of like a family reunion. I think of it as a family reunion except with people that I like. That’s usually what it is. But we did receive some good feedback from the attendees. I actually realized that first night’s reception while it was outdoors there, whenever there’s a roof above us, it just gets loud because we’re all excited. So that’s one thing. It’s not always possible to have an outdoor venue and that’s why in Dubrovnik it was so nice to not have a ceiling. 

And so you can just talk and it’s not super loud, but I felt like the first night reception was hard for me, especially as I get older to just concentrate. And here it’s the loud bar problem. Some folks asked for more breakout sessions, which I thought was interesting. I feel like we had a lot, we had some workshops led from the stage. We had breakout sessions where people could choose different options, and then we had the excursions and so we only have five main stage speakers. There are obviously some attendees talks as well that are given. But that was a suggestion. I’m curious how you felt about the balance of say, content being spoken to versus more like breakout, workshopy non talk content.  

Derrick Reimer:
Yeah, I feel like as I now reflect back to multiple years ago, MicroConf where it would just be two days of talks without the excursions built in. That was a lot. And I think this feels just energy wise, I’m able to take in the information better if there’s a little bit more variety I guess. I actually used the breakout session time for getting a little bit of work done. I needed to check on support and things and then ended up kind of in the lobby and a few other people were doing similar things and we had a little bit of conversation there and then that was nice. That was a nice way to break up the day. I do wonder, yeah, especially with more mature businesses there represented, that does maybe present a problem of people are dealing with a wider spectrum of different problems. So maybe that speaks to a desire for, okay, this is a session that’s really catered to people who are over a hundred KMRR and then this is one for people at lower stage. I know this is something you guys have played around with in different forms over the years on how to make the content relevant for people at a wide spectrum of stages in their business. So I don’t know, there could be something there, but overall just the amount of talking from the stage feels like it’s in a good spot for me.  

Rob Walling:
I think for me as well, we went down to four speakers in Malta, so MicroComp Europe a couple of years ago and it was like an opener on the first day, a closer on the first day, an opener on the second day, a closer on the second day, and then two attend detox or three, and then everything else was like founder by founder and excursions and this and that, and it felt like MicroConf light to me. And actually that was a feedback we got. So I think four speakers is probably one too few. So if you’re listening to this and you are intrigued if you’re interested in attending a potential MicroConf event, there are two in-person events on the schedule and one remote event. So MicroComp Growth Retreat is in London, May 14th through the 16th. You can just head to microcomp.com/events to see all of these listed. 

MicroConf Europe is going to be in Istanbul, Turkey, September 28th through the 30th of 2025. And then MicroConf remote, our sales focused edition will be online May 21st. And we try to keep those tickets pretty inexpensive really in the $50 range such that anyone can attend. So thanks again for joining us this year, Derek at another MicroConf us, and thanks for coming back on the show and sharing your thoughts with the crowd. For sure. Happy to do it. Folks want to keep up with you. You’re on Twitter and Blue Sky. Let’s see, Twitter, you’re Derek Reimer and Blue Sky or you derek remer.com? I am, yes. Alright. And then if folks want to use the best scheduling link on the internet, they can head to savvy cal.com. Thanks again, man.  

Derrick Reimer:
Thank you.  

Rob Walling:
Thanks again to Derek Remer for coming on the show. And thanks to you for listening this week and every week. This is Rob Walling signing off from episode 769.

Rob Walling:
You’re listening to Startups For the Rest Of Us, I’m Rob Walling. Every week on this show since 2010, I’ve been showing up sometimes with a co-host, sometimes on my own to talk through what it’s like to build ambitious SaaS companies. And in the early days as SaaS was just becoming a thing, we also talked about downloadable software and mobile apps and even sometimes content websites and e-commerce sites because at that time I was running the Gamut info products, there was all kinds of stuff. But over time, this show honed in on SaaS software as a service because SaaS, especially B2B SaaS is the best business model in the world. And that’s why myself and the tens of thousands of listeners of this show, as well as the guests that you hear appear on the show, go all in on building incredible companies that bring us freedom, purpose, and relationships and that we can build and create and bring into the world without sacrificing our health, our family relationships, and the rest of our lives. 

Because we build businesses to support and to improve our lives rather than sacrificing the quality of our lives and our relationships for our companies. We want to be ambitious. We want to build incredible companies, but we want to do it in a way that isn’t unicorn or bust and that doesn’t require asking anyone for permission. So today I’m going to be digging into controversial takes from Scraping Bee co-founder Pierre de Wolff, and what I’m going to do is walk through a tweet that he posted in the middle of 2024, so about eight or nine months ago, and he says, these are my semi controversial beliefs I have about bootstrapping a successful product, and he has 15 or 20 bullets that I think are fascinating, some of which I agree with, some of which has more nuance, others I inevitably will disagree with. The best part of this is I’m not telling him that I’m recording this. 

Pierre and I know each other pretty well. He’s spoken at MicroComp. He’s a TinySeed founder. Scraping Bee is an incredible business. They’ve been public about mostly bootstrapping it to millions of dollars in revenue and they’ve done very well and grown very quickly. So an accomplished and successful founder and also a prolific ex Twitter user. And so I look forward to diving into his thoughts here in just a second. Before I do that, I want to tell you about our MicroConf Growth retreat that we’re going to be holding in London. This May of 2025, May 14th through the 16th. There are only 60 tickets available and by the time you hear this, there will be less than 60. We will sell this event out, and this is a new type of event that we’re trying, MicroConf Growth Retreat where SaaS founders connect, recharge and grow with the size. 

We’re planning it at 60 people. It’s an intimate gathering designed for SaaS founders who want to build deeper connections, gain clarity on their business and experience London like never before. So there’s going to be deep networking sessions. There’s going to be a morning work session to get feedback on your business, solve roadblocks, and there will be workshop strategies in small focused groups, then afternoon excursions and a ton of founder-led conversations throughout the event. Activities include things like going to electric shuffle to play shuffleboard. I’ve actually been to that place. Relaxing Paddleboard sessions on Region’s Canal, a guided tour of London’s best pubs and more to find out more and to buy a ticket before this event inevitably sells out. Head to MicroConf dot com and look in the top NAV for events and it’s called Growth Retreat 2025. 

All right, so let’s dive in to Pierre’s thoughts. We are going to link this tweet up in the show notes. The interesting thing is X, Twitter has some weird bugs these days. It doesn’t actually show a date of his tweet, but the replies are mostly from July 11th, 2024, so I’m going to assume that’s when this tweet went live. It’s such a weird bug. Anyways, Pierre says, today Marks six years since I left my job to start my indie hacker journey. I would say they’re far beyond being Indie hackers. They’re ambitious SaaS founders. They’re mostly bootstrapped, they’re TinySeed backed. Pierre continues. We’re now making millions a year, but we started from zero many times. Here’s a list of semi controversial beliefs I have about bootstrapping a successful product. Number one, don’t waste time on a rebrand. You don’t have a brand. You have a product of barely making $2,000 a month and at $2,000 a month, I would agree with him. 

The question then, of course I think through, because I’m on a podcast, he’s on X Twitter, on exter, you have to be extremely brief on a podcast. I would then think to myself, well, when does it make sense to rebrand? And usually that’s further down the line. It’s if you basically get an MVP brand out and you’re doing 20 or 30 KA month or your brand is hurting your efforts, it’s not helping you close sales, it’s actually driving prospects away because your design looks cheap. It isn’t conveying the messaging and frankly, the gravitas or some element of your product or your business. That’s the time when I think about a rebrand, and it is very rare that I will do that. It’s only when I’m seriously bothered. Like recently, Rob Walling dot com, which I had designed in 2018, and it was on WordPress. I had that redesigned and moved to Squarespace, and there were two reasons for it. 

One was because of the site was hard to edit, and I needed folks on my teams MicroConf TinySeed to be able to spin up new landing pages and change text. And even just adding a mention of TinySeed, there was no mention of TinySeed on Rob Walling dot com. Adding a mention of TinySeed would’ve been clunky. I would’ve basically had to hire a developer, not hardcore developer, but someone who can muck around with a word pressing and I just didn’t want it. And is Squarespace the best platform in the world? Of course not, but is Squarespace really easy to edit and my team knows how to use it? Yes, and so we paid for a rebrand of Rob Walling dot com. Now I think that’s worth it. It’s Rob Walling as a personal brand, not Rob Walling me as a person, but Rob Walling dot com sends a lot of people into this MicroConf TinySeed podcast, YouTube and Books ecosystem, and improving the brand of that property will absolutely sell more books, get more people into the ecosystem. 

And you should check it out actually, Rob Walling dot com, as I’ve said 17 times already on this podcast, but you can head there. And the about page I think is probably the one I’m most proud of. I just think our designers did an incredible job, but not only of the visual design, but of the informational design. And shout out to producer Ron for pulling almost all the content for that together in just a handful of days. But the idea there is this is a mature brand. If we were to redesign MicroConf tomorrow, I wouldn’t want to because it would mean we were standing still. But enough people see that site and the brand is solid enough that at times it can be justifiable. Do I think you should rebrand every year or two? Absolutely not. Do I think you should not rebrand as Pierre says, when you’re barely making $2,000 a month? 

Yeah, he and I are locked in on that. His semi controversial. Take number two, I think I’m just going to say controversial take so I don’t have to say semi every time. His take number two is.com, dot io dot. so.ai. In the end, no one cares. I think he’s mostly right here. I think.com is superior, but how much does it matter if you’re do io dot? So ai, I don’t know. I don’t think it’s the end of the world to be honest, as long as people can find you in a Google search. And as long as, the thing that bothered me so much Derek and I both was that we used get drip.com, so people kept calling Drip get drip, and that was infuriating. And what I wished I had done is bought drip.io or drip.co, even these days, drip ly. No, I didn’t want ly but Drip. 

So drip ai, any of those would have made sense. And I think that’s the big lesson I learned from there is to get your brand or exact company or product domain name, and then the TLD. The top level domain I make is less important because for maybe a month or two before we got TinySeed dot com, we got TinySeed fund.com. That was the initial $8 domain that I purchased before I went and bought TinySeed on the secondary market and people started calling us TinySeed Fund, and that was not fun. I did not enjoy that. And the misrepresentation is too strong of a word, but it is not how I wanted people to know us. It’s confusing. And so in the end, I do agree with Pierre, although I would say he says no one cares across these. I would say.com is the clear winner. And then for the others, I just don’t think it makes that much of a difference. 

Controversial. Take number three. Don’t think a affiliation or affiliate marketing will fix your acquisition issues. It’ll just create another acquisition problem acquiring affiliate partners. 100% true. And I don’t know if Pierre found this on his own or I’ve been saying this for 10, 12 years, that affiliate marketing is enterprise sales. And this is why I say if you are going to be a SaaS founder, don’t build your audience, build your network. Because if you build a network of folks who have audiences, that’s the killer play right there. You can then go to your network, which are people that you can text or email, and they respond right away. You’re in private Slack groups with ’em, you see ’em in person, you recognize them. Maybe you’d go out to dinner with ’em and you can ring them up. And just like Sherry and I did when we wrote Exit strategy recently, I emailed John Warlow and said, Hey, John, nice to talk to you. 

I haven’t seen you in six months. I hope things are well with you and the business. Hey, Ben Chestnut, co-founder, MailChimp. Thanks for speaking at MicroConf. Would you be interested in writing a testimonial for this book? John Warlow, would you write the forward for exit strategy? Derek Sives. Hey, man, been a couple years since we chatted and we hung out in Thailand 10 years ago. Would you be willing to read my next book that I’m writing with Sherry and write a testimonial? Hey, Sam Parr, founder of the Hustle, host of my first million, Eric Huberman, founder and CEO Hawk Media. Sherry actually knows him and on and on and on. I say these names and if I didn’t know them and they didn’t know me, it would be very difficult to get them to write endorsements of our books. And if I was a SaaS founder or wanted to do affiliate marketing, it’s these kinds of people that I would be going out to saying, does this make sense for you to promote this for this commission? 

Are you willing to help me? That’s why your network is so, so important when you’re building SaaS and your audience itself is fine. It’s an initial leg up, but your audience isn’t big enough to build a viable SaaS business on. And so back to my point about affiliate marketing being enterprise sales, it’s basically you going out and acquiring the affiliate partners that have existing audiences. Affiliate partners without existing audiences will not drive anyone. They will be rounding errors. It will be the long tail where they send you one new customer a year, and it’s more pain to deal with than it’s worth. And you want affiliate partners with large lists, large audiences. Now, whether that’s a big YouTube list, whether that’s a big podcast audience, a big email list, people that are listening to them in one way it’s owned media, right? It’s the channel that they own and they can promote you as an affiliate. 

You have to then go recruit them. If you have a great network, boom, it’s done. Otherwise you’re doing SPR said, it’s basically enterprise sales. It creates another acquisition problem acquiring affiliate partners, a hundred percent on board with this one. Number four, there is no silver bullet. There isn’t one thing that will grow your product from zero to one, but many things will grow it from 0.1 to 0.11. So from point 10 to point 11, if you think about it for the most part, yeah, there’s been a couple silver bullets that I’ve seen, but this is across hundreds, hundreds of companies, maybe thousands where people do stumble into an idea exactly the right time. I had Braden Dennis, the co-founder of fin chat.io on this podcast and them pivoting into the AI space, really was kind of a silver bullet and brought ’em from zero to one, but there’s a bunch of reasons. 

They had a bunch of data that was proprietary for the past several years, and they launched this MVP, I think it was in like four weeks or six weeks. You can go back and listen to the interview. There was a silver bullet there. There was also a silver bullet with Drip, although it wasn’t zero to one, so it’s still in line with what P is saying. But when we launched our visual workflow builder that took Derek five months to build, that was an unlock. And we went from growing from let’s say three to 5,000 MRR each month it went up to 10 KA month. I mean it was noticeable. Noticeable. It really wasn’t unlock, it was very difficult to build. It was complicated, but that feature was holding back a lot of folks from signing up. And so Pierre is right though there are no silver bullets and across the 212 companies that I’m invested in as well as the literally thousands of founders that I’ve spoken with over the years in general, it’s going to be even by the definition of silver bullet that I was giving where it’s not actually a silver bullet, but it’s just a level up or something that really accelerates growth or you feel like isn’t unlock. 

It’s extremely rare, so don’t count on it if you get lucky. We have hard work, luck and skill. Basically what Pierre is saying is develop your skill and work hard. Don’t count on luck, and I would agree with that. Number five, if you don’t know where to begin, copy what works best. That probably means emulating the best in class, not your competitors. Stripe for documentation, Amazon for conversion, apple for copywriting. Expand your copy scope. I really like this advice actually. I dunno that I’ve ever thought of it this way, but he’s exactly right. I know I’ve quoted on this podcast some copy that I’ve seen in Instagram ads that I thought was really clever about things not being the cheapest. These socks are not the cheapest because it’s not cheap to make amazing, awesome socks, and he’s right. Amazon obviously spent a lot of money converting and Apple does have quite good copy and Stripes documentation is amazing. 

So I think this is great advice. Hell, you’ll hear me on this podcast, talk about Picasso, talk about Paul McCartney’s baselines, talk about John Lennon writing Strawberry Fields forever. Talk about Dave ett on his Comic lab podcast. He’ll talk there about drawing comics and the philosophy behind being a self-employed entrepreneur. Basically, as a comics artist, I pull things in from all kinds of disciplines to help me make sense of this B2B SaaS landscape, and I definitely think you should as well. I like this advice a lot. Number six, once you find an acquisition channel that works, forget everything else, every dollar spent elsewhere is a dollar that could have been spent with a guaranteed and increasing return since you’ll get better at this acquisition channel. In general, I agree with this. The only time that I see it, I guess not say not working is when you top it out. 

If you’re doing SEO and you kind of own all the keywords you think you can own or you’re running ads and you’ve topped out all the ads, that’s when you do have to look for something else. But if I have an acquisition channel that is halfway working, much like, look, we started going into YouTube and it kind of worked and then we pumped tremendous amount of time, attention, energy, and dollars into growing our YouTube channel and LinkedIn is the place we’re doing that now. We’ve found that LinkedIn resonates with folks. It’s a lot of you listeners are on there. And so now we are recording a bunch of videos, creating a bunch of carousels for that. And I won’t say we’ve forgotten everything else, but I do like the idea, especially in the early stage of being extremely focused on what’s working and grinding on that for three to six months until you feel and three to six months to kind of get it to a place where it’s working. 

And then depending on the channel, you could then literally spend a year or two just expanding, expanding, expanding and growing that single channel without adding anything else. The only time I think you get in trouble with this is when you have a multimillion dollar company, two, three, $4 million of a RR, and you’re still relying on a single channel. That’s when it makes me nervous because even if it’s SEO, which is huge, man, what if Google accidentally de ranks you or delists you? If you don’t have any other channels, it becomes dangerous, but it’s all about that risk versus reward calculation that you have to do as a founder, as to when should I branch out into the next one? What you don’t want to do is try to experiment with and develop four channels at once because you’re basically probably with your limited resources, not going to succeed at any of them. 

So I definitely like this. Advice number seven is be the generalist hire specialists. The best way to work with people, better than you is to find those who excel at one thing. People who are good at everything will not work for you. They’ll build their own company. Yeah, I mostly agree with this. As a founder, you have to be a generalist hiring specialist, especially in the early days. I think it’s helpful. Well, there’s a couple ways to look at this, right? In the early days of your startup, you often need someone to do two things at once because you don’t have enough support to keep someone busy. You don’t have enough customer success to keep ’em busy full time. But man, if you can hire someone who could do both, would you say they’re a specialist? I don’t know. They’re kind of doing two roles technically, but I wouldn’t call ’em a generalist, so maybe this is in line with what Pierre is saying. 

As a company gets bigger, you definitely hire more specialists. I think people who are good at everything are still hireable. I think people with multiple skill sets, like Tracy Osborne, who’s been on this show many times, she’s an author of multiple books. She’s a graphic designer, she can write copy, she can do build Funnels, email marketing, she can manage people. She runs the accelerator. She and I are doing sales calls currently for SaaS Institute, which is the premium coaching for seven figure SaaS founders, SaaS institute.com, if you’re curious. So she can do a lot of things. And while she has built her own company, she did come on board early with TinySeed because we are doing really interesting things that she wanted to be part of. So there are times when you can paint a vision, paint a picture of what the future will look like, and granted, we did have budget TinySeed raised funding. 

We have currently $42 million under management, and the management fees from that allowed us to hire someone more senior who could do more things. And I think in this case, Pierre is talking to Indie Hackers. She’s not expecting ’em to have funding in the bank to be able to hire someone like a Tracy Osborne. So this is where I’m just adding nuance on a podcast. And again, if I was on Twitter, it would be one sentence and I would leave it behind, but I think that in the early days of a bootstrapped SaaS or a cash strapped SaaS, as I might say, I like to hire people who have that skillset, but maybe who have one other skillset like, oh, they’re in customer support, but then maybe they also can write support docs and maybe they could do blog posts. It’s a stretch, but maybe they could help with some other thing. 

You don’t want to search for a unicorn, someone who’s good at three things. Hiring generalists is really challenging, but I do like the gist of this advice, which is to be the generalist and then usually hire folks who are good at, especially if they’re contractors, actually freelancers or contractors, if I’m working with them, yes, I want them to be extremely specialized. I can just hire a bunch of them for all of the little things that I need done. I don’t need ’em to work part-time. Number eight, never offer a plan with unlimited features. It leaves money on the table for whale customers who could make up 70% of your revenue. And I think Pierre is talking from experience here. I don’t know if he took this one from the tiny C Playbook, which we have a pricing playbook where we talk about this kind of stuff, don’t do unlimited, or if they just discovered it on their own, but a hundred percent no unlimited. 

The only time, I mean, there’s some rare instances where you can offer unlimited something but not your value metric, right? If you’re measuring based on the number of email subscribers, there is no unlimited email subscriber plan with MailChimp or if I was starting an email service provider, you can offer unlimited other thing like, Hey, you get unlimited sends within our terms of service because that’s not the value metric that you are charging based on. And ASPR says, these whale customers are, your large customers are going to make up a huge chunk of your revenue if you do your pricing right. Number nine, if you can’t offer both a cheap plan and exceptional support, then don’t offer a cheap plan feature. Gating support means potential. Big customers will have a terrible experience and look elsewhere, and worse, you’ll never hear from them. And then I’m going to add and worse, everyone at that cheat plan will bitch about you on social media, on Reddit, on private forums. 

It’s not a good look. I agree here, don’t do it. Number 10, there is absolutely no reason to add Google login and any relevant social logins to your signup page. I think I disagree with this. I have seen folks, Ruben Gomez with Sewell and O Heat and Shaw did this where they add the Google login and it does increase their funnel. It increases the number of folks coming through their conversion funnel. So I think that’s the reason to me, there’s no other reason other than to improve your funnel likely. So I’m curious if Pierre and Kevin, his co-founder, have firsthand experience with this one or where it’s coming from because I do think I disagree with him on this one. Number 11, read all your competitors reviews on G two and Capterra several times per year. I love this idea, not only so you get an idea of what people are upset with, and that can help sometimes guide your direction and your positioning and your copy and your strategy and how you do support and all that stuff. 

But it can also help you in sales calls where you can specifically point out to a review or hey, you can say, Hey, go to look at Capterra. Here are the general complaints. I think this is really good advice. Number 12, it’s delusional to think that if you can make it to 10 KMRR, you’ll magically get to 100 KMRR. There’s this little thing called churn. That’s funny. Yeah, I mean, 10 Xing a business like that always requires, it usually requires you to do something different. It doesn’t always, but definitely there’s churn. And oftentimes as you get bigger, you’ll find that there are headwinds that creep up that you just can’t foresee until you get there. And then there’s churn number 12. If you share your success on Twitter, you will get copied 100%. There’s no way around it. He’s probably right. I mean, I’ve shared my success at conferences and on this podcast, and I’m usually copied a hundred percent. 

I think everything I know hit tail a hundred percent was copied almost pixel for pixel Drip was copied by several folks. TinySeed has been copied. MicroConf has been, yeah. All right. He’s right. It’s on Twitter. If you share you’re success anywhere, you’re going to get copied. Yeah, it sucks. It sucks, but it is the way things go. Number 13, people who tell you build this feature and all subscribe will never subscribe to your SaaS. He’s probably right. And in fact, here’s something that we used to do well, I have a couple counter examples, but it’s small numbers, but I remember in the early days of Drip when people would say this, I would say, great, sign up and your credit card. We will pause your billing until this feature is ready and the day this feature is ready, we will unpause your account. And I got some people to do that and it worked, but I’m not saying that to counter this because he’s mostly right. 

There’s a lot of people. What is the one on Comic lab? The co-host, Brad Geiger says the people who tell you, I would buy that comic or that joke, if it was on a t-shirt, we’ll never buy it. And he has all these examples of putting it on a little red bubble t-shirt, sending it to him, and never making a sale and never is a strong word, but realistically, you get the idea. It’s like most people say these things and just don’t mean it. So what I would definitely avoid is hearing build this feature and I’ll subscribe and going off and building it based on just that because the odds are pretty low. They’re actually going to follow through. Number 14, the Mom Test by Rob Fitzpatrick are the best 130 pages you’ll ever read about product development, and I don’t know that I can disagree with that. 

I would add in two other resources, actually deploy Empathy, the book by Michelle Hanson and the market chapter of the SaaS Playbook. I don’t think I would want to write an entire book on product development. It’s something I know how to do, but I don’t feel like I’m a world-class expert at it, but I think I know enough that I could write a chapter about it. I think there’s 30 pages or something in the SaaS playbook, and that’s another resource that I think is maybe not talked about enough out of the SaaS playbook. I think there’s some good guidelines in there. So mom test, deploy empathy and the market chapter of the SaaS Playbook number 14, and there’s only 16, so we just have another couple to go. The easiest way to sell your product when you start from zero is to provide value to your target demographic for free. 

Participate in forums, engage in Facebook groups, answer on Twitter. People will like you want to know more about you and will be open to learning about your thing. It’s not a bad way to go and this way to do it without an audience. Or if you have a network of people with audiences, it’s easy to get on their podcast or get on their YouTube channel or write something for their email newsletter. Whatever form that audience takes, it’s easy for you to get in front of them. Obviously, if you have your own audience, that’s fine, but it’s not something I would spend a ton of time building. I do think that forums Facebook groups, answering things on Twitter and being generally helpful to a demographic is good advice. Number 15, launching on Product Hunt is a nice baptism of fire if you’ve never launched anything, but don’t overthink it. 

It’s not as impactful as it used to be. I would agree with that. And I think even more so today. Again, this was written eight or nine months ago and the 16th and final controversial take, you’re probably never going to sell your SaaS for a 10 x multiple. Heck, you’ll probably never be able to sell your SaaS at all. That doesn’t mean you don’t have a great asset, but two to five X multiple is what happens in real life 99% of the time. And for this one, I think it depends. If he’s truly talking to indie hackers who build small lifestyle businesses, then I think that’s true. And I think when you look at Quiet Lights, numbers or like acquire.com will put stuff out, FE international, these smaller assets where you’re just selling the tech, it’s net profit or seller discretionary earning multiple, but let’s just say net profit multiples are like five to seven, four to seven, five to eight, four to kind of in that range. 

And then if you get to about a million and a half, 2 million a RR and you’re growing and you’re selling not just the technology but kind of the team, like the whole company, the product, everything you’ve built, that’s more than two to five XARR usually. Now I have seen, I saw one that was, what was it? Super flat and it went for 3.5 x. I’ve seen some go in that two to four range, but that could be declining or flat. But if you are growing healthily, I would think, Hey, I might be able to get, it depends on the time. It really does depend on what year you selling, because in 2021, you sell for a lot more, and then in 2025, the multiples were down. But have I seen exits for five to 10 XARR and up more than 10 XARR in the past 18 months for multimillion dollar SaaS companies? 

I have, and I’m intimately, this is not secondhand. This is firsthand knowledge of being affiliated with it. And so this is where it just depends. Multiples are, if you think about a bell curve and there’s the bottom end, which is the, it’s very few sell in that range and the top end, very few sell in that range, and then there’s this big kind of bubble in the middle and on the bottom end, it’s usually declining or flat or your churn is high. Growth is the number one factor. Churn is the number two factor. And man, if you are two, three, 4 million and you’re growing a hundred percent year over year or 50% year over year, you can get crazy high multiples. And then it also depends on just who’s in the market for it, who really wants this? Are you vertical SaaS versus horizontal? There’s a bunch of factors that go into it, so these multiples are helpful, but realize Pierre is probably right. 

You’re probably never going to sell your SaaS for a 10 x multiple, and in fact, you’re probably never sell your SaaS at all. It’s not an unreasonable thing to say. So that’s it for Pierre De Wolfe, co-founder of Scraping Bees, semi controversial takes on X Twitter. I hope you enjoyed walking through those with me. I really enjoyed just thinking through them, asking the what ifs and expanding on them, because again, that’s the beauty of a podcast is that we can sit here and think more deeply about it than you can on Twitter and explore all the ways that these things are true today. Maybe they weren’t true 10 years ago, maybe they won’t be true in 10 years, but at least for now, I think Pierre’s pretty close to being dead on with his takes. Thank you for joining me again for this episode of Startups of the Rest Of Us, the podcast for ambitious B2B SaaS founders. This is Rob Walling, signing off from episode 768.

Rob Walling:
Welcome back to Startups For the Rest Of Us. I’m your host, Rob Walling, and this week Brendan Fortune returns to the show and we answer questions focused on product management. We talk a lot about identifying and focusing on your ideal customer profile, how to prioritize feature requests, some dangers around using tools to prioritize feature requests, how to think about pricing and more listener questions, focus on product. Before we dive in to the questions, we are raising Fund three for TinySeed. We are investing in ambitious SaaS Bootstrappers. We’ve made 192 investments to date, and fund three is slated to invest in well over a hundred B2B SaaS founders over the next few years. Tiny c.com/invest. If you are interested in indexing your investment across a lot of different B2B SaaS companies that we identify through our application process and we identify as being high velocity and as companies having a high chance of succeeding and providing an amazing return for investors. 

So if you’re an accredited investor or the equivalent of that in your country, you do not have to be US based to invest. Head to TinySeed dot com slash invest. And finally, MicroConf Mastermind applications are open now and they close on March 31st. That’s at MicroConf masterminds.com. If you want to get matched up in a peer group of other ambitious B2B SaaS founders that are looking to travel a similar trajectory to you, and some will be ahead of you, some will be behind you, but frankly, we spend a lot of time to match those that are around the same stage as you. And where we think that a small group of you, four or five, maybe six of you in a mastermind, will be able to provide a ton of value to one another. MicroConf masterminds.com. And with that, let’s dive into listener questions with Brendan Fortune. 

Brendan Fortune, welcome back to Startups For the Rest Of Us, Mr. Walling, nice to be here. You are last on our show in episode 756, why Great Product Management is Critical for your startup. And in that episode, I did a call for questions for product related questions and did we ever get some questions? I think we got too many to answer in a single episode. I think we got almost a dozen. And I want to thank tom@garagetoolapp.com as well as Kyle Marr for sending these questions in. I sent ’em all to you and you handpicked the ones that you felt like would apply to the most people and would be most helpful for the audience. So thanks for doing that.  

Brendan Fortune:
Yeah, I’m excited to get  

Rob Walling:
Going on these. Let’s dive into the first one. So our first question is, it sounds like from the podcast that your ideal customer should be your highest paying customer. Does your ideal customer need to be the one that pays me the most? What if it’s someone that is easiest to work with, most responsive gives me the best feedback, but isn’t necessarily the highest paying customer? What do you think?  

Brendan Fortune:
Yeah, this is such a great question. The ideal customer does not need to be your highest paying one, but if your ideal customer is not in your, let’s say, top 20% of paying customers, it’ll be very important to understand why. The SaaS business model really depends on two things, retention and expansion. And if you can get both right, you unlock this magic of compound growth. And that’s really what makes saso special. Just as an example, so customer io where I work, only a couple percent of customers churn each month, which means there’s about 98%, 99% customer retention each month. And of those greater than 60% expand their profile count each month. And in customer io, we charge based on profile count. So when they add profiles to the system, they pay customer IO a bit more each month. So the combination of keeping these customers month over month and them growing is what unlocks this compound growth. 

So when you’re thinking about your ideal customer, one of the things to do rather than just jumping to the highest paying, although I think that’s a good shortcut, is you could look for your oldest customer that’s retention. So someone who’s really stuck around and gotten value out of your platform for a while, and you want to combine that with the oldest customer that has also grown their usage of your system the most. So whatever the key actions are, key behaviors that you want to see, you want to see not only that they’ve been around with you for a long time, but also that they’re using you consistently and ideally more and more each month. And those customers, if you’re pricing right, are almost always going to be some of your highest paying. They’ll also often be some of your most responsive because they’re getting value out of your platform. 

They’ve got questions, they’ve got feedback, they want you to improve certain things. They’re probably not going to be the easiest to work with though because they’ll be pushing the boundaries of your system, whether that’s missing capabilities or features, whether that’s the performance, if you’ve got really a high data processing type of product, drip is a good example of that or both at the same time. So look for the ideal customer again and the ones that have been around the longest and have used your product more and more and more over time. That’d be my pitch.  

Rob Walling:
And finding NICP is harder than it sounds. I remember with the Drip and I would say in the early days, but even in the mid days, the later days, there were several different ideal customer profiles. Now, drip is a pretty horizontal tool, right? An ESP marketing automation provider, however you want to classify it. And there were bloggers with these massive lists that would come in and pay a load of money. Problem was is they kind of went to the tool du jour. And so they switched, the switching cost for them was very low because they didn’t build deep automations, really weren’t that technical. And so really what they kind of needed was a newsletter service with some email sequence. This is a pretty light use case, but they paid us a lot of money. And so at a certain point they were a pretty key component of the drip customer base, but as time went on, they were less and less and less and we actually focused less on building features for them. 

Frankly, they just didn’t need the complicated features. SaaS companies were interesting because they did need the complicated features, but to your point, man, they pushed the envelope of everything because they tied into the APIs and they did all types of crazy, I say crazy. It was just what they needed to really communicate well with their customers. Very complicated setups and SaaS customers list sizes are way smaller than bloggers. You get a blogger, we had a blogger with a million emails, rarely did I see a SaaS company with even a hundred thousand emails. That would be a lot, right? 50,000 was more the size and since pricing is based on subscriber account, that’s what we were thinking about. And then what was the other one? Well, e-commerce became a thing even before there was the pivot, right? As I was leaving, they pivoted into e-commerce. We did no marketing into e-commerce. 

We did not even have a Shopify integration and 15% of our customers were e-commerce. And I don’t really know why I didn’t really have reach into e-com, but they came in and I remember their use case being a little different, but Infomarketers actually, and I’m separating those from bloggers may have been the best customers because they tended to, I’d say build bigger lists, maybe not as big as Bloggers is definitely bigger than SaaS. They really needed the components and they locked into our integrations are selling things, and so they needed either that Stripe or the PayPal or the Send Owl or the Gum Road or some type of lightweight cart. These are carts back in the day, I don’t know if Sendal is still around, but these were a lot of the integrations and they I think pushed the platform in a more healthy way that a lot of people could use versus we had some SaaS founders and I guess some info marketers who pushed it to the point where Derek and I kept building things for them. 

But at a certain point I remember being like, why did we build all these super power user features? Like Brennan Dunn, the co-founder of Write Messages, he wanted a full on JavaScript console in, he wanted to write the workflows in JavaScript or markdown or something. And I remember being like, that’s an interesting idea that absolutely one person will use. And so the reason I’m saying all this is you and I can talk about ICP and say, man, you should really find one ICP. It’s not always that easy. And there were, again, everything’s a bell curve, there’s always a spectrum. And I felt like there were Venn diagram overlap or there’s something where bloggers were not our number one ICP, but they were number four for a while and they actually paid the bills for quite a long time. They had these big lists. So I guess all that, that’s my color commentary on this. What do you think about that and how does that translate to larger companies? Let’s say I’m doing 50 million a year as a SaaS. Do I have one ICP or am I adding more over time?  

Brendan Fortune:
Yeah, I think there are almost always multiple ICPs and then there’s one priority. That’s the definition of priorities. You can only have one, at least one at the top. It’s so interesting to hear you talk back on these ICPs for drip though, because even I want to take a minute and play them back on this retention and expansion framework. So the bloggers for example, they are maybe a little bit lower on the retention side, like you said, because switching costs are down. But on the expansion side, they’re high because they’re going to be adding way more people to their list, which is how you charge. So you got one of the elements, but you don’t have both. On the SaaS side, the retention’s going to be really good, and integrations are such a key part of retention strategies for a lot of SaaS products, especially when you have to put in a custom integration, which was part of Drip’s deal, certainly part of customer iOS as well, where there’s an API integration in addition to maybe a Shopify or WooCommerce or something else. 

So you’ve got the retention angle there, but then you’re missing a little bit of that expansion with the SaaS companies and stuff. And ideally you want to try and find someone that’s going to be a little bit of both. And there are some customers, like the info marketer is maybe a little bit of a balance of both because the retention might be a little higher, not because necessarily of their integration. So that could be part of it, but it’s because of the complexity of the workflows and the automations that they might build out. And Brennan Dunn is the ultimate example of that, and he really pushed drip to its limits. So I totally agree with that. And I think when you’re looking at different ICPs, the focus is less on which one should I just go all in on and instead, what’s the stack ranking that I want to put them in based on this combination again, of retention and expansion. 

And it’s rare when it’s just obvious, well, okay, of course we’ll just do this. So you do end up having to focus a little bit on multiple. So that makes a ton of sense. And I think as you get, as company sizes increase as you’re making more and more money, oftentimes what happens is at some point someone will sit down and be like, okay, we need to make personas and personas become a little bit of a shortcut for an ICP. Sometimes they become, I dunno, kind of more of a mental exercise than a practical exercise because people get so obsessed with who’s the buyer? Wait, who’s the user? Who are we going to pick for pictures? All sorts of stuff. But at the end of the day, if you can connect it back to expansion and retention, I think it all boils down to that. And even as companies grow, you have to find who you’re going to prioritize, even if it is more than one ICP.  

Rob Walling:
One other thing I want to add to this before we move to the next question, and it is there’s a third element. It’s not just retention and expansion, although you could lump this into expansion, but I’m going to argue that it shouldn’t be and it’s promotion or spreading the word. And here’s the thing, if you have a bunch of infomarketers or bloggers using your tool and you’ve set up an affiliate program and they like your tool and you pay ’em 20 or 30% top line, they will likely get you hundreds or thousands of customers. Like if you work hard at this and this is your focus and you do webinars with ’em and you push, it’s the playbook that ClickFunnel said, it’s the playbook that lead pages did. I’ve seen it over and over. If instead you focused on SaaS founders, they do not give a shit about affiliate commissions. 

They don’t have an audience, it’s not the same thing. So there’s a third element that is not present in most customer bases to be honest, which is why you’re not bringing it up because it’s probably 5% of potential SaaS apps have this ability, maybe 10%. It’s a very super minority, but if that’s on your radar, you can absolutely grow very quickly, often in an unhealthy way. I’ll say, I often giving away a huge amount of your net margin and often the promotion is to nascent entrepreneurs. Early stage kind of wannapreneurs is the derogatory term for it. And so the churn is really high. But man, I have seen the internals of a business that went, what did it do? I think it was end of year one, two and a half million a RR, and this was basically mostly bootstrapped end of year, two 5 million, end of year, three 10 million, end of year four 20 million. And it was on the back of this. And so it’s an interesting thing. It’s not something I’ve ever executed on, but I have seen it. I’ve seen it both, I’ll say secondhand and third hand through both TinySeed companies and other companies I’ve been involved in.  

Brendan Fortune:
So it’s like the third angle of acquisition. There we go. That’s maybe where I’d play that. And if you can get the, as long as again, the acquisition falls out the leaky bucket, if you don’t have the retention piece of it, which can be the risk and you called that out too, but yeah, that’s a total fair point. If you’ve got a Venn diagram of three things between retention, expansion and acquisition, in a perfect world you get all three. But that’s not very common at all. But yeah, that’s a totally fair point. And I think a lot of, especially like you were saying, that early stage where you’re trying to get some sort of traction, you’re trying to bring a lot of customers in the door, if you’ve got an opportunity to go after that, then do it.  

Rob Walling:
Yeah. And as I said, it may not be the right decision long term. It may not be the healthiest business. You’ll have higher churn than you think, and it doesn’t happen by itself. You don’t just say, Hey, an affiliate program and I have a bunch of bloggers, is that No, you, you have to. I’ll just say I’ll use Expression Wine and dine, but you have to do enterprise sales basically with them to get them to start recommending you. And there’s a whole conversation and stuff. So it’s not as simple as I’m making it sound, but it is a tactic that I’ve seen. 

I want to take a minute to let you know about the MicroConf Growth Retreat, a new event we’re launching in London from May 14th to the 16th of 2025. This isn’t your average conference, we’re keeping it intimate with just 40 to 60 SaaS founders joining us for deep networking and invaluable insights. We’ll have focused morning work sessions where you’ll gain clarity on your business challenges followed by unforgettable afternoon excursions, exploring the best of London, and then we’ll end each night with a reception. Tickets are limited, so head over to MicroConf dot com slash retreat to secure your spot. We will sell this event out. If you want to go to the MicroConf retreat in London, head to MicroConf dot com slash retreat. Let’s dive into our next question. How do you prioritize features slash product requests? Right now I’m doing it based on if multiple customers ask for a feature that would be high priority, along with if a feature is already on our backlog, things I felt that would’ve been a good feature. And then if a customer asked for it, is there a better way? Right now we have about 10 customers, so finding a common denominator in feature requests isn’t always easy. What do you think, sir?  

Brendan Fortune:
So I would amend the last sentence and say, it’s never easy. Even if you’ve got a hundred or a thousand customers, it’s still going to be, this is one of the hardest things to do and this is what a great product manager really, I dunno about solves for you that’s maybe too simple but really accelerates for you and kind of improves your hit rate when it comes to prioritization. So first off, I think you can go deep down a rabbit hole on this question and lots and lots of people have tried to create different equations frameworks for figuring out exactly how you do it. There’s the rice framework, which they’re all fine, they all kind of do similar sort of things, which is try to pick a few elements that are important to your business and then rank things based on them. And that can be a really smart mental exercise as you’re trying to find your flywheel. 

And that is one of my going to be my broken record thing. I know we talked about that in the last episode with pricing and packaging, but the flywheel is your strategy. It’s the thing that you want to prioritize, feature requests that accelerate, that flywheel. All that said, when you’re just getting started, I think the risk that I have seen is more inaction, sporadic action. So kind of just moving all over the place, prioritizing different things that are solving different types of problems. So I’d recommend just a simple prioritization framework like this, pain versus ease one that’s been around for forever if something is really high pain. So when I hear in this question a customer asks for a feature that would be high priority, make an assumption that high priority is also high pain for the customer. They cannot get their job done without this thing. 

That’d be very, very high pain. And if it’s high pain and low effort, which does sometimes happen, then just do it. Don’t think too hard about it, just get it done. If it is something that is a high paying, high effort sort of thing, and this could be like let’s say you had some sort of e-commerce payment product and someone came in and was like, I really need a whole website, e-commerce delivery platform and I want to be able to customize this and that and the other thing, basically an adjacent market expansion that’s going to be really high payment and also really high effort. And in that case you want to slow down and take a look at how you think that will impact your core SaaS metrics around expansion, churn, customer acquisition. And if the answer is it’s not much, I’m not really very certain, you should not do it. 

If you’re not really sure, then take some time maybe a week and spike it out. But I wouldn’t put more than into it or at least that would be my pitch. Moving down the framework. If it’s a low pain, low effort thing, then do it, but try not to do too many of them. There’s the temptation sometimes to only do these things because you see the problem, you understand the problem and you understand the solutions. So you just kind of churn these out and if you do that, you’re going to lose out on the growth potential basically of your business. And then if it’s low pain and high effort, then obviously drop it. And I think, Rob, you had a great example with the Brennan Dunn JavaScript workflow generator, super cool kind of low pain, but definitely higher effort to maintain and troubleshoot and quality control and all that stuff. 

So in those cases, drop it and move on. The other common question that comes up is like, well, does it depend on who asks for a feature if they’re like a high paying customer, if they’re my ICP or whatever? In general, we’ve been talking about you always want to prioritize who you think is the customer that’s going to bring your business toward its goals. But even in that case, I think there’s a little bit of art to this experience, especially early on when you’re trying to try out different flywheels, different patterns of customer behavior that are both good for your customers and good for your business. I think that a lot of flexibility is key as long as you have some sort of learning that comes out of shipping stuff. If you ship the thing and then you can actually answer questions like, Hey, this got used, this didn’t get used. Here’s who used it, did they continue using it? Stuff like that. Then I think your risk is really low of overthinking. Just try and learn.  

Rob Walling:
You’ve outlined the science of product management, the buckets, the low paying, low effort, high paying high, that’s the science of it. The art is when a feature request comes through, which bucket do I put it in? And that’s the thing that I want to communicate to people there is you cannot a hundred percent make these decisions with data. 

It just surveys or asking or there’s always some gut feel, some classification, some ask ai or frankly it’s in my head and that’s like the founders I see who are building products that people want. They develop this sense of their customer, who they’re focused on what they might need. I remember having conversations, we get a feature request and just kind of asking openly like, ah, this is an interesting feature. What percentage of our customer base do we think would actually use this if we rolled it out? And none of us knew, but I remember sometimes being like, my gut is it’s 5%. And so I think to me that’s a relatively, even if it’s high paying, it’s just a low adoption. So I would throw that out or sometimes it’d be like, I bet at least 20 30% of our customer base would do it, which is that felt significant or even 50 or whatever. 

And again, was I completely right? Probably not. Was I right a hundred percent of the time? Probably not. Was I close enough of the time? You don’t have to be right all the time. So that’s the thing I want to call out with this is it is such the cliche that it’s part art, part science, but it is, yes. But I like the science aspect that you’re throwing out of just having, especially early on having these four, it’s basically four buckets, right? Because a two by two matrix and then you can add more stuff later. And that’s where in the early days it’s hard. You don’t know who your ICP is yet, and you’re kind of have a hypothesis. This is also why I believe horizontal SaaS is so much harder. If you’re building Sewell, Ruben Gomez has, it’s a competitor to DocuSign, horizontal electronic signature. 

Can he possibly have one ICP? Probably not. Versus if I’m vertical, I know there’s, let’s look at Jim desk, which is software for gyms, martial arts, dojos, fitness studios, yoga centers and such. It’s just easier. And at that point, yes, of course you’re going to get some gyms with five locations or 20 locations. You’re going to get single location gyms and you’re going to get ones with this much revenue, ones that don’t have a subscription. I don’t know. There’s all things, and you do have to narrow it down, but the number of options for an ICP is much smaller when you are in a vertical, and that is something we see across tiny C companies is that they tend to, there’s less competition frankly in not horizontal markets. And there’s I think a slightly easier time honing in on an ICP.  

Brendan Fortune:
Yeah, that’s pretty, that’s interesting. Do you think when you’re balancing the art and the science, what do you think has been most successful for you when it’s building that product sense? That’s what I kind of hear with the art piece. I have thoughts on this, but I’m curious for yours.  

Rob Walling:
I think it’s a couple things. I think it is having some type of ideal customer or two or three. I mean, I’ll be honest, with Drip it was, I always thought of bloggers, SaaS, infomarketers as these three buckets and as it went on, and then E-commerce became one, and then bloggers we kind of bailed on because it was like there is not great customers for us, but I had those in my head and I, there was a prototypical one or two of each of those that was a real customer that kind of had you, you know what I mean? And I can name them here, they’re in my head, but I’m not going to name them. And I would think, would they use this? Is this kind of, so I did have personas, but they were just real people I think floating around in my head. 

So that was something, and it was knowing our customers pretty dang well. And then there was this other thing, man, it was like product vision, does this fit with what I want to build? There were times where we got requests to add a CRM to drop a lot, and I remember Derek and I wrestling with this and be like, is that where we want to go? Active campaign has that and Infusionsoft would changes name to keep had that. Is that really the business we’re in? Or do we think we can get to tens of millions of dollars without adding A CRM? Because by the time we had a CRM, we are heading down this dangerous road of we’re going to have two mediocre products attached to each other. I mean inevitably. 

And so that was our vision collectively was like, I don’t think we want to do that. If we do that, we are going all in on that. And then I only want people who need a CRM in drip. I don’t want people who, again, they don’t need A CRM. So would almost be turning our back on them and saying, if you need Drip plus A CRM, then now you’re our ICP. And I never felt like that was the right call. So that’s why tying that vision, product vision of seeing where we want to go and where we want to be in the market and what market we want to be in and who we want to compete with was really the thing. So those are my thoughts. How about you?  

Brendan Fortune:
Well, I think the specificity is so useful that you’re talking through. And I agree a lot of the times, especially early on, the more customers that you talk with deeply, so not just like a random one-off or like, oh, I’ve got one email, but you’ve actually had conversations with them, had lunch with them even or something that’s a little bit deeper. The more you can drive them into your head, the more you develop this product sense. And I think that is a superpower of most founders is if you can be more in touch with your customers, more intimately involved with them, you develop that product sense a whole lot faster than if you’re a product manager, for example, coming into a bigger company that’s just trying to develop that same thing. And that is why I think it’s a little bit easier to develop products that customers love when you are more intimately involved with those customers. 

And it’s because again, your product sense or the art is a little better when you talk about the product vision stuff. What I love about that is there’s a little bit of combo of art and science that’s just really inherent there. The way you were talking through it, you were like, well, we’re going to spread ourselves too thin and quality is part of our vision. We’d rather be best at one thing than okay at two things. And that is more of a, I don’t even know about product sense. Maybe that’s more of a business sense thing developed over trying different ideas, different startups and things like that. But the reason I ask that question is because along my career sometimes I’ve found it really hard to follow exactly what does that mean if I want to develop this art, is that like a nature thing or is that a nurture thing? And I still think it’s a little bit of both, but I think a lot of it is nurture. That’s why the power of curiosity is so great, I think as a product manager or as a founder is because then again, you’ll develop this sense which you need in order to balance making decisions quickly with making the right decisions on priorities. So I basically wholeheartedly agree.  

Rob Walling:
Alright, let’s dive into our third question. Brendan talked a lot about pricing and not leaving money on the table, but what if your competitors pricing does leave money on the table? For example, we charge for user, well, one of our competitors lets you have unlimited users for a fixed price. Ooh, that’s kind of rough. That competitor is probably making a mistake. So the question is how do you compete against that?  

Brendan Fortune:
Yeah, such another great question and I think the core answer, which is a little bit, can be a little bit frustrating, is you want to compete on value, not on price. Okay, so what does value mean? Value is the reason that your customers are paying you. It’s the job that you are helping them perform or just doing entirely for them. And if you can keep the focus on how well you’re going to deliver that value, then you’re going to be able to compete even if the prices don’t match up. So instead of having it be like an apples to apples comparison where it’s just so tempting to go just based on price, you make it an apples versus oranges sort of comparison by focusing on the value of your product. And this really is a psychological exercise which can make it challenging, not a technical one. 

And some questions to think about are what is the sales pitch that earns you customers if you’re talking with someone, but what is the pattern? What is the story that you end up telling where you can see a little light bulb like click oh, now I’m actually interested in this. Now I’m going to lean in a little bit more. So that’s going to get you closer to understanding the value that you’re providing. Same thing with learning from your customers through their feedback about why they stay with you, what are they doing with your product and what are the kind of requests they’re making. All that kind of stuff helps you understand your value and if you can figure out the right story, stories, sell and prices help has been my experience. I’ve even seen really impressive product managers, founders, and certainly salespeople sell future roadmaps over the current value and just blast through some of the pricing conversation. 

Again, it depends on your ICP and how price sensitive they are, but I’ve seen that work really well. Now to this specific question, when you’re doing usage-based pricing, which can be user-based pricing as well, and you’re competing against some sort of all in fixed price, two things come to mind. One, you’re competing against simplicity, which is a hard thing. Customers just being like, I get this. I feel like it’s simple, I feel like I can predict it, but a common way around it and customer I has done this is you start a little bit less expensive than where they’re at with users and maybe that continues for a while as they kind of build up their usage with your product. But if you find a good fit with that customer, you’re going to end up with higher margins, you’re going to end up more expensive. But the difference is you’re going to have proved your value out to the customer and they’re going to be happy to pay for it because they understand the value. Whereas upfront, it’s a little bit harder to do that. So if you can start a little bit cheaper, I think that’s a fair way to compete with someone who is trying to go all in.  

Rob Walling:
Something I like about what you said is basically if you’re undifferentiated, you become a commodity. And if you are a commodity and you are competing on price, good luck. Don’t do that. It’s basically like if you’ve listened to this show for any length of time, I will frequently ask people, especially when I’m challenging them about their product, how are you different? How are you different? How are you different? If you’re the same as anything else, then you compete on price and that’s it. I have a section in my book SaaS Playbook called How Can I Build a Moat? And I talk about network effects of integrations. I talk about building a strong brand. Brand can be bullshit, but frankly, the larger you get, the more it matters, right? When you’re doing 10 million a year and they’re like, I know I’m going to go with customer.io over X, Y, Z competitor because the brand is stronger. 

I talk about a switching costs and some other things. I’m trying to think if I’ve ever competed on price ever with any product, probably some commodity stuff I had years and years ago like pre drip and even pre hit tail because like MicroConf itself, it ticket to MicroConf is more expensive than most startup conferences. But guess what? We sell out every event. Why do you think that is? When someone could buy a ticket for half the price to go to another event because MicroConf has a strong brand, there is trust that we are going to deliver. With Drip, we used to get, oh, you’re 20%, 30% more than MailChimp. And so we would say, great, if MailChimp has what you need, you should go with MailChimp. But guess what they don’t have. We had the whole visual builder, we had all this stuff. If you need this, we are way cheaper than any other competitor. 

And that’s how we positioned ourselves. Even today, TinySeed itself is not the cheapest money that you can raise. And I’ve seen this ad on Instagram, well, it’s being copied by a bunch of things, but it’s for socks or for pens or for whatever. And there’s this one for this sock company and it says, these socks are not cheap because they’re not cheap. It’s not cheap to make a sock that lasts four times longer than cotton. It’s not cheap to create a marina wool that blah, blah, blah. So they’re leaning into why they’re expensive. And so we were batting this around. I like these types of things where it’s like this counterintuitive approach and I put it in the TinySeed team, slack and Alex, who is our program director for the accelerator just wrote this out for TinySeed and he wrote, our funding isn’t cheap because we’re not cheap. 

It’s not cheap to build a program that’s four times longer than the average accelerator. It’s not cheap to create a world-class group of industry leading mentors. It’s not cheap to connect a network of hundreds of SaaS founders through events worldwide. It’s not cheap, but when it comes to your business’ growth, it makes a big difference. That right there is an interesting position. So we do absolutely have people, whether it’s individuals or whether it’s other funds that are paying homage to our model, I wouldn’t say copy, but they’re paying homage to us. They will match or beat our offers, right? It’s like we make an offer and then they’re like, well, obviously I’ll give you a higher valuation because they have to. And yet we win almost all those deals. And why do you think that is? Because we are better, I believe, but because the public thinks we’re better because people who see TinySeed think, man, that is the gold standard or a gold standard like a world-class accelerator. And so the same thing applies to your SaaS, I think is what we’re, that was my long rant on positioning commoditization. This is something founders, I think some founders forget or they don’t pay attention to and they think price is the only factor and it’s not.  

Brendan Fortune:
No, the story is so important. The branding is, yeah, that is the power of the brand.  

Rob Walling:
Moving on to our next question, question number four. I find opinions tend to vary when it comes to how good product managers should be spending their time. Some seem to suggest talking with users is all you should ever do while others spend all their time project managing the engineers and still others interface mostly with marketing any good rules of thumb. So anytime anyone says always or never, I’m like, that’s definitely not the right answer. So if someone says they always talk to you’s just like, yeah, slow down there, or always project managing it is probably a mix. But what’s your take on this?  

Brendan Fortune:
Yeah, this is, I think part of the reason this question will never go away is because where good PMs focus their time changes depending on the projects that they’re working with and more importantly the team or teams that they’re working with. But it doesn’t have to be that complicated. So I do have a rule of thumb for this, which is as a pm I often like to ask, are you aiming or are you executing? And the question is intentionally I guess a little bit ambiguous. Oh, I’m just aiming, oh, I’m just executing. It’s always a little bit of a combo, which is right. But in general, product managers, the unique thing that product managers should be bringing to their teams is prioritization. They should be saying, this is an important problem that is both important for our customers to have solved, and if we solve it, we are going to make more money for it. 

However that happens, that is what product managers are uniquely there to do. So when you’re asking yourself, am I aiming more than executing or the other way around, you want the balance to be more in the favor of aiming than to executing. But aiming does not mean talking to users nonstop. As a matter of fact, that’s a problem. I think if that’s all that you’re doing, because as anyone who’s talked to a lot of customers knows at some point you start just hearing the same thing over and over and over and over again. So it’s not just talking to users, it is synthesizing information from lots of different streams. So some of that is talking to users, some of it is market anecdotes, maybe that’s like a competitor’s marketing or ad or press release or website or something, surveys, business metrics, product analytics and other problems and ideas that you might hear through your team no matter how small your internal team is. 

And synthesizing means sifting through all the noise. There is a lot of noise in any communication and looking for those common themes between what you’re hearing. And this brings me to one of my favorite points, and this is a trap I have fallen into many times myself. When you are synthesizing all of this information that you’re hearing that doesn’t happen alone in your own mind, and I think that’s a common myth. It happens with creatives too. Like authors of books or great musicians or performers, they kind of went off and into their zone, created this amazing art and then shipped it out to the world and it was just perfect right there. It’s rarely the case. And as a pm I think trying to retreat into your own mind, write a lot, maybe do a bunch of diagramming and stuff that rarely is going to help you synthesize. 

Instead what happens where that happens best in my experience is when you’re talking out a theory with another member of your team or a customer. So you’re saying, this is the pattern that I think I’m seeing and here’s why, dah, dah, dah, and then letting some questions come in about that from them and iterating based that input. So trying to have those conversations I think is super, super important. And I’ve got a tool called rock tumbling, which we won’t have time for, but if you’re a bigger customer with a larger PM team, it’s a really cool way to make this happen. One other kind of related point, and this is more for people that are working with product managers, even if it’s just one, I have encountered several times product managers, especially product leaders that will say something to me in a very confident and decisive way, this is the problem, this is the opportunity we need to go after and here’s why. 

And it doesn’t sound like a debate or an opportunity for curiosity. It sounds like an opportunity to fall in line and start taking action. And what I’ve learned time and time again is that a lot of times product managers are incentivized to sound this way because they don’t want to come across as wishy-washy and they want people to feel focused and they have clear direction and clear priorities, but actually they’re making it up kind of on the spot. They just get really, really good at communicating in a way that makes it sound like they’ve got it all figured out even when they don’t. So again, I tie this back to the whole synthesizing thing. It’s really important for any product manager or someone who’s deciding priorities to have conversations with others and get questions and challenges back because that is actually what the product manager or founder need. That’s what everyone needs to make better prioritization decisions. So don’t do it in a vacuum. And even if you do, you are tempted to present it in a confident way, ask for questions even if, does this sound right to you? What part of this doesn’t make sense? Could you repeat it back to me? Even depending on the partners that you have, try to iterate on it and not just steamroll everyone.  

Rob Walling:
That question and your answer actually dovetails nicely into our final question of the day, which is I’ve lately been using a SaaS product called Air Focus for managing our roadmap and user feedback. I like it, but I do like hearing more about how other PMs organize their planning and feedback.  

Brendan Fortune:
I’m going to try and refrain from Hot Takes on this one because I think product roadmap tools are really great and they’re also incredibly dangerous because they incentivize making a process. The goal, like the outcome, like following a process becomes the goal rather than making more durable prioritization decisions. But they do have their use. So what I’ve found is organizing user feedback, whether it’s an air focus or any other tool, there are many of ’em. It’s a great way to synthesize information for maybe the first quarter or two or maybe three when you’re immersing yourself in a new market that very little about or a new area of your product. Like going back to the drip example, if you were to expand into CRM, that might be a time to be a little bit more deliberate and organized with how you process feedback. But after a certain point, and that certain point comes pretty soon, there’s just severely diminishing returns to spending your time categorizing feedback. 

And what I mean by diminishing returns is your prioritization decisions. They don’t tend to get more accurate for all of the work that it takes to be like, I got this email. There are three pieces of feedback. Here’s where I’m going to categorize this. And tools that are around road mapping and organizing feedback often encourage you to go to that level of detail. So what I’d say is it’s more of a time thing. So use Air focus, use any of those tools. At first, I find a spreadsheet is about as good of a job. If it’s just about organizing the feedback, less so about presenting a roadmap visual, which actually brings me to the second point. Roadmaps are a fascinating topic because what the best roadmaps are lagging indicators or outputs of alignment with the team no matter how small that team is or how big the team is. 

So they’re not connections to your user feedback. It shouldn’t be the output of an equation where I’ve, okay, well I’ve got five high paying customers that requested this thing, therefore boom, it’s on the roadmap instead. It’s more about, again, communicating the alignment around this is a business opportunity that I think and members of my team are all in agreement, like in alignment, they’ve challenged it, they’ve had a chance to hear and discuss it. And so the roadmap is kind of inconsequential. It’s just a representation of what we’ve already talked about and decided. And tools like Air Focus, again, sometimes incentivize creating a roadmap document without those conversations because they tie it just directly into your user feedback organization and you can do that. But in my experience, where that tends to work is in organizations where you’re not being challenged and then I point back to my synthesis, you’re probably not going to be making the best prioritization decisions if you are making them in a vacuum just out of that organization. You’re going to make better decisions if you’re forced to build alignment with other people and not defend your decisions necessarily, but at least process them, rock tumble them. That’s the old Steve Jobs analogy of you want to bang them against something hard a little bit because they’ll be smoother. You’re going to get a better output if you allow them to be beaten up a bit. So in a nutshell, tools like Air Focus are great. I’ve never seen one that’s better than another personally, but don’t lean on ’em too heavily would be my recommendation.  

Rob Walling:
And I would be remiss if I did not mention TinySeed company savio@savio.io. Their H one is centralized, organize and prioritize, go to market team product feedback. So folks can also check that out if they are evaluating options. Brendan Fortune been quite the pleasure, man, having you back.  

Brendan Fortune:
Yeah, I love these questions.  

Rob Walling:
It’s a good questions. I know, and there were several others that we didn’t have time to answer today, but really enjoyed having you on the show. Again, folks want to keep up with you. They can search for your name on LinkedIn. We’ll obviously link that up in the show notes. That probably the best spot.  

Brendan Fortune:
Yes. Yep.  

Rob Walling:
Brendan Fortune, just like it sounds. Thanks again for coming on the show, man.  

Brendan Fortune:
Alright, thank you.  

Rob Walling:
Thanks again to Brendan for coming on the show, and thank you for sending in your listener questions, whether you sent in the product focused questions that came for this episode, or you head to startups For the Rest Of Us dot com, click the ask a question link in the top nav. Your questions are what allows this podcast to feel more like a community, more like a living, breathing thing, rather than just me talking on the microphone every week as I’ve done for 15 years. And speaking of that, episode, one of this very podcast came out on March 30th, 2010. This is going live on March 25th, 2025, just a few days off from 15 years of shipping this podcast every week. If you keep listening, I’ll keep recording. This is Rob Walling signing off from episode 767.

Rob Walling:
It’s startups. For the Rest Of Us, I’m Rob Walling. Today I’m joined by four time guest, Stelli fd co-founder of close.com. We have what I consider to be an amazing conversation about their pretty amazing growth being a mostly bootstrapped company to $40 million in a RR. I love talking with Sally because he is so thoughtful, but also very passionate and he and I have known each other for more than 10 years. And so there’s just this kind of common frame of reference and this understanding of each other’s history that allows us to go pretty deep, pretty quick on topics that I think matter to entrepreneurs. It’s a great conversation and I hope you enjoy it. Before we dive into that exit strategy, my new book is available on Amazon and Audible. You can of course go to exit strategy book.com to get the links or go to Amazon or Audible and search for exit strategy by Rob and Sherry Walling. And with that, let’s dive into my conversation with Stelli Stelli fd, welcome back to Startups For the Rest Of Us.  

Steli Efti:
So good to be back.  

Rob Walling:
It’s your fourth appearance. Your last appearance was May of 2020.  

Steli Efti:
Wow.  

Rob Walling:
May of 2020. If that day, the rings a bell with it. And it was something about how to sell during a pandemic and you were doing a lot of tugging about it. I don’t think fondly of those days. Pandemic days. I believe you’re a four time MicroConf speaker. I was trying to recall. It’s always hard to remember.  

Steli Efti:
I think so.  

Rob Walling:
And you’re the founder of close.com, your H one is stop using slow cluttered CRMs. You guys have been in business for, what is it like 13 years? Am I remembering correctly?  

Steli Efti:
Yeah, I think the product has been launched in January, 2013. So 12 years.  

Rob Walling:
And I tend to refer to you as mostly bootstrapped, meaning you raised a little bit of funding early on and then never raised again. Is that still accurate?  

Steli Efti:
Yeah, that’s correct.  

Rob Walling:
Cool. And do you want to give folks an idea of where the business stands today in terms of if you’re willing to share a RR and employee headcount?  

Steli Efti:
Yeah, so we are at 110 people fully remote and over 40 million in revenue. Good  

Rob Walling:
For you, man. Hell of a business. So when people hear this, there’s a good chunk of this audience who will know you. They will know you from this podcast, they’ll know you from MicroConf, and then there’s a chunk who don’t yet. And when I hear someone saying they built a SaaS company over 12 years, I mean it’s kind of SaaS og, right? SaaS was a thing, but I mean that’s a long time. And to also build a business of that magnitude without a bunch of funding, just a high level looking back, has the journey felt, as long as that sounds as 12 years of working on the same project or has it kind of flown by may not be the right word, but have you just day-to-day you execute and suddenly you’re here.  

Steli Efti:
It’s both. This sort of life is a paradox in many ways, and it feels both much longer and much shorter depending on the mood the day. But 

Sometimes I feel so young and then I feel so old and the time spent between those two sensations does no, this have to be that long. So similarly with running a company like this, sometimes things are just flowing and you reflect back and you go, holy shit, this has been a hell of a journey. And it’s been pretty smooth. And then there are moments where there’s trouble and you’re like, how much longer am I going to be doing this? This is too difficult. So it’s like depending on the mood and the day, but it’s definitely been a very gratifying journey for sure. A really amazing journey  

Rob Walling:
I can imagine. Yeah. And do you have one co-founder?  

Steli Efti:
Two, we have three co-founders  

Rob Walling:
And they all, is everyone still working or has  

Steli Efti:
Anything done? Okay, that is probably one of our biggest accomplishments and that probably trickled into a lot of the other things that made close special is that the three of us have been working as co-founders. We did a couple of other things before we ended up pivoting to close. So we’ve been working together as co-founders for 14 years. And I would say that our relationship today is closer than ever before and we are such different people. 14 years, there’s a lot of life that happens. So a lot of moments of crisis where everything pushes you to show up at your worst or to expect the worst or to be a little bit more selfish than you ought to be or see somebody else slack off or be selfish and all these potential for conflicts. And usually these things are the things that sort of break co-founders apart, just like any other very intense relationship. And we’ve been able to work really hard on the relationship and navigate these tricky waters and all three still work at the company and still work very intensely together.  

Rob Walling:
It’s really impressive on a couple fronts. Number one, it’s very unusual to have co-founders who are able to stay together that long, but it’s also really interesting that all three of you have still felt so engaged with the business because usually what happens, even if you have two, and especially with three, at some 0.1 of them is like, well, I have a life change. I have a wife and kids and I want to just move on. Or I have an idea and I’m bored with it. Whatever. There’s reasons we all move on from stuff. And with three people there’s a lot more variable. So it’s really striking that not only are the three of you still as you sit very close, I mean you’re probably really good friends I’d imagine working together that long, but that all three of you still feel like the business is invigorating to you and the best use of your time is really impressive.  

Steli Efti:
I think in reality, just like anything else that you really invest long-term in and any other relationship that goes on for a very long time, you’re going to have ups and downs. It’s not like all ups, no matter how great the end result is or how great the current status of affairs is. There have been times where some of us were less engaged in others. There have been many times that one of us or even all of the three of us were like, what are we even doing with our lives? Is this really what we want to be doing for the rest of our life? We’ve had all kinds of crisis of meaning and all kinds of other things. I think what has kept us together has been a combination of being very honest with each other and trusting that you can be honest and that you can be frustrated or can tell people how you really feel. 

And you don’t have to hide, don’t have to pretend you’re not going to be judged if you say, I’m really stressed out or I am burned out, I’m not feeling that inspired. I don’t know if AKI want to do this. You don’t have to worry that your other two co-founders are not going to conspire with a board to push you out and get your equity or some other thing, right? There’s a tremendous amount of trust. To be honest, I think we were all three quite wise in many times, recognizing that this is an emotional state that I’m in or a face and maybe this is the truth and I should act on it, but I can’t act on it right now. It’s too hot. I need to let it cool down and simmer down. I need to look at it from a number of perspectives and then I can make a good decision, but I shouldn’t just knee jerk act because it’s been a tough couple of weeks or something. 

And I think that more often than not, after we’ve had sort of times of crisis, it went and there was something exciting on the horizon or something engaging on the horizon. And then the other thing is I think that the three of us have built so much of a commitment to each other as well, that also sort of over the years we’ve showed up so much for each other that there’s a sort of a bond that’s very strong and a recognition that yes, maybe there’s a shiny cool co-founder over there that’s flirting with you at a bar about a new AI startup and everything’s going to be simpler and more fun. But usually that’s bullshit. And usually all problems that I have here I’ll take with me in other situations. So why not fix the problem here with people I really trust and really respect instead of just hopping to the next most exciting thing to run away from my problem. So this company’s problems, I think that all three of us have have that which people don’t usually always bring to the table that sort of perspective or little bit of wisdom. And that has saved us, I think, from making decisions that ultimately, I don’t believe that at any point, anything that we thought about of doing that would’ve been more fun or more exciting would’ve been as fulfilling and successful as what we’re currently doing.  

Rob Walling:
It’s a mature perspective for sure. And as you said, a lot of entrepreneurs have this, what do you call it, shiny object syndrome or a DD or grass is greeners on the other side type thing that as you said, maybe it’s, it’s an idea, maybe it’s an opportunity or maybe it’s just frustration or burnout because you do anything for 13 years, 12, 13 years, you hit points of being very unmotivated, uninterested in it. I mean, I’ve been married almost 25 years, I’ve been doing this podcast for almost 15, and I talk about same thing, right? It’s like there are ups when it’s great and there are downs when it’s like, Ooh, this is not going well at all. And I really resonate with the fact that you said, but when it’s not going well, you say, I’m not going to make a permanent solution to a temporary problem, is really what you were saying, A permanent solution is to I’m bailing, right? I’m shutting it down, I’m walking away, I’m selling my shares, or I’m just not going to work on it anymore. And that I think is something that a lot of people don’t have. It’s crazy. It’s maturity and loyalty it sounds like that the three of you have for each other. So it’s really quite striking.  

Steli Efti:
I think honestly, Rob, when I think back at our success, we’ve done some great things at a time, but I think most consistently it’s not been that we’ve been so brilliant that’s gotten us to where we are. It’s been that we have consistently avoided being stupid. It’s that sort of like that Charlie Munger quote of how far you can come in life if you consistently can avoid being stupid. And that’s definitely something that looking back there are very tempting times to be stupid. There’s times where it’s almost impossible not to act stupid as a founder. And in those times, I think that we’ve had the ability to sort of disconnect how we feel and realize that that may be the truth and should be acted on, but it very likely isn’t. So what is the right action is to just hold that emotion or hold that frustration, hold that anger or fear or greed and go, in Germany they say, go pregnant with it. 

Just walk with it a little bit. Just carry it for a couple of days. Talk to a number of people, marinate on it instead of instantly making a decision, especially decisions that can’t be easily reversed where you walk through a door you can’t go back from. And most people will act when they’re overwhelmed with fear, with greed, with whatever it is. That’s why I think a lot of companies don’t reach their potential because they kill themselves. They commit suicide rather than being killed by external forces because they overreact in situations where they should think it through a couple more times before they make a final decision.  

Rob Walling:
I think longevity is underrated, just staying alive and sticking around both in SaaS because as we know, it’s a long slow SaaS ramp of death. And I bet if we went back and traced close your amazing $40 million company now, but after 12 months, do you remember what the revenue was? It probably wasn’t very much.  

Steli Efti:
No, actually our first three years were pretty amazing. I think the first you went, oh, were they? Yeah, yeah, yeah. I think we’re not a good example there, but we came with a lot of unnatural momentum of running this elastic sales sales agency. We had a bit of a name in the market and all that. So the first three years were great, but we had years where growth stalled and we had years where, especially where it seemed that there were a couple of peers that surpassed us, or I even remember at MicroConf in Vegas, meeting a founder and giving him advice, and he was like, whatever. It was 5K an MRR after many years of hustling. And then I was already at whatever it was at the time, 9 billion, 11 million, whatever it was. And then two years later, his company surpasses mine and rocket ships. And if you’re long enough in the market, you’ll meet people that get richer quicker than you. And you’re like, huh, what are we doing wrong? What is going on here?  

Rob Walling:
There’s always something, huh?  

Steli Efti:
There’s always something. Oh  

Rob Walling:
Man, it’s funny. So I feel the same way, right? Let’s talk about this podcast, which is one of the, aside from my marriage is probably the longest thing I’ve done in my life. I guess raising kids is the other thing. I have an 18-year-old, but a lot of this podcast is just showing up 52 weeks a year. I’ve shipped an episode every week since 2010, and some people are like, wow, startups For the Rest Of Us really popular. How can I build something like that? And I’m like, I don’t know how to do it and not do it over 15 years. But then Sam Par, who for my first million, is an unknown kid. I mean, he was very young. He was in his twenties. He sends me an email when I’m in Fresno back in, I was doing Drip, so it must’ve been 2012 or 13. 

I still have the email in my Gmail account and it’s like, Hey, I’m in San Francisco. And he was very broey, but it was super fun. And he’s like, you, I’d like you to come to this meetup or something. I was like, I can’t make it. And then Sam Parr starts a podcast. How old is my first million? Three years, four years. And it’s 10 times the listenership of this. So to me, you, I’m like, oh, what happened? What have I been doing with my life? But then I think I have the success that I want. I have the success that I deserve. I have the success that I should be happy. It’s only through comparison that I have ever found myself not being happy with what I have. I have plenty of my life in terms of my family, my professional success, financial success, this podcast, the audience, whatever you look at, comparison is a thief of joy. That’s the quote. But I feel you that the 5K to surpassing you, it happens.  

Steli Efti:
And there’s a part of me with those examples, these kind of Sam pars people that you mentored and then they have a more successful company than you and all that. I have both joy and pride for them. I’m happy, I want people to be successful, but being somebody that is ambitious, being somebody that poured a lot of hard work into something and is very self-critical, you do go, what the hell am I? This is proof that I suck at this. I’m not good at this. I’m not living up. There’s this idea of full potential, which for most of my life I was chasing and I was like, I just want to grow. I want to live up to my full potential. And I think I’m coming to a stage where maybe out of convenience, maybe out of wisdom, at an old age, I come to this, what is evening? 

If you ask people of their full potential, we have this imaginary idea where if I did everything that I can think of myself doing, possibly, I’m like a superhuman robot. I just do all these things. And that’s not realistic. It’s easy to think of all these things and to actually live them. And when you live them, when you meet people, I’ve met a couple of people that are super successful and very, very well-known and are working harder than I’ve ever worked on to live to that sort of wake up in the morning cold plunge, this, that every minute is strict and you just fly over to this airport, do this event, fly over there, do that. And when I meet them, there’s a part of me now that just, it breaks my heart where I go, wow, they work so hard and they’re still on this treadmill and they’re not any little bit happier or more fulfilled or richer in any substantial way than they were when they were. 

And so there’s a part where you have to sort of realize, well, I’m doing the best I can and let’s see what’s next. Let’s just see what’s next. But there’s also something to be said for just consistently showing up in the business world. It’s just like if you cannot die, if you can just not die while maintaining optimism, fun and curiosity, which is very difficult, people that just survive usually become more cynical and then just surviving or committing suicide. I don’t know what’s better. Maybe you should just exit. If you’re just so miserable, burned out and depressed, just keep going. Maybe it’s not the right advice. But if you can survive while staying positive, curious, and having some fun, you are going to, I mean, you’re already winning, but you are going to, the chances of you eventually breaking out of whatever plateau you are and experiencing massive success are dramatic, dramatic. 

So if you can do something with longevity, if you could just show up day in doubt with a good attitude, with the curiosity and open-mindedness to learn to adjust where you’re not just doing the same thing that doesn’t work forever and pretend it’s working. If you can have that sort of balance of the two, it’s really magical superpower. And I didn’t do my podcast for as long as you, I did a ton of content for many, many years. I’ve been in this space for a long time, but now that I just started doing a bit more content, again, it’s surprising and humbling to get these emails and messages of people that are like, for 10 years I was reading all your stuff and blah, blah. Stelli did this for me with employees. This is a fun little experience that I have now that we are hiring people. 

And for the past couple of years, consistently, people would either be like, oh, I remember watching you or seeing you at MicroConf. And I thought, maybe one day I’ll work for a guy like that, and now I’m at this company or people saying, oh, when I said, when I announced on LinkedIn, I joined Close. I didn’t know about close before. I’d never heard of you before, but when I announced it, I got 15 messages on LinkedIn. Hey, say hi to Stelli. I love this content. They’re like, you’re a big deal. People know about you. And I’m like, I don’t know. I guess putting that much out there and helping that many people and showing up so much, the dividends are just even many, many years later. I can still benefit from that. My business still benefits from that. And same with you. You have such an incredible reputation. 

You had such incredible impact to so many people, and it’s hard sometimes you just look at the numbers, you just look at the download numbers of the YouTube views. And I remember this, he and I had a podcast, the Startup Chat for five years. We did two episodes every week, but we had plateaued for a number of years. It was just X amount of downloads, whatever it was. And then we saw all these other people that did two founders doing a podcast about startup stuff, and some of them were millions of downloads, and there was some frustration in the room. I remember I was frustrated about it, but when I think about it, there were thousands of founders that were listening to our episodes that benefited. There are hundreds, I’ve met hundreds of people. If you put it in a room, it’d be a whole conference of people that I met just from the podcast that told me one way or another, you changed my life. 

That’s a lot. And even meeting one person that tells you that is so moving, it’s like, wow, I really had an impact. I really did something good here. But when it’s thousands and thousands, tens of thousands, it’s a huge number. But we look at count on a YouTube and it’s like 8,000 views or something. You’re like, I’m a failure. I don’t matter totally, but it compounds. If you do it for a long time, I don’t want to rant too much about this. And it will benefit your business and your career in many, many ways and showing up consistently. It’s very, very hard to do emotionally, not to get discouraged, not to get distracted, but if you can, it’s an incredibly powerful unlock of impact and success, and it’s much more fulfilling than just doing some viral thing that gets a bunch of views, but nobody cares. Nobody uses anything that you told them. It doesn’t really make a difference in their lives.  

Rob Walling:
Yeah, no, I fully agree. Obviously, as someone who’s been doing this for a while, the numbers, as you said, I know I have a couple of friends who’ve been doing a podcast for years and they have 2,500 downloads per episode or something, which when I say that, a lot of people think, wow, that’s obviously a failure, but how many of us have 2,500 people listening to every word we say on a show? It’s like, yeah, you can have a lot of impact. And if you have a big impact, even on a small number of people, I still think you’re moving the world, moving it forward. I want to ask you a question about if you ever with CLO had a moment probably with your co-founders where I use this expression. I think Pel said this, Peloni founder of Balsamic said this one time at a MicroConf, but he said he woke up one day and what was it? 

He had deleted the credit card table or they’d been hacked or there was something that happened and he said, well, I guess it’s been a good run. I love that. I guess he literally thought the business was done, and this was years into it, and I had a few of those. I’ve had a few of those over the years. Is there any one of those moment where you guys are after the initial, the first year or whatever you’re trying to survive, but after that, did you ever think, oh man, this is going to tank us?  

Steli Efti:
No, so I don’t have a good story that there were many moments of crisis, right? There were many moments where, I mean, last time we talked, it was just around the pandemic. When it just started, it did raise the question, what will this mean? Is this going to be like, will we survive this? How will we survive this? But there’ve been also many sort of just internal things that happened where we did have fraudulent attacks on a massive scale, but we were lucky to catch it early enough. And it was more of a, once the crisis was averted, it was like a, oh, if we had caught this a couple of days later, it would’ve been game over. We had some moments like that, but never a moment where I thought, this is it. This is it. We’re done. No, it is also a mentality thing, and many founders have this. 

I am much better in a crisis than when things are particularly going well, actually, when things are going really, really well, it’s very hard sometimes to motivate myself or sometimes there’s a guilt, a weird guilt of, I know I’m not working as hard as this success right now. There’s all kind of weird things going on, but when things are going really well, it’s not my happiest time. I’m doing okay. I’m learning to get better at this, but it’s not my happiest time when there’s a big crisis. Not that I don’t enjoy it, I really worry. I have anxiety, I have stress, I fear, but there’s a deep rooted trust that I know I’m showing up and I’m going to weather this crisis. There’s something that just, there’s a voice in my head that says, you’re going to survive this. You’re going to find a solution to this. 

I don’t know where that’s coming from, but it’s always been there. And we’ve gone through enough of these that now it’s over many. I’ve been an entrepreneur for over 20 years, over so many crisis. There’s a very deep rooted, and we had a security issue two years ago, three years ago where something happened, something was exposed. Somebody emailed us about that exposure of something, and there was, it sort of very quickly skyrocketed into almost like panic mode where a couple of engineers looked at it and they’re like, oh my God, we didn’t realize this thing. And they extrapolate it. And even one of the co-founders got sucked into this panic mode. And the problem when I started catching up on the threat as I was reading it, the problem was growing bigger and bigger and bigger. It was really like, this is a huge issue. 

And the proposed sort of like, we have to email every customer right now. We have to do all these very drastic moves. And again, I thought, all right, wait a second. This is not the vibe here. It just doesn’t feel right. Let’s analyze one thing at a time. This person that emailed us, there’s all these insertions in interpretation. So who this person is and what the context is, do we really know? Let’s isolate that. Let’s research who is this person and what is that person’s intent in sending us this information? Then secondly, let’s actually how many customers were really affected by that right now nobody knows. Let’s put a team together where we research what is the security problem, how quickly can we fix it? Let’s put the most resources in just fixing it right now, and then what we communicate and to whom and who we pay money to, and the legal implications. 

We’ll tackle that one team at a time, one thing, but right now we can’t tackle any of this unless we know these other factors. And then we put three or four teams on these different little projects, and a day later we came back with some information that was like, okay, everybody calm down. It’s not as bad as everybody thought. Let’s take another two days to get more answers. And by the end of the week, it was like three customers were maybe affected by probably not, and we send it to a legal team, we send it to a security company. What do we really have to do? Is this really the right evaluation? Everybody came back. Almost nothing has to happen. We fixed the issue. Almost nothing has to happen. Everybody’s protected, everything’s fine. I was like, wow. We were so close to sending an email that would’ve put thousands and thousands of all our customers in panic mode. And then once that cat is out of the back, you can’t put it back in. There’s no way to reverse that. Oops. Yeah.  

Rob Walling:
By the way, remember the email we got the other day? Well, that was said in mistake. So now it’s like, we don’t know what  

Steli Efti:
The fuck we’re doing. Don’t know what fuck we’re doing. Trust us, we told you you can’t trust us, but we figured out you cannot trust us about not trusting us, but you should trust us. And that was so easy. There was such a momentum towards that action. There was such a built momentum, and all it took was one cool head at that time, it was mine. At other times it had been other people’s. I remember when I mentioned to you when we first started in the very first year, we had telephony always enclosed, by the way, inbound and outbounds. You can make calls, receive calls, enc close, you can phone tree with closed everything. And in the beginning we had free trials and we gave people complete free unlimited telephony on the trial, being a bunch of noobs and a startup we’re like, oh, free. Just do as much as you want.  

Rob Walling:
Listeners, don’t do that. Don’t do that. Don’t do that. Yeah. So what happened? I’m waiting for this story. This is building up for me.  

Steli Efti:
So then we were lucky. We were lucky that one of my co-founders out of interest would randomly look at the call logs to just see what kind of interesting calls which countries just out of an interest. And one random weekend was, this is weird. There’s these calls and they’re very long. They’re going on for eight hours. That can’t be right. And then he started digging and figured out, well, they’re calling sort of pay per minute numbers, whatever it is. And it’s like, wait a second. That account is calling 20 of these numbers, and he’s never hanging up. And then started looking into it. And I think he discovered that we had one kind of fraud account that had generated 20, 30,000 in calling costs for us in 48 hours. And we had at that point, no fraud detection. We didn’t have the systems in place to sort of flag that. 

And if it hadn’t been for us, just generally curious, looking around once in a while, we had sort of calculated out that within a week it would’ve bankrupt us. It’s just like we didn’t have enough money. It would’ve bankrupt, and it would’ve been such a sudden death that we would’ve seen it coming. And since then, I mean, we’ve gotten really good at fraud production and we don’t allow people to just make calls. But even since then, I’ve been amazed how consistently and creatively fraudulent scammers would use some scheme to make money with texting or calling or whatever in close or use the email capabilities or any other tool that we have. I’ve been always amazed at the creativity. I’ve always been amazed at how do these people even know we exist? We’re such a small company, especially in the first couple of years, but that was an example of that. We would’ve just gotten $300,000 in calling costs from free accounts, and we didn’t have that much money on a bank account to pay. And that would’ve been it. And if it was me and just the third co-founder, the technical engineer guy, and the sales marketing guy wouldn’t have seen it needed the ops guy that looked under the hood and wandered around to catch that early enough to save the company.  

Rob Walling:
So that’s getting a little lucky in that case. I talk a lot about, I’ll tell founders, Hey, to be successful, you need some combination of hard work, luck and skill. That’s what I believe, whether everyone may or may not agree with it, but I think you have to put up hard work in to do most things that are worthwhile. And I think you have to develop and build some type of skillset to do it. And then sometimes you get really lucky and you need a lot less hard work and skill than other people. But usually, usually, I don’t want to count on luck. I want repeatable things that I can do. I want to start a company with a repeatable approach. That sounds like you guys stayed alive. I know you’ve worked hard over the years. I know each of you have developed skills to be able to grow the company, and sometimes you need to get a little lucky in order to stay alive, it sounds like. 

So I want to ask you about a recent pricing change that you made in January, which was last month as we’re recording this, and you mentioned offline that for years your entry level plan into close was in the 39 40 $9 range. And there were folks, there’s always folks saying, oh, I would use you. This is every SaaS ever. If you were cheaper, I would use you. Right? But you said you’ve gotten a lot of feedback over the years of, hey, if you had whatever, a 15 or $19 plan that for one seat that I would be willing to do it. And so in January you launched this plan, and I believe it’s $19 if you pay monthly and 15 if you pay annually, give or take. So I’m curious to ask a couple of questions. Why did you decide to launch that plan? I’m sure you’ve been hearing the same feedback about having a cheaper plan for 10 or 10 plus years since the day you launched, right? But why do it now and then to find out is that working for you? Do you have enough data to be like, oh, this was a good choice, or is it more cannibalizing your, I guess, your $49 plan?  

Steli Efti:
Yeah, I’ll say a couple of things about that. One is that I think pricing is a much bigger deal in software than I realized for the first couple of years, especially once you get to some level of scale, pricing is really a big driver of growth. And I think that for many, many years, we were just too small up until, whatever it was, two, three years, we were just less than 50 people for most of the company’s history. We’re a very small team, and we just didn’t have people to really work on pricing in a dedicated manner to really do a lot of testing. And I think we always thought about, we were always a little scared to have compete on low prices and get more volume of customers because we’re such a small team and because our more higher ranked pricing always worked really well for the business and for the kind of customers we wanted to attract. 

But there was always this, it was always bumming us out that I would get on a podcast like this one and I would talk about clothes, and then sometimes we did promos about eBooks, other things, and sometimes we told people that We’ll give you a good deal. And then they would come and sign up for clothes and they would say, Hey, I’m a micro entrepreneur. I’m trying out a couple of ideas and I really love clothes, but my ideas are not taking off yet. Or This thing I’m doing is not taking off yet. It’s going to take probably a little longer than I thought. And there’s this competitor product and it’s not as nice as close, but it does do the job and it’s three times cheaper, so I’m going to just switch over there and then once I’m really successful, I’ll come back just, and it’s just always a bummer when people would leave because of that versus the product isn’t working or it’s not working for me. 

Now, you’re right, there’s always going to be people that want cheaper when it’s free, they’re going to complain that you don’t have enough features or you don’t give them enough support is going to end. But only recently have we really felt like, wow, the company’s big enough now where we can make some more investments in the growth of the business into our customer base, sort of grow earlier with them and grow with them, versus being sort of very disciplined about what kind of customer we can really serve. And when we had the internal resources to run experiment to know people can consistently work on something like pricing versus we were always afraid to touch it because we knew once we touch it and change it, nobody here will want to look into it again and have to redo the work of pricing because we’re such a small team and everybody is too much on their plate already, and it’s too early to conclusively say. 

I can tell you that I think two years ago, we packaged our prices and we did a big pricing change, somebody champion at close where the prices were higher and it were packaged number of seeds, and that was a terrible decision for us. And instead of helping with retention and fixing a bunch of problems, it messed with all our metrics. And it took a long time to really admit that and a long time to reverse that. This pricing change is newer, but it’s also less sort of all compounding. It’s just an entry level plan. It doesn’t touch or change everything else that we’re doing. And the instant result is that our customer acquisition is skyrocketing in terms of just how many customers we’re converting. So with a lot more customers, those customers seem to retain a little bit better. Now, what we’re going to have to look at over the next couple of months is do they grow and upgrade and how does that affect all other numbers? 

But we’re pretty excited about it so far, especially as I believe we’re going to see more entrepreneurship. More and more people will start things, try things. We’re going to see more smaller teams accomplish big things in the future. I want the earliest youngest entrepreneur in their journey to come and use clothes and use the power of clothes and not feel like, oh, that’s a solution once we’re sort of enterprise level ready. So I’m psyched about just getting more entrepreneurs and business owners and more small businesses on the platform, and it feels now that we have a scale and a size where we can make these investments, even if it takes a long time for us to pay off,  

Rob Walling:
That makes a lot of sense. Pricing changes always take a long time to figure out, because there’s retention, there’s all these things. It’s not, oh, hey, I got more people or I’m making more revenue in the next 60 days. It really is kind of a long tail. So folks want to check out close, obviously close.com, and I often recommend close.com/guides, which is, I mean, gosh, an extensive collection of sales guides ranging from the ultimate sales pitch deck 12 sales pipeline templates, sales management software tools. The ultimate sales pitch guide is just a lot of eBooks. I know you originally wrote, I think most of them, but I think maybe other people on your team have contributed to those in the recent years.  

Steli Efti:
Maybe the last of, I don’t know even how many there are there, but if you go back to the first 40, they’re all for me and I’m going through them now that I’m back in the content game to revisit my old videos and my old stuff, and most of them still hold up pretty well. I would have to say any advice there on how to sell as a startup, how to negotiate as a startup, how to hire salespeople as a startup, all that stuff is pretty solid. It was timeless, so I’m happy to say, so that stuff should help anyone that is doing a startup and is trying to get customers.  

Rob Walling:
So that’s close.com/guides, and then you have a YouTube show or a podcast, a video podcast, I dunno how you think about it, but it’s called The zero to 30 million Blueprint.  

Steli Efti:
Yeah. Last year people eventually pressured me into our corner at the company and said, you have to get back in the game. People want you, you, let’s revisit how we went from zero to 30 million in revenue, and let’s do a couple of seasons where we sort of break down the different stages. So you can go on YouTube and find the zero to 30 million blueprint, but also just go to Elli on X or Stelli FD on LinkedIn. I’m getting back into the game of publishing a lot of content that’s timely and relevant right now. And as always with people that listen to this podcast, especially, send me an email stelli@close.com if you need advice, if you want feedback. I’ve been a part of the MicroConf community for many years, as you mentioned, and really some incredible stories have come out of it and some great friendships. So I’m always happy to hear from people that listen to the podcast and want to connect or want to get feedback or help.  

Rob Walling:
Amazing. Sally fte, thanks so much for joining me again,  

Steli Efti:
My man. Rob, thank you. It was a pleasure.  

Rob Walling:
Thanks again to Stelli FTE for joining me on the show. And thanks to you for listening this week and every week. This is Rob Walling signing off from episode 766.