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In this episode of Startups For The Rest Of Us, Rob talks with Brian Casel of Audience Ops, about recovering from a 40% decline in MRR. They start the story back in 2016 and work through the decline, audience ops rebound, the start of Ops Calendar, and Brian’s decision to learn how to code.
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Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on this show, we cover topics related to building and growing ambitious yet sane and sustainable startups. We realize that starting a company is hard. More than half of being a startup founder is managing your own psychology and much of being a founder is making decisions with incomplete information where the right answer is impossible to find through math or data.
This week’s episode, I talk with Brian Castle about overcoming a 40% decline in MRR and rising from those ashes. This is Startups for the Rest of Us episode 474.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in building, launching, and growing startups. Whether you’ve built your fifth startup, or you’re thinking about your first. I’m Rob and today with Brian Castle, we’re here to share experiences to help you avoid the mistakes we’ve made.
Welcome back to the show. Thank you for joining me again this week on Startups for the Rest of Us. We have many different show formats. This week is a conversation with someone you’ve likely heard of, Brian Castle. He hosts the Bootstrapped Web podcast with Jordan Gal. And I’ve been listening to that podcast for many years. Hope you enjoy our conversation today.
But before we dive into that, I want to let you know about a MicroConf announcement we’re making this Friday, December 13th. It is by far the biggest we’ve made since launching the conference a decade ago. I really encourage you to go to microconf.com, make sure you’re on the email list. If you’ve attended a MicroConf in the past or you have tickets now, you’re already on the list and you’ll hear about it. But it really is big news and I’m not just saying that to try to sensationalize it or encourage you to go over there. But there’s a lot that’s been going on in terms of the planning of MicroConf for 2020 and we have a lot of new things coming and would love for you to be in the loop on all that’s going on. There’s a lot that’s going to be announced. microconf.com, make sure you’re on the email list.
I enjoyed the conversation I had today with Brian Castle. To set a little bit of the stage, Brian is a frontend designer and UX guy by trade, and then he learned to do some frontend development work. He had been doing a lot of consulting and eventually started dabbling and building products as many of us do. He started at a SaaS app called Restaurant Engine which was originally designed. His vision was for it to be Squarespace for restaurants, but really it evolved almost into a productized service where he had to do a lot of hand holding with the restaurant managers. I think that probably got his gears turning on its software plus service. That offered more value than just straight up building another website builder.
In early 2015, he sold Restaurant Engine for a tidy sum. He talks about that. He said it wasn’t life changing money, but it was enough to go towards a new home. We joined his story at that point where he sold Restaurant Engine and he’s about to start a new productized service. I hope you enjoy this conversation with Brian Castle.
Brian, thank you so much for joining me on the podcast.
Brian: Hey Rob, thanks for having me on.
Rob: Absolutely, man. We joined your story in the middle as I like to say where things are going up into the right. You’ve launched Audience Ops, productized service, and you launched it 2015 and over the course of about the next 18 months, it is all up into the right and you grow from zero dollars in MRR from April of 2015 to 50K of MRR by September of 2016. What was that feeling? Have you ever launched a product that grew that quickly. It’s productized service so it’s not all software, we get it. Have you ever launched anything that had had that much success for that long?
Brian: No, definitely not. I definitely didn’t expect to grow that fast. Looking back on it, it sort of makes sense. Obviously what I’ve learned with productized services is that you can charge a lot more per customer and that helps accelerate the growth rate. If you really nail a market and you’re solving a problem, specific value proposition all that, then I found that growing a recurring productize service like that can really happen. You can grow that revenue pretty fast.
But when I launched it in April 2015, I did not set out to even hit that. The goal was what’s the fastest thing that I can do to get 10K MRR and hit that within two months.
Rob: Right. Like you said, it’s the average revenue per user, a lot of people don’t realize it when that’s $500 a month or $1000, does not take many customers to get you to that 10K, 20K, 30K price point. I’ve seen it with MicroConf companies, with TinySeed companies trying to launch at $20 average revenue per customer app and get to any scale is a very long road even if you have a big audience or have a lot of traffic. Whereas the folks who are plug and away adding two customers a month at $500 average revenue per customer, that’s a grand a month of MRR that you’re growing. It’s a nice base to have.
Brian: Yeah. Audience Ops has, for the most part, been between $1000 and $2000 a month in terms of average per customer. I think it’s great to be able to grow a service like that so quickly. It has some downsides to it too when you’re charging that much because you just see crazy swings in MRR. You can add just a couple of customers, lose just a couple in a week and you’re seeing swings in 5K or 10K MRR. That can really screw with you.
Rob: Right. Stuff we won’t dig into here is you’ve talked a lot about productized services, there are pros and cons to them, you can grow quickly as you’re saying the price points are high and that’s great. Obviously the cons are hey, it’s not as easily scalable as pure software. You do have to hire staff. 50K MRR SaaS company might have 3, 4 people working on it. And a 50K productized service probably has a team of 15 or more. There’s pros and cons to this.
But the thing that’s cool is you launched it and 18 months later, obviously there was a lot of work that you had to do but you have this 50K MRR business now that’s supporting you because after you exited your prior app restaurant engine, I imagine you didn’t want to sit and burn through that cash. You mentioned to me offline that in 2016, you actually spent most of your restaurant engine money on a new house.
Brian: Yeah, that’s right. It wasn’t a life changing exit or anything, but it was a chunk of cash. I looked at that and I really thought about what is going to be in my next business to replace that income. I wanted to get into SaaS software right then in 2015. I looked at a few ideas, but the thought back then of basically burning all of that cash within a year and then maybe getting somewhere close to 10K MRR, which was a big maybe. That kind of scared me.
That’s what lead me to start looking at I kind of know productized services fairly well at this point. That seems to be the fastest way to get to a viable recurring revenue source to then free up my time. Obviously, a lot of work goes into building the team and the systems to remove myself, but that’s always been the goal with the service companies is to grow the cash flow to fund my time to work on stuff.
Rob: You’re a 50K MRR with Audience Ops, it’s fall, September 2016. Since everything is going up into the right, you’re feeling great, you already had two full time W-2 people, you turned 2 more people, they were contractors, you put them on salary and then you started looking at launching the SaaS app. You’re starting to build OPS Calendar. You did some validation there and started upping your expenses. What was the thought process there?
Brian: Right around that time, I guess it was around September into October, I had the idea for this software called OPS Calendar at the time, it was like an editorial software calendar with some process stuff built into it. You can automate content processes and things. Essentially, that was the precursor to my product today—ProcessKit. But back then, that’s what I was doing. At that point, I didn’t personally have the ability to just build an app myself. I‘ve always been a frontend developer and a designer, not a backend. It would definitely require outsourcing and hiring developers to build the functional app.
I did some presale, I got 10, 13, 14 people to prepay based on the idea and a promise that they will someday use this idea. That, combined with the growth rate on Audience Ops, and I had some profit saved up at this point. Okay, I’m good with spending around 5K a month on an outsourced developer and that turned into two or three guys overseas that I was working with.
Rob: Since we didn’t cover it before, could you give people just a two sentence explanation of what OPS Calendar, what it is and the purpose it would serve if it had made it to market, so to speak.
Brian: The idea with OPS Calendar, it was essentially an editorial calendar software with some production process stuff built into it. You and your team can build a process for how you produce blog articles, and podcasts, and social media, and map all that stuff to a calendar to see who needs to do what by when and also to schedule blog posts and social post to the calendar.
Back then I was running Audience Ops which is a content service, we do blog content as a service so obviously it was born out of that. That was essentially the idea with OPS Calendar at the time.
Rob: Yeah, cool. There’s a six months chunk where really from November of 2016, right after you ratchet up these expenses, things hit the skids with Audience Ops. I think this is one of the tough parts of your journey, it seems like. You want to walk us through the timeline there, what happened?
Brian: We’re three years later now and this is still one of those periods of time that I still look back on. Like, “Man, that was painful.” What happened was basically that growth from Audience Ops, 0-50K, that started to plateau right around October, November into the holidays and then started to decline through the holidays, in the January, February into about March or April is when it started to finally turn back around. It was painful on a number of fronts because it coincides right at the time that I decided to start spending a lot of extra cash on developers and employees all at the same time. There was that part of it.
And then it was also just like, “Why is this happening?” Everything was growing just fine up until that point. What is causing the reduction in leads or the increase to churn, it was probably a combination of both. I was looking at it in a thousand different angles to try to uncover what was actually causing it. It’s still unclear to me to this day. I have a few ideas, some hunches of what it could have been. But when you’re in it and you’re trying to fix it, you just don’t know what exactly is broken. It’s really frustrating.
Rob: Absolutely. That’s devastating. 40%? That’s a huge drop. 50K down to 30K. That’s a lot of salaries, that’s probably all your net profit on this thing. I’ve seen SaaS apps plateau, I’ve seen them right over the top, so to speak, when they start to decline. But I’ve never heard of a drop that fast that wasn’t due to some big platform risk. Like, “Hey, I’m integrated with Shopify and they just completely cut off our access.” Or, “I’m a Twitter client and they cut the API.” Or a Google change. Something that was just decimating.
But just to have that happen seemingly out of the blue, it sounds like, and three years later not have been able to pinpoint what happened, must have been terrible. It sounds like it went on for five months and you were just trying to fix it this whole time. Is that what it was?
Brian: Yeah. There are a few things. It was probably a combination of things that I look back on. One was in summer 2016, it was the first time that I hired a sales person for Audience Ops. There was somebody on the team, actually still on the team today, and I put that person into a sales role to remove myself from the sales. That was one remaining jobs that I was still doing in Audience Ops, the team was handling other stuff. It’s not any fault of his, he actually did a really great job of closing a lot of accounts that summer. Bringing out a lot of clients, but a lot of those clients that he sold and closed churned a lot faster than other clients have come on.
I take that as my fault for the training, maybe some of the compensation structure that I really didn’t structure and situate to have a sales person really set the right expectations for customers. Basically the way that I do when I do sales calls for Audience Ops is for me, when I do it, it’s really about let me tell you exactly what’s happening in Audience Ops and almost talk you out of signing up for Audience Ops to make sure that you’re really on board for this. There’s that, we just saw a string of cancellations.
Then the holiday season hit and that slowed down. It was weird because the previous holiday season was actually a pretty big spike in growth for us, but it didn’t happen in 2016. In January, now we’re in the thick of this six month period where sales are stalling, we’re seeing this churn. I go away to the Philippines, my wife has some family there. We were there for a whole month. My plan was to work a little bit while we’re there, but it’s a completely different timezone and that means I literally could not do any sales calls. Even the leads that we had, I couldn’t really even talk to them. Combine that with terrible WiFi while I was there. That was stressful as well.
Rob: How did that manifest itself? What was the peak moment or a moment you can remember where you lost your **** or you were feeling extremely mad about it?
Brian: Anyone who knows me, I am really pretty level headed, I think. I tend to compartmentalize pretty well. Poor sleep, bad eating habits and exercise and all that definitely starts to pile up. Because it’s like I could go exercise today, or I could keep working and try to fix this thing. That was a choice every single day.
Rob: Right. You just dug in and just grinded it out, I shall say. Probably took a toll on your body and mental well being, too.
Brian: Yeah. Into March, April 2017 is when things started to turn around. It’s almost like I don’t really know because it wasn’t a sudden turn around either. It took all of 2017 to dig back out and back up to where it was. But, we definitely improved a lot of things. That was when we really improved the new customer on boarding process heavily. Again, to reinforce those expectations. That I think had a really big impact on customer retention. If they have a really fantastic first month with Audience Ops, they’re really likely to stay on for a year or more at that point.
I worked on some new marketing stuff during that time and some new content, some webinar stuff. I think that seemed to help as well.
Rob: It’s something I talk a lot to entrepreneurs, especially new entrepreneurs don’t understand that they’ll see someone who’s built a business up to 10K a month. You may be able to sell that for $250,000 or something, there’s all these factors. But whatever, you can sell it for quite a million dollars. But people will say, “Why wouldn’t you just keep that? Just keep it and keep running on the side. It’s only three hours a week or five hours a week. Just keep running it.” Usually, there’s a couple of reasons, one because distraction is distraction and there’s opportunity cost to that. But the bigger one is that none of the businesses we have run on autopilot for years. They always get smacked around by something. Sometimes it’s Google, and sometimes it’s a competitor, and sometimes it’s platform risk, and sometimes it’s something you never would’ve guessed, it’s a key employee quitting, it’s something that you have a tough time identifying like what happened with you.
Then you have to shut everything down, stop doing what you’re focused on, and you have to turn your focus back to this thing that you’re tired of working on anyways. At a certain point, eventually, you give in. I’ve done this with multiple businesses and I’ve seen people do it as well, where you’re just like, “Forget it. I just got to sell this thing. I got to get it off my plate.”
Brian: Yeah. It hasn’t really come to that point in Audience Ops, but I can definitely say that there have been times. This period in 2016 was definitely one of those where it was like my mindset is trying to get this brand new idea for a SaaS off the ground. It wasn’t even in existence yet. It was just like get this thing to market. That was my number one goal. Working with developers, I’m paying for developers. I want that to happen as soon as possible. And then I have to stop and work on this churn problem in Audience Ops. Yeah, that was pretty painful.
Rob: We’ll talk in a second about how essentially you did turn that around through 2017. But I’m curious, that low point, this five, six months where things from November to March, April, when they are just in the thrawf and you can’t dig it out. You said that’s still a point that you remember very vividly. I have moments like that in three, four, five months period as well. I learned a lot from them and they impact the way that I do things today. They impact the way that I think about business and the way I ran my apps after that. I’m curious, what lesson or lessons did you take away from that? That impact the way that you make decisions.
Brian: I found that there are one or two of those points in my career so far that I can look back on, that I feel like really influenced the way that I work today. I think in some ways that’s a good thing and in some ways, I do things to a fault today to try to prevent that from happening again. On the positive side, I’ve been through enough of those ups and downs in the MRR graph to know that no matter how well something might be going today, I still have to play it extremely conservative.
We’re like three years out from that, Audience Ops is actually doing really well and I have a profit savings saved up that I’m able to deploy on new products and ProcessKit and things like that. But I’m actually hesitant to spend anything. Because it’s like just keep the reserves in check just in case, you really never know. You look at the news, the economy and stuff. I look at things almost afraid of what could happen.
Tactically, on the sales side of it, I talked about how that period I had a salesperson and then there was a string of churn that came in the months after that. That has caused me to really delay and delay on trying to put a salesperson in place again on Audience Ops.
I’m actually now doing that finally in the end of 2019 with a new strategy behind it and some new structure, but it took me three more years. I have removed myself from every other aspect of Audience Ops. I really spend less than two hours a week on this business, but those two hours are doing the sales calls. Because I just want to make sure that that message is being sent to new customers as they get on. I’m finally coming around to being okay in letting that role go.
Rob: That makes sense. I was going to ask, obviously, if you brought a salesperson and it didn’t work out, you had to turn the app around but after that, I would think that if you do want to get that sales, you would just try and try again. Most sales people don’t work out. The first one you find, frankly, more of the first VAs that I find, the first one almost never works out. So I just hire one, two, three, four and it’s frustrating and it takes time, but eventually, you find someone and then you’re able to let it go. Is that where you’re at now? Is that something you’re looking at doing, trying again and stepping away?
Brian: Yeah. I’m trying again because I think it will actually help impact the business, growth, and the overall health of the business to get me out of that role. Speaking about it now in 2019, I just have a lot more space to breathe. Financially and time wise and so many more things inside the business are more optimized now than they were back then. The on boarding stuff is really locked in, things like that. I just think it’s probably a better time to try to get that off my plate now than it was.
Again, things did start to turn around in 2017, but it took all of ‘17 into the beginning of ‘18. ‘18 was really when I finally got my bearings back in terms of having some space to play with.
Rob: Right. It sounds like it, and that April 2017 point could have been celebratory because you’re bringing your first paying customers in for your SaaS up OPS Calendar, but your financial runway was basically gone. You had to turn around over the next six, seven, eight months. What were a couple steps that you took, it was all hands on deck at that point, right? We’ve lost 40% revenue, we’re still declining at this point. What were some steps you took to turn this around and get out of the tailspin?
Brian: Just to be clear, there’s two parallel products in play here. One is Audience Ops which is in the site crisis mode, and then OPS Calendar which is trying to get off the ground but then I would have to pause, paying for the developers, right at these critical moments as we’re bringing these new customers on to the software. I just didn’t have the cash to fund for the development and couldn’t move fast and all that stuff. That was really frustrating.
But with Audience Ops to start to turn it around, I did a number of different things to try to attack the problem from different angles. One was that new customer on boarding again. I worked with my team a bit to see how can we just make sure that customers are really happy after their first month and that clearly has had an impact on improving churn over time. Just focusing on retention. I think that also helped with customers like referring other leads to us, that has that side effect too.
I did work on some new marketing materials. A whole round of new content, I think I did a recorded webinar that I put into the marketing system at that point, worked on the email automations that helped to nurture. I just went through the whole funnel. Everything that leads and customers see as they find out about Audience Ops, as they go through the sales process, as they get educated and nurtured and on boarded. I tried to improve every step of the funnel over that in early 2017.
Those are the kinds of improvements that you just don’t see moving the needle overnight, you just do that work then maybe a few months later things start to improve.
Rob: Right, and it worked because you turned it around over the next six or eight months.
Brian: I think it has definitely returned to where it was and has grown beyond that but it doesn’t really see the growth rate that it saw in that very first year. But I think that’s sort of a natural slowing down that a business sees. At least I’ll see it that way.
Rob: Yeah. It’s hard to say without going out and really beating the bushes and trying to generate a bunch of leads and doing cold outbound, focusing on SEO or running ads, there’s a natural threshold that always sets in. It seems to me like you’ve always been cool with that plateau because that plateau provides you with a full time income budget to build other apps which is really what you want to do. That’s your lifestyle choice.
Brian: Yeah, exactly.
Rob: They were working on OPS Calendar, your developers were, and you got your first paying customers in April and then you had to pull them off because you didn’t have the money, and then in July in 2017 you’re able to get them back to work on OPS Calendar, and then you get a little bit of traction right that latter half of 2017 but you never found product market fit with OPS Calendar. By February of 2018, you were still trying to push it forward, but some calamities happened. It sounds like there was a code base thing you want to talk us through what it was like dealing with that.
Brian: Throughout that year of 2017, it was trying to bring those first customers on and got a few handful of paying customers, but over the summer there whatever savings I had was gone from that period of Audience Ops. I’m not one of these people who just goes crazy on the credit card. Once I see a little bit of balance on there, I’m just too risk averse and debt averse to really go too heavy on that. I just pause and I don’t really spend until I have the cash in the bank account. I had to pause those developers over the summer which really, really hurt because I felt like it was at a critical time.
As we get into 2018, I went on a trip and we had been pushing off this upgrade from Vue one to Vue JS. At the time, I wasn’t a developer, I didn’t even really understand what Vue was. The developers chose that framework. That upgrade broke everything. I came home from that trip looking at a situation where I could pay those developers to go fix every single feature that I had just paid them for the last 18 months to build. Essentially, spend all that money and all that time again to rebuild the app, which was not going to happen.
It was also we’re having a hard time converting these customers, even a lot of the early prepaid customers didn’t end up continuing on as full customers. That said to me you know what, this thing isn’t really right. Because we have a process feature in OPS Calendar, and people were using that side of it and they were not touching the social media calendar stuff. That was also a signal to me that really the product that I deep down wanted to build was more of a process oriented tool.
Here I am in early 2018, probably going to “pivot” the product, if you will, to something else. Probably a new name and everything. I’m having a problem with these developers, but at that point I just decided to just stop everything. Just pause all work on OPS Calendar, take a month and figure out what I’m going to do. My conclusion was that I’m done with being limited by not being able to build apps myself. As a designer and front-end developer and product person, I’ve always felt, and this really brought it to a head was this experience with OPS Calendar, I’ve always felt this frustration that I can’t move fast enough because I’m always waiting for the developers to finish a feature. Sometimes I can’t move at all because I don’t have the cash to pay developers.
Let me bypass that by investing my time in learning back in development. I learned Ruby on Rails. I basically decided all of 2018, I’m going to use all my full time hours to make myself a full stack developer. I know I won’t be a very good one, but at least I’ll be able to take any idea and build it into a product and bring it to market, and that’s essentially what I do.
Rob: You were just about 18 months into OPS Calendar and I’m going to guess tens of thousands of dollars paying developers. You put on maintenance mode. You effectively shut it down. What was that decision like? How hard was it for you?
Brian: I think it was somewhere around $30,000 or $40,000 that I put into over that period of time. It sort of sucked, but it was also I don’t really have any other option here. I’m not going to just keep spending on something that’s clearly not working. I knew that the tech underneath the app, they technically built the features that I designed and speckled, but there were underlying architectural issues that I could just feel as a user.
That was another reason moving to let me just try to build it myself because at least I could design the thing from the inside out the way that I feel like it should be built. It was hard, but it was also I’m moving on. At that point I was also really excited about this idea for what the next version is which became ProcessKit, which is what I’m working on today.
Rob: I’m curious, deciding to learn to code from scratch, you’ll often hear folks send questions in to this podcast and say, “Should I learn to code if I’m going to watch a SaaS app?” The answer’s always it depends. Do you think that’s something you’re interested in? I would at the minimum learn to code well enough to know if the developers are trying to pull one over on you so you have a concept, you can talk to them. I don’t write production code anymore myself, but I wrote code professionally for 10 years.
I can still have architectural conversations. When Derrick and I were building Drip, I could go pretty deep on the tech stuff. It’s an asset to have for sure. But I’m curious, instead of learning to code, why not launch another productized service? Because you seem to be good at them, they seem to work out for you. Audience Ops is obviously successful and profitable. Why continue to seek after something that is showing you so much resistance in essence, which is a true software base SaaS app?
Brian: Number one, I’ve always been interested in software. I’m not new to software today. I’ve been working on it in different forms for many years. That has always been my number one interest in terms of what I want to create on the web. I’ve been building on the web for over a decade. That’s really always been where I’ve been heading with this. Even since I started Audience Ops, yeah I worked very hard on building it and building the team and the processes, the systems and everything. It’s always been with the end goal in mind of removing myself so that I can fund my time to work on software.
Like you said, the scalability aspect. Yes, I believe a service company can run without you and be profitable without you in the day to day like it is for me, but it’s clearly not as scalable as a SaaS that has hit product market fit and has that growth. Just in terms of the value of an asset and all that.
Also, I just wanted to go back to what you’re saying about the decision to learn to code or not, I agree with you. In many cases, it may not be the smartest choice, or maybe you should just learn a very light understanding of it so that you can communicate with developers. I think there are few caveats that made my situation a little bit unique from where most people are that I come across at least.
Number one, I’m not starting from scratch. I had been a frontend HTML, CSS, little PHP, little JavaScript work. But professional level frontend stuff for years. Building websites, doing a lot of work with advanced WordPress stuff, working on major websites for agencies and things like that. I was not completely new to basic coding and programming. I just never really learned a back end stack like Ruby on Rails, and working with databases and things like that.
There was that. That gave me a head start. And then the other thing is that I had the time. I really have full time hours to throw at this. If I didn’t have that, if I was doing this nights and weekends, I don’t think it would be possible to make as much progress as I did over the last now almost two years. I don’t think I would have been able to really make a lot of progress with it if I couldn’t work on it full time every day.
Rob: Right. You had a lot of time to focus and it was something that as you said, you already had a basis for.
Brian: And I had a lot of help too. A lot of my close friends are software developers, Rails developers, I had of people that I could turn to for support and they’ve been super helpful.
Rob: Totally. That’s the thing. You’re in the developer community already even if you’re more of a frontend developer/designer. It’s like you live in that world and it’s not such a far stretch to be like, okay, I want to go one layer deeper and see how it interacts with the service side code. Cool.
That takes us to spring of 2018. Audience Ops is back, profitable, and you were able to free up your time and spent most of 2018, as you said, learning Rails. What was the most surprising part of that experience of taking that six or eight months and digging into service side code and learning to build your own software top to bottom for the first time?
Brian: In the early months, I knew that it would be a very big effort and that it would take me a long time to get decent at it. It was a little bit frustrating going through tutorials and courses and then still not quite being able to build anything real yet, but then just hacking away at it a little bit more for another month or two and then I can build something very simple.
Over the course of 2018, I went through a bunch of courses, I worked with a coach which was very helpful, and then I did some throwaway practice project apps. By the end of that, I was able to put together a simple app called Sunrise KPI. That was the first real app that I’d built.
I should mention that the idea for ProcessKit I had throughout 2018. I bought the domain. I spent some money on that domain. I was putting sketch ideas for what ProcessKit would be, but I also knew that I wasn’t capable of building it yet. I had to get those skills up and it wasn’t until the end of 2018 I had felt confident in actually starting to build what is now ProcessKit.
Rob: Yeah. If someone’s listening to this and they are thinking about themselves learning to code, what would be a piece of advice, either a warning or just a hey, do this, this is what really worked for me, this is what fast tracked me.
Brian: Early on, I definitely wanted to stay away from the newest, trendiest, most complex frameworks, especially like the JavaScript frameworks and stuff. I’m sure there’s plenty of technical benefits to those, but I wanted boring, tried and true, non trendy stuff. It came down to a decision between Ruby on Rails or PHP in Laravel.
I went through a couple of weeks with PHP Laravel, some tutorials. I could follow along with those, but then I found I couldn’t take what I’d learned and go build something simple. I went through a one on one course on Rails. I did a month on PHP in Laravel and then a month on Rails. I found that at the end of the month on Rails, I was able to take that and build something simple. I continued to double down on Rails from there.
I went through a number of courses on that. Tip number one is to stick with something like Ruby on Rails, or PHP with Laravel. Something that has a huge developer community with tons of resources and educational stuff. That’s a big number one. Number two is to try and find mentors. I go to friends like I talked about. I paid a couple of people for paid mentorship for a while and I’ve learned to code in Rails developer communities, I go to that for some help as well. I frequently talked with friends about code questions. I hit up codementor.io quite a bit when I really get stuck.
Rob: Sounds cool. You mentioned ProcessKit which we haven’t really covered in this conversation. You want to tell folks what that is? Is it the next generation of OPS Calendar done in the way based on your learning from the first time?
Brian: At this point, the way that it’s positioned is that it’s really a projects tool. It kind of like a project management software, but it’s process driven. If your projects really follow the same script every time, they’re very repeatable and you’re doing a lot of the same stuff, whether you’re onboarding customers to a service or to a SaaS or something like that and you need your team to follow a certain process, that’s really where ProcessKit comes in. It’s different from the project management tools where you might run your tasks and projects in one of those tools, but you have your documentation, your SOPs over in a silo somewhere else. That’s where those kinds of operations tend to fall apart, the team just never really follows the SOPs.
ProcessKit sort of brings those together, and then also builds in automation steps. You can say if this then that, if it is is this type of project then assign these tasks to these people, calculate these due dates, and link up with Zapier and all that kind of fun stuff.
Rob: Cool. Where is that project in terms of launching? This is the part of the interview where I ask you questions I already know the answer to. What status is ProcessKit at right now?
Brian: It launched, it has customers. I’ve been doing the slow launch things over the past really throughout ‘19. I think I started on boarding the first customers around June, the very first ones. Today, we’re in November. I’ve been sending early access, invites pretty regularly since then. It was up on Product Hunt about two weeks ago and now it’s out there.
Rob: Is it everything you wanted and more to own a SaaS app? Is it just growing up into the right by itself? You make money while you sleep? I was going to say is it back to the same slug as OPS Calendar, but I don’t think it is. This time really is different. I get the feeling that there is more potential here. Is that pretty accurate?
Brian: First I heard your interview with Jane Portman this morning and I completely relate to that, probably so many other early SaaS founders with the long slow SaaS ramp of death. It’s real.
It’s very slow and the revenue is nowhere new replacing the income that I get from Audience Ops. But yeah, it’s less than a year in, and it does have more customers now than OPS Calendar did. It resonates with people a lot more, the problem and the solution, and the positioning. At least with my audience, the people that I’m connected to. But it’s early on. It really just launched a couple of weeks ago. Now that the new website is up, I’m starting to kick into gear. That shift away from just going to the early access list to actually marketing this thing and getting new traffic and new leads and that sort of stuff.
Rob: Now the real work begins is what I like to say. Getting to launch is like 30% of the journey. That’s where folks who are listening, we could do Startups for the Rest of Us drinking game where like if you get to launch and you don’t have some type of launch list that you’ve been building, then you have a problem. That’s the first base or the first quarter of the journey. And then now you’re launched and now the real work begins. That’s where it’s like you probably don’t have product market fit yet.
Now, I’m going to spend the next six months figuring that out as I grow very slowly. Then, you do get to product market fit, now I need to find a sustainable source of leads when it’s relatively scalable. Then you spend the next 6-12 months figuring that out. That’s why it’s the long slow SaaS ramp. These things are in stages and it’s truly the Cinderella stories that don’t have these steps in this order. It’s always a grind.
Even the Cinderella stories, like I said, there are no Cinderella stories, but even the ones that we look at and say, “Oh my gosh, that grew so fast.” It was a complete grind behind the scenes. This is never easy.
I wish you the best of luck with ProcessKit, because it’s essentially a second iteration of a SaaS app. You’ve obviously fought very hard for multiple years to get this out. This is something you really believe in. You can tell that it’s not an opportunistic product. It’s like I’m going to ship dog food to people on the internet because I could make money. You’re building this because this is something you need and you believe in. I hope that you’re able to make it work.
I think longer term, if for some reason it doesn’t work out, would you build another SaaS app again or would you consider doing a productized service?
Brian: At this point, I am pretty committed personally to doing software whether that’s ProcessKit or another idea or several other ideas, I’m pretty focused primarily on ProcessKit right now. I would use the productized service model if it came to that. No, I should say that I’m actually still using the service model in many ways. Obviously there’s Audience Ops that continues to grow, but even in ProcessKit, now we’re launching a Done with You process service to help you and your team improve and audit your processes, get you set up on ProcessKit as a paid service. That’s sort of like a productized service built on the software, which I really love that model.
You asked about how is it. For me right now, in that slow grind on ProcessKit, I’ll be honest, I’m really loving it. I’m really loving doing everything from the design to the code and talking to customers every day because being able to talk to customers and then literally iterate on the feedback that I got on the feature that I could ship by the end of the week, that just feels so empowering. I know that it won’t be forever, but at this point, Audience Ops is back to growth and profitable in steady state and a really amazing, fantastic team that I have that space to breathe now. I’m not worried about having to cut off the development cycles because of cash flow or things being built in the wrong way or things like that.
Rob: Yeah. There’s definitely a luxury to being able to control that whole pipeline, the manufacturing pipeline. Like I said, I don’t write code anymore, but when I was getting started all the way through Drip, everything before that, I wrote at least some code. Even if it was just maintenance, even if it’s just tinkering here, it was just tweaking. Because finding developer to make a three line code change in PHP or Cold Fusion or classic ASP or .NET or any of those things, it’s a huge amount of work to find someone just to do that. If you know the basics of code, to then just learn, I didn’t know some of those languages but I picked up a book or I went on Stack Overflow, whatever and you Google it, and you’re like, “I’m going to make this change and see if it doesn’t break anything.” If it doesn’t, it’s like wow, I just saved myself like a week of recruiting someone just because you know how to do the basics.
It cuts both ways. I think then you can also get mired in it and then you’re not working on the things you should be and that’s where as we started Drip originally, Derrick said, “Hey, I want to build it on Rails.” I said, “Cool.” Originally I was going to learn Ruby but eventually I said, “You know what, I actually think I shouldn’t because I will get into the repo and start tweaking things. And I should be talking to customers, I should be building processes for this business, I should be doing all the other things that don’t involve the coding.” There’s a point where that makes sense. And if obviously for building a venture backed startup and you’re raising money, you probably shouldn’t be the one digging into the code. Maybe someone on your team is. But there’s a balance there.
But that’s not what you’re doing. You’re building something that you want to build, that you want to exist in the world, and you’re willing and able to take it slow and that gives you a luxury.
Brian: Taking it slow, I’m as impatient as they come with things. I constantly want to move fast and execute and ship something new every single week. But bigger picture, that what’s this podcast and MicroConf and everything is all about. It’s about embracing that slow model of taking your time and making sure that things are done right. I’m all about it.
Rob: That’s right. Ambitious founders who want to build interesting things, build sizable business but are not willing to sacrifice their lives, their health, their relationships, whatever it is, even in your case, it’s a lifestyle that you don’t want to sacrifice to do it and that’s what it’s about. It’s about retaining that control.
Brian: 100%.
Rob: Thanks so much for coming on the show, man. If folks want to keep up with you, and they like the podcast, they should search for Bootstrapped Web, podcast you release every week or two with Jordan Gall. I’m a listener, have been for years. If they want to keep up with you on Twitter, you are @casjam and of course processkit.com is where your SaaS app lives. Any other places folks might want to look out for you?
Brian: Audience Ops is still kicking. Great team over there. Yeah, you hit it. That’s it.
Rob: Sounds great. Thanks again, man.
Brian: Thanks. Thanks, Rob.
Rob: If you have any questions for Brian or myself after hearing this interview, I’d love it if you would tweet me @robwalling or send a question into questions.startupsfortherestofus.com and I would be glad to have Brian back on the show to answer questions you have about any of his experiences, or productized services, or anything else that you feel like he could lend some insight into. If you have an unrelated question for the show, you can leave me a voicemail at 888-801-9690. Or you can always email us questions.startupsfortherestofus.com. You can find us in all the podcasting marketplaces and directories, just search for Startups.
If you’re interested in the full transcript or to make a comment on an episode, just hit up startupsfortherestofus.com. This was episode 474. Our theme music is an excerpt from We’re Outta Control by MoOt, it’s used under Creative Commons. Thank you for listening, and I’ll see you next time.
This week’s episode, I talk with Brian Castle about overcoming a 40% decline in MRR and rising from those ashes. This is Startups for the Rest of Us episode 474.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in building, launching, and growing startups. Whether you’ve built your fifth startup, or you’re thinking about your first. I’m Rob and today with Brian Castle, we’re here to share experiences to help you avoid the mistakes we’ve made.
Welcome back to the show. Thank you for joining me again this week on Startups for the Rest of Us. We have many different show formats. This week is a conversation with someone you’ve likely heard of, Brian Castle. He hosts the Bootstrapped Web podcast with Jordan Gal. And I’ve been listening to that podcast for many years. Hope you enjoy our conversation today.
But before we dive into that, I want to let you know about a MicroConf announcement we’re making this Friday, December 13th. It is by far the biggest we’ve made since launching the conference a decade ago. I really encourage you to go to microconf.com, make sure you’re on the email list. If you’ve attended a MicroConf in the past or you have tickets now, you’re already on the list and you’ll hear about it. But it really is big news and I’m not just saying that to try to sensationalize it or encourage you to go over there. But there’s a lot that’s been going on in terms of the planning of MicroConf for 2020 and we have a lot of new things coming and would love for you to be in the loop on all that’s going on. There’s a lot that’s going to be announced. microconf.com, make sure you’re on the email list.
I enjoyed the conversation I had today with Brian Castle. To set a little bit of the stage, Brian is a frontend designer and UX guy by trade, and then he learned to do some frontend development work. He had been doing a lot of consulting and eventually started dabbling and building products as many of us do. He started at a SaaS app called Restaurant Engine which was originally designed. His vision was for it to be Squarespace for restaurants, but really it evolved almost into a productized service where he had to do a lot of hand holding with the restaurant managers. I think that probably got his gears turning on its software plus service. That offered more value than just straight up building another website builder.
In early 2015, he sold Restaurant Engine for a tidy sum. He talks about that. He said it wasn’t life changing money, but it was enough to go towards a new home. We joined his story at that point where he sold Restaurant Engine and he’s about to start a new productized service. I hope you enjoy this conversation with Brian Castle.
Brian, thank you so much for joining me on the podcast.
Brian: Hey Rob, thanks for having me on.
Rob: Absolutely, man. We joined your story in the middle as I like to say where things are going up into the right. You’ve launched Audience Ops, productized service, and you launched it 2015 and over the course of about the next 18 months, it is all up into the right and you grow from zero dollars in MRR from April of 2015 to 50K of MRR by September of 2016. What was that feeling? Have you ever launched a product that grew that quickly. It’s productized service so it’s not all software, we get it. Have you ever launched anything that had had that much success for that long?
Brian: No, definitely not. I definitely didn’t expect to grow that fast. Looking back on it, it sort of makes sense. Obviously what I’ve learned with productized services is that you can charge a lot more per customer and that helps accelerate the growth rate. If you really nail a market and you’re solving a problem, specific value proposition all that, then I found that growing a recurring productize service like that can really happen. You can grow that revenue pretty fast.
But when I launched it in April 2015, I did not set out to even hit that. The goal was what’s the fastest thing that I can do to get 10K MRR and hit that within two months.
Rob: Right. Like you said, it’s the average revenue per user, a lot of people don’t realize it when that’s $500 a month or $1000, does not take many customers to get you to that 10K, 20K, 30K price point. I’ve seen it with MicroConf companies, with TinySeed companies trying to launch at $20 average revenue per customer app and get to any scale is a very long road even if you have a big audience or have a lot of traffic. Whereas the folks who are plug and away adding two customers a month at $500 average revenue per customer, that’s a grand a month of MRR that you’re growing. It’s a nice base to have.
Brian: Yeah. Audience Ops has, for the most part, been between $1000 and $2000 a month in terms of average per customer. I think it’s great to be able to grow a service like that so quickly. It has some downsides to it too when you’re charging that much because you just see crazy swings in MRR. You can add just a couple of customers, lose just a couple in a week and you’re seeing swings in 5K or 10K MRR. That can really screw with you.
Rob: Right. Stuff we won’t dig into here is you’ve talked a lot about productized services, there are pros and cons to them, you can grow quickly as you’re saying the price points are high and that’s great. Obviously the cons are hey, it’s not as easily scalable as pure software. You do have to hire staff. 50K MRR SaaS company might have 3, 4 people working on it. And a 50K productized service probably has a team of 15 or more. There’s pros and cons to this.
But the thing that’s cool is you launched it and 18 months later, obviously there was a lot of work that you had to do but you have this 50K MRR business now that’s supporting you because after you exited your prior app restaurant engine, I imagine you didn’t want to sit and burn through that cash. You mentioned to me offline that in 2016, you actually spent most of your restaurant engine money on a new house.
Brian: Yeah, that’s right. It wasn’t a life changing exit or anything, but it was a chunk of cash. I looked at that and I really thought about what is going to be in my next business to replace that income. I wanted to get into SaaS software right then in 2015. I looked at a few ideas, but the thought back then of basically burning all of that cash within a year and then maybe getting somewhere close to 10K MRR, which was a big maybe. That kind of scared me.
That’s what lead me to start looking at I kind of know productized services fairly well at this point. That seems to be the fastest way to get to a viable recurring revenue source to then free up my time. Obviously, a lot of work goes into building the team and the systems to remove myself, but that’s always been the goal with the service companies is to grow the cash flow to fund my time to work on stuff.
Rob: You’re a 50K MRR with Audience Ops, it’s fall, September 2016. Since everything is going up into the right, you’re feeling great, you already had two full time W-2 people, you turned 2 more people, they were contractors, you put them on salary and then you started looking at launching the SaaS app. You’re starting to build OPS Calendar. You did some validation there and started upping your expenses. What was the thought process there?
Brian: Right around that time, I guess it was around September into October, I had the idea for this software called OPS Calendar at the time, it was like an editorial software calendar with some process stuff built into it. You can automate content processes and things. Essentially, that was the precursor to my product today—ProcessKit. But back then, that’s what I was doing. At that point, I didn’t personally have the ability to just build an app myself. I‘ve always been a frontend developer and a designer, not a backend. It would definitely require outsourcing and hiring developers to build the functional app.
I did some presale, I got 10, 13, 14 people to prepay based on the idea and a promise that they will someday use this idea. That, combined with the growth rate on Audience Ops, and I had some profit saved up at this point. Okay, I’m good with spending around 5K a month on an outsourced developer and that turned into two or three guys overseas that I was working with.
Rob: Since we didn’t cover it before, could you give people just a two sentence explanation of what OPS Calendar, what it is and the purpose it would serve if it had made it to market, so to speak.
Brian: The idea with OPS Calendar, it was essentially an editorial calendar software with some production process stuff built into it. You and your team can build a process for how you produce blog articles, and podcasts, and social media, and map all that stuff to a calendar to see who needs to do what by when and also to schedule blog posts and social post to the calendar.
Back then I was running Audience Ops which is a content service, we do blog content as a service so obviously it was born out of that. That was essentially the idea with OPS Calendar at the time.
Rob: Yeah, cool. There’s a six months chunk where really from November of 2016, right after you ratchet up these expenses, things hit the skids with Audience Ops. I think this is one of the tough parts of your journey, it seems like. You want to walk us through the timeline there, what happened?
Brian: We’re three years later now and this is still one of those periods of time that I still look back on. Like, “Man, that was painful.” What happened was basically that growth from Audience Ops, 0-50K, that started to plateau right around October, November into the holidays and then started to decline through the holidays, in the January, February into about March or April is when it started to finally turn back around. It was painful on a number of fronts because it coincides right at the time that I decided to start spending a lot of extra cash on developers and employees all at the same time. There was that part of it.
And then it was also just like, “Why is this happening?” Everything was growing just fine up until that point. What is causing the reduction in leads or the increase to churn, it was probably a combination of both. I was looking at it in a thousand different angles to try to uncover what was actually causing it. It’s still unclear to me to this day. I have a few ideas, some hunches of what it could have been. But when you’re in it and you’re trying to fix it, you just don’t know what exactly is broken. It’s really frustrating.
Rob: Absolutely. That’s devastating. 40%? That’s a huge drop. 50K down to 30K. That’s a lot of salaries, that’s probably all your net profit on this thing. I’ve seen SaaS apps plateau, I’ve seen them right over the top, so to speak, when they start to decline. But I’ve never heard of a drop that fast that wasn’t due to some big platform risk. Like, “Hey, I’m integrated with Shopify and they just completely cut off our access.” Or, “I’m a Twitter client and they cut the API.” Or a Google change. Something that was just decimating.
But just to have that happen seemingly out of the blue, it sounds like, and three years later not have been able to pinpoint what happened, must have been terrible. It sounds like it went on for five months and you were just trying to fix it this whole time. Is that what it was?
Brian: Yeah. There are a few things. It was probably a combination of things that I look back on. One was in summer 2016, it was the first time that I hired a sales person for Audience Ops. There was somebody on the team, actually still on the team today, and I put that person into a sales role to remove myself from the sales. That was one remaining jobs that I was still doing in Audience Ops, the team was handling other stuff. It’s not any fault of his, he actually did a really great job of closing a lot of accounts that summer. Bringing out a lot of clients, but a lot of those clients that he sold and closed churned a lot faster than other clients have come on.
I take that as my fault for the training, maybe some of the compensation structure that I really didn’t structure and situate to have a sales person really set the right expectations for customers. Basically the way that I do when I do sales calls for Audience Ops is for me, when I do it, it’s really about let me tell you exactly what’s happening in Audience Ops and almost talk you out of signing up for Audience Ops to make sure that you’re really on board for this. There’s that, we just saw a string of cancellations.
Then the holiday season hit and that slowed down. It was weird because the previous holiday season was actually a pretty big spike in growth for us, but it didn’t happen in 2016. In January, now we’re in the thick of this six month period where sales are stalling, we’re seeing this churn. I go away to the Philippines, my wife has some family there. We were there for a whole month. My plan was to work a little bit while we’re there, but it’s a completely different timezone and that means I literally could not do any sales calls. Even the leads that we had, I couldn’t really even talk to them. Combine that with terrible WiFi while I was there. That was stressful as well.
Rob: How did that manifest itself? What was the peak moment or a moment you can remember where you lost your **** or you were feeling extremely mad about it?
Brian: Anyone who knows me, I am really pretty level headed, I think. I tend to compartmentalize pretty well. Poor sleep, bad eating habits and exercise and all that definitely starts to pile up. Because it’s like I could go exercise today, or I could keep working and try to fix this thing. That was a choice every single day.
Rob: Right. You just dug in and just grinded it out, I shall say. Probably took a toll on your body and mental well being, too.
Brian: Yeah. Into March, April 2017 is when things started to turn around. It’s almost like I don’t really know because it wasn’t a sudden turn around either. It took all of 2017 to dig back out and back up to where it was. But, we definitely improved a lot of things. That was when we really improved the new customer on boarding process heavily. Again, to reinforce those expectations. That I think had a really big impact on customer retention. If they have a really fantastic first month with Audience Ops, they’re really likely to stay on for a year or more at that point.
I worked on some new marketing stuff during that time and some new content, some webinar stuff. I think that seemed to help as well.
Rob: It’s something I talk a lot to entrepreneurs, especially new entrepreneurs don’t understand that they’ll see someone who’s built a business up to 10K a month. You may be able to sell that for $250,000 or something, there’s all these factors. But whatever, you can sell it for quite a million dollars. But people will say, “Why wouldn’t you just keep that? Just keep it and keep running on the side. It’s only three hours a week or five hours a week. Just keep running it.” Usually, there’s a couple of reasons, one because distraction is distraction and there’s opportunity cost to that. But the bigger one is that none of the businesses we have run on autopilot for years. They always get smacked around by something. Sometimes it’s Google, and sometimes it’s a competitor, and sometimes it’s platform risk, and sometimes it’s something you never would’ve guessed, it’s a key employee quitting, it’s something that you have a tough time identifying like what happened with you.
Then you have to shut everything down, stop doing what you’re focused on, and you have to turn your focus back to this thing that you’re tired of working on anyways. At a certain point, eventually, you give in. I’ve done this with multiple businesses and I’ve seen people do it as well, where you’re just like, “Forget it. I just got to sell this thing. I got to get it off my plate.”
Brian: Yeah. It hasn’t really come to that point in Audience Ops, but I can definitely say that there have been times. This period in 2016 was definitely one of those where it was like my mindset is trying to get this brand new idea for a SaaS off the ground. It wasn’t even in existence yet. It was just like get this thing to market. That was my number one goal. Working with developers, I’m paying for developers. I want that to happen as soon as possible. And then I have to stop and work on this churn problem in Audience Ops. Yeah, that was pretty painful.
Rob: We’ll talk in a second about how essentially you did turn that around through 2017. But I’m curious, that low point, this five, six months where things from November to March, April, when they are just in the thrawf and you can’t dig it out. You said that’s still a point that you remember very vividly. I have moments like that in three, four, five months period as well. I learned a lot from them and they impact the way that I do things today. They impact the way that I think about business and the way I ran my apps after that. I’m curious, what lesson or lessons did you take away from that? That impact the way that you make decisions.
Brian: I found that there are one or two of those points in my career so far that I can look back on, that I feel like really influenced the way that I work today. I think in some ways that’s a good thing and in some ways, I do things to a fault today to try to prevent that from happening again. On the positive side, I’ve been through enough of those ups and downs in the MRR graph to know that no matter how well something might be going today, I still have to play it extremely conservative.
We’re like three years out from that, Audience Ops is actually doing really well and I have a profit savings saved up that I’m able to deploy on new products and ProcessKit and things like that. But I’m actually hesitant to spend anything. Because it’s like just keep the reserves in check just in case, you really never know. You look at the news, the economy and stuff. I look at things almost afraid of what could happen.
Tactically, on the sales side of it, I talked about how that period I had a salesperson and then there was a string of churn that came in the months after that. That has caused me to really delay and delay on trying to put a salesperson in place again on Audience Ops.
I’m actually now doing that finally in the end of 2019 with a new strategy behind it and some new structure, but it took me three more years. I have removed myself from every other aspect of Audience Ops. I really spend less than two hours a week on this business, but those two hours are doing the sales calls. Because I just want to make sure that that message is being sent to new customers as they get on. I’m finally coming around to being okay in letting that role go.
Rob: That makes sense. I was going to ask, obviously, if you brought a salesperson and it didn’t work out, you had to turn the app around but after that, I would think that if you do want to get that sales, you would just try and try again. Most sales people don’t work out. The first one you find, frankly, more of the first VAs that I find, the first one almost never works out. So I just hire one, two, three, four and it’s frustrating and it takes time, but eventually, you find someone and then you’re able to let it go. Is that where you’re at now? Is that something you’re looking at doing, trying again and stepping away?
Brian: Yeah. I’m trying again because I think it will actually help impact the business, growth, and the overall health of the business to get me out of that role. Speaking about it now in 2019, I just have a lot more space to breathe. Financially and time wise and so many more things inside the business are more optimized now than they were back then. The on boarding stuff is really locked in, things like that. I just think it’s probably a better time to try to get that off my plate now than it was.
Again, things did start to turn around in 2017, but it took all of ‘17 into the beginning of ‘18. ‘18 was really when I finally got my bearings back in terms of having some space to play with.
Rob: Right. It sounds like it, and that April 2017 point could have been celebratory because you’re bringing your first paying customers in for your SaaS up OPS Calendar, but your financial runway was basically gone. You had to turn around over the next six, seven, eight months. What were a couple steps that you took, it was all hands on deck at that point, right? We’ve lost 40% revenue, we’re still declining at this point. What were some steps you took to turn this around and get out of the tailspin?
Brian: Just to be clear, there’s two parallel products in play here. One is Audience Ops which is in the site crisis mode, and then OPS Calendar which is trying to get off the ground but then I would have to pause, paying for the developers, right at these critical moments as we’re bringing these new customers on to the software. I just didn’t have the cash to fund for the development and couldn’t move fast and all that stuff. That was really frustrating.
But with Audience Ops to start to turn it around, I did a number of different things to try to attack the problem from different angles. One was that new customer on boarding again. I worked with my team a bit to see how can we just make sure that customers are really happy after their first month and that clearly has had an impact on improving churn over time. Just focusing on retention. I think that also helped with customers like referring other leads to us, that has that side effect too.
I did work on some new marketing materials. A whole round of new content, I think I did a recorded webinar that I put into the marketing system at that point, worked on the email automations that helped to nurture. I just went through the whole funnel. Everything that leads and customers see as they find out about Audience Ops, as they go through the sales process, as they get educated and nurtured and on boarded. I tried to improve every step of the funnel over that in early 2017.
Those are the kinds of improvements that you just don’t see moving the needle overnight, you just do that work then maybe a few months later things start to improve.
Rob: Right, and it worked because you turned it around over the next six or eight months.
Brian: I think it has definitely returned to where it was and has grown beyond that but it doesn’t really see the growth rate that it saw in that very first year. But I think that’s sort of a natural slowing down that a business sees. At least I’ll see it that way.
Rob: Yeah. It’s hard to say without going out and really beating the bushes and trying to generate a bunch of leads and doing cold outbound, focusing on SEO or running ads, there’s a natural threshold that always sets in. It seems to me like you’ve always been cool with that plateau because that plateau provides you with a full time income budget to build other apps which is really what you want to do. That’s your lifestyle choice.
Brian: Yeah, exactly.
Rob: They were working on OPS Calendar, your developers were, and you got your first paying customers in April and then you had to pull them off because you didn’t have the money, and then in July in 2017 you’re able to get them back to work on OPS Calendar, and then you get a little bit of traction right that latter half of 2017 but you never found product market fit with OPS Calendar. By February of 2018, you were still trying to push it forward, but some calamities happened. It sounds like there was a code base thing you want to talk us through what it was like dealing with that.
Brian: Throughout that year of 2017, it was trying to bring those first customers on and got a few handful of paying customers, but over the summer there whatever savings I had was gone from that period of Audience Ops. I’m not one of these people who just goes crazy on the credit card. Once I see a little bit of balance on there, I’m just too risk averse and debt averse to really go too heavy on that. I just pause and I don’t really spend until I have the cash in the bank account. I had to pause those developers over the summer which really, really hurt because I felt like it was at a critical time.
As we get into 2018, I went on a trip and we had been pushing off this upgrade from Vue one to Vue JS. At the time, I wasn’t a developer, I didn’t even really understand what Vue was. The developers chose that framework. That upgrade broke everything. I came home from that trip looking at a situation where I could pay those developers to go fix every single feature that I had just paid them for the last 18 months to build. Essentially, spend all that money and all that time again to rebuild the app, which was not going to happen.
It was also we’re having a hard time converting these customers, even a lot of the early prepaid customers didn’t end up continuing on as full customers. That said to me you know what, this thing isn’t really right. Because we have a process feature in OPS Calendar, and people were using that side of it and they were not touching the social media calendar stuff. That was also a signal to me that really the product that I deep down wanted to build was more of a process oriented tool.
Here I am in early 2018, probably going to “pivot” the product, if you will, to something else. Probably a new name and everything. I’m having a problem with these developers, but at that point I just decided to just stop everything. Just pause all work on OPS Calendar, take a month and figure out what I’m going to do. My conclusion was that I’m done with being limited by not being able to build apps myself. As a designer and front-end developer and product person, I’ve always felt, and this really brought it to a head was this experience with OPS Calendar, I’ve always felt this frustration that I can’t move fast enough because I’m always waiting for the developers to finish a feature. Sometimes I can’t move at all because I don’t have the cash to pay developers.
Let me bypass that by investing my time in learning back in development. I learned Ruby on Rails. I basically decided all of 2018, I’m going to use all my full time hours to make myself a full stack developer. I know I won’t be a very good one, but at least I’ll be able to take any idea and build it into a product and bring it to market, and that’s essentially what I do.
Rob: You were just about 18 months into OPS Calendar and I’m going to guess tens of thousands of dollars paying developers. You put on maintenance mode. You effectively shut it down. What was that decision like? How hard was it for you?
Brian: I think it was somewhere around $30,000 or $40,000 that I put into over that period of time. It sort of sucked, but it was also I don’t really have any other option here. I’m not going to just keep spending on something that’s clearly not working. I knew that the tech underneath the app, they technically built the features that I designed and speckled, but there were underlying architectural issues that I could just feel as a user.
That was another reason moving to let me just try to build it myself because at least I could design the thing from the inside out the way that I feel like it should be built. It was hard, but it was also I’m moving on. At that point I was also really excited about this idea for what the next version is which became ProcessKit, which is what I’m working on today.
Rob: I’m curious, deciding to learn to code from scratch, you’ll often hear folks send questions in to this podcast and say, “Should I learn to code if I’m going to watch a SaaS app?” The answer’s always it depends. Do you think that’s something you’re interested in? I would at the minimum learn to code well enough to know if the developers are trying to pull one over on you so you have a concept, you can talk to them. I don’t write production code anymore myself, but I wrote code professionally for 10 years.
I can still have architectural conversations. When Derrick and I were building Drip, I could go pretty deep on the tech stuff. It’s an asset to have for sure. But I’m curious, instead of learning to code, why not launch another productized service? Because you seem to be good at them, they seem to work out for you. Audience Ops is obviously successful and profitable. Why continue to seek after something that is showing you so much resistance in essence, which is a true software base SaaS app?
Brian: Number one, I’ve always been interested in software. I’m not new to software today. I’ve been working on it in different forms for many years. That has always been my number one interest in terms of what I want to create on the web. I’ve been building on the web for over a decade. That’s really always been where I’ve been heading with this. Even since I started Audience Ops, yeah I worked very hard on building it and building the team and the processes, the systems and everything. It’s always been with the end goal in mind of removing myself so that I can fund my time to work on software.
Like you said, the scalability aspect. Yes, I believe a service company can run without you and be profitable without you in the day to day like it is for me, but it’s clearly not as scalable as a SaaS that has hit product market fit and has that growth. Just in terms of the value of an asset and all that.
Also, I just wanted to go back to what you’re saying about the decision to learn to code or not, I agree with you. In many cases, it may not be the smartest choice, or maybe you should just learn a very light understanding of it so that you can communicate with developers. I think there are few caveats that made my situation a little bit unique from where most people are that I come across at least.
Number one, I’m not starting from scratch. I had been a frontend HTML, CSS, little PHP, little JavaScript work. But professional level frontend stuff for years. Building websites, doing a lot of work with advanced WordPress stuff, working on major websites for agencies and things like that. I was not completely new to basic coding and programming. I just never really learned a back end stack like Ruby on Rails, and working with databases and things like that.
There was that. That gave me a head start. And then the other thing is that I had the time. I really have full time hours to throw at this. If I didn’t have that, if I was doing this nights and weekends, I don’t think it would be possible to make as much progress as I did over the last now almost two years. I don’t think I would have been able to really make a lot of progress with it if I couldn’t work on it full time every day.
Rob: Right. You had a lot of time to focus and it was something that as you said, you already had a basis for.
Brian: And I had a lot of help too. A lot of my close friends are software developers, Rails developers, I had of people that I could turn to for support and they’ve been super helpful.
Rob: Totally. That’s the thing. You’re in the developer community already even if you’re more of a frontend developer/designer. It’s like you live in that world and it’s not such a far stretch to be like, okay, I want to go one layer deeper and see how it interacts with the service side code. Cool.
That takes us to spring of 2018. Audience Ops is back, profitable, and you were able to free up your time and spent most of 2018, as you said, learning Rails. What was the most surprising part of that experience of taking that six or eight months and digging into service side code and learning to build your own software top to bottom for the first time?
Brian: In the early months, I knew that it would be a very big effort and that it would take me a long time to get decent at it. It was a little bit frustrating going through tutorials and courses and then still not quite being able to build anything real yet, but then just hacking away at it a little bit more for another month or two and then I can build something very simple.
Over the course of 2018, I went through a bunch of courses, I worked with a coach which was very helpful, and then I did some throwaway practice project apps. By the end of that, I was able to put together a simple app called Sunrise KPI. That was the first real app that I’d built.
I should mention that the idea for ProcessKit I had throughout 2018. I bought the domain. I spent some money on that domain. I was putting sketch ideas for what ProcessKit would be, but I also knew that I wasn’t capable of building it yet. I had to get those skills up and it wasn’t until the end of 2018 I had felt confident in actually starting to build what is now ProcessKit.
Rob: Yeah. If someone’s listening to this and they are thinking about themselves learning to code, what would be a piece of advice, either a warning or just a hey, do this, this is what really worked for me, this is what fast tracked me.
Brian: Early on, I definitely wanted to stay away from the newest, trendiest, most complex frameworks, especially like the JavaScript frameworks and stuff. I’m sure there’s plenty of technical benefits to those, but I wanted boring, tried and true, non trendy stuff. It came down to a decision between Ruby on Rails or PHP in Laravel.
I went through a couple of weeks with PHP Laravel, some tutorials. I could follow along with those, but then I found I couldn’t take what I’d learned and go build something simple. I went through a one on one course on Rails. I did a month on PHP in Laravel and then a month on Rails. I found that at the end of the month on Rails, I was able to take that and build something simple. I continued to double down on Rails from there.
I went through a number of courses on that. Tip number one is to stick with something like Ruby on Rails, or PHP with Laravel. Something that has a huge developer community with tons of resources and educational stuff. That’s a big number one. Number two is to try and find mentors. I go to friends like I talked about. I paid a couple of people for paid mentorship for a while and I’ve learned to code in Rails developer communities, I go to that for some help as well. I frequently talked with friends about code questions. I hit up codementor.io quite a bit when I really get stuck.
Rob: Sounds cool. You mentioned ProcessKit which we haven’t really covered in this conversation. You want to tell folks what that is? Is it the next generation of OPS Calendar done in the way based on your learning from the first time?
Brian: At this point, the way that it’s positioned is that it’s really a projects tool. It kind of like a project management software, but it’s process driven. If your projects really follow the same script every time, they’re very repeatable and you’re doing a lot of the same stuff, whether you’re onboarding customers to a service or to a SaaS or something like that and you need your team to follow a certain process, that’s really where ProcessKit comes in. It’s different from the project management tools where you might run your tasks and projects in one of those tools, but you have your documentation, your SOPs over in a silo somewhere else. That’s where those kinds of operations tend to fall apart, the team just never really follows the SOPs.
ProcessKit sort of brings those together, and then also builds in automation steps. You can say if this then that, if it is is this type of project then assign these tasks to these people, calculate these due dates, and link up with Zapier and all that kind of fun stuff.
Rob: Cool. Where is that project in terms of launching? This is the part of the interview where I ask you questions I already know the answer to. What status is ProcessKit at right now?
Brian: It launched, it has customers. I’ve been doing the slow launch things over the past really throughout ‘19. I think I started on boarding the first customers around June, the very first ones. Today, we’re in November. I’ve been sending early access, invites pretty regularly since then. It was up on Product Hunt about two weeks ago and now it’s out there.
Rob: Is it everything you wanted and more to own a SaaS app? Is it just growing up into the right by itself? You make money while you sleep? I was going to say is it back to the same slug as OPS Calendar, but I don’t think it is. This time really is different. I get the feeling that there is more potential here. Is that pretty accurate?
Brian: First I heard your interview with Jane Portman this morning and I completely relate to that, probably so many other early SaaS founders with the long slow SaaS ramp of death. It’s real.
It’s very slow and the revenue is nowhere new replacing the income that I get from Audience Ops. But yeah, it’s less than a year in, and it does have more customers now than OPS Calendar did. It resonates with people a lot more, the problem and the solution, and the positioning. At least with my audience, the people that I’m connected to. But it’s early on. It really just launched a couple of weeks ago. Now that the new website is up, I’m starting to kick into gear. That shift away from just going to the early access list to actually marketing this thing and getting new traffic and new leads and that sort of stuff.
Rob: Now the real work begins is what I like to say. Getting to launch is like 30% of the journey. That’s where folks who are listening, we could do Startups for the Rest of Us drinking game where like if you get to launch and you don’t have some type of launch list that you’ve been building, then you have a problem. That’s the first base or the first quarter of the journey. And then now you’re launched and now the real work begins. That’s where it’s like you probably don’t have product market fit yet.
Now, I’m going to spend the next six months figuring that out as I grow very slowly. Then, you do get to product market fit, now I need to find a sustainable source of leads when it’s relatively scalable. Then you spend the next 6-12 months figuring that out. That’s why it’s the long slow SaaS ramp. These things are in stages and it’s truly the Cinderella stories that don’t have these steps in this order. It’s always a grind.
Even the Cinderella stories, like I said, there are no Cinderella stories, but even the ones that we look at and say, “Oh my gosh, that grew so fast.” It was a complete grind behind the scenes. This is never easy.
I wish you the best of luck with ProcessKit, because it’s essentially a second iteration of a SaaS app. You’ve obviously fought very hard for multiple years to get this out. This is something you really believe in. You can tell that it’s not an opportunistic product. It’s like I’m going to ship dog food to people on the internet because I could make money. You’re building this because this is something you need and you believe in. I hope that you’re able to make it work.
I think longer term, if for some reason it doesn’t work out, would you build another SaaS app again or would you consider doing a productized service?
Brian: At this point, I am pretty committed personally to doing software whether that’s ProcessKit or another idea or several other ideas, I’m pretty focused primarily on ProcessKit right now. I would use the productized service model if it came to that. No, I should say that I’m actually still using the service model in many ways. Obviously there’s Audience Ops that continues to grow, but even in ProcessKit, now we’re launching a Done with You process service to help you and your team improve and audit your processes, get you set up on ProcessKit as a paid service. That’s sort of like a productized service built on the software, which I really love that model.
You asked about how is it. For me right now, in that slow grind on ProcessKit, I’ll be honest, I’m really loving it. I’m really loving doing everything from the design to the code and talking to customers every day because being able to talk to customers and then literally iterate on the feedback that I got on the feature that I could ship by the end of the week, that just feels so empowering. I know that it won’t be forever, but at this point, Audience Ops is back to growth and profitable in steady state and a really amazing, fantastic team that I have that space to breathe now. I’m not worried about having to cut off the development cycles because of cash flow or things being built in the wrong way or things like that.
Rob: Yeah. There’s definitely a luxury to being able to control that whole pipeline, the manufacturing pipeline. Like I said, I don’t write code anymore, but when I was getting started all the way through Drip, everything before that, I wrote at least some code. Even if it was just maintenance, even if it’s just tinkering here, it was just tweaking. Because finding developer to make a three line code change in PHP or Cold Fusion or classic ASP or .NET or any of those things, it’s a huge amount of work to find someone just to do that. If you know the basics of code, to then just learn, I didn’t know some of those languages but I picked up a book or I went on Stack Overflow, whatever and you Google it, and you’re like, “I’m going to make this change and see if it doesn’t break anything.” If it doesn’t, it’s like wow, I just saved myself like a week of recruiting someone just because you know how to do the basics.
It cuts both ways. I think then you can also get mired in it and then you’re not working on the things you should be and that’s where as we started Drip originally, Derrick said, “Hey, I want to build it on Rails.” I said, “Cool.” Originally I was going to learn Ruby but eventually I said, “You know what, I actually think I shouldn’t because I will get into the repo and start tweaking things. And I should be talking to customers, I should be building processes for this business, I should be doing all the other things that don’t involve the coding.” There’s a point where that makes sense. And if obviously for building a venture backed startup and you’re raising money, you probably shouldn’t be the one digging into the code. Maybe someone on your team is. But there’s a balance there.
But that’s not what you’re doing. You’re building something that you want to build, that you want to exist in the world, and you’re willing and able to take it slow and that gives you a luxury.
Brian: Taking it slow, I’m as impatient as they come with things. I constantly want to move fast and execute and ship something new every single week. But bigger picture, that what’s this podcast and MicroConf and everything is all about. It’s about embracing that slow model of taking your time and making sure that things are done right. I’m all about it.
Rob: That’s right. Ambitious founders who want to build interesting things, build sizable business but are not willing to sacrifice their lives, their health, their relationships, whatever it is, even in your case, it’s a lifestyle that you don’t want to sacrifice to do it and that’s what it’s about. It’s about retaining that control.
Brian: 100%.
Rob: Thanks so much for coming on the show, man. If folks want to keep up with you, and they like the podcast, they should search for Bootstrapped Web, podcast you release every week or two with Jordan Gall. I’m a listener, have been for years. If they want to keep up with you on Twitter, you are @casjam and of course processkit.com is where your SaaS app lives. Any other places folks might want to look out for you?
Brian: Audience Ops is still kicking. Great team over there. Yeah, you hit it. That’s it.
Rob: Sounds great. Thanks again, man.
Brian: Thanks. Thanks, Rob.
Rob: If you have any questions for Brian or myself after hearing this interview, I’d love it if you would tweet me @robwalling or send a question into questions.startupsfortherestofus.com and I would be glad to have Brian back on the show to answer questions you have about any of his experiences, or productized services, or anything else that you feel like he could lend some insight into. If you have an unrelated question for the show, you can leave me a voicemail at 888-801-9690. Or you can always email us questions.startupsfortherestofus.com. You can find us in all the podcasting marketplaces and directories, just search for Startups.
If you’re interested in the full transcript or to make a comment on an episode, just hit up startupsfortherestofus.com. This was episode 474. Our theme music is an excerpt from We’re Outta Control by MoOt, it’s used under Creative Commons. Thank you for listening, and I’ll see you next time.
TinySeed Tales 7 | The Growing Pains of Delegation
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This week Craig Hewitt of Castos, feels the pains of a growing team and talks about how his role as a founder must evolve as the team continues to grow.
Episode 473 | Managing Annual Subscriptions, Low-price vs. High, Being a Non-Developer Founder, and More Listener Questions with Laura Roeder
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In this episode of Startups For The Rest Of Us, Laura Roeder joins the podcast to answer a number of listener questions on topics including managing annual subscriptions, being a non-developer founder, and more.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. This is a show where we talk about building ambitious, yet sane startups. This week, I had a great time answering listener questions with Laura Roeder from MeetEdgar. We talked through questions about managing annual subscriptions, going low price versus high, being a non-developer founder, and we talked through more listener questions. This is Startups for the Rest of Us episode 473.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in building, launching, and growing software products. Whether you’ve built your fifth startup, or you’re thinking about your first. I’m Rob and today with Laura Roeder, we’re going to share our experiences to help you avoid the mistakes we’ve made.
Welcome back to the show. This is the show where we focus on indie-funded and self-funded startups, folks who want to do interesting things, are ambitious, and want to build themselves a better life, but also want to build companies that grow. Starting a company is hard. Having this community of people who are going through the same thing that you are, having that sense of belonging, knowing (a) that it’s possible but (b) that there’s a place where we can all hang out and just get each other, and where you don’t go in and explain what you do and everyone looks at you funny, there’s a tremendous amount of value to that. That was a big reason why we started this podcast almost 10 years ago, back in 2010.
Startups for the Rest of Us has many episode formats. Sometimes, I just have conversations with folks, do interviews. Now and again, we do founder hot seats. But one of my favorite episode formats is listener questions. We’ve answered a tremendous number of listener questions over the years. We’ve had a lot of episodes on this. It’s just the gift that keeps on giving, because it’s a time for listeners to participate, and to hear what other folks are going through, and to hear the thought process of a couple of founders typically who’ve been there and have done some things, and it’s not that we’ve been through everything that they asked about, but you can at least hear that thought process of how we would approach it. And over the years, we’ve always receive positive feedback about this episode format.
Before we dive in, I want to let you know that at MicroConf, we are making an announcement next week. It is by far the biggest announcement that we will have made since we launched the event nine years ago. It is coincidental that the 20th MicroConf is going to be on April 20th of 2020, so the 20th during the 20s or whatever, but that’s not the announcement. I’ve obviously already mentioned that MicroConf Growth and Starter are in Minneapolis in late April of 2020, but if you’re not on the MicroConf list, I encourage you to go to microconf.com, enter your email, and we’ll loop you in as soon as we have the info. It really is pretty spectacular and you probably know me well enough by now to know that I’m not trying to inflate the importance of it.
Today I answer questions with founder Laura Roeder. If you don’t remember Laura, I interviewed her in episode 451. She runs MeetEdgar which is a social media management SaaS app and in 451, we talked about stellar growth, platform risk, layoffs, and powering through roadblocks. It was a really, really good interview and Laura knows her stuff. I have a ton of respect for her. Honestly, I always love getting on the mic and just chatting with her. Super fun. I had a fun interview at 451 and I had a great time talking to her today and hearing her insights and her take on some of your questions. Without further ado, let’s dive in.
Laura Roeder, thank you so much for coming back on the show.
Laura: I love the Startups for the Rest of Us. I cannot stay away.
Rob: Awesome. I am so stoked to have you on to answer some questions. You’ve actually submitted questions in the past, so it’s cool to have you on the other side of the ear bud, so to speak. We have some good questions today. As always, voicemails go to the top of the stack. I curated some questions that I think you should have some unique insight on. Let’s just roll right into the first voicemail which is about being a nontechnical founder and how to make good technical decisions.
Mack: Hi Rob, this is Mack from the UK. I’ve got a question, I’m looking for advice for a nontechnical founder. How can I avoid getting called out by poor decisions from the technical team or just not knowing about the consequences of some of the technical revisions that gets made to create their software? Any advice would be great. Thanks.
Rob: This is an interesting question, Laura. As a nontechnical SaaS founder yourself, I’m curious what your initial take is on it.
Laura: I would first like to take umbrage with the phrase non technical founder. I mean obviously, I know what he’s referring to. Nontechnical founder means that you are not a developer and I’m not a developer. But I always think it’s a little funny because I’m like, “I run a software company.” It doesn’t seem quite right to call me nontechnical, but this is a very real problem for all of us who are running software companies and are not developers because obviously, you are not intimately familiar with a really core part of what your company does.
I guess the first blanket advice for this is that, you really need to have a person in that CTO role who you trust 100%. I think this goes for any leadership role in your business, but it’s especially important in this case, because you’re not going to be able to provide so much oversight. Anyone can look at a customer service email and say, “Okay, that was not how we want to answer,” but you really can’t read code if you’re not a coder. I think that’s just step one is, make sure that you’re willing to put 100% faith in the person in that dev leadership role.
Rob: That’s what I was going to say as well. Even if you aren’t at the place where you can have a CTO. The fact that he used the phrase, “How do I not get called out,” does your team not trust you or do you feel like you have to make decisions that are out of your league? That’s an interesting turn of phrase. It implies that the team calls him out for making technical decisions, but are you making decisions you shouldn’t be since you’re not a developer? I would dig into that. I think having a CTO, or the senior dev, or somebody that really is making decisions in the best interest of the company, is a huge deal.
Laura: I think it also brings up that you shouldn’t try to pretend to be anything you’re not. If people are calling you out, does it mean that you’re pretending you know things that you don’t know or maybe making decisions that would be better for other people in the company to make? I think it’s just important to be unafraid to ask really stupid, really basic questions until you understand some of these core concepts related to writing code.
You can decide how much you feel you need to know. For me, I feel like I’ve been through this process recently big time with our finance team, understanding all the financials of the business. I just asked our finance person over and over and over again. Sometimes I’ll literally read a book. I read a finance book recently. I just wrote down questions for her in the margins and then I’m like, “I want you to read this book too and we’re going to have a call together. I’m going to ask you all of my questions about the book.”
I think that’s a great thing to do for technical questions as well. You need to be open with your team about what you know and don’t know and I think it’s important for you to work with the type of person that is very patient and very understanding in explaining things to you. Within reason, you don’t need to understand every detail. There are a lot of concepts that are probably unfamiliar to you that you do need to understand at least the basics of how “the sausage gets made.”
Rob: I like your example because as a founder, you don’t need to know every single thing about bookkeeping, accounting, and finance, but you should probably know enough to be able to ask the right questions. I feel the same way running a software company. I don’t think you should be able to code everything in a SaaS app, but maybe it’s worth going through a code where the code camps or maybe it’s worth on the side taking you to make classes.
It’s easier than ever to learn and have just a really basic level of coding knowledge such that, yes, you’ll never be able to make architectural decisions, you won’t make the senior level things, but you can at least relate to, “Oh, this is what code is. This is how it works. This is what it’s like to write a bug,” and spend four hours and not realizing that it’s the semicolon. That’s a lot of what it is. I think having that cursory knowledge and being able to then ask the right questions is what you’re touching on and that’s what I like about it.
Laura: Yes.
Rob: You don’t like the term non technical founder. If you’re a developer and you’re writing the code, then you’re like a developer founder, is it a non-developer founder, is there a term that you prefer rather than nontechnical?
Laura: I guess maybe just say founder and then when you’re explaining later your side of the business, because you also don’t call like you just a developer founder, but I’ve never heard anyone actually say that.
Rob: I was just making up a new term to try not to say technical and non, because typically it’s technical and nontechnical are the two terms people use. I was just trying to think of a different way to say that because you’re right, running a SaaS app, yes, you may not write code but you are more technical than most people we know just because by nature of being in it. It is a misnomer.
But if someone wanted to differentiate between Derek and I when we started Drip, he was literally in a code every day and I was literally not in the code every day. I don’t know how else you differentiate that or what phrase we could come up. I don’t feel nontechnical founder as pejorative. I don’t feel like it’s a negative. Does it have a stigma? Do you feel like it does?
Laura: I actually think it does have a little bit of a stigma because I’ve heard developers use it in that way before. We’re not as cool of a founder if you’re not technical.
Rob: No, I think that’s lame.
Laura: That is lame.
Rob: That sucks. I don’t use it that way but if it gets that connotation then yeah, we need to figure out another phrase for it. Cool. Thanks for the question. I hope that was helpful.
We’re going to bounce into our second question which is also a voicemail. It’s about a founder who’s launching a second SaaS app. They’re nearing launch and he’s concerned about potential lawsuits.
Thomas: Hello, this is Thomas from Austria. I listened to the show for a long time and wanted to tell you that it’s really great content. I love following along your journeys and also hear stories of other people in similar situations.
To my question, I founded a SaaS company three years ago. It provides an invoicing solution for small independent car repair shops. It’s doing pretty okay. I can live off it and it’s slowly growing, so I’m happy with that. Half a year ago, I founded another company with a partner and we are building a software to compare prices for car parts.
Now that we want to go to market with the software to the suppliers, the […] of us are trying to fight us pretty hard. I think we have to go to court several times. There is not really a legal problem with fetching the prices because we do it locally on the customer’s computer and they’re not going through our systems, but still they can make our lives very miserable if they pulled us to court all the time.
Now, I’m not really sure how to go along. My partner really wants to push through that and he’s sure that it will work out. I’m also pretty sure that it will work out in the end, but I’m not sure if I am the right person to spend my next one, two, three years fighting big companies. I wanted to hear your thoughts on that and maybe what you would do in this situation. Thank you.
Rob: Thomas also wrote in and he said that he wanted to clarify that he hasn’t spent any money on the price comparison project, and have a small private investor, but in essence, he has only invested his time so far. I should preface this with we’re not legal experts, we don’t give legal advice, obviously, but it’s more of, “Hey, if I were in your shoes, how would I think through this?” This is an interesting situation. I’m not sure it’s one I’ve heard before. What do you think about this Laura?
Laura: The way I think of it is just, there are pros and cons with every business, every business model, and it’s really smart to go into a business with your eyes wide open about those pros and cons. From what I understood from his message, this is a likely threat, not a certain threat. He suspects that there is going to be lawsuits. He has a good reason to believe that’s going to happen or it could not happen at all. It makes me think of with my business MeetEdgar, we are entirely dependent on the social networks. You can listen to my interview on this podcast on Startups for the Rest of Us. I talked about a big problem we had because of that, but all businesses have upsides and downsides.
For me, I know that I’m in a space where I’m totally dependent on these partners that I have no relationship with and that can do whatever they want. That’s a big downside to my business. The big upside is that I’m building on Facebook, Twitter, and Instagram. Obviously, very popular tools, so lots of users. I think that he just needs to know this going in and maybe it’s something that you budget for.
It’s good not to be scared of it. It’s good to go in and say, “Okay, I know that this will likely happen. Maybe we have some money set aside for it. Maybe we’ve already figured out who our lawyer is so they can jump right in and we won’t be surprised,” spending a few months just trying to find a good counsel.
To me it doesn’t sound like a deal breaker, because it might not even happen at all. Like you said, you have to know that that is a battle that you could be fighting and you have to know that that’s something that you want to sign up for.
Rob: I like the way you’re thinking about it. I think these unknowns, like if you’ve never received a cease and desist, or you’ve never been sued, it’s super scary. You don’t you don’t know what that entails. I got sued by a patent troll about probably five years ago, but it was literally a blanket. It was about a troll. Someone who sued 100 people at once for having online invoicing software is what it was. It was just this crazy, he sued everybody that does online invoicing because it was a ridiculous patent. I got to be honest, I was super scared the day I got the email.
Then I quickly realized I could talk to a lawyer and someone was just like, “Yeah, this just isn’t that big of a deal,” and we have these stigmas against things. Lawsuits can be a big deal. They can be expensive, but your point of it’s almost like try to demystify, or de-risk, or just get more familiar with what this might look like. Typically, if you were to launch something like this, you’re not going to get five lawsuits the next day from five suppliers. It’s probably going to be weeks, months, and then they’re going to grumble and they’re going to have to call you or send you an email, and then you might get a cease and desist.
It would be a long process and maybe like you said, you set aside money to either have a lawyer, whether it’s to go to court or whether it’s to try to negotiate settlements. There’s a lot of options here and I think this comes back to expertise. As a nonlawyer, you should know how to ask the right questions, but you’re not the expert in how they should all go down. There’s folks who can give you advice if you find a good counsel.
I think the biggest question for me is, is this a big idea? Is this a seven-figure idea or an eight-figure idea that’s worth going through all of this for it or is it something that’s going to generate $5000 a month? In which case personally, it doesn’t sound like it would really be worth it. I mean maybe I would launch it and if it’s doing a couple thousand dollars a month or $5000 a month and you start getting cease and desist, well maybe that’s the point where you’re like, “Okay, I guess I’m going to pull the plug on this,” maybe that’s the best decision because it just doesn’t make enough money or maybe that is your defense of, it doesn’t make enough money. Go ahead and sue it. It’s not worth anything.
I think that’s really the question I’d be asking, not is it worth it, but is the idea big enough? Do you think the company can be big enough to make it worth fighting for?
Laura: I think it’s also worth a quick Google. I think he said he’s in Austria. He didn’t say if the business would also be dealing with Austrian suppliers. America is very litigious, most of Europe is not, you can’t just file random lawsuits about anything the way you can in America. If this were my business, you can figure out a pretty good amount just from educating yourself on the internet. Would the suppliers have any case? If they wouldn’t, that’s also just going to make the whole thing much more unlikely.
Rob: Yeah. Thanks for the question Thomas. I hope that was helpful. Depending on what happens, I’d love to hear an update on how you move forward.
Our next question is about pricing and whether to try to go for more customers with lower pricing or vice-versa. It’s from Winslow Moore and he says, “I’m a huge fan of your podcast and all you guys do. I found you guys at the end of last year when I was going through a bit of what I’m doing in my life and I’ve learned so much. I’ve wanted to reach out for a while, but haven’t because my current product under development isn’t SaaS, it’s just an app. A recipe book app to be precise.” I’m assuming it’s a mobile app.
“Development is nearing completion and I’m wanting to make a landing page to gain some interest. Before I do, I’d like to figure out some pricing scheme options and I’m hoping you can give some advice. Here are my main ideas. Number one, make the app free with ads,” he listed pros and cons, “Number two, make the app freemium with paying to unlock X recipe storage. The third is to make it cheap like $1, and the fourth is to make it a subscription like $1 a month or $5 a quarter. Again, I know this isn’t something you normally answer questions on, but if you feel adventurous, it would be appreciated.” What do you think?
Laura: I feel like I have some news that he’s not going to like to hear. I’m trying to let him down gently. This is one of the most crowded spaces you could possibly enter. There’s so much recipe content on the internet. So much of it is excellent and so much of it is free. None of the models that you outlined gave a compelling reason for someone to pay. You just said like a recipe app, maybe they’ll pay $1, maybe they’ll pay a subscription. I think you just need to rethink your starting assumptions or maybe there’s something you didn’t tell us, because there are reasons that people could pay for some recipe or cooking service.
I know a SaaS business that does meal plans for people. You put in all of your detailed dietary requirements and they spit out really specific meal plans, shopping lists, and there’s a whole app and a subscription around it. They have a business doing that because they’re meeting a specific need in the market that is related to recipes. There are businesses related to recipes and food, but just recipe app, I don’t think is really one of them.
Rob: I like the way you’re thinking about it because if you were to niche way down and, like you said, build custom meal plans, that’s something you can’t get for free, or it’s really hard to do at a good quality or vegan meal plans or Paleo meal plans. There are ways to think about it. I’m guessing everything I just named is already done to death. Even if he has, let’s say, he builds not just content and he builds an app that actually has functionality that people are interested in. A $1 a month, you need a thousand customers to make, and doesn’t Apple 30%, I think, so you’re really making $0.70 on that. You need a thousand customers to make $700 a month. That is a tough business.
Even with apps store distribution, you would really need to know apps store SEO. I mean you to rank in the top whatever, top five, four or whatever term that has enough volume to do it. This would be a pure search play in my opinion, because at $1 a month, even for lifetime value is $10, $20, $30, $40, you can’t run ads, you can’t hire sales, none of the standard models work. It’s purely a spray-and-pray and it’s, “I need to have enough free traffic,” so you need virality, or you need organic discovery through a search engine. Really, none of these pricing models are easy.
Laura: I’m going to go out and say they’re not viable. I think it’s polite to say that they’re not easy, but they’re really only viable if you have some way of getting that mass, which is possible. Maybe you’re like, “I’m going to raise a ton of funding and I’m going to be the number one recipe destination on the internet.” Someone has to be that. That’s not an impossible thing, but it’s going to take a ton of money to get there or you’re like. “I am the number one SEO ninja on the app store. No one can do apps store SEO better than me and I also probably have a bunch of money or some money to put behind it, so that’s how I’m going to get there.”
I just think you need to really look at how does mass work out to make this a viable business and what’s my strategy beyond just like, “Well, I hope a lot of people find my recipe app in the app store.”
Rob: And even if you’re building a SaaS app, let’s say, just in general, what’s the general rule? The lower your price point, the higher your churn, the harder it is to grow. This is not in every case, but it’s in 95% of cases. That’s why so many SaaS apps, the playbook is, you go out, you underprice yourself because you just don’t know any better or you don’t value what your built and over time everybody goes up market. It’s a very common playbook.
The reason is if those customers as you go up market tend to churn less, they tend to be more sophisticated, less support, there’s just a bunch of plusses with it, but you often can’t start out at those high price points because your product is not worth it at that point. It doesn’t provide the value and it takes you time to get product market fit with that audience. Then move it up market.
Laura: That’s all B2B stuff, also, everything you’re saying. We’re talking B2C, so I don’t think there’s really even a big market to go to for an app. There’s more expensive consumer services but, I’ve never heard of an expensive app. Maybe it’s a thing, people have done everything. Now I’m curious. Is there an app for consumers that cost $800 a month and is a lot more high-end looking than the other app? I don’t know.
Rob: I’ve never heard of one. I bought a $25 app the other day. It wasn’t a subscription, but it’s a teleprompter, that goes on my iPhone, that listens to my voice. It’s the only one that turns the microphone on and as I speak, it teleprompts automatically. To me that was worth $25, but really, am I a consumer? Because I bought it for business purposes. I bought it for these videos I’m recording. I’ve also bought $20 app a couple of years ago. It was before where you can pair an iPad as a second monitor to your Mac. It was software that did that. Again, there was only one or two of them and I did the best one. It wasn’t a subscription and I would’ve been less likely to pay a subscription for either those to be honest.
Laura: Yeah, those are really tough models, too, where they’re only making $20 one time.
Rob: Right. Thanks for your question, Winston. Sorry for the bad news, but I hope that was helpful. I’m curious, if you love recipes or somehow love that space, then dig in and figure out that maybe it’s not a $1 app, maybe it is a website that you acquire from someone to get a traffic source and you build just a web app into there. I mean, there are other options in the food and recipe space, that I’m sure there’s opportunity and I would say don’t get locked into trying to pick up pennies really is what $1 a month it’s like.
Laura: I didn’t actually say the name of the one I was talking about. It’s realplans.com if you want to check that out.
Rob: Awesome. Our next question is about recurring payments and it’s from Gavin Esplan. He says, “I’m in the planning stage of a small daycare management app. One of the main features will be setting up recurring payments between the daycare providers and their customers, who are parents or guardians of the kids. I also need recurring payments for the providers to pay me. I’m a professional web developer, but I’m not sure which system, like Stripe, would be best to accomplish this. I’m leaning toward Stripe, but it’s probably because it’s the one I’ve heard of most. I’m not sure what other good options would be out there. Do you guys have any recommendations?” What do you think, Laura?
Laura: Well, there’s an easy part and a hard part to his question. As far as him taking payments from customer, I say yeah, Stripe is great. We use it. We like it. Go for it. The other part where your customers take payments gets a lot trickier because your customers need to have something like Stripe or PayPal, but they need their own individual accounts and then are you helping then set that up? Then there’s your customer stuff that has to be complied with or do they already have their accounts? I just want to point out there’s a trickier question within the question.
Rob: Stripe Connect is for marketplaces. I think it’s for this instance. I’ve never used it, but I know folks who’ve set up market places and use it. This isn’t technically a market place, so that’s where I’m not sure if the terms of service would apply to him having 20 or 30 day cares using it and taking payments or if the Know Your Customer stuff would pass through to him. Do you have any interaction with Stripe Connect?
Laura: No, I’ve researched it a little bit for a different project and the hurdle that we came up with is that this similar model, they still have to have their own Stripe account which Stripe helps facilitate. We thought that might be confusing and challenging for this customer to set that up which I imagine daycare centers might have the same or they might have their own payment system already that they’re using.
Rob: Yes I would head to Stripe Connect and at least research it because that’s the one that I’ve heard the most about when you’re in this type of situation. Again, not saying it’s going to work but I think that’s where it starts. In my opinion, Stripe is number one in this game. They kill it. They make it easy and if you can make it work with them, great. To me, by my rules, if for some reason I couldn’t you Stripe, I would look at Braintree. I think they’re the number two in our space for doing this stuff.
Obviously, it doesn’t sound like he’s funded. I’m guessing he’s bootstrapped listening to this podcast. If you look at Gumroad, as an example, became a processor themselves. That is a possibility. There’s a lot of red tape and regulation. I’m guessing, one of the reasons I heard Gumroad raised their money was that they had to go to banks basically and have a bank say, “Okay, we’re cool with you being a processor.” If you’re some bootstrap person working at your garage, that’s unlikely to happen. It’s probably not an option for you now, but in the longer term hopefully, you don’t have to do that, but that would be a parachute option, I think. Thanks for the question, Gavin, hope that was helpful.
Our next question is from Ash Yadav, and he’s looking for thoughts on joining an early stage startup just after graduation. He said, “I just cover the podcast, I’m going through one episode at a time. They really informative and enjoyable. I recently graduated with a degree in EECS,” Electrical Engineering and Computer Science, I think, “then joined an early stage Internet of Things startup. I want to ask what are some tools, courses, workshops, et cetera, I can look into to get more comfortable with the industry lingo.
As I recently graduated, working in a two person team right now, there are times when I have to talk to clients or talk to people who are much more experienced than me and sometimes I feel left out. I don’t have industry project management experience, an MBA, or the entrepreneurial experience to be fluent in business lingo. For example, this might sound silly, but someone recently talked to me about beta sites and I had no clue what beta sites were. Luckily, I was able to figure it out while we chatted in made it out alive, but I fear I’ll be in a similar situation again.”
You almost certainly will. I remember my first job out of college and I didn’t understand anything. Thanks that’s a great question, Ash. Interested in your thoughts, Laura.
Laura: I think the first thing, Ash, is that someone asking questions is a huge sign of intelligence, not the opposite. Everyone knows that you’re young, everyone knows that you just graduated from college. When you ask those questions like, “What’s a beta site?” instead of pretending that you know and then maybe being way off base, it’s actually going to make you look much smarter, eager to learn, and capable than just pretending that you know stuff. Hopefully, most of the people around you feel the same way that I do. I don’t think you should be shy about asking questions. Even if it’s something that you feel is really basic, that you feel a bit embarrassed about.
We all we’re born knowing nothing. No one knew the term Internet of Things until the first time they heard it and then someone explain it to them. No one is born knowing any of those stuff. I think people should do this anytime in their career. We were talking about this earlier in the podcast about learning and asking questions, asking more questions. For me, the answer is less about courses and more of just having the attitude and the mindset that asking questions is a wonderful thing and that’s how you learn.
Rob: Yeah, when I graduate from college and had my first job, I thought I needed to know everything. I felt weird about asking questions and I thought it was a sign of weakness. I pretty quickly learned what fixed it for me is I worked with this one guy who is really smart and he was senior and he knew bunch stuff. In meetings, someone would say a concept and I remember being like, “Oh, I know what that is,” and he would say, “I don’t know what that is. Can you define out for the group?” and I was like, “Whoa.” Everybody respected him.
That showed me that it was okay to ask a question like that. It was such a good model for me and I think the thing to keep in mind is you’re going to ask a lot of questions up front, but it’s not going to be like that forever, because you’re just going to learn enough. First, you’re going to learn 20% and then 60% and then you’re going to get to the point where you’re 80 or 90% fluent in all the lingo. That may take three months, it may take six months, but at a certain point, you’re not going to ask as many questions.
You still want to ask questions, but you’re going to be seen as more of this mid-level or senior and you’ll get to the point where you don’t have to do it all the time. For me, if I was trying to learn about a new space, I don’t know much about IoT (Internet of Things), just what I’ve heard on Tech podcast, so if I got a job at one, I would probably be in a similar boat. I would dive deep in the IoT podcasts and some IoT audio books. For me, I do a lot of audio just because that’s my thing. For you, maybe it’s Kindle or maybe it’s paper or whatever I would use Google a lot. I will try to get the lingo from the podcast or the books in advance and then every time I heard something I didn’t understand I would Google it. You’ll be shocked, there’s only so many terms in any space.
In SaaS, it’s an app and there’s MRR and there’s LTV and it sounds like there is infinite, but if you listen to the show for probably 10 or 20 episodes, you’re going to hear 90% of the terms that we all use. If you’ve defined of those and committed them to memory, that’s great training for trying to get up to speed faster.
Laura: Yeah, I love that advice. I was thinking just the other day I actually Googled the term “test case.” It came up in my company flat, they’re talking about test cases and I was like, “You know, I’m assuming I know what that means, based on some context, but I’m actually not sure that I know what a test case is. I just Googled it and I read about it and I figured it out, right in front of a nontechnical founder thing.” This is a skill that you want to have throughout your career and like Rob said, luckily, it will get certainly easier and you’ll have to do less Googling as time goes on.
It’s something to embrace to make sure that you’re not making assumptions, make sure that you are on the same page which is why it can be good to ask things like, “Okay, this is this is what I mean when I say test case, is that what you mean,” because those types of miscommunications come up all the time.
Rob: That’s a really good point. Probably once a week, I Google an acronym. Oftentimes, it’s something someone posts on Twitter and it’s like a colloquialism that I just don’t know. I mean maybe a year ago it was TBH and I used TBH the other day. I was talking to my 13-year-old and in conversation out loud, I was like, “So TBH, blah, blah, blah.” He’s like, “What does that mean?” and I was like, “To be honest.” He’s like, “Oh my, you’re such a nerd.” But I find myself Googling this on what does this mean and then there’s like seven different definitions and you have to take it from context. Don’t feel like you’re in over your head, Ash. I think we all are. Just because someone has been doing this for a few years doesn’t mean that they know everything about it. Thanks for the question. I think it’s a good one.
Wrapping this up for the day, our final question is from Zee and it’s about managing subscriptions. He says, “Hello. Big fan. What recommendations do you have to manage subscriptions that come both via credit card and check? As the business is growing, I want to make sure I’m not missing out on things as people renew their subscriptions. For example, we make a credit card payments through Braintree.” I think it means they accept credit card payments through Braintree, but they also have people that pay via check annually and they handle stuff through PayPal.
To set the context, when I first read this, I thought he was saying, “We have a bunch of SaaS subscriptions, how do we keep track of those?” But he’s actually saying they accept payments in a bunch of different ways, some of which are annual. He says, “We then use QuickBooks for all the accounting. We want to be sure we don’t miss out on annual fees.” Laura, have you had to deal with this?
Laura: No, I haven’t.
Rob: Is it all credit card with EDGAR?
Laura: Yeah. I mean, we would just say, “No, thank you.” if someone wanted to buy with a check, but I know that in some industries, you can’t do that.
Rob: Yeah we did this with Drip. Let me think. After we get acquired by Leadpages, we were using Stripe, they were using Braintree. At a certain point, we started accepting PayPal and they were doing these larger annual contract values. You get you get a 12-month subscription that is $20,000 and really that’s an invoice check situation. Frankly, you don’t want to pay the $600 processing fee, the 3%, but also the companies, bigger companies as you said that’s the way it works
The way we did it, like the very first one, is it literally went into an Excel spreadsheet or maybe it was a Google Docs that we all had access to and we’re like, Okay, note to self, calendar reminder,” and it goes into a Google Doc. In the next month, we need to build some type of system. Then we just went into our existing billing code, and we tweak some things to say, “Oh, this is a check and so and so needs to be reminded.” It sends off an email to this AR (accounts receivable) at this certain thing. We hacked it together. That took one day or two days of development work, but in the moment we were able to accept the check.
We knew there was a calendar reminder in case everything went haywire. We went back and it was like this just in time MVP implementation of something. I’ve been gone from Drip for two years now. I’m guessing by now, hopefully they built even a better system. I think there are a bunch of ways to do this and that they’re trying to build a gold-plated version from V1 is not necessarily the best way to do it. If you only have one or two customers paying you that way, you just don’t need that much infrastructure.
Laura: Yeah, I don’t have anything on this one.
Rob: All right. Well Laura, thanks again for coming back on the show. It’s so good to chat with you. Folks who want to keep up with you, you are @lkr on Twitter, that’s a great three-letter Twitter handle, I’m so jealous. If folks want to know what you’re up to with Edgar, they can head to meetedgar.com. Anything else you’d like folks to check out?
Laura: I would just like to say that people used to be a lot more impressed by my Twitter handle, I feel like you can tell that Twitter’s on its way out because I used to get a much bigger reaction. You threw in a little comment which was very polite of you, but I missed out on having a cool Instagram handle. My Instagram is @laurakroeder, I can’t even get @lauraroeder, I had to throw my middle initial in there. I’m just like feeling a little old that I missed the Instagram thing and no one cares about my Twitter handle anymore. That’s my closing comment for the show.
Rob: That’s amazing. Thank you so much. I guess I should go register an Instagram handle, is what you’re saying. That’s how old I am.
Laura: Yeah. Get on that.
Rob: Thanks again, Laura. I hope you enjoyed today’s episode. Next week on the show, Mr. Brian Castle from Bootstrapped Web and Process Kit is coming on to talk about just the brutal year he had in 2016 and 2017, overcoming a 40% decline in MRR, and we walk through his trials and tribulations, dig into frankly some struggles, some victories and failures, and it’s a good interview. Also I hope you’ve been checking out TinySeed Tales on Thursday mornings. That season wraps up here in the next week or so.
I would love to hear your feedback or input on that. You can email me directly questions@startupsfortherestofus.com, you can Twitter DM me, or if you have great things to say, obviously, just go into Twitter and let me know. I appreciate it. Should we do it again? I’ve started working on season two doing some interviews, but if you like it, if you will listen, if it’s a good fit for you, please let me know. If it’s not, that’s cool, too.
It was definitely an experiment. As I’ve said when we announced that this is by far the most time and money I’ve ever invested into an audio project. It’s TinySeed tales, because TinySeed was able to make that happen. If it’s worth it and it’s providing value, then we’ll keep doing it. If not, we always have more good ideas we can implement, so I can obviously but my focus elsewhere.
You heard a bunch of questions answered today. If you have a question for the show, you can leave us a voicemail at 888-801-9690 or you can record an MP3 and WAV, an Ogg Vorbis, an AIFF, send us a Dropbox or a GDrive link to questions@startupsfortherestofus.com.
I tweeted something out a couple weeks ago and I said if I were starting a company today, these are the tools that I would use. I just listed it, it was a five-minute tweet tops. I just listed a bunch of things and look through them, made comments and spit it out. It’s like one of the most popular tweets I’ve ever done. These things are both fine and infuriating, where you spend 20 minutes trying to craft something and like six people care about it and then you do something like this that is just off-the-cuff-flippant and it gets all these traction. I think it has 150 retweets or something at this point.
The funny thing is just the opinions about Dropbox versus GDrive versus Box. It was like, “Why not that? “ It’s personal preference. There’s feature parity. These things are not so different from one another, it’s really a personal preference, unless there’s some individual, sneaky feature somewhere that somebody has that you really need. For the most part, these things are all equivalent, but I think a lot of preference comes into it as well as pricing and stuff.
Anyway, I digress. Our theme music on the show is an excerpt from a song called We’re Outta Control by a band named MoOt, it’s used under Creative Commons. You can subscribe to this podcast, and you should, by searching for startups in any pod catcher you have. To be honest, new subscribers is a big ranking factor in iTunes. If you’re listening to this and you’re not subscribed, even if you just listen to it on the web or you somehow download it through an FTP script that you coded up years ago, it would be super cool if you would open iTunes and just hit the subscribe button because it does help us rank higher. It helps us get more reach and it helps us reach more people.
If you haven’t been to startupsfortherestofus.com in a while, we have full transcripts of all of our episodes within a week or two after they air, we […] the audio live is that, number one thing in transcripts just take time to get done. We get a decent number of helpful comments on the site too, so if you have a comment on an episode, you can obviously tweet to me @robwalling or you can come to the website itself startupsfortherestofus.com. Check out the fancy new design we put in place a couple of months ago. Leave a comment, drop us an email through the contact form. Thank you so much for listening today. I’ll see you next time.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in building, launching, and growing software products. Whether you’ve built your fifth startup, or you’re thinking about your first. I’m Rob and today with Laura Roeder, we’re going to share our experiences to help you avoid the mistakes we’ve made.
Welcome back to the show. This is the show where we focus on indie-funded and self-funded startups, folks who want to do interesting things, are ambitious, and want to build themselves a better life, but also want to build companies that grow. Starting a company is hard. Having this community of people who are going through the same thing that you are, having that sense of belonging, knowing (a) that it’s possible but (b) that there’s a place where we can all hang out and just get each other, and where you don’t go in and explain what you do and everyone looks at you funny, there’s a tremendous amount of value to that. That was a big reason why we started this podcast almost 10 years ago, back in 2010.
Startups for the Rest of Us has many episode formats. Sometimes, I just have conversations with folks, do interviews. Now and again, we do founder hot seats. But one of my favorite episode formats is listener questions. We’ve answered a tremendous number of listener questions over the years. We’ve had a lot of episodes on this. It’s just the gift that keeps on giving, because it’s a time for listeners to participate, and to hear what other folks are going through, and to hear the thought process of a couple of founders typically who’ve been there and have done some things, and it’s not that we’ve been through everything that they asked about, but you can at least hear that thought process of how we would approach it. And over the years, we’ve always receive positive feedback about this episode format.
Before we dive in, I want to let you know that at MicroConf, we are making an announcement next week. It is by far the biggest announcement that we will have made since we launched the event nine years ago. It is coincidental that the 20th MicroConf is going to be on April 20th of 2020, so the 20th during the 20s or whatever, but that’s not the announcement. I’ve obviously already mentioned that MicroConf Growth and Starter are in Minneapolis in late April of 2020, but if you’re not on the MicroConf list, I encourage you to go to microconf.com, enter your email, and we’ll loop you in as soon as we have the info. It really is pretty spectacular and you probably know me well enough by now to know that I’m not trying to inflate the importance of it.
Today I answer questions with founder Laura Roeder. If you don’t remember Laura, I interviewed her in episode 451. She runs MeetEdgar which is a social media management SaaS app and in 451, we talked about stellar growth, platform risk, layoffs, and powering through roadblocks. It was a really, really good interview and Laura knows her stuff. I have a ton of respect for her. Honestly, I always love getting on the mic and just chatting with her. Super fun. I had a fun interview at 451 and I had a great time talking to her today and hearing her insights and her take on some of your questions. Without further ado, let’s dive in.
Laura Roeder, thank you so much for coming back on the show.
Laura: I love the Startups for the Rest of Us. I cannot stay away.
Rob: Awesome. I am so stoked to have you on to answer some questions. You’ve actually submitted questions in the past, so it’s cool to have you on the other side of the ear bud, so to speak. We have some good questions today. As always, voicemails go to the top of the stack. I curated some questions that I think you should have some unique insight on. Let’s just roll right into the first voicemail which is about being a nontechnical founder and how to make good technical decisions.
Mack: Hi Rob, this is Mack from the UK. I’ve got a question, I’m looking for advice for a nontechnical founder. How can I avoid getting called out by poor decisions from the technical team or just not knowing about the consequences of some of the technical revisions that gets made to create their software? Any advice would be great. Thanks.
Rob: This is an interesting question, Laura. As a nontechnical SaaS founder yourself, I’m curious what your initial take is on it.
Laura: I would first like to take umbrage with the phrase non technical founder. I mean obviously, I know what he’s referring to. Nontechnical founder means that you are not a developer and I’m not a developer. But I always think it’s a little funny because I’m like, “I run a software company.” It doesn’t seem quite right to call me nontechnical, but this is a very real problem for all of us who are running software companies and are not developers because obviously, you are not intimately familiar with a really core part of what your company does.
I guess the first blanket advice for this is that, you really need to have a person in that CTO role who you trust 100%. I think this goes for any leadership role in your business, but it’s especially important in this case, because you’re not going to be able to provide so much oversight. Anyone can look at a customer service email and say, “Okay, that was not how we want to answer,” but you really can’t read code if you’re not a coder. I think that’s just step one is, make sure that you’re willing to put 100% faith in the person in that dev leadership role.
Rob: That’s what I was going to say as well. Even if you aren’t at the place where you can have a CTO. The fact that he used the phrase, “How do I not get called out,” does your team not trust you or do you feel like you have to make decisions that are out of your league? That’s an interesting turn of phrase. It implies that the team calls him out for making technical decisions, but are you making decisions you shouldn’t be since you’re not a developer? I would dig into that. I think having a CTO, or the senior dev, or somebody that really is making decisions in the best interest of the company, is a huge deal.
Laura: I think it also brings up that you shouldn’t try to pretend to be anything you’re not. If people are calling you out, does it mean that you’re pretending you know things that you don’t know or maybe making decisions that would be better for other people in the company to make? I think it’s just important to be unafraid to ask really stupid, really basic questions until you understand some of these core concepts related to writing code.
You can decide how much you feel you need to know. For me, I feel like I’ve been through this process recently big time with our finance team, understanding all the financials of the business. I just asked our finance person over and over and over again. Sometimes I’ll literally read a book. I read a finance book recently. I just wrote down questions for her in the margins and then I’m like, “I want you to read this book too and we’re going to have a call together. I’m going to ask you all of my questions about the book.”
I think that’s a great thing to do for technical questions as well. You need to be open with your team about what you know and don’t know and I think it’s important for you to work with the type of person that is very patient and very understanding in explaining things to you. Within reason, you don’t need to understand every detail. There are a lot of concepts that are probably unfamiliar to you that you do need to understand at least the basics of how “the sausage gets made.”
Rob: I like your example because as a founder, you don’t need to know every single thing about bookkeeping, accounting, and finance, but you should probably know enough to be able to ask the right questions. I feel the same way running a software company. I don’t think you should be able to code everything in a SaaS app, but maybe it’s worth going through a code where the code camps or maybe it’s worth on the side taking you to make classes.
It’s easier than ever to learn and have just a really basic level of coding knowledge such that, yes, you’ll never be able to make architectural decisions, you won’t make the senior level things, but you can at least relate to, “Oh, this is what code is. This is how it works. This is what it’s like to write a bug,” and spend four hours and not realizing that it’s the semicolon. That’s a lot of what it is. I think having that cursory knowledge and being able to then ask the right questions is what you’re touching on and that’s what I like about it.
Laura: Yes.
Rob: You don’t like the term non technical founder. If you’re a developer and you’re writing the code, then you’re like a developer founder, is it a non-developer founder, is there a term that you prefer rather than nontechnical?
Laura: I guess maybe just say founder and then when you’re explaining later your side of the business, because you also don’t call like you just a developer founder, but I’ve never heard anyone actually say that.
Rob: I was just making up a new term to try not to say technical and non, because typically it’s technical and nontechnical are the two terms people use. I was just trying to think of a different way to say that because you’re right, running a SaaS app, yes, you may not write code but you are more technical than most people we know just because by nature of being in it. It is a misnomer.
But if someone wanted to differentiate between Derek and I when we started Drip, he was literally in a code every day and I was literally not in the code every day. I don’t know how else you differentiate that or what phrase we could come up. I don’t feel nontechnical founder as pejorative. I don’t feel like it’s a negative. Does it have a stigma? Do you feel like it does?
Laura: I actually think it does have a little bit of a stigma because I’ve heard developers use it in that way before. We’re not as cool of a founder if you’re not technical.
Rob: No, I think that’s lame.
Laura: That is lame.
Rob: That sucks. I don’t use it that way but if it gets that connotation then yeah, we need to figure out another phrase for it. Cool. Thanks for the question. I hope that was helpful.
We’re going to bounce into our second question which is also a voicemail. It’s about a founder who’s launching a second SaaS app. They’re nearing launch and he’s concerned about potential lawsuits.
Thomas: Hello, this is Thomas from Austria. I listened to the show for a long time and wanted to tell you that it’s really great content. I love following along your journeys and also hear stories of other people in similar situations.
To my question, I founded a SaaS company three years ago. It provides an invoicing solution for small independent car repair shops. It’s doing pretty okay. I can live off it and it’s slowly growing, so I’m happy with that. Half a year ago, I founded another company with a partner and we are building a software to compare prices for car parts.
Now that we want to go to market with the software to the suppliers, the […] of us are trying to fight us pretty hard. I think we have to go to court several times. There is not really a legal problem with fetching the prices because we do it locally on the customer’s computer and they’re not going through our systems, but still they can make our lives very miserable if they pulled us to court all the time.
Now, I’m not really sure how to go along. My partner really wants to push through that and he’s sure that it will work out. I’m also pretty sure that it will work out in the end, but I’m not sure if I am the right person to spend my next one, two, three years fighting big companies. I wanted to hear your thoughts on that and maybe what you would do in this situation. Thank you.
Rob: Thomas also wrote in and he said that he wanted to clarify that he hasn’t spent any money on the price comparison project, and have a small private investor, but in essence, he has only invested his time so far. I should preface this with we’re not legal experts, we don’t give legal advice, obviously, but it’s more of, “Hey, if I were in your shoes, how would I think through this?” This is an interesting situation. I’m not sure it’s one I’ve heard before. What do you think about this Laura?
Laura: The way I think of it is just, there are pros and cons with every business, every business model, and it’s really smart to go into a business with your eyes wide open about those pros and cons. From what I understood from his message, this is a likely threat, not a certain threat. He suspects that there is going to be lawsuits. He has a good reason to believe that’s going to happen or it could not happen at all. It makes me think of with my business MeetEdgar, we are entirely dependent on the social networks. You can listen to my interview on this podcast on Startups for the Rest of Us. I talked about a big problem we had because of that, but all businesses have upsides and downsides.
For me, I know that I’m in a space where I’m totally dependent on these partners that I have no relationship with and that can do whatever they want. That’s a big downside to my business. The big upside is that I’m building on Facebook, Twitter, and Instagram. Obviously, very popular tools, so lots of users. I think that he just needs to know this going in and maybe it’s something that you budget for.
It’s good not to be scared of it. It’s good to go in and say, “Okay, I know that this will likely happen. Maybe we have some money set aside for it. Maybe we’ve already figured out who our lawyer is so they can jump right in and we won’t be surprised,” spending a few months just trying to find a good counsel.
To me it doesn’t sound like a deal breaker, because it might not even happen at all. Like you said, you have to know that that is a battle that you could be fighting and you have to know that that’s something that you want to sign up for.
Rob: I like the way you’re thinking about it. I think these unknowns, like if you’ve never received a cease and desist, or you’ve never been sued, it’s super scary. You don’t you don’t know what that entails. I got sued by a patent troll about probably five years ago, but it was literally a blanket. It was about a troll. Someone who sued 100 people at once for having online invoicing software is what it was. It was just this crazy, he sued everybody that does online invoicing because it was a ridiculous patent. I got to be honest, I was super scared the day I got the email.
Then I quickly realized I could talk to a lawyer and someone was just like, “Yeah, this just isn’t that big of a deal,” and we have these stigmas against things. Lawsuits can be a big deal. They can be expensive, but your point of it’s almost like try to demystify, or de-risk, or just get more familiar with what this might look like. Typically, if you were to launch something like this, you’re not going to get five lawsuits the next day from five suppliers. It’s probably going to be weeks, months, and then they’re going to grumble and they’re going to have to call you or send you an email, and then you might get a cease and desist.
It would be a long process and maybe like you said, you set aside money to either have a lawyer, whether it’s to go to court or whether it’s to try to negotiate settlements. There’s a lot of options here and I think this comes back to expertise. As a nonlawyer, you should know how to ask the right questions, but you’re not the expert in how they should all go down. There’s folks who can give you advice if you find a good counsel.
I think the biggest question for me is, is this a big idea? Is this a seven-figure idea or an eight-figure idea that’s worth going through all of this for it or is it something that’s going to generate $5000 a month? In which case personally, it doesn’t sound like it would really be worth it. I mean maybe I would launch it and if it’s doing a couple thousand dollars a month or $5000 a month and you start getting cease and desist, well maybe that’s the point where you’re like, “Okay, I guess I’m going to pull the plug on this,” maybe that’s the best decision because it just doesn’t make enough money or maybe that is your defense of, it doesn’t make enough money. Go ahead and sue it. It’s not worth anything.
I think that’s really the question I’d be asking, not is it worth it, but is the idea big enough? Do you think the company can be big enough to make it worth fighting for?
Laura: I think it’s also worth a quick Google. I think he said he’s in Austria. He didn’t say if the business would also be dealing with Austrian suppliers. America is very litigious, most of Europe is not, you can’t just file random lawsuits about anything the way you can in America. If this were my business, you can figure out a pretty good amount just from educating yourself on the internet. Would the suppliers have any case? If they wouldn’t, that’s also just going to make the whole thing much more unlikely.
Rob: Yeah. Thanks for the question Thomas. I hope that was helpful. Depending on what happens, I’d love to hear an update on how you move forward.
Our next question is about pricing and whether to try to go for more customers with lower pricing or vice-versa. It’s from Winslow Moore and he says, “I’m a huge fan of your podcast and all you guys do. I found you guys at the end of last year when I was going through a bit of what I’m doing in my life and I’ve learned so much. I’ve wanted to reach out for a while, but haven’t because my current product under development isn’t SaaS, it’s just an app. A recipe book app to be precise.” I’m assuming it’s a mobile app.
“Development is nearing completion and I’m wanting to make a landing page to gain some interest. Before I do, I’d like to figure out some pricing scheme options and I’m hoping you can give some advice. Here are my main ideas. Number one, make the app free with ads,” he listed pros and cons, “Number two, make the app freemium with paying to unlock X recipe storage. The third is to make it cheap like $1, and the fourth is to make it a subscription like $1 a month or $5 a quarter. Again, I know this isn’t something you normally answer questions on, but if you feel adventurous, it would be appreciated.” What do you think?
Laura: I feel like I have some news that he’s not going to like to hear. I’m trying to let him down gently. This is one of the most crowded spaces you could possibly enter. There’s so much recipe content on the internet. So much of it is excellent and so much of it is free. None of the models that you outlined gave a compelling reason for someone to pay. You just said like a recipe app, maybe they’ll pay $1, maybe they’ll pay a subscription. I think you just need to rethink your starting assumptions or maybe there’s something you didn’t tell us, because there are reasons that people could pay for some recipe or cooking service.
I know a SaaS business that does meal plans for people. You put in all of your detailed dietary requirements and they spit out really specific meal plans, shopping lists, and there’s a whole app and a subscription around it. They have a business doing that because they’re meeting a specific need in the market that is related to recipes. There are businesses related to recipes and food, but just recipe app, I don’t think is really one of them.
Rob: I like the way you’re thinking about it because if you were to niche way down and, like you said, build custom meal plans, that’s something you can’t get for free, or it’s really hard to do at a good quality or vegan meal plans or Paleo meal plans. There are ways to think about it. I’m guessing everything I just named is already done to death. Even if he has, let’s say, he builds not just content and he builds an app that actually has functionality that people are interested in. A $1 a month, you need a thousand customers to make, and doesn’t Apple 30%, I think, so you’re really making $0.70 on that. You need a thousand customers to make $700 a month. That is a tough business.
Even with apps store distribution, you would really need to know apps store SEO. I mean you to rank in the top whatever, top five, four or whatever term that has enough volume to do it. This would be a pure search play in my opinion, because at $1 a month, even for lifetime value is $10, $20, $30, $40, you can’t run ads, you can’t hire sales, none of the standard models work. It’s purely a spray-and-pray and it’s, “I need to have enough free traffic,” so you need virality, or you need organic discovery through a search engine. Really, none of these pricing models are easy.
Laura: I’m going to go out and say they’re not viable. I think it’s polite to say that they’re not easy, but they’re really only viable if you have some way of getting that mass, which is possible. Maybe you’re like, “I’m going to raise a ton of funding and I’m going to be the number one recipe destination on the internet.” Someone has to be that. That’s not an impossible thing, but it’s going to take a ton of money to get there or you’re like. “I am the number one SEO ninja on the app store. No one can do apps store SEO better than me and I also probably have a bunch of money or some money to put behind it, so that’s how I’m going to get there.”
I just think you need to really look at how does mass work out to make this a viable business and what’s my strategy beyond just like, “Well, I hope a lot of people find my recipe app in the app store.”
Rob: And even if you’re building a SaaS app, let’s say, just in general, what’s the general rule? The lower your price point, the higher your churn, the harder it is to grow. This is not in every case, but it’s in 95% of cases. That’s why so many SaaS apps, the playbook is, you go out, you underprice yourself because you just don’t know any better or you don’t value what your built and over time everybody goes up market. It’s a very common playbook.
The reason is if those customers as you go up market tend to churn less, they tend to be more sophisticated, less support, there’s just a bunch of plusses with it, but you often can’t start out at those high price points because your product is not worth it at that point. It doesn’t provide the value and it takes you time to get product market fit with that audience. Then move it up market.
Laura: That’s all B2B stuff, also, everything you’re saying. We’re talking B2C, so I don’t think there’s really even a big market to go to for an app. There’s more expensive consumer services but, I’ve never heard of an expensive app. Maybe it’s a thing, people have done everything. Now I’m curious. Is there an app for consumers that cost $800 a month and is a lot more high-end looking than the other app? I don’t know.
Rob: I’ve never heard of one. I bought a $25 app the other day. It wasn’t a subscription, but it’s a teleprompter, that goes on my iPhone, that listens to my voice. It’s the only one that turns the microphone on and as I speak, it teleprompts automatically. To me that was worth $25, but really, am I a consumer? Because I bought it for business purposes. I bought it for these videos I’m recording. I’ve also bought $20 app a couple of years ago. It was before where you can pair an iPad as a second monitor to your Mac. It was software that did that. Again, there was only one or two of them and I did the best one. It wasn’t a subscription and I would’ve been less likely to pay a subscription for either those to be honest.
Laura: Yeah, those are really tough models, too, where they’re only making $20 one time.
Rob: Right. Thanks for your question, Winston. Sorry for the bad news, but I hope that was helpful. I’m curious, if you love recipes or somehow love that space, then dig in and figure out that maybe it’s not a $1 app, maybe it is a website that you acquire from someone to get a traffic source and you build just a web app into there. I mean, there are other options in the food and recipe space, that I’m sure there’s opportunity and I would say don’t get locked into trying to pick up pennies really is what $1 a month it’s like.
Laura: I didn’t actually say the name of the one I was talking about. It’s realplans.com if you want to check that out.
Rob: Awesome. Our next question is about recurring payments and it’s from Gavin Esplan. He says, “I’m in the planning stage of a small daycare management app. One of the main features will be setting up recurring payments between the daycare providers and their customers, who are parents or guardians of the kids. I also need recurring payments for the providers to pay me. I’m a professional web developer, but I’m not sure which system, like Stripe, would be best to accomplish this. I’m leaning toward Stripe, but it’s probably because it’s the one I’ve heard of most. I’m not sure what other good options would be out there. Do you guys have any recommendations?” What do you think, Laura?
Laura: Well, there’s an easy part and a hard part to his question. As far as him taking payments from customer, I say yeah, Stripe is great. We use it. We like it. Go for it. The other part where your customers take payments gets a lot trickier because your customers need to have something like Stripe or PayPal, but they need their own individual accounts and then are you helping then set that up? Then there’s your customer stuff that has to be complied with or do they already have their accounts? I just want to point out there’s a trickier question within the question.
Rob: Stripe Connect is for marketplaces. I think it’s for this instance. I’ve never used it, but I know folks who’ve set up market places and use it. This isn’t technically a market place, so that’s where I’m not sure if the terms of service would apply to him having 20 or 30 day cares using it and taking payments or if the Know Your Customer stuff would pass through to him. Do you have any interaction with Stripe Connect?
Laura: No, I’ve researched it a little bit for a different project and the hurdle that we came up with is that this similar model, they still have to have their own Stripe account which Stripe helps facilitate. We thought that might be confusing and challenging for this customer to set that up which I imagine daycare centers might have the same or they might have their own payment system already that they’re using.
Rob: Yes I would head to Stripe Connect and at least research it because that’s the one that I’ve heard the most about when you’re in this type of situation. Again, not saying it’s going to work but I think that’s where it starts. In my opinion, Stripe is number one in this game. They kill it. They make it easy and if you can make it work with them, great. To me, by my rules, if for some reason I couldn’t you Stripe, I would look at Braintree. I think they’re the number two in our space for doing this stuff.
Obviously, it doesn’t sound like he’s funded. I’m guessing he’s bootstrapped listening to this podcast. If you look at Gumroad, as an example, became a processor themselves. That is a possibility. There’s a lot of red tape and regulation. I’m guessing, one of the reasons I heard Gumroad raised their money was that they had to go to banks basically and have a bank say, “Okay, we’re cool with you being a processor.” If you’re some bootstrap person working at your garage, that’s unlikely to happen. It’s probably not an option for you now, but in the longer term hopefully, you don’t have to do that, but that would be a parachute option, I think. Thanks for the question, Gavin, hope that was helpful.
Our next question is from Ash Yadav, and he’s looking for thoughts on joining an early stage startup just after graduation. He said, “I just cover the podcast, I’m going through one episode at a time. They really informative and enjoyable. I recently graduated with a degree in EECS,” Electrical Engineering and Computer Science, I think, “then joined an early stage Internet of Things startup. I want to ask what are some tools, courses, workshops, et cetera, I can look into to get more comfortable with the industry lingo.
As I recently graduated, working in a two person team right now, there are times when I have to talk to clients or talk to people who are much more experienced than me and sometimes I feel left out. I don’t have industry project management experience, an MBA, or the entrepreneurial experience to be fluent in business lingo. For example, this might sound silly, but someone recently talked to me about beta sites and I had no clue what beta sites were. Luckily, I was able to figure it out while we chatted in made it out alive, but I fear I’ll be in a similar situation again.”
You almost certainly will. I remember my first job out of college and I didn’t understand anything. Thanks that’s a great question, Ash. Interested in your thoughts, Laura.
Laura: I think the first thing, Ash, is that someone asking questions is a huge sign of intelligence, not the opposite. Everyone knows that you’re young, everyone knows that you just graduated from college. When you ask those questions like, “What’s a beta site?” instead of pretending that you know and then maybe being way off base, it’s actually going to make you look much smarter, eager to learn, and capable than just pretending that you know stuff. Hopefully, most of the people around you feel the same way that I do. I don’t think you should be shy about asking questions. Even if it’s something that you feel is really basic, that you feel a bit embarrassed about.
We all we’re born knowing nothing. No one knew the term Internet of Things until the first time they heard it and then someone explain it to them. No one is born knowing any of those stuff. I think people should do this anytime in their career. We were talking about this earlier in the podcast about learning and asking questions, asking more questions. For me, the answer is less about courses and more of just having the attitude and the mindset that asking questions is a wonderful thing and that’s how you learn.
Rob: Yeah, when I graduate from college and had my first job, I thought I needed to know everything. I felt weird about asking questions and I thought it was a sign of weakness. I pretty quickly learned what fixed it for me is I worked with this one guy who is really smart and he was senior and he knew bunch stuff. In meetings, someone would say a concept and I remember being like, “Oh, I know what that is,” and he would say, “I don’t know what that is. Can you define out for the group?” and I was like, “Whoa.” Everybody respected him.
That showed me that it was okay to ask a question like that. It was such a good model for me and I think the thing to keep in mind is you’re going to ask a lot of questions up front, but it’s not going to be like that forever, because you’re just going to learn enough. First, you’re going to learn 20% and then 60% and then you’re going to get to the point where you’re 80 or 90% fluent in all the lingo. That may take three months, it may take six months, but at a certain point, you’re not going to ask as many questions.
You still want to ask questions, but you’re going to be seen as more of this mid-level or senior and you’ll get to the point where you don’t have to do it all the time. For me, if I was trying to learn about a new space, I don’t know much about IoT (Internet of Things), just what I’ve heard on Tech podcast, so if I got a job at one, I would probably be in a similar boat. I would dive deep in the IoT podcasts and some IoT audio books. For me, I do a lot of audio just because that’s my thing. For you, maybe it’s Kindle or maybe it’s paper or whatever I would use Google a lot. I will try to get the lingo from the podcast or the books in advance and then every time I heard something I didn’t understand I would Google it. You’ll be shocked, there’s only so many terms in any space.
In SaaS, it’s an app and there’s MRR and there’s LTV and it sounds like there is infinite, but if you listen to the show for probably 10 or 20 episodes, you’re going to hear 90% of the terms that we all use. If you’ve defined of those and committed them to memory, that’s great training for trying to get up to speed faster.
Laura: Yeah, I love that advice. I was thinking just the other day I actually Googled the term “test case.” It came up in my company flat, they’re talking about test cases and I was like, “You know, I’m assuming I know what that means, based on some context, but I’m actually not sure that I know what a test case is. I just Googled it and I read about it and I figured it out, right in front of a nontechnical founder thing.” This is a skill that you want to have throughout your career and like Rob said, luckily, it will get certainly easier and you’ll have to do less Googling as time goes on.
It’s something to embrace to make sure that you’re not making assumptions, make sure that you are on the same page which is why it can be good to ask things like, “Okay, this is this is what I mean when I say test case, is that what you mean,” because those types of miscommunications come up all the time.
Rob: That’s a really good point. Probably once a week, I Google an acronym. Oftentimes, it’s something someone posts on Twitter and it’s like a colloquialism that I just don’t know. I mean maybe a year ago it was TBH and I used TBH the other day. I was talking to my 13-year-old and in conversation out loud, I was like, “So TBH, blah, blah, blah.” He’s like, “What does that mean?” and I was like, “To be honest.” He’s like, “Oh my, you’re such a nerd.” But I find myself Googling this on what does this mean and then there’s like seven different definitions and you have to take it from context. Don’t feel like you’re in over your head, Ash. I think we all are. Just because someone has been doing this for a few years doesn’t mean that they know everything about it. Thanks for the question. I think it’s a good one.
Wrapping this up for the day, our final question is from Zee and it’s about managing subscriptions. He says, “Hello. Big fan. What recommendations do you have to manage subscriptions that come both via credit card and check? As the business is growing, I want to make sure I’m not missing out on things as people renew their subscriptions. For example, we make a credit card payments through Braintree.” I think it means they accept credit card payments through Braintree, but they also have people that pay via check annually and they handle stuff through PayPal.
To set the context, when I first read this, I thought he was saying, “We have a bunch of SaaS subscriptions, how do we keep track of those?” But he’s actually saying they accept payments in a bunch of different ways, some of which are annual. He says, “We then use QuickBooks for all the accounting. We want to be sure we don’t miss out on annual fees.” Laura, have you had to deal with this?
Laura: No, I haven’t.
Rob: Is it all credit card with EDGAR?
Laura: Yeah. I mean, we would just say, “No, thank you.” if someone wanted to buy with a check, but I know that in some industries, you can’t do that.
Rob: Yeah we did this with Drip. Let me think. After we get acquired by Leadpages, we were using Stripe, they were using Braintree. At a certain point, we started accepting PayPal and they were doing these larger annual contract values. You get you get a 12-month subscription that is $20,000 and really that’s an invoice check situation. Frankly, you don’t want to pay the $600 processing fee, the 3%, but also the companies, bigger companies as you said that’s the way it works
The way we did it, like the very first one, is it literally went into an Excel spreadsheet or maybe it was a Google Docs that we all had access to and we’re like, Okay, note to self, calendar reminder,” and it goes into a Google Doc. In the next month, we need to build some type of system. Then we just went into our existing billing code, and we tweak some things to say, “Oh, this is a check and so and so needs to be reminded.” It sends off an email to this AR (accounts receivable) at this certain thing. We hacked it together. That took one day or two days of development work, but in the moment we were able to accept the check.
We knew there was a calendar reminder in case everything went haywire. We went back and it was like this just in time MVP implementation of something. I’ve been gone from Drip for two years now. I’m guessing by now, hopefully they built even a better system. I think there are a bunch of ways to do this and that they’re trying to build a gold-plated version from V1 is not necessarily the best way to do it. If you only have one or two customers paying you that way, you just don’t need that much infrastructure.
Laura: Yeah, I don’t have anything on this one.
Rob: All right. Well Laura, thanks again for coming back on the show. It’s so good to chat with you. Folks who want to keep up with you, you are @lkr on Twitter, that’s a great three-letter Twitter handle, I’m so jealous. If folks want to know what you’re up to with Edgar, they can head to meetedgar.com. Anything else you’d like folks to check out?
Laura: I would just like to say that people used to be a lot more impressed by my Twitter handle, I feel like you can tell that Twitter’s on its way out because I used to get a much bigger reaction. You threw in a little comment which was very polite of you, but I missed out on having a cool Instagram handle. My Instagram is @laurakroeder, I can’t even get @lauraroeder, I had to throw my middle initial in there. I’m just like feeling a little old that I missed the Instagram thing and no one cares about my Twitter handle anymore. That’s my closing comment for the show.
Rob: That’s amazing. Thank you so much. I guess I should go register an Instagram handle, is what you’re saying. That’s how old I am.
Laura: Yeah. Get on that.
Rob: Thanks again, Laura. I hope you enjoyed today’s episode. Next week on the show, Mr. Brian Castle from Bootstrapped Web and Process Kit is coming on to talk about just the brutal year he had in 2016 and 2017, overcoming a 40% decline in MRR, and we walk through his trials and tribulations, dig into frankly some struggles, some victories and failures, and it’s a good interview. Also I hope you’ve been checking out TinySeed Tales on Thursday mornings. That season wraps up here in the next week or so.
I would love to hear your feedback or input on that. You can email me directly questions@startupsfortherestofus.com, you can Twitter DM me, or if you have great things to say, obviously, just go into Twitter and let me know. I appreciate it. Should we do it again? I’ve started working on season two doing some interviews, but if you like it, if you will listen, if it’s a good fit for you, please let me know. If it’s not, that’s cool, too.
It was definitely an experiment. As I’ve said when we announced that this is by far the most time and money I’ve ever invested into an audio project. It’s TinySeed tales, because TinySeed was able to make that happen. If it’s worth it and it’s providing value, then we’ll keep doing it. If not, we always have more good ideas we can implement, so I can obviously but my focus elsewhere.
You heard a bunch of questions answered today. If you have a question for the show, you can leave us a voicemail at 888-801-9690 or you can record an MP3 and WAV, an Ogg Vorbis, an AIFF, send us a Dropbox or a GDrive link to questions@startupsfortherestofus.com.
I tweeted something out a couple weeks ago and I said if I were starting a company today, these are the tools that I would use. I just listed it, it was a five-minute tweet tops. I just listed a bunch of things and look through them, made comments and spit it out. It’s like one of the most popular tweets I’ve ever done. These things are both fine and infuriating, where you spend 20 minutes trying to craft something and like six people care about it and then you do something like this that is just off-the-cuff-flippant and it gets all these traction. I think it has 150 retweets or something at this point.
The funny thing is just the opinions about Dropbox versus GDrive versus Box. It was like, “Why not that? “ It’s personal preference. There’s feature parity. These things are not so different from one another, it’s really a personal preference, unless there’s some individual, sneaky feature somewhere that somebody has that you really need. For the most part, these things are all equivalent, but I think a lot of preference comes into it as well as pricing and stuff.
Anyway, I digress. Our theme music on the show is an excerpt from a song called We’re Outta Control by a band named MoOt, it’s used under Creative Commons. You can subscribe to this podcast, and you should, by searching for startups in any pod catcher you have. To be honest, new subscribers is a big ranking factor in iTunes. If you’re listening to this and you’re not subscribed, even if you just listen to it on the web or you somehow download it through an FTP script that you coded up years ago, it would be super cool if you would open iTunes and just hit the subscribe button because it does help us rank higher. It helps us get more reach and it helps us reach more people.
If you haven’t been to startupsfortherestofus.com in a while, we have full transcripts of all of our episodes within a week or two after they air, we […] the audio live is that, number one thing in transcripts just take time to get done. We get a decent number of helpful comments on the site too, so if you have a comment on an episode, you can obviously tweet to me @robwalling or you can come to the website itself startupsfortherestofus.com. Check out the fancy new design we put in place a couple of months ago. Leave a comment, drop us an email through the contact form. Thank you so much for listening today. I’ll see you next time.
TinySeed Tales 6 | The No Credit Card Trial
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In this week’s episode Craig Hewitt “turns the business on it’s head” by implementing a no credit card trial.
Episode 472 | From Amazing Launch to Near Bankruptcy to Profitability with Shai Schechter
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In this episode of Startups For The Rest Of Us, Rob talks with Shai Schechter of RightMessage, about his amazing launch and then finding himself near bankruptcy and how he was able to right the ship.
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TinySeed Tales 5 | Building a Business That Runs Itself
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Rob is back with Craig Hewitt of Castos. They talk about learning to delegate more of his responsibilities as a new growth marketer joins the team.
Episode 471 | Fighting to Gain Traction in a Crowded Space with Jane Portman of Userlist
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In this episode of Startups For The Rest Of Us, Rob talks with Jane Portman of Userlist. They discuss the struggles of growing slowly, gaining traction in the crowded space, and some of the lessons learned from her first SaaS app.
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Rob: In this week’s episode of Startups For The Rest of Us, I talk with Jane Portman of Userlist, about their fight to gain traction in a crowded space. This is Startups For The Rest of Us episode 471.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth start up or you’re thinking about your first. I’m Rob and today with Jane Portman, we’re here to share our experiences to help you avoid the mistakes we’ve made.
Welcome to this week’s episode. I’m your host, Rob Walling. Each week on the show. We cover topics relating to building and growing ambitious startups that we grow, because we want to improve our lives. We want to improve the lives of those around us, but we’re not willing to sacrifice ourselves, our lives, our relationships, our health to grow these companies. We believe in relentless execution with a long-term mindset. We think in terms of years, not months. As such, we don’t burn ourselves out by working crazy hours, sacrificing our health, or relationships.
Over the past 470 episodes, we’ve espoused things like freedom, purpose, and relationships. Freedom is the freedom to work on what you want, when you want, without a boss breathing down your neck. The freedom to go on your kids baseball game on a Thursday afternoon without asking anyone’s permission. Purpose, the ability to work on something that fascinates you and drives you everyday to make it better. The purpose of building something that tens and thousands of people are getting value out of and it makes you feel great. Relationships, deep and meaningful relationships with your family, your significant other, your kids, your friends.That’s what Startups for the Rest of Us is all about. That’s the lens through which we view startups.
Today, I’ve invited Jane Portman on the show. Have known Jane for several years. She spoke at MicroConf Europe back in 2014. We’re going to talk about the app userlist.com that she co-founded with her co-founder Benedikt Deicke. They started working on Userlist about two years ago. They did a bunch of customer interviews. Then, almost a year later, they sold pre-orders. That was about one year ago. Really, it was a little bit less than a year ago when they started onboarding people and turned on billing towards the end of 2018.
Userlist, which used to be userlist.io, but they just recently got the .com, so now it’s userlist.com is customer life cycle email, perfect for your SaaS business. It’s event-based email, behavior tracking, lifecycle automation, segmentation, they have broadcast, and that kind of stuff. You can imagine competitors of Userlist might be something like an Intercom, customer.io and maybe even a tool like, Vero. To be honest, I’m so much less clear on the whole email marketing space. Know that I’m not in it day-to-day. But, at one point Vero was in this stuff as well.
Both Benedikt and Jane have been to many MicroConfs. I’ve had dinner with them multiple times. They are just fixtures of the community and good people who are working hard, essentially Bootstrap SaaS app. It’s always fun to have conversations with folks who are doing it. Benedikt is a developer and Jane is a really solid UX/UI designer. They make a good team, as you can tell by the design and from what I’ve heard the reviews of Userlist.
In today’s episode, we talk about the struggles of growing slowly and trying to find traction in a crowded space, because there is a lot of competition. We even walk through some lessons learned, that Jane learned from her first SaaS app that she founded. That one came as a surprise to me. I remembered the app, but I just hadn’t realized what had happened to it. In the middle of the interview she said, “Hey, I have a bunch of interesting takeaways from that,” and we run through those towards the end. Hope you enjoy this conversation with Jane Portman.
Jane Portaman, thank you so much for coming on the show today.
Jane: Thank you Rob. I’m super, super thrilled to share a story here.
Rob: It’s good to have you on. You and I have known each other for many years actually. You spoke at MicroConf Europe back in 2014. I believe? We’ve met at many a MicroConf.
Jane: Absolutely. Thanks for putting that amazing community together.
Rob: For sure. Congratulations on userlist.com. Still on the back of my mind, I think of you as userlist.io because you just have them for two years. I think just recently, you dropped a couple thousand bucks on the .com.
Jane: Quite a few, yeah. We’re absolutely excited about this. We had doubts until the very last moment. But when we did buy it, and when we got out to the community with the news, then it was an instant hit. We’re like, “Yes. This is so great.”
Rob: That’s what I was going to ask. As a bootstrapper, I think Benedikt said you spent $2000 or $3000 on the domain name. He mentioned it on his podcast. Obviously, that’s an investment. You said you have doubts right up until the end. Where you’re just questioning whether or not it would be worth it, whether or not you should do it?
Jane: We actually spent, $4000. It’s definitely a lot for a bootstrapper budget. We have been on the negotiation curve for a year-and-a-half. Basically, ever since our business started. It felt the right moment that it was available enough for us. We understood that Userlist really has good traction now. It was also a good enough point for them not to understand that we’re super, super successful because otherwise, we would probably go back up.
We started at negotiating at $20,000 and then met at $4000. We’ve been having doubts, but we have never looked back ever since. That’s been such an emotional uplift for the whole company.
Rob: Yeah, that’s good. That’s nice to have those hard decisions. That once you make them, you know you’re either going to feel terrible and be dragging them along and second guess them, or you’re going to feel amazing, move on, and know that it was the right call. It’s so hard to know until you send that wire or until you do the 301 redirect and how your domain is all up. I’m super stoked to hear that it was the right call for you guys.
Jane: Thank you.
Rob: You’ve been working on Userlist with your co-founder Benedikt and your co-founder Claire for two years now. As you and I talked a bit offline, it’s been a long journey to get to the point where you are today. You started doing customer interviews about two years ago. Then another year later, you did some presales. Then it was just about a year ago that you started onboarding people.
I know that there’s a lot of talk in the MicroConf community about Userlist. I believe they were even cemented from the stage of MicroConf Europe for folks who are using Userlist. I’ve heard from you and Benedikt that it’s been slow growth. It has been perhaps a little discouraging that it’s taking this long. Can you talk me through how that felt?
Jane: Absolutely. There are a lot of facets to that. First hand is, our naivety in the beginning. Our initial plan was to get to market and $5000 MRR in six months. Primary reason for that was that we did the software product together with Benedikt before. We got it out in a few weeks because it was smaller. This time, we figured, we’ll have a more complex product, but let’s go full throttle in this. It took way longer than that.
We’ve done a lot of administrative stuff in the first year. We didn’t even do much product development because of that, because email […] so sensitive. We wanted to get properly set up with a lot of things like incorporation, all kinds of legal documents, agreements, everything like that, we had in place before even onboarding the first customer.
That feels great because we don’t have to deal with that now. But whilst we were done building the actual MVP, the second part of the hurdle happened. It’s an intentional model that we decided to be a critical business tool for people as opposed to a Vitamin type of product. That implies lower churn and much better retention, but that also implies problematic onboarding. It’s much harder to help people onboard into critical business tool, as supposed to some productivity stuff.
Therefore our users, our customers, they do strongly depend not only on the state of our product, and the complexity. But also, because our product is super easy inside. The integration might seem intimidating, but it’s not really, and inside is super simple. What mostly depends on is this stage in their business. We have plenty of early-stage founders who are planning their launch in a few months and it’s never the perfect day to tackle customer messaging. That’s what we have to deal with. I think we still yet to solve that inflection point moment and how to stimulate that in our customer’s mind. We’ve been trying our best to inspire them with learning materials, with podcast channels, and everything else. It’s still very much learning in progress.
Rob: Yeah. You mentioned that it’s hard to get people to switch, or to come onboard because it’s such an aspirin. You’ve talked about the Vitamin aspirin. That caught me a little bit there. That’s what I found, too. When I’ve had apps that we’re Vitamins, it was easier to get people to try them out, but the churn was higher. Frankly, it can cut both ways.
It’s nice when people will just try it on a whim. It sucks when they cancel, but it is nice to be able to get casual users. Building the aspirin type product is exactly what you’re talking about, where it is a lot harder to get folks to sign up, commit, and move over. And there’s switching cost, even if there isn’t true switching cost. There’s switching cost in their head and there’s set up cost. There’s all of that almost mental baggage that I think people have resistance to moving over. How have you been attacking that?
Jane: Like I’ve said, we’ve been trying to inspire folks. We do our best to follow-up with the potential leads in the most polite but persistent way. We don’t have our secret sauce yet. It really helps that our brand has grown over the last years, especially. We have gotten some nice publicity. I think that a nice public image also makes us more attractive of a purchase, and that contributes to that excitement, that founders generally need to get started with this. It’s just a matter of technically helping them onboard when they need technical assistant, but that’s not a huge burden at all.
Rob: It’s an issue that probably any email tool, that’s worth its weight is facing. Is that, most people who are going to use their tool are already using something else in place of it. They are either using a tool like Mailchimp, or Drip, or customer.io, or they have built it themselves in-house. They already have Rails code with a Liquid template that they pull at the database and then they send these life cycle emails. I introed it at the top of the show, but just to remind folks, it’s customer life cycle email designed for SaaS businesses. It’s behavior-based, event-based life cycle automation, segmentation and that kind of stuff.
The switching cost for that is, there’s a challenge there because it’s hard. If I was running a SaaS app, I don’t want all my marketing emails in Mailchimp and my lifecycle emails in Userlist. I want them all together so that when someone unsubscribes, it unsubscribes across everything. So that I have the data, the tags, and all the stuff across everything. The decision to switch over to Userlist is not as simple, easy, “I make the decision today, I move tomorrow” decision. It’s the one that really covers a lot of aspects of my business, all the way from marketing, into the sales process, into the onboarding, the customer retention process. It really does touch a lot of key points in a business.
Jane: You’re just hitting a nail on its head. We have very, very heated discussions in house. They’re not heated, because we initially agreed to give this only post sign-up, customer communications. There is a bunch of trade-offs and perks related to that. The perks are that it allows us to make the products super simple inside. Literally, very very intuitive, as opposed to more complex enterprise tools that do both. On the other hand, there have been an increasing support requests and I know there are opinions out there (yours included), that we should probably allow for classic email marketing automation inside this list as well. So, it’s in debate and we’ll see if this direction is worth pursuing down the road. It’s not an easy decision for sure.
Rob: No. I went through the same thing. I wouldn’t say that I think you guys should do marketing. I just know that when we started Drip, it was overwhelming. By the time we’re just doing the customer interactions, people kept asking us for the marketing. It was for the reason I said they wanted it all to be in one place. That is a decision for you guys to make yourselves.
If you look at Intercom and Customer.io (https://customer.io/) , they’re not designed for marketing emails. It’s really customer communication. It’s obvious that you can build a business without doing those things. I don’t know if Vero was still that way, but getvero.com (https://www.getvero.com/) was also just used to be customer messaging. I think there’s a path to do it and do it successfully. It’s just a matter of how you attack it and which customers you go after.
Jane: And making these tools speak to each other. It’s not just a matter of technical set up. There is no convention in the whole SaaS industry to date. Please correct me if I’m wrong. What is the best practice if somebody becomes your customer? Do you keep sending them newsletters or not? What kind of communication they receive? Is there a single unsubscribe button or not? Every founder makes those decisions for themselves. It’s a technical set up and it’s plenty of logical decisions they have to take.
Rob: Yeah, that’s right. You find yourself all in the mix. Every founder, as you said, makes the decision differently, but they all think that their decision is right. That’s where it gets complicated. That’s interesting.
Over the last couple of years, you’ve been grinding it out, getting Userlist on, getting it built, getting presales, getting folks to use it. You do have paying customers at this point and MRR. I’m curious. In your mind, has there been a lot of uncertainty? Or is there uncertainty now in terms of, “Are we going to be able to pull this off? Is this going to work? We’re two years in and I wish we were growing faster. I wish we were bigger.” Does it ever feel like, “I am just not sure that this is going to work at the scale that we wanted to”?
Jane: It sure sometimes feels like a marketing drudge for any founder. From day one, we have never had any doubt that this is a product that’s needed for people. We’ve done some inventive products before, but we were absolutely positive that there is a need. It was just a matter of making it happen, step by step, slowly, very slowly, very very slowly towards the right direction.
We’ve actually been getting more optimistic with time. The last few months have been super cool. We know there’s a lot of work ahead, but it’s been so nice to see how the traction picks up and there is word of mouth in the community, et cetera. We have actually made decisions, we have been part-time on this, myself and Benedikt. We have made the decision to take the scary plunge and actually go full-time on that in the beginning of 2020, starting January.
Rob: Wow. That’s just a couple of months out. Good for you guys.
Jane: Yeah. There is a lot of work, like prep up we have to do in terms of client work. Having client work, it pulls your attention away, but on the same side, it lets you do that organic slow thing in the more secure manner. You don’t have to worry about bread and butter on the table, because that desperate type of marketing is no good for any brand.
Rob: Yeah. It’s hard to be stressed about money and watch runway shrinking away. Yet, it’s also hard to have split focus. I’ve done both of them and neither is that fun. That’s the conundrum of being a founder. It’s making hard decisions with incomplete information where none of the decisions is 100% clear. I feel your pain on that. Congrats on deciding to go full-time. I do think that will probably be game changing for you guys in terms of the focus.
Jane: Thank you so much. We’re absolutely looking forward to this.
Rob: I bet. I asked you before the interview, if we were cool to talk about your third co-founder, Claire Suellentrop. Folks may have seen her on the MicroConf stage a couple of years ago. You, Claire, and Benedikt actually started Userlist together a couple of years ago. I know that she’s a lot less involved than she was early on. Do you want to talk us through maybe, what the situation is and how that went down?
Jane: Yeah, absolutely. We started this together, the three of us. It was me who pulled the folks together. In my previous SaaS, I was a solo founder, so I had to pay Benedikt cash to build stuff. There was no way I could do this with such a complex project, so I invited Benedikt on board. I was super lucky that he said, “Yes.” There was one more piece of the puzzle missing, the marketing person. Claire was number one on my rolodex of nice people and also amazing marketers, so I reached out to her. At that point of time, she was particularly looking for something of her own to start after quitting Calendly. There was ofcourse time between that. She was previously director of marketing at Calendly. See how large of talent we’re talking about?
I was absolutely thrilled when she said, “Yes.” We had a lot of discussions in the beginning. I’m super happy that we formalized our relationship in the most transparent way. Splitting the shares in the correct manner, doing the vesting schedule, then doing the proper contract. Even though in the beginning, that contract was sort of informal, but we still signed. Then we incorporate it.
Everything was really really well-organized. It’s not just about being legally protected, but also about having clear system in your mind. What’s going to happen when something changes? The assumption of that was everyone was going to be friends forever. It’s definitely very naive and childish, because things change for everyone. That is exactly what happened after a year that we’ve been working together.
The traction has been slow. We just started onboarding our fist pre-order customer. There was no sign of MRR whatsoever. Claire had to decide what’s going to be the number one priority. She had to take things off her plate to make it happen. She had two large projects at that time. It was Userlist and Forget The Funnel, which you’ve probably heard online, which is a huge training website and platform for marketers. She made a conscious choice towards working with marketers because these are her peers, target audience, and that was just overall more fulfilling.
Therefore, we’ve rearranged our agreement. We slowed down her vesting in half and she became our advisor instead of doing work hands one. In that type of mode, we spend another year until just recently when all of the above happened, that we decided to go full in. It didn’t feel quite fair that we’d go full in, start working our backs off, and Claire would just be advising. We decided maybe we could put together a more fair agreement and we reconsidered it again.
Right now, we have not documented it yet. She will formally stop vesting at the end of the year. She will just retain the number of shares she has while myself and Benedikt will go full spin. It sounds pretty stressful, but we really didn’t get into any human arguments about it. It was more like a constructive discussion about figuring out ways how it can work for all of us and the work that’s fairly rewarding. Going into business with adequate people really, really pays off. After all, she is a good fit.
Rob: That’s what I’m going to say. From what I’ve heard from you and Benedikt just in passing, in talking about stuff, it sounds like it’s been a surprisingly easy process for something that could’ve been really hard. It often turns into a big emotional fight with co-founders if there’s someone that has a perfectly good reason to come, walk away, and do something else that they decided to go do. It can hurt people’s feelings and it can have all types of ramifications. It really sounds like you all were just reasonable people trying to figure out what was best. Is that a good summary of it?
Jane: Yeah, very much so. Interesting fact: we never got to use it, but in our original agreement we also had a field for a mediator. That was a person we all knew and trusted who would mediate our arguments should we arrive at a deadlock somewhere. We never resorted to that measure, but it was another cautionary thing that we took. It sounds like marriage. You need to find adequate people to really resonate with each other and you need to document everything. That’s how it works.
Rob: That’s good. I’m glad. I like Claire and I know that you guys are friends. It’s nice to be able to go away with everyone feeling good about the resolution.
Jane: We’re so very much a team. She remains as the co-founder. For sure we’re going to have a monthly marketing sessions together. She’s still participating largely in the strategic side of the business. It feels great. She’s a wonderful human being.
Rob: Jane, you’ve worked on many SaaS apps. You’ve built a couple yourself, as you said. You hired Benedikt prior as a contractor, and now working as a co-founder. You have a bit of an experience under your belly here. What has been the most surprising thing to you in building Userlist?
Jane: Building Userlist? I was thinking you’re going to ask about the takeaways from the first app because I had plenty.
Rob: Oh. Let’s go back on that after you answer this. I’d love to hear it.
Jane: Probably the slowness of it was the biggest surprise.
Rob: Yeah. You thought it would gain traction quicker?
Jane: Yes. The product idea is quite unbeatable. It’s really, really a useful tool. You will think that just getting the word out in the community would get fellow founders signing up like that but no.
Rob: Yeah. Is that an issue with switching cost? Or do you think it’s the differentiation thing of not having the same features? If I were to compare you to your competitors, I don’t know who has the most features or whatever, so I’m curious what your take is on that.
Jane: We’re all wise enough to know—our team and you—that features that are not exactly the key thing in purchasing decisions. I think feature parity is not an issue. A lack of some features is clearly a benefit in our case. It makes the product much more transparent and straightforward to use.
I don’t want to be comparing it to Apple but because it’s run-of-the-mill, we try to make some opinionated product decisions insight so that it’s simpler, easier to use, and more efficient. In that regard, that’s definitely not a problem.
As for the switching cost, yes. I think that’s a primary reason as we talked about. I’m hoping there’s a secret sauce inside. Overall, that and explaining what it does all together really makes a puzzle. I’m glad that I have been putting it together gradually but it’s clearly not there yet.
Rob: To wrap us up today, you hinted takeaways from your prior SaaS. For folks who don’t know, it’s called Tiny Reminder. It was a form builder with notifications. Does that correctly sum it up?
Jane: That’s right. It was a Vitamin. Very much Vitamin type of product.
Rob: Cool. What were your handful of takeaways from building and I presume, shutting that down?
Jane: Quite a few. I sold it Nusii, so it still exists and functions. They’re planning to grow it as a satellite, a promotional tool for Nusii. I had a bunch of takeaways. I’m so glad I had this lab SaaS, lab rat sort of project that I’ve made all possible mistakes. I didn’t market it to a clear audience. It was really so useful that anyone could use it and after that, just focus on a niche instead.
It was super Vitamin. That’s why we set out to do an Aspirin product this time. Also, I did a freemium and that was quite a battle. Freemium is not a great way for bootstrap founders to start their business. Not just because of the lack of revenue but also the lack of MRR as a validation. You never know whether those people are just like tire kickers or real users—do they really need it?
And a couple of more discoveries. I had a lot of experience with info products before. I’ve been observing how sales work, that sales are hard to get, how downloads work, how emails, sign-ups, and numbers work. Not everything is cool. I was not prepared for that in SaaS businesses. It’s so much harder.
Just selling a book and an impulse purchase is way easier than selling a tool. That’s clearly not something you can just buy. You need to use it and get value out of it.
Rob: I had that conversation with so many info marketers who are making $50,000 a month or $100,000 a month. They’ll say, “How am I going to get into SaaS?” I’m like, “I know you can write a copy. I know you can get people to impulse buy a book.” If they don’t read the book, they don’t cancel on you because they’ve already paid you. It’s like in a completely different world. You’re right, it’s not twice as hard. It’s like 10 times as hard to make it work with SaaS.
Jane: We had a spectacular product launch for Tiny Reminder. The number of free trials, I think, was the cold traction to the website. We’ve got like 10 or something. I don’t exactly remember the number but it was super miserable. For a typical marketing freebie, it would have been, like you’ve said, 10 times bad.
Another lesson was that I had no audience of my own related to design. I’m sure there are plenty of founders in that audience. I’ve learned to understand that personal audiences don’t translate into SaaS sales, period. We’ve had a few users coming from my site but this is clearly not a primary channel. It’s not something you can leverage very well. You really need to count on product market fit first and some scalable, reliable, marketing channels instead of trying to milk your list, which I’ve never done in a bad way, but I tried with the first product and it just clearly didn’t work.
Rob: Yeah. That’s a lesson I’ve learned a long time ago as well. You can sell a little bit to your list but really, they’re interested in hearing from you, hearing about your process, and they’ll buy books from you all day because that’s hearing about you and your process. Books, video courses, and conference tickets are things that you can sell their personal audience, but SaaS apps, you can get that first. You will get a first handful of customers and then that’s it. Now, the real work begins.
That’s why I’ve heard folks say, “Hey. You should build an audience before you build a product.” That’s the way to do it. I’ve heard that said about infoproducts and I’ve heard it said about SaaS. I think it’s the wrong advice with SaaS. It’s never bad to have an audience but I do not think it’s worth the years and all the effort of building an audience.
Building an audience is very, very hard in order to launch a SaaS app. I think I have many more examples of people who have not built an audience and launched a successful SaaS app than I had people who have done it. Versus, if we’re going to talk about the knowledge product side where you’re going to write books, courses, and that kind of stuff, I would say people need to know, like, and trust you. Therefore, if they need that relationship with you, therefore, I would recommend and err on the side of actually building an audience before doing that.
Jane: You need to find scalable ways of reaching out to new people anyways. Even if you have a nice waiting list like we had something close to between 500 and 1000 people, I have an impression that they never really fully converted, even though we’re doing our best and talking to them very, very often, very diligently, with exciting updates. It’s still not a scalable way to grow our customer base for sure.
Rob: Yeah. That’s right. When we launched Drip, I had a launch list—not my robwalling.com list—but an actual Drip interest list. It was about 3400 people. The first 500 on the list were from me talking about in the podcast. I think I emailed my email list and just talk about it in another podcast. Then, there were segments that were from other shows. There were some from Facebook ads to a landing page. I watch how they converted. It was definitely my personal brand that converted almost the worst.
There were some cold traffic that converts worse than that, but people were more interested in the story. That’s okay, but you have to know that going in that an audience is not a golden ticket to launching a successful SaaS app.
Jane: Moreover, it can be deceptive. We’ve heard those stories like Brennan building RightMessage. They almost have that hangover from Brennan’s authority in the automation space when they were building a different kind of product. I’ve just had Derrick on my show and we’ve talked about Level and how we validated it. That was basically off his authority based on Drip and everything that got him into a little bit deceptive situation, too.
Rob: Yup. As you said, it can be deceiving.
Jane, thank you so much for coming on the show today to talk about Userlist and your experience with it. If folks want to keep up with you on Twitter, you are @uibreakfast. You have the UI Breakfast Podcast that you have mentioned a couple of times. Any other things folks should check out?
Jane: Of course, userlist.com. We just migrated yesterday. That’s a great resource. You can find all kinds of materials if you’re interested in life cycle email. We grabbed the Twitter handle, too. We are now at @userlist. That’s just pure luck. We didn’t even buy it.
Rob: That’s great. Cool. Thanks again, Jane.
Jane: Thank you so much, Rob.
Rob: Thanks again to Jane for coming on the show. If you have a question you’d like to hear answered on the show, leave me a voicemail at (888) 801-9690. Or email questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control used under Creative Commons. Subscribe to us by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. I’ll see you next time
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth start up or you’re thinking about your first. I’m Rob and today with Jane Portman, we’re here to share our experiences to help you avoid the mistakes we’ve made.
Welcome to this week’s episode. I’m your host, Rob Walling. Each week on the show. We cover topics relating to building and growing ambitious startups that we grow, because we want to improve our lives. We want to improve the lives of those around us, but we’re not willing to sacrifice ourselves, our lives, our relationships, our health to grow these companies. We believe in relentless execution with a long-term mindset. We think in terms of years, not months. As such, we don’t burn ourselves out by working crazy hours, sacrificing our health, or relationships.
Over the past 470 episodes, we’ve espoused things like freedom, purpose, and relationships. Freedom is the freedom to work on what you want, when you want, without a boss breathing down your neck. The freedom to go on your kids baseball game on a Thursday afternoon without asking anyone’s permission. Purpose, the ability to work on something that fascinates you and drives you everyday to make it better. The purpose of building something that tens and thousands of people are getting value out of and it makes you feel great. Relationships, deep and meaningful relationships with your family, your significant other, your kids, your friends.That’s what Startups for the Rest of Us is all about. That’s the lens through which we view startups.
Today, I’ve invited Jane Portman on the show. Have known Jane for several years. She spoke at MicroConf Europe back in 2014. We’re going to talk about the app userlist.com that she co-founded with her co-founder Benedikt Deicke. They started working on Userlist about two years ago. They did a bunch of customer interviews. Then, almost a year later, they sold pre-orders. That was about one year ago. Really, it was a little bit less than a year ago when they started onboarding people and turned on billing towards the end of 2018.
Userlist, which used to be userlist.io, but they just recently got the .com, so now it’s userlist.com is customer life cycle email, perfect for your SaaS business. It’s event-based email, behavior tracking, lifecycle automation, segmentation, they have broadcast, and that kind of stuff. You can imagine competitors of Userlist might be something like an Intercom, customer.io and maybe even a tool like, Vero. To be honest, I’m so much less clear on the whole email marketing space. Know that I’m not in it day-to-day. But, at one point Vero was in this stuff as well.
Both Benedikt and Jane have been to many MicroConfs. I’ve had dinner with them multiple times. They are just fixtures of the community and good people who are working hard, essentially Bootstrap SaaS app. It’s always fun to have conversations with folks who are doing it. Benedikt is a developer and Jane is a really solid UX/UI designer. They make a good team, as you can tell by the design and from what I’ve heard the reviews of Userlist.
In today’s episode, we talk about the struggles of growing slowly and trying to find traction in a crowded space, because there is a lot of competition. We even walk through some lessons learned, that Jane learned from her first SaaS app that she founded. That one came as a surprise to me. I remembered the app, but I just hadn’t realized what had happened to it. In the middle of the interview she said, “Hey, I have a bunch of interesting takeaways from that,” and we run through those towards the end. Hope you enjoy this conversation with Jane Portman.
Jane Portaman, thank you so much for coming on the show today.
Jane: Thank you Rob. I’m super, super thrilled to share a story here.
Rob: It’s good to have you on. You and I have known each other for many years actually. You spoke at MicroConf Europe back in 2014. I believe? We’ve met at many a MicroConf.
Jane: Absolutely. Thanks for putting that amazing community together.
Rob: For sure. Congratulations on userlist.com. Still on the back of my mind, I think of you as userlist.io because you just have them for two years. I think just recently, you dropped a couple thousand bucks on the .com.
Jane: Quite a few, yeah. We’re absolutely excited about this. We had doubts until the very last moment. But when we did buy it, and when we got out to the community with the news, then it was an instant hit. We’re like, “Yes. This is so great.”
Rob: That’s what I was going to ask. As a bootstrapper, I think Benedikt said you spent $2000 or $3000 on the domain name. He mentioned it on his podcast. Obviously, that’s an investment. You said you have doubts right up until the end. Where you’re just questioning whether or not it would be worth it, whether or not you should do it?
Jane: We actually spent, $4000. It’s definitely a lot for a bootstrapper budget. We have been on the negotiation curve for a year-and-a-half. Basically, ever since our business started. It felt the right moment that it was available enough for us. We understood that Userlist really has good traction now. It was also a good enough point for them not to understand that we’re super, super successful because otherwise, we would probably go back up.
We started at negotiating at $20,000 and then met at $4000. We’ve been having doubts, but we have never looked back ever since. That’s been such an emotional uplift for the whole company.
Rob: Yeah, that’s good. That’s nice to have those hard decisions. That once you make them, you know you’re either going to feel terrible and be dragging them along and second guess them, or you’re going to feel amazing, move on, and know that it was the right call. It’s so hard to know until you send that wire or until you do the 301 redirect and how your domain is all up. I’m super stoked to hear that it was the right call for you guys.
Jane: Thank you.
Rob: You’ve been working on Userlist with your co-founder Benedikt and your co-founder Claire for two years now. As you and I talked a bit offline, it’s been a long journey to get to the point where you are today. You started doing customer interviews about two years ago. Then another year later, you did some presales. Then it was just about a year ago that you started onboarding people.
I know that there’s a lot of talk in the MicroConf community about Userlist. I believe they were even cemented from the stage of MicroConf Europe for folks who are using Userlist. I’ve heard from you and Benedikt that it’s been slow growth. It has been perhaps a little discouraging that it’s taking this long. Can you talk me through how that felt?
Jane: Absolutely. There are a lot of facets to that. First hand is, our naivety in the beginning. Our initial plan was to get to market and $5000 MRR in six months. Primary reason for that was that we did the software product together with Benedikt before. We got it out in a few weeks because it was smaller. This time, we figured, we’ll have a more complex product, but let’s go full throttle in this. It took way longer than that.
We’ve done a lot of administrative stuff in the first year. We didn’t even do much product development because of that, because email […] so sensitive. We wanted to get properly set up with a lot of things like incorporation, all kinds of legal documents, agreements, everything like that, we had in place before even onboarding the first customer.
That feels great because we don’t have to deal with that now. But whilst we were done building the actual MVP, the second part of the hurdle happened. It’s an intentional model that we decided to be a critical business tool for people as opposed to a Vitamin type of product. That implies lower churn and much better retention, but that also implies problematic onboarding. It’s much harder to help people onboard into critical business tool, as supposed to some productivity stuff.
Therefore our users, our customers, they do strongly depend not only on the state of our product, and the complexity. But also, because our product is super easy inside. The integration might seem intimidating, but it’s not really, and inside is super simple. What mostly depends on is this stage in their business. We have plenty of early-stage founders who are planning their launch in a few months and it’s never the perfect day to tackle customer messaging. That’s what we have to deal with. I think we still yet to solve that inflection point moment and how to stimulate that in our customer’s mind. We’ve been trying our best to inspire them with learning materials, with podcast channels, and everything else. It’s still very much learning in progress.
Rob: Yeah. You mentioned that it’s hard to get people to switch, or to come onboard because it’s such an aspirin. You’ve talked about the Vitamin aspirin. That caught me a little bit there. That’s what I found, too. When I’ve had apps that we’re Vitamins, it was easier to get people to try them out, but the churn was higher. Frankly, it can cut both ways.
It’s nice when people will just try it on a whim. It sucks when they cancel, but it is nice to be able to get casual users. Building the aspirin type product is exactly what you’re talking about, where it is a lot harder to get folks to sign up, commit, and move over. And there’s switching cost, even if there isn’t true switching cost. There’s switching cost in their head and there’s set up cost. There’s all of that almost mental baggage that I think people have resistance to moving over. How have you been attacking that?
Jane: Like I’ve said, we’ve been trying to inspire folks. We do our best to follow-up with the potential leads in the most polite but persistent way. We don’t have our secret sauce yet. It really helps that our brand has grown over the last years, especially. We have gotten some nice publicity. I think that a nice public image also makes us more attractive of a purchase, and that contributes to that excitement, that founders generally need to get started with this. It’s just a matter of technically helping them onboard when they need technical assistant, but that’s not a huge burden at all.
Rob: It’s an issue that probably any email tool, that’s worth its weight is facing. Is that, most people who are going to use their tool are already using something else in place of it. They are either using a tool like Mailchimp, or Drip, or customer.io, or they have built it themselves in-house. They already have Rails code with a Liquid template that they pull at the database and then they send these life cycle emails. I introed it at the top of the show, but just to remind folks, it’s customer life cycle email designed for SaaS businesses. It’s behavior-based, event-based life cycle automation, segmentation and that kind of stuff.
The switching cost for that is, there’s a challenge there because it’s hard. If I was running a SaaS app, I don’t want all my marketing emails in Mailchimp and my lifecycle emails in Userlist. I want them all together so that when someone unsubscribes, it unsubscribes across everything. So that I have the data, the tags, and all the stuff across everything. The decision to switch over to Userlist is not as simple, easy, “I make the decision today, I move tomorrow” decision. It’s the one that really covers a lot of aspects of my business, all the way from marketing, into the sales process, into the onboarding, the customer retention process. It really does touch a lot of key points in a business.
Jane: You’re just hitting a nail on its head. We have very, very heated discussions in house. They’re not heated, because we initially agreed to give this only post sign-up, customer communications. There is a bunch of trade-offs and perks related to that. The perks are that it allows us to make the products super simple inside. Literally, very very intuitive, as opposed to more complex enterprise tools that do both. On the other hand, there have been an increasing support requests and I know there are opinions out there (yours included), that we should probably allow for classic email marketing automation inside this list as well. So, it’s in debate and we’ll see if this direction is worth pursuing down the road. It’s not an easy decision for sure.
Rob: No. I went through the same thing. I wouldn’t say that I think you guys should do marketing. I just know that when we started Drip, it was overwhelming. By the time we’re just doing the customer interactions, people kept asking us for the marketing. It was for the reason I said they wanted it all to be in one place. That is a decision for you guys to make yourselves.
If you look at Intercom and Customer.io (https://customer.io/) , they’re not designed for marketing emails. It’s really customer communication. It’s obvious that you can build a business without doing those things. I don’t know if Vero was still that way, but getvero.com (https://www.getvero.com/) was also just used to be customer messaging. I think there’s a path to do it and do it successfully. It’s just a matter of how you attack it and which customers you go after.
Jane: And making these tools speak to each other. It’s not just a matter of technical set up. There is no convention in the whole SaaS industry to date. Please correct me if I’m wrong. What is the best practice if somebody becomes your customer? Do you keep sending them newsletters or not? What kind of communication they receive? Is there a single unsubscribe button or not? Every founder makes those decisions for themselves. It’s a technical set up and it’s plenty of logical decisions they have to take.
Rob: Yeah, that’s right. You find yourself all in the mix. Every founder, as you said, makes the decision differently, but they all think that their decision is right. That’s where it gets complicated. That’s interesting.
Over the last couple of years, you’ve been grinding it out, getting Userlist on, getting it built, getting presales, getting folks to use it. You do have paying customers at this point and MRR. I’m curious. In your mind, has there been a lot of uncertainty? Or is there uncertainty now in terms of, “Are we going to be able to pull this off? Is this going to work? We’re two years in and I wish we were growing faster. I wish we were bigger.” Does it ever feel like, “I am just not sure that this is going to work at the scale that we wanted to”?
Jane: It sure sometimes feels like a marketing drudge for any founder. From day one, we have never had any doubt that this is a product that’s needed for people. We’ve done some inventive products before, but we were absolutely positive that there is a need. It was just a matter of making it happen, step by step, slowly, very slowly, very very slowly towards the right direction.
We’ve actually been getting more optimistic with time. The last few months have been super cool. We know there’s a lot of work ahead, but it’s been so nice to see how the traction picks up and there is word of mouth in the community, et cetera. We have actually made decisions, we have been part-time on this, myself and Benedikt. We have made the decision to take the scary plunge and actually go full-time on that in the beginning of 2020, starting January.
Rob: Wow. That’s just a couple of months out. Good for you guys.
Jane: Yeah. There is a lot of work, like prep up we have to do in terms of client work. Having client work, it pulls your attention away, but on the same side, it lets you do that organic slow thing in the more secure manner. You don’t have to worry about bread and butter on the table, because that desperate type of marketing is no good for any brand.
Rob: Yeah. It’s hard to be stressed about money and watch runway shrinking away. Yet, it’s also hard to have split focus. I’ve done both of them and neither is that fun. That’s the conundrum of being a founder. It’s making hard decisions with incomplete information where none of the decisions is 100% clear. I feel your pain on that. Congrats on deciding to go full-time. I do think that will probably be game changing for you guys in terms of the focus.
Jane: Thank you so much. We’re absolutely looking forward to this.
Rob: I bet. I asked you before the interview, if we were cool to talk about your third co-founder, Claire Suellentrop. Folks may have seen her on the MicroConf stage a couple of years ago. You, Claire, and Benedikt actually started Userlist together a couple of years ago. I know that she’s a lot less involved than she was early on. Do you want to talk us through maybe, what the situation is and how that went down?
Jane: Yeah, absolutely. We started this together, the three of us. It was me who pulled the folks together. In my previous SaaS, I was a solo founder, so I had to pay Benedikt cash to build stuff. There was no way I could do this with such a complex project, so I invited Benedikt on board. I was super lucky that he said, “Yes.” There was one more piece of the puzzle missing, the marketing person. Claire was number one on my rolodex of nice people and also amazing marketers, so I reached out to her. At that point of time, she was particularly looking for something of her own to start after quitting Calendly. There was ofcourse time between that. She was previously director of marketing at Calendly. See how large of talent we’re talking about?
I was absolutely thrilled when she said, “Yes.” We had a lot of discussions in the beginning. I’m super happy that we formalized our relationship in the most transparent way. Splitting the shares in the correct manner, doing the vesting schedule, then doing the proper contract. Even though in the beginning, that contract was sort of informal, but we still signed. Then we incorporate it.
Everything was really really well-organized. It’s not just about being legally protected, but also about having clear system in your mind. What’s going to happen when something changes? The assumption of that was everyone was going to be friends forever. It’s definitely very naive and childish, because things change for everyone. That is exactly what happened after a year that we’ve been working together.
The traction has been slow. We just started onboarding our fist pre-order customer. There was no sign of MRR whatsoever. Claire had to decide what’s going to be the number one priority. She had to take things off her plate to make it happen. She had two large projects at that time. It was Userlist and Forget The Funnel, which you’ve probably heard online, which is a huge training website and platform for marketers. She made a conscious choice towards working with marketers because these are her peers, target audience, and that was just overall more fulfilling.
Therefore, we’ve rearranged our agreement. We slowed down her vesting in half and she became our advisor instead of doing work hands one. In that type of mode, we spend another year until just recently when all of the above happened, that we decided to go full in. It didn’t feel quite fair that we’d go full in, start working our backs off, and Claire would just be advising. We decided maybe we could put together a more fair agreement and we reconsidered it again.
Right now, we have not documented it yet. She will formally stop vesting at the end of the year. She will just retain the number of shares she has while myself and Benedikt will go full spin. It sounds pretty stressful, but we really didn’t get into any human arguments about it. It was more like a constructive discussion about figuring out ways how it can work for all of us and the work that’s fairly rewarding. Going into business with adequate people really, really pays off. After all, she is a good fit.
Rob: That’s what I’m going to say. From what I’ve heard from you and Benedikt just in passing, in talking about stuff, it sounds like it’s been a surprisingly easy process for something that could’ve been really hard. It often turns into a big emotional fight with co-founders if there’s someone that has a perfectly good reason to come, walk away, and do something else that they decided to go do. It can hurt people’s feelings and it can have all types of ramifications. It really sounds like you all were just reasonable people trying to figure out what was best. Is that a good summary of it?
Jane: Yeah, very much so. Interesting fact: we never got to use it, but in our original agreement we also had a field for a mediator. That was a person we all knew and trusted who would mediate our arguments should we arrive at a deadlock somewhere. We never resorted to that measure, but it was another cautionary thing that we took. It sounds like marriage. You need to find adequate people to really resonate with each other and you need to document everything. That’s how it works.
Rob: That’s good. I’m glad. I like Claire and I know that you guys are friends. It’s nice to be able to go away with everyone feeling good about the resolution.
Jane: We’re so very much a team. She remains as the co-founder. For sure we’re going to have a monthly marketing sessions together. She’s still participating largely in the strategic side of the business. It feels great. She’s a wonderful human being.
Rob: Jane, you’ve worked on many SaaS apps. You’ve built a couple yourself, as you said. You hired Benedikt prior as a contractor, and now working as a co-founder. You have a bit of an experience under your belly here. What has been the most surprising thing to you in building Userlist?
Jane: Building Userlist? I was thinking you’re going to ask about the takeaways from the first app because I had plenty.
Rob: Oh. Let’s go back on that after you answer this. I’d love to hear it.
Jane: Probably the slowness of it was the biggest surprise.
Rob: Yeah. You thought it would gain traction quicker?
Jane: Yes. The product idea is quite unbeatable. It’s really, really a useful tool. You will think that just getting the word out in the community would get fellow founders signing up like that but no.
Rob: Yeah. Is that an issue with switching cost? Or do you think it’s the differentiation thing of not having the same features? If I were to compare you to your competitors, I don’t know who has the most features or whatever, so I’m curious what your take is on that.
Jane: We’re all wise enough to know—our team and you—that features that are not exactly the key thing in purchasing decisions. I think feature parity is not an issue. A lack of some features is clearly a benefit in our case. It makes the product much more transparent and straightforward to use.
I don’t want to be comparing it to Apple but because it’s run-of-the-mill, we try to make some opinionated product decisions insight so that it’s simpler, easier to use, and more efficient. In that regard, that’s definitely not a problem.
As for the switching cost, yes. I think that’s a primary reason as we talked about. I’m hoping there’s a secret sauce inside. Overall, that and explaining what it does all together really makes a puzzle. I’m glad that I have been putting it together gradually but it’s clearly not there yet.
Rob: To wrap us up today, you hinted takeaways from your prior SaaS. For folks who don’t know, it’s called Tiny Reminder. It was a form builder with notifications. Does that correctly sum it up?
Jane: That’s right. It was a Vitamin. Very much Vitamin type of product.
Rob: Cool. What were your handful of takeaways from building and I presume, shutting that down?
Jane: Quite a few. I sold it Nusii, so it still exists and functions. They’re planning to grow it as a satellite, a promotional tool for Nusii. I had a bunch of takeaways. I’m so glad I had this lab SaaS, lab rat sort of project that I’ve made all possible mistakes. I didn’t market it to a clear audience. It was really so useful that anyone could use it and after that, just focus on a niche instead.
It was super Vitamin. That’s why we set out to do an Aspirin product this time. Also, I did a freemium and that was quite a battle. Freemium is not a great way for bootstrap founders to start their business. Not just because of the lack of revenue but also the lack of MRR as a validation. You never know whether those people are just like tire kickers or real users—do they really need it?
And a couple of more discoveries. I had a lot of experience with info products before. I’ve been observing how sales work, that sales are hard to get, how downloads work, how emails, sign-ups, and numbers work. Not everything is cool. I was not prepared for that in SaaS businesses. It’s so much harder.
Just selling a book and an impulse purchase is way easier than selling a tool. That’s clearly not something you can just buy. You need to use it and get value out of it.
Rob: I had that conversation with so many info marketers who are making $50,000 a month or $100,000 a month. They’ll say, “How am I going to get into SaaS?” I’m like, “I know you can write a copy. I know you can get people to impulse buy a book.” If they don’t read the book, they don’t cancel on you because they’ve already paid you. It’s like in a completely different world. You’re right, it’s not twice as hard. It’s like 10 times as hard to make it work with SaaS.
Jane: We had a spectacular product launch for Tiny Reminder. The number of free trials, I think, was the cold traction to the website. We’ve got like 10 or something. I don’t exactly remember the number but it was super miserable. For a typical marketing freebie, it would have been, like you’ve said, 10 times bad.
Another lesson was that I had no audience of my own related to design. I’m sure there are plenty of founders in that audience. I’ve learned to understand that personal audiences don’t translate into SaaS sales, period. We’ve had a few users coming from my site but this is clearly not a primary channel. It’s not something you can leverage very well. You really need to count on product market fit first and some scalable, reliable, marketing channels instead of trying to milk your list, which I’ve never done in a bad way, but I tried with the first product and it just clearly didn’t work.
Rob: Yeah. That’s a lesson I’ve learned a long time ago as well. You can sell a little bit to your list but really, they’re interested in hearing from you, hearing about your process, and they’ll buy books from you all day because that’s hearing about you and your process. Books, video courses, and conference tickets are things that you can sell their personal audience, but SaaS apps, you can get that first. You will get a first handful of customers and then that’s it. Now, the real work begins.
That’s why I’ve heard folks say, “Hey. You should build an audience before you build a product.” That’s the way to do it. I’ve heard that said about infoproducts and I’ve heard it said about SaaS. I think it’s the wrong advice with SaaS. It’s never bad to have an audience but I do not think it’s worth the years and all the effort of building an audience.
Building an audience is very, very hard in order to launch a SaaS app. I think I have many more examples of people who have not built an audience and launched a successful SaaS app than I had people who have done it. Versus, if we’re going to talk about the knowledge product side where you’re going to write books, courses, and that kind of stuff, I would say people need to know, like, and trust you. Therefore, if they need that relationship with you, therefore, I would recommend and err on the side of actually building an audience before doing that.
Jane: You need to find scalable ways of reaching out to new people anyways. Even if you have a nice waiting list like we had something close to between 500 and 1000 people, I have an impression that they never really fully converted, even though we’re doing our best and talking to them very, very often, very diligently, with exciting updates. It’s still not a scalable way to grow our customer base for sure.
Rob: Yeah. That’s right. When we launched Drip, I had a launch list—not my robwalling.com list—but an actual Drip interest list. It was about 3400 people. The first 500 on the list were from me talking about in the podcast. I think I emailed my email list and just talk about it in another podcast. Then, there were segments that were from other shows. There were some from Facebook ads to a landing page. I watch how they converted. It was definitely my personal brand that converted almost the worst.
There were some cold traffic that converts worse than that, but people were more interested in the story. That’s okay, but you have to know that going in that an audience is not a golden ticket to launching a successful SaaS app.
Jane: Moreover, it can be deceptive. We’ve heard those stories like Brennan building RightMessage. They almost have that hangover from Brennan’s authority in the automation space when they were building a different kind of product. I’ve just had Derrick on my show and we’ve talked about Level and how we validated it. That was basically off his authority based on Drip and everything that got him into a little bit deceptive situation, too.
Rob: Yup. As you said, it can be deceiving.
Jane, thank you so much for coming on the show today to talk about Userlist and your experience with it. If folks want to keep up with you on Twitter, you are @uibreakfast. You have the UI Breakfast Podcast that you have mentioned a couple of times. Any other things folks should check out?
Jane: Of course, userlist.com. We just migrated yesterday. That’s a great resource. You can find all kinds of materials if you’re interested in life cycle email. We grabbed the Twitter handle, too. We are now at @userlist. That’s just pure luck. We didn’t even buy it.
Rob: That’s great. Cool. Thanks again, Jane.
Jane: Thank you so much, Rob.
Rob: Thanks again to Jane for coming on the show. If you have a question you’d like to hear answered on the show, leave me a voicemail at (888) 801-9690. Or email questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control used under Creative Commons. Subscribe to us by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. I’ll see you next time
TinySeed Tales 4 | A Bug in the Funnel and Giving Up Control
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Rob does another follow up with Crag Hewitt of Castos, they talk about his new hire (growth marketer) and news of a major break-through.
Episode 470 | A Bluetick Update from Mike Taber
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In this episode of Startups For The Rest Of Us, Rob checks in with Mike Taber on his progress with Bluetick. They talk about the finale of the Google audit, a new integration. and trying to find differentiation in the market.
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Rob: In this week’s episode of Startups for the Rest of Us, I catch up with Mike Taber and get an update on his progress with Bluetick. This is Startups for the Rest of Us Episode 470.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth start up or you’re thinking about your first. I’m Rob and today with Mike Taber, we’re going to share our experiences to help you avoid the mistakes we’ve made.
Welcome to the show. I’m your host, Rob Walling. Each week on the show, I cover topics related to building, growing startups in order to build yourself a better life and improve the world in some small way. We strive to be ambitious, but we’re not willing to sacrifice our life or health to grow our companies. We have many different show formats. We have some tactics and teaching. We have interviews, listener questions. Sometimes, we do founder hot seats and breaking news episodes. All kinds of things that just mix it up and the feedback I’ve gotten since the mix up 20, 25 episodes ago is that the people really like that and they almost like the unpredictability of it. I’ve been overwhelmingly told to keep going and keep doing what we’re doing.
Each month or so, about every four to six weeks, I catch up with Mike Taber. He’s still a regular guest on the show, but he only comes on every month or two to update us on what he’s been doing with his product, Bluetick, that he’s been struggling to get to the point of supporting him full-time. If you haven’t already heard episodes 448 and 458, I’d encourage you to go listen to those episodes because they do give you a background on really what we’re talking about, how I’m trying to help push Mike forward, and challenge some of his assumptions. Also, to get updates, just to hear what’s going on because I like to know what’s up with Mike and I’ve heard overwhelmingly that people want to as well. They want to know what’s going on with him.
Today’s episode is a fun one. I do push back on a few things that Mike has said and call him on why he hasn’t made more progress. Overall, it’s a positive episode and it’s fun to hear Mike rant about the Google audit and I think our editor even has to bleep him once or twice, which is unusual for Mike.
Before we dive in, I want to let you know that tiny TinySeed applications for batch two are now open. You can go to tinyseed.com, click the apply button. If you’re a bootstrap, SaaS app, or subscription software and you’re looking for mentorship and community in a small batch of motivated founders as well as $120,000 investment or more frankly, if you have a couple of founders, you should head over to TinySeed and see what we’re up to. We’re super bootstrapper-friendly and the idea is to raise the tide and to raise all the boats in this segment that is really an underserved group.
The venture capitalist has an agenda and it’s to go bigger or go home, it’s to be a unicorn or bust, and that’s not what we’re doing. Our thesis is that we can get a lot of folks who are wanting to build this $1–$20 million ARR, these life-changing SaaS apps, ambitious but not 90-hour weeks. We’re about halfway through our first batch of ten. This application process runs for the next couple of weeks and we’ll be doing another batch early next year. We’re getting that together. Good things have been happening there. tinyseed.com, if you’re interested. With that, let’s talk to Mike.
Mike, thanks for coming back on the show.
Mike: Hey, how is it going?
Rob: It’s pretty good, man. I was just counting the days. I think it’s been about five weeks, about right around 34–35 days since we last spoke. I know during that time you were out of town for five days with MicroConf Europe, but I’ve been getting feedback both at MicroConf Europe and then at a little founder retreat I went to earlier this week that folks do like following the story of what you’ve been up to, so I’m curious.
As usual, I have my list of stuff from last time that some stuff was up in the air and the threads that we’re following, so I look forward to hearing about it. I think the thread of the hour and the one that you’re basically spending 15 hours a week last time we spoke is this Google audit. You were a month into it and you thought it would be six more weeks’ worth of stuff. We’re essentially five weeks into that period so I’m fascinated to hear what that’s looked like over the past five weeks, where it’s at, are you wrapping up, that kind of stuff.
Mike: I guess for context of dates and timeline here, three weeks ago was MicroConf Europe. There was a Wednesday that I was basically either on a plane or over in Dubrovnik for MicroConf Europe. That spans a couple of weeks where, I don’t know about you, but a day or two before you travel, you really don’t get a whole lot done and then the day or two after is kind of the same thing so that basically makes it almost two full weeks right there.
My audit started last Monday and it was supposed to go from Monday to Monday, I believe. That process is finished. I’ve got a draft of the report and I’m going to go over it with them next week. I’ve got the letter of attestation or whatever it is, more like a letter of assessment. That’s already in my hands and I’ve sent that off to Google. Now, it’s a waiting game to see if Google just looks at it and says, “Yup, this is good. You’re all set for the next 12 months.” That’s the good news. The bad news is I’m super pissed about the whole thing.
Rob: Well, you have been the whole time. Are you more pissed now than you were the last two episodes? Has something more happened?
Mike: I’m way more pissed about it because basically they came back and said, “Yeah, everything looks fine. It’s pretty much it.” There was one thing they complained about and they’re like, “Yeah, you’re cryptography keys, the keys that you’re using to encrypt information, shouldn’t be on the same machine as all source code,” or not even a source code, but the actual application because before, I was compiling it directly into the application knowing that nobody else has access to that machine. You can’t get to it unless you break the machine open and hack into it, and then you’ve got access to the source code and everything else.
At that point, encrypting things really doesn’t do a whole heck of a lot and yeah, the data is on a different machine, but I’m well aware of all the security implications there. In the grand scheme of things, that’s a very, very small thing. They’re like, “Yeah, that’s an absolute no, no. You can’t do that.” I was like, “All right. Fine.” I spend a couple of days using Azure’s Key Vault, I think it’s called. Basically, now I’m storing the keys someplace else, but the client’s secret and stuff are still on that machine, so it’s like, “Okay, now I have to go to this other machine, pull back that information, and then encrypt it.” I have to do that every single time that I have to encrypt or decrypt information. I’m like, “This is just stupid.” It’s just like, “All right, whatever. I’ll do it,” because I have to. I have no other choice.
Rob: Yeah, that’s the thing. You can get hung up on it and be pissed about it, but then you got to move past it especially if Google approves this certificate of attestation, I think is what you said. I mean assuming that that goes through, you have 12 months and it’s time to get on your horse and get things moving.
I’m curious. Over the past five weeks, how much of your time was that was it? You expected it to maybe ramp up to like 20 hours a week, like half your time, and I’m curious if that amounted to that or what it looked like.
Mike: It wasn’t that much. I had to give them a whole ton of documentation. It wasn’t quite a dozen different documents of policies and procedures and stuff like that, but some of it was just I’ll say personally frustrating because they’re like, “Document what your secure coding procedures look like and how you educate other people who come onboard.” I’m like, “Well, there really isn’t anybody else that I have to educate about it because it’s just me.”
I distinctly remember looking at one of the questions and it was something along the lines of, “Please describe how you do pair programming for code reviews.” I wanted to laugh at it and I had to hold myself back from saying, “I wait 12 hours, sober up, and then look at the codes sober to figure out what it was that I was doing.” It’s just so frustrating to have to go through that stuff and answer completely stupid questions and provide documentation for things that I’m not going to look at and nobody else will.
Rob: I wish you would have put that drunk answer on there and just to see what they said.
Mike: Well, it ended up in the report, too. Not that, but some of the other things that I wrote, they asked me a couple of clarifying questions and literally word-for-word, the stuff that I put in there, it was word-for-word what I said was in the executive report.
Rob: Yeah, that makes sense. I was joking, by the way, about the drunk comment. I’m glad you didn’t do that because that wouldn’t have gotten well. This feels like a win to me. I’m going to flip it on its head because I can tell you’re pissed and you have been for three months or more because the whole thing threatened your business itself.
When you got initial quotes or estimates, they were really high. Then you got lower quotes, then you negotiated, and then you got something that was reasonable enough for you to pay. Now, it sounds like your done and while it has killed some time, it didn’t kill as much time as you were projecting over the next six weeks. Right now, are you done? Do you have to make any more code changes to satisfy their recommendations?
Mike: As far as I know, no. I have the letter. I have to hand it off to Google. I believe, at that point, Google just takes it and says, “Okay. Yes, you’re approved.” And they toggle some switches on their side and they stop bugging me about all this stuff. My belief is that I’m done, but what pisses me off is how little they found and how big a deal Google made it out to be. They’re like, “We’re going to kill your business if you don’t do these things or you don’t go through this process and pay this large sum of money to this third party company to do a security audit.”
There’s no recourse there whatsoever. So, I go through the process and then when I get through it, I come back and I look at their end result of it and they’re like, “Oh yeah, you have to change this one minor thing here that’ll take you like a day or two.” Then, all the other documentation that I put together, which is a total waste of time because nobody else is ever going to look at any of it, it’s totally useless. It was a huge time sink for absolutely nothing. It didn’t benefit my customers. It doesn’t make the product any better. It doesn’t get more people using it. It literally does nothing other than allow me to stay in business. That’s the piece that’s so frustrating. That’s the part that really pisses me off and makes me angry at Google, for putting me through this when at the end of the day, you look at the report and they’re like, “Oh yeah, these one or two things.” It was almost completely unnecessary.
Rob: If you’re at home playing the Startups For the Rest of Us drinking game, you can know take your shot for Mike saying it was unnecessary and he’s angry at Google. Mike, I know. I totally get it. I think I want to say it again. I consider this a win because you’ve passed this. Six months ago, maybe more, you started talking about this and it was a big, big deal and you’re done. You made it through and it didn’t wreck the business. To me, it’s like the Bill Wolf quote, “Control what you can control and let the score take care of itself.” That’s where you are. You can be pissed. I get pissed all the time at stuff. You know me pretty well. I get mad pretty easily, but I try to let stuff go quickly and move on. You know what I mean?
I mean this could’ve been a complete and utter roadblock that decimated your business whether because you failed the audit, whether it’s because you couldn’t afford the audit, whether it’s because you refused to do the audit on principle. Any one of those would’ve wrecked the business and you turned it into a speed bump. You said, “What are my options here? I can pay for this thing. I can negotiate this thing. With my teeth clenched, I can just force my way through,” and that’s what you did. I think I know it’s a pain in the ass. I totally get it and I’m really surprised that we have not had to use the beep noise over any of your words so far this episode, but cheers to you, man. I am happy. I look ahead at Bluetick and now, it’s all about execution. It’s differentiation. It’s writing some code. It’s marketing. It’s getting more people in. That’s how I feel about it. I have the outside perspective. You’ve been mired in this for months. Does that resonate with you? Do you feel that way or do you feel like I’m being too optimistic silver lining?
Mike: You’re absolutely right. Everything that you just said is 100% correct, but Google still pisses me off right now. I’m not the type of person who gets upset easily. I’m not the person who you can just poke with a stick and suddenly, I just rear my claws and just go after you. I just don’t do that, but this has been dragging on for so long and I really feel like I’ve been put through the ringer for this for no good reason. I just can’t point anything justifiable. The problem is I know I have to go through it again next year.
Next year, it will be better because I’ve got all the documentation in place and yeah, the product will change, certain things are going to have to be updated here and there and that’s fine, but the fact that they went through this whole thing and they made it such a big deal, and they get to the end of it and there’s this report that shows, “Oh, we found three things.” One of which is not even on my servers. I’m like, “Okay, this is total […]. Complete and utter […]. You’re complaining about an SSL certificate that I put on a server that’s not even my server. Come on. That’d ridiculous.” I even told them that. I’m like, “I have no control over this.”
Rob: Yeah. I hear you about having to do it again in 12 months. My hope is that the fact that you already have an existing relationship with an auditor and that you have the same docs or depending on where you are in 12 months, maybe you’ll have hired a developer or a senior developer that could do parts of this for you so you don’t have to mire through it.
I realized that’s a tall order. You’d have to make a lot of progress between now and then, but I think in the back of my mind, in your shoes, you’ve seen how frustrating this is and how much it emotionally derails you. With me, with Drip, it was blacklists, there were support requests, it was cues being slow. There were these things that I had to find people to do because they slowly tore away at me and they made me hate my job.
As entrepreneurs, we can’t hate our job because we control them. If we’re not enjoying it, it’s to a certain extent, our fault. Now, in this case, it’s not. It’s not your fault that Google made you do that but you did then have the chance to say, “Well, I’m just going to shut the business down,” or, “I’m going to pivot away from Google,” or whatever, but you gritted it and made it through, which is in my opinion, what you should have done. But looking ahead 12 months, I’d be thinking how can I not let this be six weeks, eight weeks of me being mad next time? What types of things can I put in place to help with that?
Mike: The fact of the matter is, I think that in a year when this comes up again, it will be a lot less stressful because I will have had full visibility of all the things that are going on, and all the things that they’re looking out, and I will have already had one report to look at that says, “These are all the things that we looked at and be able to at least keep them in mind moving forward.” Up until I got a final report, even during the week of the audit, it was just super stressful because I wasn’t getting anything back from them and I was expecting a daily report or something along those lines that says, “Hey, we looked at this and this is a problem. You need to fix it. Here’s a high priority. Here’s a critical thing that you have to do.” Because that all those critical and high items had to be taken care of before they could issue this letter of assessment and I was getting nothing.
I asked them. I was like, “What’s going on here? I’m expecting something here and I haven’t heard anything.” They’re like, “Oh, we haven’t found anything so far.” But of course, there’s a lag time between the time that I sent them an email and then they get back to me. I think some of their penetration testing staff are in completely different time zones like halfway around the world, so it just makes that back-and-forth a lot harder to do because, (1) they don’t report directly to me, and (2) they’re in a completely different time zones. It just makes it a lot harder and a lot more stressful, but I don’t think that it’ll be nearly as bad next time.
Rob: Yeah, I would agree. Looking ahead, let’s talk about some other things that you had in the works, some of which were on hold or I think one of which was on hold due to a code freeze and then there were some other stuff that step through. Just to keep going on the thread.
You have an untestable sealed .NET component. Startups For the Rest of Us drinking game just gets so good when we go over this topic again. I want to go back and I think it had to have been six or eight months ago when you first mentioned of this thing. You said, “I’m going to replace this thing,” and you put it on hold due to the Google audit. Have you replaced it yet? Is this top priority? Where do we stand with this?
Mike: I just got the letter of assessment this morning. I was expecting it on Monday because they said that they were working on it, and then Tuesday came and nothing, Wednesday came and still nothing, and finally, I got it this morning. It was like one o’clock in the morning. Until then, it’s basically been on code freeze. So no, I haven’t touched that yet. Is it on deck? Yes, at some point. When exactly? I don’t really know.
I have to go through and look at where that really falls in the priority list because I feel like it’s a lower priority than a lot of the sales and marketing stuff that I have to do. I hate to say that this is or isn’t holding me back because I’m not really sure. I want to get it out of there. I don’t know how hard it is to be able to pull it out because it is pretty integrated into the core of my code and I’m going to have to change the storage mechanism.
I think I’m just going to have to make a judgment call at some point about do I just suck it up and leave it there even though I know that it’s the wrong decision? There are certain part of I think everybody’s application where it’s got words on it and you’re like, “This really needs to be rewritten or it needs to be refactored.” And you don’t do it because you know that you’re just kicking a hornet’s nest and it’s going to be terrible.
Rob: How long do you think it’s going to take you to get the new component in? I know you have to redo data and you have to remap stuff and namespaces. I get it. How long though? That’s the thing.
Mike: Just for me to migrate the data would probably take a week. That’s just the computers churning.
Rob: Yeah, so it’s a sizable thing, but you have decided that this is the right choice, right?
Mike: Yeah. That’s the thing. Assuming nothing goes wrong, it would take a week.
Rob: Sure. All right. It happened this morning and you’re not done with it yet, Mike? What have you been doing? No, I’m just kidding. Do you plan to start it? What is it? Thursday today so do you plan to start that tomorrow or Monday? Is that the next priority or you’re just saying I’m going to do this in a few months?
It’s tough. This one’s not so clear up to me. To me, in my head, it’s a bite the bullet type of thing where it’s overhead and I know it creates legacy, or cruft, or just hard code to work around. To me, I would bite the bullet and I would cover up two weeks and I would hammer this through. But I can also see an argument on the other side of this provides no value to your customers. On the flip side, it’s like, “I should be marketing, selling, and getting more people in before that.” I could see an argument either way. Again, I would probably make the product such that I feel more comfortable marketing and selling it, because I hate having crappy code. What’s your plan there?
Mike: The best thing that I can come up with is to plan to do it in about a month because that would put it in mid- to late-December, which I know there’s not going to be many people using Bluetick at the time and I’m probably not going to be fielding very many support requests. I’m probably not going to be launching very many new marketing or sales campaigns at the time. It’s a slow time where it would be a good time to sit down and bite the bullet and do that as opposed to now where people are still ramping up for the holiday season, doing email follow-ups, and trying to get deals and stuff. By the end of the year, it seems like my time is probably better spent doing that now and then plan for that slow period of biting the bullet.
Rob: Cool. That sounds good. We will connect with you again on that next time you come back. For our next topic, let’s talk about marketing. You obviously had the majority of your work weeks to be doing other things. You didn’t want to write code and the Google audit was taking some time. We talked about a marketing hire you were making. It was a contractor to do podcaster research and we had talked that through a little bit last time. Where does that stand?
Mike: Most of the stuff is already done and been sorted and prioritized. I got the information I need for all those things, so we’re basically waiting until the end of this audit to start queuing those up. Between today and tomorrow, the plan is to start queuing those up, start sending those emails out, and see if I can get onto a handful of other podcasts. I’ve already done one podcast interview. I actually did that last week. I’ve got another one that I was told by the podcast host that she’d love to have me on so it’s just a matter of reaching out to them and getting that set up as well. There’s no more roadblocks in the way of doing that so that’s get started ASAP at the moment.
Rob: It’s been five weeks. Why did it take that long? Why hasn’t that started two weeks ago?
Mike: Well, two weeks ago, I was in Europe. That’s why. Of the last five weeks, a good solid week-and-a-half to two weeks was spent in the middle of the audit and then there was another solid week or two that was basically over in Europe. I basically had maybe two weeks or so before MicroConf Europe get started on that. That was mostly the data aggregation and the actual work that was done behind the scenes.
Rob: Got it. Are you sending those emails through Bluetick?
Mike: Yes.
Rob: That’s cool.
Mike: Well, that’s the plan. I haven’t actually sent them out yet.
Rob: How did you get on the podcast then?
Mike: Oh, there’s a personal invitation. Somebody raised that to me.
Rob: Got it. Cool. That would be an ASAP thing then. You could get that going tomorrow literally or Monday. You just got to write some copy and get her in.
Mike: Yup.
Rob: Cool.
Mike: That’s the plan for that.
Rob: Good. Looking forward to that. We already talked about that. I won’t go into it. Again, it drives a little bit of traffic. It’s more of a slow burn. It’s a one-time thing type of thing, but I think that it’s easy enough to do as long as it doesn’t take a bunch of time. I would probably be doing the same thing right now.
The other thing you were looking at was code emailing. It was really warm emailing. You said 900 email addresses from your LinkedIn connections. You had prior Bluetick cancellations, sales leads that never converted, that were in pipe drive, other stuff. You were going to bucket them and start warm emailing cold batches in the next week or two last time we talked. Talk to me the status on that.
Mike: I’ve got those all bucketed out and that’s another situation where I was holding off on actually doing it and pulling the trigger after this audit was done. That again is something else that got the green light at this point that I can start today or tomorrow.
Rob: That’s interesting. Why were you holding off on that? Because you knew you were going to pass the audit. That wasn’t a big question. I knew you were.
Mike: It was never a question of whether I would it pass it or not, it was a question of timing. There are two pieces of the audit itself. There was the technical piece where they say, “Hey, we’re going to beat on you servers for six days.” And then aside from that, there is all this policy documentation that I had to create. Anything that they saw that raised a red flag, I had to either change the policy itself, it’s not just text that I have to change, but it’s also I have to change how I do things.
For example, one of the things that they said was, “Oh, you have to enable multi factor authentication on everything including source control.” So I have to basically generate SSH keys and lock down all of my source controls, which means that I also have to generate API keys, then go into my build environment, and I have to change all that stuff, too. It’s not just a simple thing like changing some texts on a piece of paper that I hand to them. I actually have to go do those things as well. All of that stuff needed to be changed.
There was a bunch of other things that came up during the policy side of things where they said, “Hey, you need to change how you’re going about these things just in order to comply with the requirements.” Between that, I knew that I only had a week or two before I had to leave for Europe, and then immediately after that, I had to dive right into the technical side of the policy stuff.
What I didn’t want to do is start going out and start and try to schedule meetings, calls, and stuff with people. They were not going to be for a month-and-a-half because I didn’t necessarily know that earlier this week things were going to be done. For all I knew, they could come back and say, “Well, you’ve got these 25 vulnerabilities, and 17 of them are high or critical. You need to make code changes to do those.” I didn’t know that I was going to be done this week. For all I knew, it could’ve been another three to four weeks.
Rob: Yeah, but I think we talked last time and I had said cold email doesn’t just start converting overnight typically. Typically, you start it at trickle, you test some things, you tweak, you tweak, you tweak. It takes weeks to really start ramping it up. I had suggested, “Hey, you have this month or whatever,” I guess it was six weeks during the audit that was projected to be six weeks, “I would propose that you just start emailing 5 a day or 10 a week.” Just a very small trickle to start seeing something such that the volume of things wouldn’t have been like, “Oh my gosh, I have 50 calls.”
It wouldn’t have been so much, but just to start ironing those out because I bet if you start this on Monday, it’ll be a couple of weeks until it really starts getting going and now, you’re at a standing stop five weeks later. You know what I mean? Five weeks after our last call, you are at standing stop trying to get it going rather than having a little bit of momentum. That’s what I was more getting at. Why did you wait during the audit to get it going?
Mike: I think I agreed at the time and then realized that I just was not going to have time. Even if that started to turn into something, I wasn’t sure what the future would hold in terms of my timeline leading up to the week after MicroConf or two weeks afterwards. Like I said, for all I knew, it could’ve been another three or four of hard, heavy lifting in terms of code or code changes. I just didn’t know. That big blind spot is really what held me back there.
Rob: Okay. Next time, you should be good. You should be rolling on these things. Right now, cold email and the podcast tour, do you have any other marketing stuff that you’re going to be rolling out or are you going to be focusing on those two? I’m just talking over the next month. Let’s say we talk again in four or five weeks.
Mike: I do have one other thing that has finished up, which we haven’t really talked about. I just finished up an integration that I got approval for I think on Monday of this week. Now, if you go over to zapier.com and you search for bluetick.io, you’ll find it underneath the early access section. bluetick.io now officially has a Zapier integration that is no longer just buy and bite only.
Rob: Nice. Congrats man. That’s cool. Now, what’s funny is I have a note because I was going to cover that. The note says, “Mike is working on an integration that should be live at the end of this week.” I read that five weeks ago. Why did it take that extra month?
Mike: Because I had to email them and then there was a little bit of back and forth. They basically had to run it through their own testing and stuff like that. There was a bunch of things that needed to be changed both on my side and inside the Zap itself in order to get it live. It took a little bit longer to get finished than I thought it would or I hoped it would. And then I emailed them and said, “Hey, can you guys take another look at this.” When I got back from MicroConf, I emailed them again because I haven’t heard back. Maybe the email got lost or buried under all the other stuff that I’ve got going on, but I ended up having to ask them again to take a look at it. It only took them two or three days after that to take a look at it to say, “Yup, this thing looks good. Go for it.”
Rob: Cool. So people can go and search for that right now. Do you get any promotion out of that? Are they going to list you anywhere?
Mike: No. They don’t do any code promotion until you get to a certain number of users, which I think I was told it was like 50 users before that happens so I have to look and see if there’s any way for me to actually see how many active users I have. But I don’t know what it currently stands at so I don’t know how far I have to go between now and doing any sort of code promotion with them.
Rob: Got it. In order to get to 50 users, obviously, you need to get more customers yourself and then have something in a sequence somewhere that is asking people to hook it up, right?
Mike: Exactly.
Rob: Cool.
Mike: But I will say having the audit and the Zapier integration behind me, I would call both of those huge wins for me.
Rob: Yeah, that’s good. Would you say over the past, since our last call, those are probably the two high points?
Mike: I would say so, yeah.
Rob: And then the low point was the audit? Just in the midst, that’s what it sounds like.
Mike: Well, the midst of it and then the end results been everything’s fine. It’s like if I wanted to pay somebody five plus figures to go not find something, I’m sure my kids would volunteer. Again, it’s just irksome. I mean you don’t know until after you’ve done it because you do have to poke at everything and I get that part of it, but it’s still frustrating especially being early on.
Rob: Wait, are you saying you were frustrated with Google and the audit? Oh Mike, every time, I’m going to keep bringing it up.
Mike: My anger is interesting.
Rob: Oh, next call, I’m going to bring it up again just to see, just to troll you. Cool. A couple of other things before we wrap. One thing I had asked you about was differentiation. I’ve mentioned, Bluetick is very similar and undifferentiated from most of your competitors and you had said, “I need to talk to some of my customers more and ask them why did they decide to use Bluetick.” Think about it as a job to be done thing. You had talked to a few customers. You got a couple of ideas. One was to have customers in multiple sequences at the same time. In other words, to be able to re-add customers to the same sequence.
It’s a two part question. One is have you gotten more confirmation that those two feature ideas or differentiators are enough? Are you going to build those? And I guess the third part is, maybe we’ll start with this, have you had more conversations with customers since we last spoke? Talk about those other things.
Mike: I’ve had a few here and there, yeah. I still don’t necessarily know if what I have in mind is the deciding factor of like, “Hey, this is going to make Bluetick leaps and bounds better than the other things that are out there.” I believe that it is, but I don’t necessarily know that for a fact. I don’t have any real basis for that. It’s a gut feeling more than anything else.
Rob: How can you turn it from a gut feeling into something? I would say a gut feeling is like, “Yeah, I’m like 30%, 40%, 50%.” How can you get this to 70% or 80%? Whether it’s with one of these things or whether it is something entirely different that you start hearing from other customers.
Mike: I think the first step one, obviously talk to some more of my customers, but two is to start running the idea past. I almost want to say go back to basics when I was first flushing out the idea of Bluetick with a bunch of different people and ask them questions about, “Would you be […] this?” or a product that solves this particular problem. I think it’s a matter of going to some of my list and finding out, “Is this the type of problem that you would be interested in solving inside of your own business?” I feel like it’s more of a reframing of what Bluetick does versus selling what Bluetick is, if that makes sense.
Rob: It does. Now, is it reframing what it does just like, “Hey, it does this one extra feature or two extra features,” or is it in a whole position? Like it’s a more broad branding/positioning shift?
Mike: A little of both, I think. In order to do it, I would have to write some more code. Obviously, I don’t want to go in that direction unless I hear more from people about, “Hey, yeah, this would actually be very compelling for us to use that.” But the other thing is when you hear about an email follow-up tool, your inclination is cold email. There has to be some sort of a brand positioning of, “Hey, this isn’t just for cold email. This is how it is positioned differently in order to make it work for people who aren’t just doing cold email.”
Right now, Bluetick serves a very, very specific piece of functionality for people in their business and if they don’t have that particular problem, then they won’t use it, but that also makes it hard to identify the types of customers because two businesses who are largely identical, one of them may be doing that activity and the other one may not be. It’s hard for me to say, “Oh, go after SaaS companies that fits this profile or in this particular business,” because unless they’re doing that particular thing, it doesn’t solve their problem.
Rob: Got it. So between now and the next time we chat, is this high on your priority list, to speak with this additional customers to try to suss this out?
Mike: It is. I wouldn’t call it my number one priority, but I really need to find what that one differentiating feature or factor is that would make it easy for people to understand what I originally had in mind with Bluetick as a vision as opposed to what it currently is and does today and what people see it as.
Rob: Yeah. I wouldn’t disagree with that. It’s kind of what I’ve been saying the whole time back to episode 448 when we first really dug into all of this. My point was Bluetick is not differentiated and you’re not moving fast enough. That was the thing, whatever that was five months ago. Now, you’re through the Google audit and you’re through a lot of this speed bumps and does feel like, (a) step one, figure out how to differentiate it, and then (b) differentiate it and move fast enough such that folks you’re trying differentiate away from aren’t keeping up with you or aren’t going in the same direction or whatever. That’s what I’d be doing, too, in your shoes, would be a lot of conversations.
I think that cold emails probably can play into that. Again, they’re not cold emails, but it’s your LinkedIn connects and the Bluetick cancellations and such. In addition, I’d probably talk to every customer you have right and just try to figure out why they’re using it, how else you can make it to be sticky. You have those two ideas of those features I mentioned earlier. Those seem like nice to have as interesting tweaks but I’m not convinced. My gut is that they aren’t enough. They aren’t enough to be really, really differentiated and make people switch. Just like what can you have that will make people switch from other tools or choose your tool when they’re comparing yours to the three or four other tools that are top of mind for me.
Mike: I mean I have an idea of exactly what it is that I would want to talk to people about because it’s something that we can talk about it here if you want. The basic idea using Bluetick as a mechanism for identifying things that you need from other people and this is something that you can do with Bluetick right now, but let’s say that I need a W-9 from you or something like that, the question is, how do I get that from you and how do I make sure that I follow-up with you until I get it?
That was one of the things that Bluetick was born out of, was when basically before Xander started helping out with this stuff, I was doing all of the data gathering for all the sponsors for MicroConf. I would say, “Hey, I need logo. I need title text. I need an image. I need all these different things,” and asking them for it and then going back and forth like, “Hey, I’ve got these two things but not this other one or this third one over here or fourth one over here,” and using Bluetick instead as a mechanism for gathering that stuff.
That’s basically a way to build a process into Bluetick such that solve a very tightly-defined problem to gather digital materials from other people and they may fit a specific format, or they may be documents, or Excel spreadsheets or something, and then Bluetick can manage that back and forth process to say, “Hey, I’ve got these three things but not this other thing over here.” Does that make sense? There are like 30 different use cases for it but just very simplistically, that’s the idea.
Rob: Yeah, that makes sense. That’s a clear path or a clear job to be done. The job to be done, you’re saying, is not cold email, it’s not increasing sales, it really is to get something in a workflow from other folks and to do that with email. My first thought when I hear that is right now, the tool I use for that is Gmail and Boomerang. If I email someone for an image, and a this, and an invoice, I Boomerang it in a week if there’s no reply or two weeks if there’s no reply and then I just respond to it again. I know that’s different. Probably in Bluetick, you could put a whole sequence together and if they don’t reply, it automatically does it. I don’t have to type the next one.
I think that Boomerang does a really good job on a small scale and if I only had five sponsors to deal with, that’s what I would do. Bluetick is going to be limited only to those that needed that scale. Cold outbound email or sales emails, you’re a 1000 a month or 2000 a month. There’s no way you would do that via a Boomerang, so everyone in that boat needs or should be using a tool like Bluetick or one of your competitors’.
Whereas, the niche you’re talking about, I think, not only is that a lot smaller and it’s further away from the dollars that the people are trying to generate for their business, because more of a back office thing, but it has to be people doing that at scale. Again, if you’re onboarding five clients a month, you’re probably just going to do via email. If you’re onboarding 100 clients a month, 100 sponsors a month, now it makes a lot more sense to use a tool like you’re talking about.
Mike: A lot of what you’re saying makes sense but I had a conversation with somebody who does onboarding at a small scale and they already know let’s say 30 or 50 different things that they need from the customer. Rather than saying, “Here’s the list of all the stuff that I need,” they only ask for two or three. The reason they only ask for 2 or 3 is because if they ask for 50, it’s going to be overwhelming to the customers. Instead, they only ask them for a couple of things and then they modify that list over time.
So the idea would be you’ll have this, I’ll say a workflow, where you’re asking for something from somebody and you need Bluetick to follow-up or you need a follow-up mechanism in place to basically manage the process of gathering that stuff and you don’t want to overwhelm them with everything all at once. That’s just one instance.
But also, I’ll tell you from experience of managing the sponsors. Once you get up to more than about five conversations in parallel like that where you have different things that you need from people, it gets really hard to manage. It’s not 1000, it’s not even 25, it’s like 5 or 6, and it’s just a nightmare to manage, even 5 or 6.
Rob: It’s interesting. I think, in the interest of time because we’re wrapping up, I want to make a note of this and circle back once you’ve had more conversations, I don’t think it’s a terrible idea. It’s an interesting position. I think there’s a hole we could dive way into how I would think about this because if you’re going to build a generic tool to do that and there are three different use cases, you have a problem. If you can pick one, what’s the biggest one of those used cases, the biggest pain point? Back to conversations we’ve had in the past, is it conference organizers trying to get sponsors and speakers to give them stuff? Is it, whatever, we could pick any vertical and is that where you start? Or is it lawyers trying to get stuff?
Mike: Is it CPAs trying to get tax information from their customers?
Rob: Exactly. Right. All that stuff.
Mike: I’ve had those conversations, too, and it’s a nightmare. I hate to go down the road of going after real estate brokers where you’re trying to get a loan and you need all these different things to apply for. I don’t want to deal in that particular business, but that’s another particular use case where there’s a lot of back and forth and a lot of information that’s needed.
Rob: That’s the thing, is all those verticals we just named or several of them are a pain in the ass to sell into. They are inundated with cold outreach. They don’t adopt new technology quickly. I tweeted this out a few months ago where I said you’re either dealing with competitor pain or customer pain these days if you’re building a SaaS. It’s a general comment but 10 years ago, you could go into a greenfield market with somewhat sophisticated customers, and you could build a SaaS app, and they would come and adopt it, and that was it. It was cool. But things changed over time and today, there’s not much greenfield left and a lot of the greenfield is like, “Well, there’s not a really good this and that for lawyers, or this and that for CPAs, or this and that for dentists.” And so, there’s not some specific thing for them. It’s like, “Cool. I’m going to build for that because I don’t want competitor pain. I don’t want a bunch of completion that chomping at my heels all the time.”
On the flip side, you’re now going to have customer pain. What I mean by that are high maintenance customers, they could be long sales cycles, they could be high price sensitivity, they are high support because they’re not technical, that’s kind of stuff. I’m not trying to make an unequivocal 100% of the time this is the thing, but these are the patterns that I’m seeing. When I look at the TinySeed batch, or when I look at people who apply to become in TinySeed, or when I look at my experience, you got to pick one of those. Trying to get away from both of those is very, very hard, I would say dang near impossible these days unless you get pretty lucky and be early to a certain market for early adopters where the market is just emerging.
I can name a few. Baremetrics is one. Early on, he didn’t have either. Now, he has competitor pain because he has a bunch of competitors, but he got in so early with the Stripe Metrics. I think another one is Tuple, Ben Orenstein’s. They filled a big gap that was left by a startup that have been acquired and shut down and right now, they don’t have competitor pain and they don’t really have customer pain either because it’s a lot of developers.
In the long run, Tuple will have competitor pain because people are watching that and there are going to be competitors that are developed there. They have a bit of a technical mode but in the long term they should just expect to experience that eventually, but since they have a head start, that’s good.
That was my long diatribe about that’s where as you decide if you want to do one vertical or five verticals to start with or wherever you want to position this. I certainly think making it a generic horizontal tool where the headline says get anything from anyone in an automated way, I think that’s a really tough way to go because in a lot of examples, people are trying to fit it into like, “What it is actually then? Is this like Mailchimp?” “No.” “Is it a cold email outreach tool?” “No. It’s not that.” So they’re trying to fit it into a bucket. That’s what people do when we go to these sites. If it’s something that’s just completely new, it’s always you’re just explaining the same thing over and over.
This is interesting. I’m making a note here because I think this is the key to unlocking something with a small group of people. This is how you find early signs of product market fit with a small group, and they love it, and they rave about it, and they say, “No other tool does it this way.” And they have different feature request for you than they would if you’re a cold email tool. If you can make it work and it’s a big if, that the direction you head. That’s how you find that you start growing.
Mike: Yeah. It’s just interesting how many conversations I’ve had have led me in that particular direction. There are a lot of things that remind me of, back when I first started working on Bluetick. It was some of the problems I ran into in trying to onboard sponsors for MicroConf or to sales for AutoShark. A lot of them are overlapping in a very similar way. Some of those features, they just never really got built.
Rob: So wrapping us up today, each time we’ve tended to talk about motivation, sleep, exercise, and stuff—I don’t want to run so far over what we dive into all of that today—I’m curious, over the last five weeks, what has your motivation been like?
Mike: I would say it’s fluctuated. It’s gone up and down. There are definitely days where I don’t have a whole lot of motivation and I feel like the world is pressing down around me. It’s not that I don’t have any options, it’s just that it’s hard to figure out what to do. And then there are days where I don’t even think twice about it and I just sit down and start working and banging things out, but it fluctuates from day-to-day. I can’t say that there’s a great pattern to it or not a great pattern but like an identifiable cause for anything that’s going on. It’s not really sleep-related. It’s not really exercise-related because I’m sleeping fairly well and exercising pretty well. So I don’t know. It’s hard to say.
Rob: I was going to wrap up the interview anyways, but the recording software crashed right at that moment and then Mike and I were basically just text chatting. But I feel like we’ve got a pretty good feeling of where Mike’s at and I’ll probably dig more into motivation, sleep, and exercise in the next episodes. It’s kind of got short shrift here. But I, for one, am feeling good for Mike about his Google audit effect that it’s done and I feel like he can get past it and move on. I’m super interested to hear what progress he can make on trying to get on this podcast as well as really the cold email as the one that I’m banking on as well as the differentiation. Those are the things that I’m going to be continuing to press him on.
These are the points of accountability that I think helped us all to move forward, is to have someone bring up what we said last time and say, “Where are you with that? If you’re not as far as you should be, why not? Okay. Let’s talk about that again in a few weeks.” Is starts to get in your head that this is a real thing that you need to move on and make progress on. Otherwise, the business doesn’t move forward.
I always enjoy talking to Mike. I feel like these are enjoyable conversations for me when I listen back to them. I feel like there are a lot of value for folks to follow his story, to hear what he’s going through as well as to take away how to keep pushing a business forward and have accountability. In a way, it’s a one way mastermind. It’s a little bit how I think about it. It’s kind of he’s reporting on things and I’m helping move it forward. I appreciate that Mike takes the time to keep us posted and we’ll keep doing this as long as it’s interesting.
If you have a question for the show, because we do a lot of Q&A episodes, email us questions@startupsfortherestofus.com and you can even attach a voicemail or link to a Dropbox, Google Drive, MP3, or whatever, or you can leave us a voicemail at (888) 801-9690. Per usual, voicemails go to the top of the stack and we will have another Q&A episode coming up here pretty soon.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. In any podcaster, search for “startups.” We’re typically in the top five. You can visit startupsfortherestofus.com to get a full transcript of each episode. Thank you for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth start up or you’re thinking about your first. I’m Rob and today with Mike Taber, we’re going to share our experiences to help you avoid the mistakes we’ve made.
Welcome to the show. I’m your host, Rob Walling. Each week on the show, I cover topics related to building, growing startups in order to build yourself a better life and improve the world in some small way. We strive to be ambitious, but we’re not willing to sacrifice our life or health to grow our companies. We have many different show formats. We have some tactics and teaching. We have interviews, listener questions. Sometimes, we do founder hot seats and breaking news episodes. All kinds of things that just mix it up and the feedback I’ve gotten since the mix up 20, 25 episodes ago is that the people really like that and they almost like the unpredictability of it. I’ve been overwhelmingly told to keep going and keep doing what we’re doing.
Each month or so, about every four to six weeks, I catch up with Mike Taber. He’s still a regular guest on the show, but he only comes on every month or two to update us on what he’s been doing with his product, Bluetick, that he’s been struggling to get to the point of supporting him full-time. If you haven’t already heard episodes 448 and 458, I’d encourage you to go listen to those episodes because they do give you a background on really what we’re talking about, how I’m trying to help push Mike forward, and challenge some of his assumptions. Also, to get updates, just to hear what’s going on because I like to know what’s up with Mike and I’ve heard overwhelmingly that people want to as well. They want to know what’s going on with him.
Today’s episode is a fun one. I do push back on a few things that Mike has said and call him on why he hasn’t made more progress. Overall, it’s a positive episode and it’s fun to hear Mike rant about the Google audit and I think our editor even has to bleep him once or twice, which is unusual for Mike.
Before we dive in, I want to let you know that tiny TinySeed applications for batch two are now open. You can go to tinyseed.com, click the apply button. If you’re a bootstrap, SaaS app, or subscription software and you’re looking for mentorship and community in a small batch of motivated founders as well as $120,000 investment or more frankly, if you have a couple of founders, you should head over to TinySeed and see what we’re up to. We’re super bootstrapper-friendly and the idea is to raise the tide and to raise all the boats in this segment that is really an underserved group.
The venture capitalist has an agenda and it’s to go bigger or go home, it’s to be a unicorn or bust, and that’s not what we’re doing. Our thesis is that we can get a lot of folks who are wanting to build this $1–$20 million ARR, these life-changing SaaS apps, ambitious but not 90-hour weeks. We’re about halfway through our first batch of ten. This application process runs for the next couple of weeks and we’ll be doing another batch early next year. We’re getting that together. Good things have been happening there. tinyseed.com, if you’re interested. With that, let’s talk to Mike.
Mike, thanks for coming back on the show.
Mike: Hey, how is it going?
Rob: It’s pretty good, man. I was just counting the days. I think it’s been about five weeks, about right around 34–35 days since we last spoke. I know during that time you were out of town for five days with MicroConf Europe, but I’ve been getting feedback both at MicroConf Europe and then at a little founder retreat I went to earlier this week that folks do like following the story of what you’ve been up to, so I’m curious.
As usual, I have my list of stuff from last time that some stuff was up in the air and the threads that we’re following, so I look forward to hearing about it. I think the thread of the hour and the one that you’re basically spending 15 hours a week last time we spoke is this Google audit. You were a month into it and you thought it would be six more weeks’ worth of stuff. We’re essentially five weeks into that period so I’m fascinated to hear what that’s looked like over the past five weeks, where it’s at, are you wrapping up, that kind of stuff.
Mike: I guess for context of dates and timeline here, three weeks ago was MicroConf Europe. There was a Wednesday that I was basically either on a plane or over in Dubrovnik for MicroConf Europe. That spans a couple of weeks where, I don’t know about you, but a day or two before you travel, you really don’t get a whole lot done and then the day or two after is kind of the same thing so that basically makes it almost two full weeks right there.
My audit started last Monday and it was supposed to go from Monday to Monday, I believe. That process is finished. I’ve got a draft of the report and I’m going to go over it with them next week. I’ve got the letter of attestation or whatever it is, more like a letter of assessment. That’s already in my hands and I’ve sent that off to Google. Now, it’s a waiting game to see if Google just looks at it and says, “Yup, this is good. You’re all set for the next 12 months.” That’s the good news. The bad news is I’m super pissed about the whole thing.
Rob: Well, you have been the whole time. Are you more pissed now than you were the last two episodes? Has something more happened?
Mike: I’m way more pissed about it because basically they came back and said, “Yeah, everything looks fine. It’s pretty much it.” There was one thing they complained about and they’re like, “Yeah, you’re cryptography keys, the keys that you’re using to encrypt information, shouldn’t be on the same machine as all source code,” or not even a source code, but the actual application because before, I was compiling it directly into the application knowing that nobody else has access to that machine. You can’t get to it unless you break the machine open and hack into it, and then you’ve got access to the source code and everything else.
At that point, encrypting things really doesn’t do a whole heck of a lot and yeah, the data is on a different machine, but I’m well aware of all the security implications there. In the grand scheme of things, that’s a very, very small thing. They’re like, “Yeah, that’s an absolute no, no. You can’t do that.” I was like, “All right. Fine.” I spend a couple of days using Azure’s Key Vault, I think it’s called. Basically, now I’m storing the keys someplace else, but the client’s secret and stuff are still on that machine, so it’s like, “Okay, now I have to go to this other machine, pull back that information, and then encrypt it.” I have to do that every single time that I have to encrypt or decrypt information. I’m like, “This is just stupid.” It’s just like, “All right, whatever. I’ll do it,” because I have to. I have no other choice.
Rob: Yeah, that’s the thing. You can get hung up on it and be pissed about it, but then you got to move past it especially if Google approves this certificate of attestation, I think is what you said. I mean assuming that that goes through, you have 12 months and it’s time to get on your horse and get things moving.
I’m curious. Over the past five weeks, how much of your time was that was it? You expected it to maybe ramp up to like 20 hours a week, like half your time, and I’m curious if that amounted to that or what it looked like.
Mike: It wasn’t that much. I had to give them a whole ton of documentation. It wasn’t quite a dozen different documents of policies and procedures and stuff like that, but some of it was just I’ll say personally frustrating because they’re like, “Document what your secure coding procedures look like and how you educate other people who come onboard.” I’m like, “Well, there really isn’t anybody else that I have to educate about it because it’s just me.”
I distinctly remember looking at one of the questions and it was something along the lines of, “Please describe how you do pair programming for code reviews.” I wanted to laugh at it and I had to hold myself back from saying, “I wait 12 hours, sober up, and then look at the codes sober to figure out what it was that I was doing.” It’s just so frustrating to have to go through that stuff and answer completely stupid questions and provide documentation for things that I’m not going to look at and nobody else will.
Rob: I wish you would have put that drunk answer on there and just to see what they said.
Mike: Well, it ended up in the report, too. Not that, but some of the other things that I wrote, they asked me a couple of clarifying questions and literally word-for-word, the stuff that I put in there, it was word-for-word what I said was in the executive report.
Rob: Yeah, that makes sense. I was joking, by the way, about the drunk comment. I’m glad you didn’t do that because that wouldn’t have gotten well. This feels like a win to me. I’m going to flip it on its head because I can tell you’re pissed and you have been for three months or more because the whole thing threatened your business itself.
When you got initial quotes or estimates, they were really high. Then you got lower quotes, then you negotiated, and then you got something that was reasonable enough for you to pay. Now, it sounds like your done and while it has killed some time, it didn’t kill as much time as you were projecting over the next six weeks. Right now, are you done? Do you have to make any more code changes to satisfy their recommendations?
Mike: As far as I know, no. I have the letter. I have to hand it off to Google. I believe, at that point, Google just takes it and says, “Okay. Yes, you’re approved.” And they toggle some switches on their side and they stop bugging me about all this stuff. My belief is that I’m done, but what pisses me off is how little they found and how big a deal Google made it out to be. They’re like, “We’re going to kill your business if you don’t do these things or you don’t go through this process and pay this large sum of money to this third party company to do a security audit.”
There’s no recourse there whatsoever. So, I go through the process and then when I get through it, I come back and I look at their end result of it and they’re like, “Oh yeah, you have to change this one minor thing here that’ll take you like a day or two.” Then, all the other documentation that I put together, which is a total waste of time because nobody else is ever going to look at any of it, it’s totally useless. It was a huge time sink for absolutely nothing. It didn’t benefit my customers. It doesn’t make the product any better. It doesn’t get more people using it. It literally does nothing other than allow me to stay in business. That’s the piece that’s so frustrating. That’s the part that really pisses me off and makes me angry at Google, for putting me through this when at the end of the day, you look at the report and they’re like, “Oh yeah, these one or two things.” It was almost completely unnecessary.
Rob: If you’re at home playing the Startups For the Rest of Us drinking game, you can know take your shot for Mike saying it was unnecessary and he’s angry at Google. Mike, I know. I totally get it. I think I want to say it again. I consider this a win because you’ve passed this. Six months ago, maybe more, you started talking about this and it was a big, big deal and you’re done. You made it through and it didn’t wreck the business. To me, it’s like the Bill Wolf quote, “Control what you can control and let the score take care of itself.” That’s where you are. You can be pissed. I get pissed all the time at stuff. You know me pretty well. I get mad pretty easily, but I try to let stuff go quickly and move on. You know what I mean?
I mean this could’ve been a complete and utter roadblock that decimated your business whether because you failed the audit, whether it’s because you couldn’t afford the audit, whether it’s because you refused to do the audit on principle. Any one of those would’ve wrecked the business and you turned it into a speed bump. You said, “What are my options here? I can pay for this thing. I can negotiate this thing. With my teeth clenched, I can just force my way through,” and that’s what you did. I think I know it’s a pain in the ass. I totally get it and I’m really surprised that we have not had to use the beep noise over any of your words so far this episode, but cheers to you, man. I am happy. I look ahead at Bluetick and now, it’s all about execution. It’s differentiation. It’s writing some code. It’s marketing. It’s getting more people in. That’s how I feel about it. I have the outside perspective. You’ve been mired in this for months. Does that resonate with you? Do you feel that way or do you feel like I’m being too optimistic silver lining?
Mike: You’re absolutely right. Everything that you just said is 100% correct, but Google still pisses me off right now. I’m not the type of person who gets upset easily. I’m not the person who you can just poke with a stick and suddenly, I just rear my claws and just go after you. I just don’t do that, but this has been dragging on for so long and I really feel like I’ve been put through the ringer for this for no good reason. I just can’t point anything justifiable. The problem is I know I have to go through it again next year.
Next year, it will be better because I’ve got all the documentation in place and yeah, the product will change, certain things are going to have to be updated here and there and that’s fine, but the fact that they went through this whole thing and they made it such a big deal, and they get to the end of it and there’s this report that shows, “Oh, we found three things.” One of which is not even on my servers. I’m like, “Okay, this is total […]. Complete and utter […]. You’re complaining about an SSL certificate that I put on a server that’s not even my server. Come on. That’d ridiculous.” I even told them that. I’m like, “I have no control over this.”
Rob: Yeah. I hear you about having to do it again in 12 months. My hope is that the fact that you already have an existing relationship with an auditor and that you have the same docs or depending on where you are in 12 months, maybe you’ll have hired a developer or a senior developer that could do parts of this for you so you don’t have to mire through it.
I realized that’s a tall order. You’d have to make a lot of progress between now and then, but I think in the back of my mind, in your shoes, you’ve seen how frustrating this is and how much it emotionally derails you. With me, with Drip, it was blacklists, there were support requests, it was cues being slow. There were these things that I had to find people to do because they slowly tore away at me and they made me hate my job.
As entrepreneurs, we can’t hate our job because we control them. If we’re not enjoying it, it’s to a certain extent, our fault. Now, in this case, it’s not. It’s not your fault that Google made you do that but you did then have the chance to say, “Well, I’m just going to shut the business down,” or, “I’m going to pivot away from Google,” or whatever, but you gritted it and made it through, which is in my opinion, what you should have done. But looking ahead 12 months, I’d be thinking how can I not let this be six weeks, eight weeks of me being mad next time? What types of things can I put in place to help with that?
Mike: The fact of the matter is, I think that in a year when this comes up again, it will be a lot less stressful because I will have had full visibility of all the things that are going on, and all the things that they’re looking out, and I will have already had one report to look at that says, “These are all the things that we looked at and be able to at least keep them in mind moving forward.” Up until I got a final report, even during the week of the audit, it was just super stressful because I wasn’t getting anything back from them and I was expecting a daily report or something along those lines that says, “Hey, we looked at this and this is a problem. You need to fix it. Here’s a high priority. Here’s a critical thing that you have to do.” Because that all those critical and high items had to be taken care of before they could issue this letter of assessment and I was getting nothing.
I asked them. I was like, “What’s going on here? I’m expecting something here and I haven’t heard anything.” They’re like, “Oh, we haven’t found anything so far.” But of course, there’s a lag time between the time that I sent them an email and then they get back to me. I think some of their penetration testing staff are in completely different time zones like halfway around the world, so it just makes that back-and-forth a lot harder to do because, (1) they don’t report directly to me, and (2) they’re in a completely different time zones. It just makes it a lot harder and a lot more stressful, but I don’t think that it’ll be nearly as bad next time.
Rob: Yeah, I would agree. Looking ahead, let’s talk about some other things that you had in the works, some of which were on hold or I think one of which was on hold due to a code freeze and then there were some other stuff that step through. Just to keep going on the thread.
You have an untestable sealed .NET component. Startups For the Rest of Us drinking game just gets so good when we go over this topic again. I want to go back and I think it had to have been six or eight months ago when you first mentioned of this thing. You said, “I’m going to replace this thing,” and you put it on hold due to the Google audit. Have you replaced it yet? Is this top priority? Where do we stand with this?
Mike: I just got the letter of assessment this morning. I was expecting it on Monday because they said that they were working on it, and then Tuesday came and nothing, Wednesday came and still nothing, and finally, I got it this morning. It was like one o’clock in the morning. Until then, it’s basically been on code freeze. So no, I haven’t touched that yet. Is it on deck? Yes, at some point. When exactly? I don’t really know.
I have to go through and look at where that really falls in the priority list because I feel like it’s a lower priority than a lot of the sales and marketing stuff that I have to do. I hate to say that this is or isn’t holding me back because I’m not really sure. I want to get it out of there. I don’t know how hard it is to be able to pull it out because it is pretty integrated into the core of my code and I’m going to have to change the storage mechanism.
I think I’m just going to have to make a judgment call at some point about do I just suck it up and leave it there even though I know that it’s the wrong decision? There are certain part of I think everybody’s application where it’s got words on it and you’re like, “This really needs to be rewritten or it needs to be refactored.” And you don’t do it because you know that you’re just kicking a hornet’s nest and it’s going to be terrible.
Rob: How long do you think it’s going to take you to get the new component in? I know you have to redo data and you have to remap stuff and namespaces. I get it. How long though? That’s the thing.
Mike: Just for me to migrate the data would probably take a week. That’s just the computers churning.
Rob: Yeah, so it’s a sizable thing, but you have decided that this is the right choice, right?
Mike: Yeah. That’s the thing. Assuming nothing goes wrong, it would take a week.
Rob: Sure. All right. It happened this morning and you’re not done with it yet, Mike? What have you been doing? No, I’m just kidding. Do you plan to start it? What is it? Thursday today so do you plan to start that tomorrow or Monday? Is that the next priority or you’re just saying I’m going to do this in a few months?
It’s tough. This one’s not so clear up to me. To me, in my head, it’s a bite the bullet type of thing where it’s overhead and I know it creates legacy, or cruft, or just hard code to work around. To me, I would bite the bullet and I would cover up two weeks and I would hammer this through. But I can also see an argument on the other side of this provides no value to your customers. On the flip side, it’s like, “I should be marketing, selling, and getting more people in before that.” I could see an argument either way. Again, I would probably make the product such that I feel more comfortable marketing and selling it, because I hate having crappy code. What’s your plan there?
Mike: The best thing that I can come up with is to plan to do it in about a month because that would put it in mid- to late-December, which I know there’s not going to be many people using Bluetick at the time and I’m probably not going to be fielding very many support requests. I’m probably not going to be launching very many new marketing or sales campaigns at the time. It’s a slow time where it would be a good time to sit down and bite the bullet and do that as opposed to now where people are still ramping up for the holiday season, doing email follow-ups, and trying to get deals and stuff. By the end of the year, it seems like my time is probably better spent doing that now and then plan for that slow period of biting the bullet.
Rob: Cool. That sounds good. We will connect with you again on that next time you come back. For our next topic, let’s talk about marketing. You obviously had the majority of your work weeks to be doing other things. You didn’t want to write code and the Google audit was taking some time. We talked about a marketing hire you were making. It was a contractor to do podcaster research and we had talked that through a little bit last time. Where does that stand?
Mike: Most of the stuff is already done and been sorted and prioritized. I got the information I need for all those things, so we’re basically waiting until the end of this audit to start queuing those up. Between today and tomorrow, the plan is to start queuing those up, start sending those emails out, and see if I can get onto a handful of other podcasts. I’ve already done one podcast interview. I actually did that last week. I’ve got another one that I was told by the podcast host that she’d love to have me on so it’s just a matter of reaching out to them and getting that set up as well. There’s no more roadblocks in the way of doing that so that’s get started ASAP at the moment.
Rob: It’s been five weeks. Why did it take that long? Why hasn’t that started two weeks ago?
Mike: Well, two weeks ago, I was in Europe. That’s why. Of the last five weeks, a good solid week-and-a-half to two weeks was spent in the middle of the audit and then there was another solid week or two that was basically over in Europe. I basically had maybe two weeks or so before MicroConf Europe get started on that. That was mostly the data aggregation and the actual work that was done behind the scenes.
Rob: Got it. Are you sending those emails through Bluetick?
Mike: Yes.
Rob: That’s cool.
Mike: Well, that’s the plan. I haven’t actually sent them out yet.
Rob: How did you get on the podcast then?
Mike: Oh, there’s a personal invitation. Somebody raised that to me.
Rob: Got it. Cool. That would be an ASAP thing then. You could get that going tomorrow literally or Monday. You just got to write some copy and get her in.
Mike: Yup.
Rob: Cool.
Mike: That’s the plan for that.
Rob: Good. Looking forward to that. We already talked about that. I won’t go into it. Again, it drives a little bit of traffic. It’s more of a slow burn. It’s a one-time thing type of thing, but I think that it’s easy enough to do as long as it doesn’t take a bunch of time. I would probably be doing the same thing right now.
The other thing you were looking at was code emailing. It was really warm emailing. You said 900 email addresses from your LinkedIn connections. You had prior Bluetick cancellations, sales leads that never converted, that were in pipe drive, other stuff. You were going to bucket them and start warm emailing cold batches in the next week or two last time we talked. Talk to me the status on that.
Mike: I’ve got those all bucketed out and that’s another situation where I was holding off on actually doing it and pulling the trigger after this audit was done. That again is something else that got the green light at this point that I can start today or tomorrow.
Rob: That’s interesting. Why were you holding off on that? Because you knew you were going to pass the audit. That wasn’t a big question. I knew you were.
Mike: It was never a question of whether I would it pass it or not, it was a question of timing. There are two pieces of the audit itself. There was the technical piece where they say, “Hey, we’re going to beat on you servers for six days.” And then aside from that, there is all this policy documentation that I had to create. Anything that they saw that raised a red flag, I had to either change the policy itself, it’s not just text that I have to change, but it’s also I have to change how I do things.
For example, one of the things that they said was, “Oh, you have to enable multi factor authentication on everything including source control.” So I have to basically generate SSH keys and lock down all of my source controls, which means that I also have to generate API keys, then go into my build environment, and I have to change all that stuff, too. It’s not just a simple thing like changing some texts on a piece of paper that I hand to them. I actually have to go do those things as well. All of that stuff needed to be changed.
There was a bunch of other things that came up during the policy side of things where they said, “Hey, you need to change how you’re going about these things just in order to comply with the requirements.” Between that, I knew that I only had a week or two before I had to leave for Europe, and then immediately after that, I had to dive right into the technical side of the policy stuff.
What I didn’t want to do is start going out and start and try to schedule meetings, calls, and stuff with people. They were not going to be for a month-and-a-half because I didn’t necessarily know that earlier this week things were going to be done. For all I knew, they could come back and say, “Well, you’ve got these 25 vulnerabilities, and 17 of them are high or critical. You need to make code changes to do those.” I didn’t know that I was going to be done this week. For all I knew, it could’ve been another three to four weeks.
Rob: Yeah, but I think we talked last time and I had said cold email doesn’t just start converting overnight typically. Typically, you start it at trickle, you test some things, you tweak, you tweak, you tweak. It takes weeks to really start ramping it up. I had suggested, “Hey, you have this month or whatever,” I guess it was six weeks during the audit that was projected to be six weeks, “I would propose that you just start emailing 5 a day or 10 a week.” Just a very small trickle to start seeing something such that the volume of things wouldn’t have been like, “Oh my gosh, I have 50 calls.”
It wouldn’t have been so much, but just to start ironing those out because I bet if you start this on Monday, it’ll be a couple of weeks until it really starts getting going and now, you’re at a standing stop five weeks later. You know what I mean? Five weeks after our last call, you are at standing stop trying to get it going rather than having a little bit of momentum. That’s what I was more getting at. Why did you wait during the audit to get it going?
Mike: I think I agreed at the time and then realized that I just was not going to have time. Even if that started to turn into something, I wasn’t sure what the future would hold in terms of my timeline leading up to the week after MicroConf or two weeks afterwards. Like I said, for all I knew, it could’ve been another three or four of hard, heavy lifting in terms of code or code changes. I just didn’t know. That big blind spot is really what held me back there.
Rob: Okay. Next time, you should be good. You should be rolling on these things. Right now, cold email and the podcast tour, do you have any other marketing stuff that you’re going to be rolling out or are you going to be focusing on those two? I’m just talking over the next month. Let’s say we talk again in four or five weeks.
Mike: I do have one other thing that has finished up, which we haven’t really talked about. I just finished up an integration that I got approval for I think on Monday of this week. Now, if you go over to zapier.com and you search for bluetick.io, you’ll find it underneath the early access section. bluetick.io now officially has a Zapier integration that is no longer just buy and bite only.
Rob: Nice. Congrats man. That’s cool. Now, what’s funny is I have a note because I was going to cover that. The note says, “Mike is working on an integration that should be live at the end of this week.” I read that five weeks ago. Why did it take that extra month?
Mike: Because I had to email them and then there was a little bit of back and forth. They basically had to run it through their own testing and stuff like that. There was a bunch of things that needed to be changed both on my side and inside the Zap itself in order to get it live. It took a little bit longer to get finished than I thought it would or I hoped it would. And then I emailed them and said, “Hey, can you guys take another look at this.” When I got back from MicroConf, I emailed them again because I haven’t heard back. Maybe the email got lost or buried under all the other stuff that I’ve got going on, but I ended up having to ask them again to take a look at it. It only took them two or three days after that to take a look at it to say, “Yup, this thing looks good. Go for it.”
Rob: Cool. So people can go and search for that right now. Do you get any promotion out of that? Are they going to list you anywhere?
Mike: No. They don’t do any code promotion until you get to a certain number of users, which I think I was told it was like 50 users before that happens so I have to look and see if there’s any way for me to actually see how many active users I have. But I don’t know what it currently stands at so I don’t know how far I have to go between now and doing any sort of code promotion with them.
Rob: Got it. In order to get to 50 users, obviously, you need to get more customers yourself and then have something in a sequence somewhere that is asking people to hook it up, right?
Mike: Exactly.
Rob: Cool.
Mike: But I will say having the audit and the Zapier integration behind me, I would call both of those huge wins for me.
Rob: Yeah, that’s good. Would you say over the past, since our last call, those are probably the two high points?
Mike: I would say so, yeah.
Rob: And then the low point was the audit? Just in the midst, that’s what it sounds like.
Mike: Well, the midst of it and then the end results been everything’s fine. It’s like if I wanted to pay somebody five plus figures to go not find something, I’m sure my kids would volunteer. Again, it’s just irksome. I mean you don’t know until after you’ve done it because you do have to poke at everything and I get that part of it, but it’s still frustrating especially being early on.
Rob: Wait, are you saying you were frustrated with Google and the audit? Oh Mike, every time, I’m going to keep bringing it up.
Mike: My anger is interesting.
Rob: Oh, next call, I’m going to bring it up again just to see, just to troll you. Cool. A couple of other things before we wrap. One thing I had asked you about was differentiation. I’ve mentioned, Bluetick is very similar and undifferentiated from most of your competitors and you had said, “I need to talk to some of my customers more and ask them why did they decide to use Bluetick.” Think about it as a job to be done thing. You had talked to a few customers. You got a couple of ideas. One was to have customers in multiple sequences at the same time. In other words, to be able to re-add customers to the same sequence.
It’s a two part question. One is have you gotten more confirmation that those two feature ideas or differentiators are enough? Are you going to build those? And I guess the third part is, maybe we’ll start with this, have you had more conversations with customers since we last spoke? Talk about those other things.
Mike: I’ve had a few here and there, yeah. I still don’t necessarily know if what I have in mind is the deciding factor of like, “Hey, this is going to make Bluetick leaps and bounds better than the other things that are out there.” I believe that it is, but I don’t necessarily know that for a fact. I don’t have any real basis for that. It’s a gut feeling more than anything else.
Rob: How can you turn it from a gut feeling into something? I would say a gut feeling is like, “Yeah, I’m like 30%, 40%, 50%.” How can you get this to 70% or 80%? Whether it’s with one of these things or whether it is something entirely different that you start hearing from other customers.
Mike: I think the first step one, obviously talk to some more of my customers, but two is to start running the idea past. I almost want to say go back to basics when I was first flushing out the idea of Bluetick with a bunch of different people and ask them questions about, “Would you be […] this?” or a product that solves this particular problem. I think it’s a matter of going to some of my list and finding out, “Is this the type of problem that you would be interested in solving inside of your own business?” I feel like it’s more of a reframing of what Bluetick does versus selling what Bluetick is, if that makes sense.
Rob: It does. Now, is it reframing what it does just like, “Hey, it does this one extra feature or two extra features,” or is it in a whole position? Like it’s a more broad branding/positioning shift?
Mike: A little of both, I think. In order to do it, I would have to write some more code. Obviously, I don’t want to go in that direction unless I hear more from people about, “Hey, yeah, this would actually be very compelling for us to use that.” But the other thing is when you hear about an email follow-up tool, your inclination is cold email. There has to be some sort of a brand positioning of, “Hey, this isn’t just for cold email. This is how it is positioned differently in order to make it work for people who aren’t just doing cold email.”
Right now, Bluetick serves a very, very specific piece of functionality for people in their business and if they don’t have that particular problem, then they won’t use it, but that also makes it hard to identify the types of customers because two businesses who are largely identical, one of them may be doing that activity and the other one may not be. It’s hard for me to say, “Oh, go after SaaS companies that fits this profile or in this particular business,” because unless they’re doing that particular thing, it doesn’t solve their problem.
Rob: Got it. So between now and the next time we chat, is this high on your priority list, to speak with this additional customers to try to suss this out?
Mike: It is. I wouldn’t call it my number one priority, but I really need to find what that one differentiating feature or factor is that would make it easy for people to understand what I originally had in mind with Bluetick as a vision as opposed to what it currently is and does today and what people see it as.
Rob: Yeah. I wouldn’t disagree with that. It’s kind of what I’ve been saying the whole time back to episode 448 when we first really dug into all of this. My point was Bluetick is not differentiated and you’re not moving fast enough. That was the thing, whatever that was five months ago. Now, you’re through the Google audit and you’re through a lot of this speed bumps and does feel like, (a) step one, figure out how to differentiate it, and then (b) differentiate it and move fast enough such that folks you’re trying differentiate away from aren’t keeping up with you or aren’t going in the same direction or whatever. That’s what I’d be doing, too, in your shoes, would be a lot of conversations.
I think that cold emails probably can play into that. Again, they’re not cold emails, but it’s your LinkedIn connects and the Bluetick cancellations and such. In addition, I’d probably talk to every customer you have right and just try to figure out why they’re using it, how else you can make it to be sticky. You have those two ideas of those features I mentioned earlier. Those seem like nice to have as interesting tweaks but I’m not convinced. My gut is that they aren’t enough. They aren’t enough to be really, really differentiated and make people switch. Just like what can you have that will make people switch from other tools or choose your tool when they’re comparing yours to the three or four other tools that are top of mind for me.
Mike: I mean I have an idea of exactly what it is that I would want to talk to people about because it’s something that we can talk about it here if you want. The basic idea using Bluetick as a mechanism for identifying things that you need from other people and this is something that you can do with Bluetick right now, but let’s say that I need a W-9 from you or something like that, the question is, how do I get that from you and how do I make sure that I follow-up with you until I get it?
That was one of the things that Bluetick was born out of, was when basically before Xander started helping out with this stuff, I was doing all of the data gathering for all the sponsors for MicroConf. I would say, “Hey, I need logo. I need title text. I need an image. I need all these different things,” and asking them for it and then going back and forth like, “Hey, I’ve got these two things but not this other one or this third one over here or fourth one over here,” and using Bluetick instead as a mechanism for gathering that stuff.
That’s basically a way to build a process into Bluetick such that solve a very tightly-defined problem to gather digital materials from other people and they may fit a specific format, or they may be documents, or Excel spreadsheets or something, and then Bluetick can manage that back and forth process to say, “Hey, I’ve got these three things but not this other thing over here.” Does that make sense? There are like 30 different use cases for it but just very simplistically, that’s the idea.
Rob: Yeah, that makes sense. That’s a clear path or a clear job to be done. The job to be done, you’re saying, is not cold email, it’s not increasing sales, it really is to get something in a workflow from other folks and to do that with email. My first thought when I hear that is right now, the tool I use for that is Gmail and Boomerang. If I email someone for an image, and a this, and an invoice, I Boomerang it in a week if there’s no reply or two weeks if there’s no reply and then I just respond to it again. I know that’s different. Probably in Bluetick, you could put a whole sequence together and if they don’t reply, it automatically does it. I don’t have to type the next one.
I think that Boomerang does a really good job on a small scale and if I only had five sponsors to deal with, that’s what I would do. Bluetick is going to be limited only to those that needed that scale. Cold outbound email or sales emails, you’re a 1000 a month or 2000 a month. There’s no way you would do that via a Boomerang, so everyone in that boat needs or should be using a tool like Bluetick or one of your competitors’.
Whereas, the niche you’re talking about, I think, not only is that a lot smaller and it’s further away from the dollars that the people are trying to generate for their business, because more of a back office thing, but it has to be people doing that at scale. Again, if you’re onboarding five clients a month, you’re probably just going to do via email. If you’re onboarding 100 clients a month, 100 sponsors a month, now it makes a lot more sense to use a tool like you’re talking about.
Mike: A lot of what you’re saying makes sense but I had a conversation with somebody who does onboarding at a small scale and they already know let’s say 30 or 50 different things that they need from the customer. Rather than saying, “Here’s the list of all the stuff that I need,” they only ask for two or three. The reason they only ask for 2 or 3 is because if they ask for 50, it’s going to be overwhelming to the customers. Instead, they only ask them for a couple of things and then they modify that list over time.
So the idea would be you’ll have this, I’ll say a workflow, where you’re asking for something from somebody and you need Bluetick to follow-up or you need a follow-up mechanism in place to basically manage the process of gathering that stuff and you don’t want to overwhelm them with everything all at once. That’s just one instance.
But also, I’ll tell you from experience of managing the sponsors. Once you get up to more than about five conversations in parallel like that where you have different things that you need from people, it gets really hard to manage. It’s not 1000, it’s not even 25, it’s like 5 or 6, and it’s just a nightmare to manage, even 5 or 6.
Rob: It’s interesting. I think, in the interest of time because we’re wrapping up, I want to make a note of this and circle back once you’ve had more conversations, I don’t think it’s a terrible idea. It’s an interesting position. I think there’s a hole we could dive way into how I would think about this because if you’re going to build a generic tool to do that and there are three different use cases, you have a problem. If you can pick one, what’s the biggest one of those used cases, the biggest pain point? Back to conversations we’ve had in the past, is it conference organizers trying to get sponsors and speakers to give them stuff? Is it, whatever, we could pick any vertical and is that where you start? Or is it lawyers trying to get stuff?
Mike: Is it CPAs trying to get tax information from their customers?
Rob: Exactly. Right. All that stuff.
Mike: I’ve had those conversations, too, and it’s a nightmare. I hate to go down the road of going after real estate brokers where you’re trying to get a loan and you need all these different things to apply for. I don’t want to deal in that particular business, but that’s another particular use case where there’s a lot of back and forth and a lot of information that’s needed.
Rob: That’s the thing, is all those verticals we just named or several of them are a pain in the ass to sell into. They are inundated with cold outreach. They don’t adopt new technology quickly. I tweeted this out a few months ago where I said you’re either dealing with competitor pain or customer pain these days if you’re building a SaaS. It’s a general comment but 10 years ago, you could go into a greenfield market with somewhat sophisticated customers, and you could build a SaaS app, and they would come and adopt it, and that was it. It was cool. But things changed over time and today, there’s not much greenfield left and a lot of the greenfield is like, “Well, there’s not a really good this and that for lawyers, or this and that for CPAs, or this and that for dentists.” And so, there’s not some specific thing for them. It’s like, “Cool. I’m going to build for that because I don’t want competitor pain. I don’t want a bunch of completion that chomping at my heels all the time.”
On the flip side, you’re now going to have customer pain. What I mean by that are high maintenance customers, they could be long sales cycles, they could be high price sensitivity, they are high support because they’re not technical, that’s kind of stuff. I’m not trying to make an unequivocal 100% of the time this is the thing, but these are the patterns that I’m seeing. When I look at the TinySeed batch, or when I look at people who apply to become in TinySeed, or when I look at my experience, you got to pick one of those. Trying to get away from both of those is very, very hard, I would say dang near impossible these days unless you get pretty lucky and be early to a certain market for early adopters where the market is just emerging.
I can name a few. Baremetrics is one. Early on, he didn’t have either. Now, he has competitor pain because he has a bunch of competitors, but he got in so early with the Stripe Metrics. I think another one is Tuple, Ben Orenstein’s. They filled a big gap that was left by a startup that have been acquired and shut down and right now, they don’t have competitor pain and they don’t really have customer pain either because it’s a lot of developers.
In the long run, Tuple will have competitor pain because people are watching that and there are going to be competitors that are developed there. They have a bit of a technical mode but in the long term they should just expect to experience that eventually, but since they have a head start, that’s good.
That was my long diatribe about that’s where as you decide if you want to do one vertical or five verticals to start with or wherever you want to position this. I certainly think making it a generic horizontal tool where the headline says get anything from anyone in an automated way, I think that’s a really tough way to go because in a lot of examples, people are trying to fit it into like, “What it is actually then? Is this like Mailchimp?” “No.” “Is it a cold email outreach tool?” “No. It’s not that.” So they’re trying to fit it into a bucket. That’s what people do when we go to these sites. If it’s something that’s just completely new, it’s always you’re just explaining the same thing over and over.
This is interesting. I’m making a note here because I think this is the key to unlocking something with a small group of people. This is how you find early signs of product market fit with a small group, and they love it, and they rave about it, and they say, “No other tool does it this way.” And they have different feature request for you than they would if you’re a cold email tool. If you can make it work and it’s a big if, that the direction you head. That’s how you find that you start growing.
Mike: Yeah. It’s just interesting how many conversations I’ve had have led me in that particular direction. There are a lot of things that remind me of, back when I first started working on Bluetick. It was some of the problems I ran into in trying to onboard sponsors for MicroConf or to sales for AutoShark. A lot of them are overlapping in a very similar way. Some of those features, they just never really got built.
Rob: So wrapping us up today, each time we’ve tended to talk about motivation, sleep, exercise, and stuff—I don’t want to run so far over what we dive into all of that today—I’m curious, over the last five weeks, what has your motivation been like?
Mike: I would say it’s fluctuated. It’s gone up and down. There are definitely days where I don’t have a whole lot of motivation and I feel like the world is pressing down around me. It’s not that I don’t have any options, it’s just that it’s hard to figure out what to do. And then there are days where I don’t even think twice about it and I just sit down and start working and banging things out, but it fluctuates from day-to-day. I can’t say that there’s a great pattern to it or not a great pattern but like an identifiable cause for anything that’s going on. It’s not really sleep-related. It’s not really exercise-related because I’m sleeping fairly well and exercising pretty well. So I don’t know. It’s hard to say.
Rob: I was going to wrap up the interview anyways, but the recording software crashed right at that moment and then Mike and I were basically just text chatting. But I feel like we’ve got a pretty good feeling of where Mike’s at and I’ll probably dig more into motivation, sleep, and exercise in the next episodes. It’s kind of got short shrift here. But I, for one, am feeling good for Mike about his Google audit effect that it’s done and I feel like he can get past it and move on. I’m super interested to hear what progress he can make on trying to get on this podcast as well as really the cold email as the one that I’m banking on as well as the differentiation. Those are the things that I’m going to be continuing to press him on.
These are the points of accountability that I think helped us all to move forward, is to have someone bring up what we said last time and say, “Where are you with that? If you’re not as far as you should be, why not? Okay. Let’s talk about that again in a few weeks.” Is starts to get in your head that this is a real thing that you need to move on and make progress on. Otherwise, the business doesn’t move forward.
I always enjoy talking to Mike. I feel like these are enjoyable conversations for me when I listen back to them. I feel like there are a lot of value for folks to follow his story, to hear what he’s going through as well as to take away how to keep pushing a business forward and have accountability. In a way, it’s a one way mastermind. It’s a little bit how I think about it. It’s kind of he’s reporting on things and I’m helping move it forward. I appreciate that Mike takes the time to keep us posted and we’ll keep doing this as long as it’s interesting.
If you have a question for the show, because we do a lot of Q&A episodes, email us questions@startupsfortherestofus.com and you can even attach a voicemail or link to a Dropbox, Google Drive, MP3, or whatever, or you can leave us a voicemail at (888) 801-9690. Per usual, voicemails go to the top of the stack and we will have another Q&A episode coming up here pretty soon.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. In any podcaster, search for “startups.” We’re typically in the top five. You can visit startupsfortherestofus.com to get a full transcript of each episode. Thank you for listening and we’ll see you next time.
TinySeed Tales 3 | The Best News Ever and the Slog
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Show Notes
Rob follows up with Craig Hewitt of Castos, as he shares some big news on the podcast
