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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions on topics including pricing and customer development. They also continue to discuss Mike’s verification journey with Google.
Items mentioned in this episode:
Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about pricing, talk about doing customer development in a crowded space, and about how much testing is too much testing. This is Startups For The Rest Of Us episode 447.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. To where this week, man?
Mike: Remember how there was a couple weeks ago where I mentioned there was this ongoing Google app authentication approval process I was going through.
Rob: Yes. Seems like that’s been going on for quite some time.
Mike: Yeah. Like I said, they had announced it back I think in October or November. But they didn’t really give any details on it other than what was published on their website and they’re slowly adding to it and then earlier this year, they started ramping up requests for information, and all these additional things. I got an email the other day saying that they’re basically going to start yanking access. I’ve actually been going back and forth with a couple of people inside of Google who reached out.
I just want to say thanks to those listeners who do work in Google and been listening, but they forwarded it over a couple of my emails, and started pushing through some things. Hopefully, things are moving a little bit faster, but I did just get an email this morning saying, “Now, you have to go through this security review.” I’m trying to figure out or find out more information about exactly what that looks like and whether it’s absolutely required. It’s just been a red date nightmare is what it really comes down to.
Rob: Yeah. I have questions for you about this. It sounds like this could be an existential threat to Bluetick, is that right? Could it basically put you out of business overnight?
Mike: Yeah. It absolutely could.
Rob: And does that scare you?
Mike: Yeah, it does. The whole reason I chose IMAP was because I didn’t want to be beholden to the Gmail API and I didn’t want to have to deal with anything that they could come in and say, “Either change” or maybe they say, “Oh, we’re not going to offer this anymore.” I didn’t want to deal with latencies and things like that associated with it because I knew people were running the problems with that kind of stuff.
Fast forward a bit, and they decide change policy and suddenly, policy says you have to go through all these red tape in order to verify your app. Now, because of what I’m doing, I have to go through security review and it’s a third party security review. The cost for that is pushed on to me and they don’t even give you an actual price for it. It’s like, I have to pay for it and it’s anywhere from $15,000-$75,000 on an annual basis.
Rob: And you totally have that in the couch cushions, right?
Mike: Yeah. Get the money from the tooth fairy or something. I don’t know.
Rob: It’s an existential threat and you genuinely don’t know what’s going to happen. They can literally yank access in two days and just say, “You didn’t comply,” or whatever. Is that accurate?
Mike: I wouldn’t think that it’s two days. I suppose it could, but I could take an email like a couple of weeks ago saying that they were going to extend the timeline to I think, June 15. I don’t know whether the security assessment needs to be done by the 15th or there is something else in there that said, “If you’ve had it done before January 19th then you have to have it done by the December 15th or 19th,” or something like that. I don’t know whether there’s this six months’ time frame. If it’s been done in the past six months, you’re fine, but before that you have to have a new one done. I don’t really know. They’re not forthcoming with direct information when you ask them questions and it’s just slow responses.
Rob: Is this anywhere? Have you gone online to forums? Other people have to be experiencing this, right? Have you gone into forums and looked? Does anyone have clarity in this? Or who do we know that has an app like Superhuman, as an example—now, we don’t know the founders of that—but who has an app like that that also relies on Google or Gmail specifically, that you can connect with, and ask if they have any clarity on it because this does feel like something where it needs more than one person because it sounds like you are not getting answers. If we cobble together, three or four founders who’ve had experience with this, then maybe you can get some clarity.
Mike: Yeah, I don’t know. I can certainly go looking for those. I’ve been following there’s a—it’s not a blog—I guess it’s a set of blog posts from a couple of different people. Contacts.io was one that I was looking at. They have this blog article that they talked about where they’re basically shutting down the whole thing because they can’t meet the requirements. They’re like, “Yeah. We’re just done.”
Then there’s another one I’ve been following, I forgot the name of it, I’ve got it bookmarked, but they’ve been documenting the whole process of what they’ve asked, what they’ve gone through, what the responses where, what they said, and they got all the way to the point where they have to have a security assessment done, and they said out of respect for that company, they’re not posting how much it cost. But I was going to drop them an email today—and that’s a recent post that they put out there—I’m going to drop an email, and be like, “Hey, look. What does this actually involve? What does this look like because I’m not getting any answers I need either.” Since they’ve already gone through it, I’d love to hear more.
But things have been really rushed over the past two weeks because that’s when they started sending out those emails saying, “Hey, here are the days where we’re going to start notifying people who own these domains that you’re no longer going to be allowed to access the API.” Or, “Your app is no longer trusted or hasn’t been verified yet.” Over the course of the next four weeks or so, three to four weeks, they say that they’re going to yank everything if you don’t meet the requirements. But I just got an email this morning saying, “Hey, you’ve gone through this final verification.” I checked my database log, and it’s like, “Yeah, they actually logged in, they did add a mailbox.” Apparently, I’m past that point, but I still need to have this security assessment done.
I wrote a long email that I guess they’re forwarding around internally that basically, laid out all these things. It’s like, “I probably know more about security and compliance than most of the people you have working on this, and definitely more than the average developer, and not to sound arrogant about that but I actually do.” I pointed to different places where, “I’ve been the author of one of the centers for internet security benchmarks. These are independent publications where you can see my name is on them.” I offered them. “Isn’t there some sort of exemption that can be put in here? Isn’t there money set aside in Google for small companies? Isn’t there something there that says that if you’re below a certain threshold, it doesn’t apply to you? It’s not like I’m out here trying to scam the world or anything. I’m just trying to carve out an existence here for myself.” They’re like the government, I guess, that’s kind of how I see it. It’s like they’re large and inflexible, and I don’t know what to do. It’s like arguing with the IRS. You’re probably not going to get very far.
Rob: The hard part is that you know the scrutiny that they’re coming under now, with all the Facebook privacy security crap. So you understand why they might have a policy like this even though it doesn’t necessarily feel fair.
Mike: I do. I get it. I understand. But at the same time, when you look at the discrepancies between what the benefits to me are for having this security assessment done, like all that does is it benefits Google, it benefits their security baseline, benefits their security posture globally. What does it do for me? Zero. It does absolutely nothing. It doesn’t get me more customers. It doesn’t add to my marketing footprint. I don’t even get really listed anywhere where it’s going to get a large amount of traffic or anything like that. I get virtually nothing. I’m the one paying for it, and Google is reaping the rewards and benefits of it.
From that justification, “Why should I pay for this?” They’re making $15 million-$16 million per hour. They actually had to go back and forth with me to say, “Please create a free account for us so that we can log into your app.” It’s like, “Really? You can’t sign up for a free trial from Google. Nobody there’s got a credit card?” It just boggles my mind that they’re treating people this way.
Rob: The part about the credit card I get because, in a big company, very few people have credit cards, right? Because they don’t want people just willy-nilly—you can’t track all the expenses, and you wouldn’t know what’s going on. It’s not that they don’t have the money to have credit cards, it’s that tracking credit cards is a pain in the butt in an organization with thousands of people. That part makes a little more sense to me.
Mike: It makes a little more sense, but at the same time, it’s a free trial. There should have been a credit card someplace that they’ve got and said, “Look, there shouldn’t be anything paid going on this and if there is, contact whoever it is and if you need to do a chargeback, do a chargeback.” But that shouldn’t be a two-week back and forth between them and the developer. I literally waited for two weeks for them to get back to me. I was like, “What email address are you using to register?” Nothing. Two weeks, nothing. It’s not a hard question. I could have done it, and I did eventually hear back from them and got it all taken care off, but then even after I sent it to them, I said, “Hey, here it is.” It was still another week.
Rob: That’s the hard part, I think. To mean them not having a credit card, I would give them a pass on. I just know how it is at big companies, and on, and on. I don’t blame them at that point. The fact that it took them two weeks or three weeks or whatever you’re saying is, that’s the part that gets really hard when they have a deadline. You are trying to meet it, and they’re not getting back to you quick enough. It sounds like they’re not staffed up enough in this department, and some arbitrary person somewhere decided, “Oh, we have to be compliant with this by this day,” but didn’t actually make the decision to staff up or give the proper resources.
I think, to circle back on the audit, how it benefits Google and not you, I don’t disagree with. It’s the same thing with Apple and the app store—it is a monopoly in essence. They can do what they want, they can screw the developers if they want, that’s the hard part, that’s the bummer of building on someone else’s platform. Until it’s antitrust, and the government gets involved, you kind of can’t do anything. You’re in an odd position because I know that you didn’t intend to build on someone else’s platform and that you did the IMAP stuff on purpose.
You’ve said that multiple times. I remember talking in the early days, and that was the point is you were going to do something that isn’t reliant on someone else. For them to just come in and say, “You need to drop $15,000-$75,000.” They can do it, and it sucks, but I cannot imagine them bearing the cost for all the developers who use their API because I think that’s what you’re saying is, you want them to bear that burden of it. I don’t know of a large company, with such a large public API, that would do that. Are you thinking they would have their own internal team that will do it, and they would just have people on salary to do it type of thing?
Mike: I would think that they have something along those lines. Honestly, my initial thought was, “There are going to be companies that can bear the burden, and it’s not really that big a deal for them.” Fine. Those aren’t the ones that I’m publicly advocating for here. It’s the ones that are in a position like me where, very limited resources, I’m not funded, I’m not making the type of money that would make a third party audit like that particularly easy, I’m doing everything myself. If I had 5 employees or 10 employees bringing in $1 million every year, okay, that’s a very different story.
There should be something set aside or some sort of exception process in place for companies that are not meeting a certain threshold, very similar to when the government comes in and say, “Oh, if you are 50 employees or more, you have to provide healthcare for your employees.” But there’s that threshold there because the burden on super small companies is so incredibly high whereas Pfizer or Facebook or Apple, they don’t care, it’s a drop in the bucket to them. They even have an entire compliance division, I’m sure. But a six-person company? No. That’s not the case. When you get into those super small companies, basically, what they’ve done is, they’ve taken this blanket statement that says, “These rules and regulations apply to everyone.”
Personally, I understand why they’ve done that, I understand what their intent is, but the application of it and applying it to every single business—big or small—it’s skewed in a direction that benefits the big businesses by pushing the smaller companies out of business.
Rob: Yeah. The thing I struggle with is, I can see it from their perspective and that the smaller companies are most likely going to be the ones that have the security holes, I would think, right? Maybe not in your case because you know security and you did it for so many years, but think about how many two-year developers, junior developer, hacking something together in PHP getting the API key, they’re not thinking about the security at the level that you are or that Google would require. I actually think that the risk to them is higher on the low-end. I don’t think there could be exemptions. It’s almost like you want more of a scholarship. That would be it, right?
Mike: If you look at exactly what you just said, the risk for a large company versus a small company is actually very similar. The reason is because a large company will have a much larger footprint, so they have much more data available to them and a larger customer base; a smaller company would have very few customers. The likelihood of any one of those getting hacked or them getting hacked or something happening—some sort of security breach—even if it does happen, the footprint of that breach is going to be much smaller.
Think of like T.J. Maxx, however many hundreds of millions of credit cards got hacked is because they are huge. If let’s say that Stripe was hacked, that’s a very similar thing. If you look at something like Bluetick or Level, for example, which Derrick Reimer just decided that he was going to shut that down, let’s just say that he was, for whatever reason, storing credit cards on his server and that got hacked, how many people have put their credit cards into that? The answer’s going to be, it’s much smaller than T.J. Maxx.
Rob: Right. It’s a higher likelihood of it getting breached, but (a) fewer people are going to want to breach it because they know it’s small, and (b) even if it gets breached, it’s just isn’t as nearly as big of a deal.
Mike: Correct. It’s about impact at that point.
Rob: Yeah. Their policy is obviously, very hard on what you are doing. I think the question I feel like, as a founder is like, you’re fighting this now, if you somehow win this battle, this conversation, do you have concerns moving forward that this is going to continue to be an issue?
I bring that up because with apps that I’ve run in the past when Google or someone else broke when it was platform-built, they broke every year, 12-18 months, 6-18 months, whatever, they just kept breaking my stuff. It was an ongoing thing, and I think I want to post that question, (a) have you considered that, and (b) is that a reason to move on? I’m not saying you should, but have you given that thought, has that gone through your mind of like, “I shouldn’t be doing this? I should look for a different idea?”
Mike: It has crossed my mind, and I have given it thought. I think this situation is a little different in terms of the platform itself breaking because I’m relying on IMAP, not anything else. From that perspective, I don’t think that’s an ongoing issue. The policy changes could be because if they change policy once then, there’s no reason to think that they couldn’t decide that they’re going to change policy again.
Could that come up in the future? It absolutely could. Could come up next year or the year after? Yeah, it absolutely could. Am I worried about that side of it? Probably not because I think with Bluetick, it’s one of those things where I evaluate it and say, “Look, this needs to move forward at a certain amount of time, and if it doesn’t, then I should go on to something else.”
Rob: Yeah. That’s something I think we should probably dig into an episode or two. I know we don’t have it on the books today and no, we haven’t done a prep but I think it could be an interesting conversation, for you and I, to talk about where you are with Bluetick and just hear more how you’re thinking about it and where it stands in your mind especially given the light of what’s going on right now. I mean, this is a lot of hassle for—like you said—for an app that is not as successful as you want it to be.
Mike: Right. I even went in and took a screenshot of revenue and sent it to him like, “Look, this is how much this is making and you want me to do this? This is absurd.” I don’t know. We’ll see what they have to say. Hopefully, in a couple of weeks, I’ll have more information. But I mean, I may not, I don’t know. I’m spending so much of my time with Red Tape right now—and I have been for several months now. I’m not moving. It sucks. I don’t know what else I can do.
Rob: Is it taking up that much time? I can imagine replying to emails, you screenshot, you make the argument, then you sent the email, and then don’t you have the rest of your day to then build features, or market, I would say? Maybe you shouldn’t be building features right now, maybe it should be more marketing, but whatever, to do things that push the business forward.
Mike: It’s really distracting. Having that in my brain bouncing around, it’s really been distracting. It’s a little bit harder to focus.
Rob: You’re saying, you fire the email, and then you’re hung up on it for an hour or two, and you’re half struggling to work done. Is that the idea?
Mike: Some of it. In the past two days, there were two different emails that I sent. Each of them took me like an hour to put together. It just takes time to do that, which sucks, and I don’t know, maybe I could provide a lot less detail. I don’t know.
Rob: Yeah. It sounds like it’s tough because when I hear that I think, “Oh man, that is a waste of time.” But if you don’t put the thought into it and write a well-crafted email in this situation, it could be business-ending, so where’s the time best spent? But if you spent an hour to send an email, you still have the other six hours of your day, or seven hours of your day, depending on how much you work. Are you then distracted for that time or are you able to just let it go because that’s where you got to get, if you want to move this forward is to let it go and be like, “I’m going to move forward.” You do have a timeline. It’s like two weeks, three weeks until you know for sure, I’m assuming.
Mike: Sure. So, this morning, I spent some time doing support stuff this morning, and then I spent an hour on one of those emails, and then I’ve got this call for an hour, and then I’ve got another call after that for an hour, and that takes me to 1:00 in the afternoon. My kids get home at 2:45 PM, and I haven’t even eaten lunch yet, so I’ll hopefully start getting work done around 1:30 PM, and I’ll have an hour and a half to two hours before my kids get home.
It’s hard to get things done when that ends up in your schedule, so I don’t know, I don’t have a good answer at the moment, but it’s something I definitely need to think about offline, but we can discuss it next week or the week after or something.
Rob: Yeah. Let’s do that because I do think this is worthwhile digging into. I don’t want to derail this whole episode, but I think this is such an interesting topic because this is the real side of entrepreneurship, right? These are the hard things that we all go through that are scary, and you often don’t know what to do, and it’s stressful. I have to imagine that when work ends, your kids get home, you’re probably stressed all evening—I would guess—unless you can let it go.
There’s a lot of ways we can talk about this. Thanks for sharing that, man. I know that it is not easy stuff to talk about, but I think this real conversation is important.
Mike: Moving on.
Rob: Yeah. I have some updates, but I’m going to leave them until the next episode because they’re just not that time sensitive. I wasn’t thinking […] I was doing. Let’s dive into a listener question, we got a voicemail question about pricing.
“Hi, Rob and Mike. First of all, thank you for your podcast. You’ve definitely made many […] journey and things like […] enjoyable. My question is yet another question about pricing. Something that’s been playing on my mind for a while. While I’m not trying to promote, I thought some background really helps these questions, otherwise, it turns into a whole load of, it depends. I run a successful SaaS called […], that runs digilization backups. However, the vendor lock in and the fear of digitalization releasing daily backups and making my life difficult is real. I’ve been working on my next product Ultimately. For SaaS products, they integrate payment gateway with your payment gateway, so you can do emails. Another work for that integration is without any code. It’s a bit like if Drip and Churn Buster have a love child. I’ve been struggling to work out pricing though. I want it to be in line with the value a customer receives, so I thought of a percentage of monthly recurring revenue, have it settle on a hidden percentage game saying, $9 per 1,000 MRR. However, talking to customers, the percentage model seems to strike fear into people with unexpected cost. Do you have a better suggestion before I roll with that because it’s just become a distraction. Thanks again, Simon. You can learn more about […] at […].com. Thank you.”
You have thoughts on this, Mike?
Mike: Yeah. Definitely. I’ve heard from other people who have apps that are kind of in the space and they have kind of reiterate the same thing that you’ve just covered, which is people really hate having a percentage model of any kind because they want it to be predictable. I think it’s interesting to see them make that argument because if you look at what you’re doing for them, you’re basically saving their money and preventing churn, and you don’t get paid unless they receive more money.
The reality of the situation is, they’re going to make more money by using your service, but they’re concerned about the fact that it’s going to cost them more money even though they’re making more money by using your service. For whatever reason, they have it in their heads that the cost fluctuates per month, and they’re not sure if they can afford it and this is a huge hang up for them. I’ve heard it time and time again.
What I would do is I would actually go and look at some competitors and don’t try to reinvent the wheel. Look at what they’ve done for pricing models and how they are putting things together and how they’re presenting them to customers. Don’t lean toward this model where people are going to hate your pricing. Find out what other people have done, copy what they’ve done, and then show how your solution differs from theirs. Don’t differentiate on your pricing model because that’s going to actually make your job of presenting it to customers a lot more challenging because they’re not going to understand it.
They’re going to look at your competitors and say, ‘”Well, they have this pricing model and that one, and this thing that you’ve come up with is completely, not insane or ridiculous, but it’s just very, very different.” They’re going to have a hard time processing it, and they’re going to mentally, cross you off their list because they don’t understand your pricing models.
Rob: Yep. I have tried to innovate with pricing models before. I have seen founders do it, and it is very hard to do. It’s like saying, “I want to invent a new category.” It’s like, “That sounds like a great idea. Call your app an integration email blah platform,” or something. People are like, “So, what is that? How are you different from MailChimp? How are you different from Zapier?” Those are the questions you get. People want to categorize that in their mind. Pricing is similar.
I think your advice is dead-on. The way I would approach it too is to at least look around at what other players who have similar models, how they’re approaching it. There are the ones that produce churn, but then there are also ones that help abandoned carts, there’s a whole gamut of things that make people money directly using email. Personally, I would pull out my Moleskine notebook, and I would just go around and do a big survey, boom, boom, boom, write it all down, and look at how that pricing is structured, and start from there. What you may find is that everyone does it based on a percentage as well, and you’ve just hit a few customers who don’t like it, and that’s fine. Your sample size is really small, and that makes it hard so far.
As you said, Mike, I would start there. Then the more people you talk to, the more data points you’ll get, and at a certain point, you will know. If you’ve talked to 20 people, and 19 will have a problem with it, it’s a real problem. But if you talk to 20 people, and it was the first two or three who said it, then it’s a little more clear cut.
I hope that was helpful, Simon. Thanks for sending your voicemail in. As always, voicemails go to the top of the questions queue. Our next question is from Martin at quoshift.com.
He says, “Hey, Rob and Mike. My name is Martin. I’m from Australia. I’m looking to start a new SaaS business in a fairly mature space. There are about three competitors in the $10 million to $100 million range in annual revenue that I would eventually like to compete with. I’ve compiled a large list of current users of those solutions. I’m going to go ahead and reach out to schedule some interviews. My platform would be easier to use while providing an objectively better technical solution than other companies. Easier to use, objectively better. What are the top three questions you would be asking these users to see if they would be interested in switching to my product? By the same token, how can I get people to pretty sign up to my solution?”
What do you think?
Mike: I think I would start by asking them what is the single thing you hate the most about what they’re using now because that’s probably going to drive them to switch. It’s not going to be, “Oh, this could be a better solution. It’s going to be better, technically or the UI is going to be better.” You have to hone in on the things that they absolutely hate. Use that as a lever to try and move them from whatever else they’re using because they’re going to want to avoid that pain, more than to incrementally improve, what they have now. That’s where I would definitely focus. Beyond that, just the language, I’d say, in the email is a little bit concerning because you’re saying that it is objectively better, technically. Dude, your customers are not going to care. It’s more about their experience with it and what they are going to get out of it.
Rob: Yes. Switching costs, whether they’re high or not, in actuality, they are always high in someone’s mental–in their mind. You can’t make an app that is 30% better and expect people to switch. You need to make an app that is two times, three times better and have a real, compelling way to communicate that to the customers. Building a better mousetrap is a really hard way to get people to switch SaaS apps.
The switching cost on mousetrap is not high—I’ll put it that way. I like your idea, the number one question of like, “What do you hate the most? What are two or three things that you hate most about this app?” I think, to tie it in, you talked about Derrick Reimer earlier deciding not to do Level. He wrote the blog post on derrickreimer.com, about deciding to shut it down, and the process there. He felt like he didn’t do it as well as he should have. He referenced the book called, The Mom Test—the subtitle is—How to Talk to Customers & Learn If Your Business is a Good Idea When Everyone is Lying to You. One of the big questions in there is not just, “What’s your biggest pain?” But that then followed up with, “What have you done to try to get around this pain so far? What have you done to solve this pain so far?”
Because if they say, “My biggest pain is I can’t integrate with this other product. If you build that integration, it would be great.” What have you done to solve that pain? Well, if they haven’t tried to hire a developer, or write any code to do it, or tie into Zapier, or do anything to actually fix the pain, then the odds are good that that pain actually, isn’t that big of a deal. In their head, they’re thinking, “Yeah, this is a pain. This is something I dislike.” But if they haven’t taken the time, or the money, or made an effort to fix it, it starts to sound like, “Well, maybe this isn’t that big of a deal. I think that’d be the follow-up question that I would ask about each of those pain points and I would […] The Mom Test, of course, to even hope further because there’s a whole bunch of questions in that book.
You know one other thing I would consider asking is because from a customer development standpoint, you want to find out what to build, and the early things to build. I would be curious to ask, “How long have you been using this product? How hard would it be to switch? Have you considered switching in the past? If you have, why didn’t you switch to another?” You know what I mean? Go down that logic, that path, of trying to really get into it to figure out when it comes time have they actually thought through what switching to your product looked like because if they haven’t, they can get right up to the end. They actually build all these integrations, and then like, “Oh, I haven’t thought that I’d have to get a developer involved.” That’s a no go. Those are the types of questions. That’s the path I wouldn’t follow. Thanks for the question, Martin. I hope that’s helpful.
I think we have more time for one more question today. This one is also about customer development. It’s about setting up initial meetings when all you have is wireframes. It’s from Scott.
“Hi, guys. I have a question for you. I’m trying to validate my idea by talking through wireframes with people, but before that can happen, I’m sending cold emails to people that I’m assuming are the target decision makers. In my case, it’s HR Managers of companies with around 250 or so employees, which may or may not be right. I wondered if you could talk about your experiences with getting those initial meetings set up. I don’t have a website at the moment, just initial product wireframes, do you think that’s a mistake at these early stage?”
He gave us a sample email, which I think is well-written. Any thoughts on this?
Mike: I like he led off the email by saying, “We’re in the early stages of building an app,” because I think it conveys to the person on the other end that you’re, I’ll say, as an aspiring entrepreneur. I found that that’s actually, a really good opening way to position yourself because you’re essentially soliciting them for their expertise and their advice.
A couple of things I would keep in mind though, the people that you talk to very early on like this—depending on how long it takes you to get your app out the door—it could be that these people are just not going to ultimately, end up being your customers. Just bear that in mind. Don’t bend over backward for every single one of these people, thinking that you’re going to get all of them as a paying customer once you start shipping the app or you have something to ship.
There’s a bunch of different reasons for that. But the fact of the matter is people switch jobs or their priorities change. All kinds of things can happen between the time that you first talked to them, and then you have something that you can show to them. I don’t think it’s a mistake to just show them wireframes. I mean, you need something to show them especially if you want to get any sort of prepayment or commitment from them.
The reason I would lean more towards that prepayment is because it essentially overcomes a hurdle which is that they’re saying they would pay for something, versus they will pay for it. If they give you a credit card as a prepayment, then they are willing to pay for it versus, “Oh, this sounds like a good idea. I would pay for it.” But the reality is, they want to see it, and they want to be able to play around with it. There’s going to be a bunch of people who fall into that category where they would pay for it except, and then they’ve got all these different reasons, that until you ask them for their credit card, they’re not really going to tell you because they want to be helpful. Nobody wants to be the person who says, “Oh, this is a bad idea.” If they’re trying to give you advice, they’re going to say those types of nice things which is going to what you want to hear, not necessarily what you need to hear.
Rob: Yeah. The hard part here is, if you’re an HR Manager of a company with 250 employees, you’re not going to prepay for something like this. Prepayment is such an SMB thing. When you’re talking to a single founder or a founder of a five-person company, yeah, they’ll totally give you a hundred bucks or whatever, put it in a credit card or whatever, but that type of thing, it works very differently as you get to the mid-market where they have these massive budgets, and everything is tracked.
You could feasibly do prepayment. But it’s going to be like, “Would you pay us $5000 or $10,000?” Then you’re going to need contracts. You’re going to have to go through procurement. That’s what this process would be like at that point. You’re trying to fund this based on customer pre-sales with larger companies, then it is definitely, much different—we would think—than if you’re dealing with just smaller companies.
Mike: Well, I don’t think you necessarily need to get to the point where you’re funding at with their money. In my mind, it’s more a matter of are they willing to commit to paying for when it’s ready. It’s a different goal than if you’re trying to get money from them to fund the development of it. That’s two different things, depending which direction he was trying to go.
Rob: Yeah. That’s fair. You don’t have to fund it, fund it yourself, but getting someone who runs HR at a 250-person company to give you their credit card number and say, “Yes, I’ll give you a few hundred dollars.” I wouldn’t do that. I worked at larger companies, and I just know the politics and everything that goes on in there, and you’re just so busy trying to push things forward that unless the solution is there in front of me, there are so many people marketing and trying to sell to these HR managers or to any manager at a company. That it’s like, them giving you the time to even give you feedback, and then them going out on a limb and then giving you money with the thought that you might build something. I mean, if they don’t know you, did they know that you’re going to build good software? Did they trust that you’re going to deliver […] ever? It’s a whole different ball game.
You’re not going to have a reputation like you might if, let’s say, I went to our audience and was like, “Hey, I’m going to build something that is going to solve whatever your problems.” There would be reputation factors, right? People know me, and hopefully, like me, and trust that I’m going to build something good, but he’s not going to have that with these HR Managers because it’s just cold outreach.
Mike: I think, what I would lean towards doing in that case is saying, “If the products says this, this, and this, so what are the roadblocks to you purchasing it and pain for it?” That gives you a little bit of insight in to the internal politics of how that company operates. If you’re asking that company that specific question, you’re going to get, I would think, a reasonably decent cross-section of how companies at that level operate in terms of purchasing and requisition.
Like, “Some are going to need to go through the IT department and they have to hand it off to them and the IT department has to purchase it. Some of them are going to have a credit card, they’re going to be able to just buy it themselves, and tell the IT department afterwards. Some of them purchases above a certain dollar amount, they need to go through somebody.” You can ask them about, “If the pricing was this, what would you think? If the pricing was this other thing, what would you think? What are the roadblocks that lead to those different points?” That’s what you need to know is how are you going to sell to these people assuming you built what they want.
So, one line of question is, “What is it that you want and need and what would make it so that she would pull the trigger and buy it and say yes.?” The second part is, “What does it take to actually get it into here?”
Rob: Yep. I think those are good points. He asked two other questions or he asked two questions in the email, and I don’t know if we’d addressed them very well. His first one was, “I wondered if you could talk about your experience with getting those initial meeting set up.” Yeah, the experience is, you have to send a lot of emails to get very few meetings. The funnel is wide, and people are busy, and they aren’t going to want to talk to you.
Other thing that I’ve done is use my network/audience to try to get that. Whether you’re going on LinkedIn, whether you are emailing everybody you know to basically say, “Look, I’m an aspiring entrepreneur or I’m a founder, and I’m in the early stages, I need advice on an HR product. Could you make an intro?” That’s how you’re going to get people who will at least talk to you on the phone. My experience is that it’s frustrating, and takes longer than you want and you get a lot of, “No, I’m not going to talk to you.” Eventually, your persevere, you figure it out, you talk to enough people.
Then his second question is, “I don’t have a website at the moment, just the initial product wireframes. Do you think that’s a mistake at this early stage?” I could go either way on this. I think wireframes is fine, but I think non-technical people have a tough time feeling wireframes as real things, but I’m less worried about how the screens worked, and I’m more worried about what is the headline. What is the headline of the website? There’s kind of this old marketing thought, and I think it’s good, it’s something that I’ve done from time to time, where you build the marketing page first, you build the landing first page. You go from there to then building the product. By the time you get that headline in there and some bullets of what the copy is and what it does. I mean, that’s how we did with Drip.
I’m trying to think, my book was that way too where it was five sentences on a page and then I took that and said, “Now, I’m going to go manifest this into reality.” That’s what I like about you building a marketing site is whether you do it in Squarespace or WordPress SaaS theme, it doesn’t have to look amazing, but it’s really about you getting it on paper, getting the marketing thoughts and the copy even in front of yourself, and maybe if they asked, you can send them there, it’s just an email opt-in, it kind of depends, but I think I lean towards in doing that. I think it’s a helpful exercise, especially for those of us who tend to want to go to the code.
Mike: I was going to mention exactly that. I don’t think that having a website in and of itself is going to help you, but I think the process of putting together the website makes you seriously think about what it needs to say, and how you’re going to position it, and it helps you craft a better story when you’re talking to people about the solution on a call, and you’re demonstrating those wireframes. It just helps you position it better so that if they look at your email, “Well, let me just take a look at the website before I reply back to this.” That should tell them very quickly whether or not they want to even waste their time at all or whether you’re serious. If you don’t have any website at all, who knows?
I mean, I feel like, this is definitely more me than anything else, but if somebody sends me some email and says, “Hey, I’m thinking about this,” and they’ve got literally nothing on their website at all or they don’t mean to have a website, it’s really hard to take him seriously that they were even going down this road.
Rob: Yeah. I think that’s a good point. Hope those thoughts are helpful, Scott.
Rob: Well, thanks for the questions everyone. If you have a question for us, you can call it into our voicemail number 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening. 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 software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. To where this week, man?
Mike: Remember how there was a couple weeks ago where I mentioned there was this ongoing Google app authentication approval process I was going through.
Rob: Yes. Seems like that’s been going on for quite some time.
Mike: Yeah. Like I said, they had announced it back I think in October or November. But they didn’t really give any details on it other than what was published on their website and they’re slowly adding to it and then earlier this year, they started ramping up requests for information, and all these additional things. I got an email the other day saying that they’re basically going to start yanking access. I’ve actually been going back and forth with a couple of people inside of Google who reached out.
I just want to say thanks to those listeners who do work in Google and been listening, but they forwarded it over a couple of my emails, and started pushing through some things. Hopefully, things are moving a little bit faster, but I did just get an email this morning saying, “Now, you have to go through this security review.” I’m trying to figure out or find out more information about exactly what that looks like and whether it’s absolutely required. It’s just been a red date nightmare is what it really comes down to.
Rob: Yeah. I have questions for you about this. It sounds like this could be an existential threat to Bluetick, is that right? Could it basically put you out of business overnight?
Mike: Yeah. It absolutely could.
Rob: And does that scare you?
Mike: Yeah, it does. The whole reason I chose IMAP was because I didn’t want to be beholden to the Gmail API and I didn’t want to have to deal with anything that they could come in and say, “Either change” or maybe they say, “Oh, we’re not going to offer this anymore.” I didn’t want to deal with latencies and things like that associated with it because I knew people were running the problems with that kind of stuff.
Fast forward a bit, and they decide change policy and suddenly, policy says you have to go through all these red tape in order to verify your app. Now, because of what I’m doing, I have to go through security review and it’s a third party security review. The cost for that is pushed on to me and they don’t even give you an actual price for it. It’s like, I have to pay for it and it’s anywhere from $15,000-$75,000 on an annual basis.
Rob: And you totally have that in the couch cushions, right?
Mike: Yeah. Get the money from the tooth fairy or something. I don’t know.
Rob: It’s an existential threat and you genuinely don’t know what’s going to happen. They can literally yank access in two days and just say, “You didn’t comply,” or whatever. Is that accurate?
Mike: I wouldn’t think that it’s two days. I suppose it could, but I could take an email like a couple of weeks ago saying that they were going to extend the timeline to I think, June 15. I don’t know whether the security assessment needs to be done by the 15th or there is something else in there that said, “If you’ve had it done before January 19th then you have to have it done by the December 15th or 19th,” or something like that. I don’t know whether there’s this six months’ time frame. If it’s been done in the past six months, you’re fine, but before that you have to have a new one done. I don’t really know. They’re not forthcoming with direct information when you ask them questions and it’s just slow responses.
Rob: Is this anywhere? Have you gone online to forums? Other people have to be experiencing this, right? Have you gone into forums and looked? Does anyone have clarity in this? Or who do we know that has an app like Superhuman, as an example—now, we don’t know the founders of that—but who has an app like that that also relies on Google or Gmail specifically, that you can connect with, and ask if they have any clarity on it because this does feel like something where it needs more than one person because it sounds like you are not getting answers. If we cobble together, three or four founders who’ve had experience with this, then maybe you can get some clarity.
Mike: Yeah, I don’t know. I can certainly go looking for those. I’ve been following there’s a—it’s not a blog—I guess it’s a set of blog posts from a couple of different people. Contacts.io was one that I was looking at. They have this blog article that they talked about where they’re basically shutting down the whole thing because they can’t meet the requirements. They’re like, “Yeah. We’re just done.”
Then there’s another one I’ve been following, I forgot the name of it, I’ve got it bookmarked, but they’ve been documenting the whole process of what they’ve asked, what they’ve gone through, what the responses where, what they said, and they got all the way to the point where they have to have a security assessment done, and they said out of respect for that company, they’re not posting how much it cost. But I was going to drop them an email today—and that’s a recent post that they put out there—I’m going to drop an email, and be like, “Hey, look. What does this actually involve? What does this look like because I’m not getting any answers I need either.” Since they’ve already gone through it, I’d love to hear more.
But things have been really rushed over the past two weeks because that’s when they started sending out those emails saying, “Hey, here are the days where we’re going to start notifying people who own these domains that you’re no longer going to be allowed to access the API.” Or, “Your app is no longer trusted or hasn’t been verified yet.” Over the course of the next four weeks or so, three to four weeks, they say that they’re going to yank everything if you don’t meet the requirements. But I just got an email this morning saying, “Hey, you’ve gone through this final verification.” I checked my database log, and it’s like, “Yeah, they actually logged in, they did add a mailbox.” Apparently, I’m past that point, but I still need to have this security assessment done.
I wrote a long email that I guess they’re forwarding around internally that basically, laid out all these things. It’s like, “I probably know more about security and compliance than most of the people you have working on this, and definitely more than the average developer, and not to sound arrogant about that but I actually do.” I pointed to different places where, “I’ve been the author of one of the centers for internet security benchmarks. These are independent publications where you can see my name is on them.” I offered them. “Isn’t there some sort of exemption that can be put in here? Isn’t there money set aside in Google for small companies? Isn’t there something there that says that if you’re below a certain threshold, it doesn’t apply to you? It’s not like I’m out here trying to scam the world or anything. I’m just trying to carve out an existence here for myself.” They’re like the government, I guess, that’s kind of how I see it. It’s like they’re large and inflexible, and I don’t know what to do. It’s like arguing with the IRS. You’re probably not going to get very far.
Rob: The hard part is that you know the scrutiny that they’re coming under now, with all the Facebook privacy security crap. So you understand why they might have a policy like this even though it doesn’t necessarily feel fair.
Mike: I do. I get it. I understand. But at the same time, when you look at the discrepancies between what the benefits to me are for having this security assessment done, like all that does is it benefits Google, it benefits their security baseline, benefits their security posture globally. What does it do for me? Zero. It does absolutely nothing. It doesn’t get me more customers. It doesn’t add to my marketing footprint. I don’t even get really listed anywhere where it’s going to get a large amount of traffic or anything like that. I get virtually nothing. I’m the one paying for it, and Google is reaping the rewards and benefits of it.
From that justification, “Why should I pay for this?” They’re making $15 million-$16 million per hour. They actually had to go back and forth with me to say, “Please create a free account for us so that we can log into your app.” It’s like, “Really? You can’t sign up for a free trial from Google. Nobody there’s got a credit card?” It just boggles my mind that they’re treating people this way.
Rob: The part about the credit card I get because, in a big company, very few people have credit cards, right? Because they don’t want people just willy-nilly—you can’t track all the expenses, and you wouldn’t know what’s going on. It’s not that they don’t have the money to have credit cards, it’s that tracking credit cards is a pain in the butt in an organization with thousands of people. That part makes a little more sense to me.
Mike: It makes a little more sense, but at the same time, it’s a free trial. There should have been a credit card someplace that they’ve got and said, “Look, there shouldn’t be anything paid going on this and if there is, contact whoever it is and if you need to do a chargeback, do a chargeback.” But that shouldn’t be a two-week back and forth between them and the developer. I literally waited for two weeks for them to get back to me. I was like, “What email address are you using to register?” Nothing. Two weeks, nothing. It’s not a hard question. I could have done it, and I did eventually hear back from them and got it all taken care off, but then even after I sent it to them, I said, “Hey, here it is.” It was still another week.
Rob: That’s the hard part, I think. To mean them not having a credit card, I would give them a pass on. I just know how it is at big companies, and on, and on. I don’t blame them at that point. The fact that it took them two weeks or three weeks or whatever you’re saying is, that’s the part that gets really hard when they have a deadline. You are trying to meet it, and they’re not getting back to you quick enough. It sounds like they’re not staffed up enough in this department, and some arbitrary person somewhere decided, “Oh, we have to be compliant with this by this day,” but didn’t actually make the decision to staff up or give the proper resources.
I think, to circle back on the audit, how it benefits Google and not you, I don’t disagree with. It’s the same thing with Apple and the app store—it is a monopoly in essence. They can do what they want, they can screw the developers if they want, that’s the hard part, that’s the bummer of building on someone else’s platform. Until it’s antitrust, and the government gets involved, you kind of can’t do anything. You’re in an odd position because I know that you didn’t intend to build on someone else’s platform and that you did the IMAP stuff on purpose.
You’ve said that multiple times. I remember talking in the early days, and that was the point is you were going to do something that isn’t reliant on someone else. For them to just come in and say, “You need to drop $15,000-$75,000.” They can do it, and it sucks, but I cannot imagine them bearing the cost for all the developers who use their API because I think that’s what you’re saying is, you want them to bear that burden of it. I don’t know of a large company, with such a large public API, that would do that. Are you thinking they would have their own internal team that will do it, and they would just have people on salary to do it type of thing?
Mike: I would think that they have something along those lines. Honestly, my initial thought was, “There are going to be companies that can bear the burden, and it’s not really that big a deal for them.” Fine. Those aren’t the ones that I’m publicly advocating for here. It’s the ones that are in a position like me where, very limited resources, I’m not funded, I’m not making the type of money that would make a third party audit like that particularly easy, I’m doing everything myself. If I had 5 employees or 10 employees bringing in $1 million every year, okay, that’s a very different story.
There should be something set aside or some sort of exception process in place for companies that are not meeting a certain threshold, very similar to when the government comes in and say, “Oh, if you are 50 employees or more, you have to provide healthcare for your employees.” But there’s that threshold there because the burden on super small companies is so incredibly high whereas Pfizer or Facebook or Apple, they don’t care, it’s a drop in the bucket to them. They even have an entire compliance division, I’m sure. But a six-person company? No. That’s not the case. When you get into those super small companies, basically, what they’ve done is, they’ve taken this blanket statement that says, “These rules and regulations apply to everyone.”
Personally, I understand why they’ve done that, I understand what their intent is, but the application of it and applying it to every single business—big or small—it’s skewed in a direction that benefits the big businesses by pushing the smaller companies out of business.
Rob: Yeah. The thing I struggle with is, I can see it from their perspective and that the smaller companies are most likely going to be the ones that have the security holes, I would think, right? Maybe not in your case because you know security and you did it for so many years, but think about how many two-year developers, junior developer, hacking something together in PHP getting the API key, they’re not thinking about the security at the level that you are or that Google would require. I actually think that the risk to them is higher on the low-end. I don’t think there could be exemptions. It’s almost like you want more of a scholarship. That would be it, right?
Mike: If you look at exactly what you just said, the risk for a large company versus a small company is actually very similar. The reason is because a large company will have a much larger footprint, so they have much more data available to them and a larger customer base; a smaller company would have very few customers. The likelihood of any one of those getting hacked or them getting hacked or something happening—some sort of security breach—even if it does happen, the footprint of that breach is going to be much smaller.
Think of like T.J. Maxx, however many hundreds of millions of credit cards got hacked is because they are huge. If let’s say that Stripe was hacked, that’s a very similar thing. If you look at something like Bluetick or Level, for example, which Derrick Reimer just decided that he was going to shut that down, let’s just say that he was, for whatever reason, storing credit cards on his server and that got hacked, how many people have put their credit cards into that? The answer’s going to be, it’s much smaller than T.J. Maxx.
Rob: Right. It’s a higher likelihood of it getting breached, but (a) fewer people are going to want to breach it because they know it’s small, and (b) even if it gets breached, it’s just isn’t as nearly as big of a deal.
Mike: Correct. It’s about impact at that point.
Rob: Yeah. Their policy is obviously, very hard on what you are doing. I think the question I feel like, as a founder is like, you’re fighting this now, if you somehow win this battle, this conversation, do you have concerns moving forward that this is going to continue to be an issue?
I bring that up because with apps that I’ve run in the past when Google or someone else broke when it was platform-built, they broke every year, 12-18 months, 6-18 months, whatever, they just kept breaking my stuff. It was an ongoing thing, and I think I want to post that question, (a) have you considered that, and (b) is that a reason to move on? I’m not saying you should, but have you given that thought, has that gone through your mind of like, “I shouldn’t be doing this? I should look for a different idea?”
Mike: It has crossed my mind, and I have given it thought. I think this situation is a little different in terms of the platform itself breaking because I’m relying on IMAP, not anything else. From that perspective, I don’t think that’s an ongoing issue. The policy changes could be because if they change policy once then, there’s no reason to think that they couldn’t decide that they’re going to change policy again.
Could that come up in the future? It absolutely could. Could come up next year or the year after? Yeah, it absolutely could. Am I worried about that side of it? Probably not because I think with Bluetick, it’s one of those things where I evaluate it and say, “Look, this needs to move forward at a certain amount of time, and if it doesn’t, then I should go on to something else.”
Rob: Yeah. That’s something I think we should probably dig into an episode or two. I know we don’t have it on the books today and no, we haven’t done a prep but I think it could be an interesting conversation, for you and I, to talk about where you are with Bluetick and just hear more how you’re thinking about it and where it stands in your mind especially given the light of what’s going on right now. I mean, this is a lot of hassle for—like you said—for an app that is not as successful as you want it to be.
Mike: Right. I even went in and took a screenshot of revenue and sent it to him like, “Look, this is how much this is making and you want me to do this? This is absurd.” I don’t know. We’ll see what they have to say. Hopefully, in a couple of weeks, I’ll have more information. But I mean, I may not, I don’t know. I’m spending so much of my time with Red Tape right now—and I have been for several months now. I’m not moving. It sucks. I don’t know what else I can do.
Rob: Is it taking up that much time? I can imagine replying to emails, you screenshot, you make the argument, then you sent the email, and then don’t you have the rest of your day to then build features, or market, I would say? Maybe you shouldn’t be building features right now, maybe it should be more marketing, but whatever, to do things that push the business forward.
Mike: It’s really distracting. Having that in my brain bouncing around, it’s really been distracting. It’s a little bit harder to focus.
Rob: You’re saying, you fire the email, and then you’re hung up on it for an hour or two, and you’re half struggling to work done. Is that the idea?
Mike: Some of it. In the past two days, there were two different emails that I sent. Each of them took me like an hour to put together. It just takes time to do that, which sucks, and I don’t know, maybe I could provide a lot less detail. I don’t know.
Rob: Yeah. It sounds like it’s tough because when I hear that I think, “Oh man, that is a waste of time.” But if you don’t put the thought into it and write a well-crafted email in this situation, it could be business-ending, so where’s the time best spent? But if you spent an hour to send an email, you still have the other six hours of your day, or seven hours of your day, depending on how much you work. Are you then distracted for that time or are you able to just let it go because that’s where you got to get, if you want to move this forward is to let it go and be like, “I’m going to move forward.” You do have a timeline. It’s like two weeks, three weeks until you know for sure, I’m assuming.
Mike: Sure. So, this morning, I spent some time doing support stuff this morning, and then I spent an hour on one of those emails, and then I’ve got this call for an hour, and then I’ve got another call after that for an hour, and that takes me to 1:00 in the afternoon. My kids get home at 2:45 PM, and I haven’t even eaten lunch yet, so I’ll hopefully start getting work done around 1:30 PM, and I’ll have an hour and a half to two hours before my kids get home.
It’s hard to get things done when that ends up in your schedule, so I don’t know, I don’t have a good answer at the moment, but it’s something I definitely need to think about offline, but we can discuss it next week or the week after or something.
Rob: Yeah. Let’s do that because I do think this is worthwhile digging into. I don’t want to derail this whole episode, but I think this is such an interesting topic because this is the real side of entrepreneurship, right? These are the hard things that we all go through that are scary, and you often don’t know what to do, and it’s stressful. I have to imagine that when work ends, your kids get home, you’re probably stressed all evening—I would guess—unless you can let it go.
There’s a lot of ways we can talk about this. Thanks for sharing that, man. I know that it is not easy stuff to talk about, but I think this real conversation is important.
Mike: Moving on.
Rob: Yeah. I have some updates, but I’m going to leave them until the next episode because they’re just not that time sensitive. I wasn’t thinking […] I was doing. Let’s dive into a listener question, we got a voicemail question about pricing.
“Hi, Rob and Mike. First of all, thank you for your podcast. You’ve definitely made many […] journey and things like […] enjoyable. My question is yet another question about pricing. Something that’s been playing on my mind for a while. While I’m not trying to promote, I thought some background really helps these questions, otherwise, it turns into a whole load of, it depends. I run a successful SaaS called […], that runs digilization backups. However, the vendor lock in and the fear of digitalization releasing daily backups and making my life difficult is real. I’ve been working on my next product Ultimately. For SaaS products, they integrate payment gateway with your payment gateway, so you can do emails. Another work for that integration is without any code. It’s a bit like if Drip and Churn Buster have a love child. I’ve been struggling to work out pricing though. I want it to be in line with the value a customer receives, so I thought of a percentage of monthly recurring revenue, have it settle on a hidden percentage game saying, $9 per 1,000 MRR. However, talking to customers, the percentage model seems to strike fear into people with unexpected cost. Do you have a better suggestion before I roll with that because it’s just become a distraction. Thanks again, Simon. You can learn more about […] at […].com. Thank you.”
You have thoughts on this, Mike?
Mike: Yeah. Definitely. I’ve heard from other people who have apps that are kind of in the space and they have kind of reiterate the same thing that you’ve just covered, which is people really hate having a percentage model of any kind because they want it to be predictable. I think it’s interesting to see them make that argument because if you look at what you’re doing for them, you’re basically saving their money and preventing churn, and you don’t get paid unless they receive more money.
The reality of the situation is, they’re going to make more money by using your service, but they’re concerned about the fact that it’s going to cost them more money even though they’re making more money by using your service. For whatever reason, they have it in their heads that the cost fluctuates per month, and they’re not sure if they can afford it and this is a huge hang up for them. I’ve heard it time and time again.
What I would do is I would actually go and look at some competitors and don’t try to reinvent the wheel. Look at what they’ve done for pricing models and how they are putting things together and how they’re presenting them to customers. Don’t lean toward this model where people are going to hate your pricing. Find out what other people have done, copy what they’ve done, and then show how your solution differs from theirs. Don’t differentiate on your pricing model because that’s going to actually make your job of presenting it to customers a lot more challenging because they’re not going to understand it.
They’re going to look at your competitors and say, ‘”Well, they have this pricing model and that one, and this thing that you’ve come up with is completely, not insane or ridiculous, but it’s just very, very different.” They’re going to have a hard time processing it, and they’re going to mentally, cross you off their list because they don’t understand your pricing models.
Rob: Yep. I have tried to innovate with pricing models before. I have seen founders do it, and it is very hard to do. It’s like saying, “I want to invent a new category.” It’s like, “That sounds like a great idea. Call your app an integration email blah platform,” or something. People are like, “So, what is that? How are you different from MailChimp? How are you different from Zapier?” Those are the questions you get. People want to categorize that in their mind. Pricing is similar.
I think your advice is dead-on. The way I would approach it too is to at least look around at what other players who have similar models, how they’re approaching it. There are the ones that produce churn, but then there are also ones that help abandoned carts, there’s a whole gamut of things that make people money directly using email. Personally, I would pull out my Moleskine notebook, and I would just go around and do a big survey, boom, boom, boom, write it all down, and look at how that pricing is structured, and start from there. What you may find is that everyone does it based on a percentage as well, and you’ve just hit a few customers who don’t like it, and that’s fine. Your sample size is really small, and that makes it hard so far.
As you said, Mike, I would start there. Then the more people you talk to, the more data points you’ll get, and at a certain point, you will know. If you’ve talked to 20 people, and 19 will have a problem with it, it’s a real problem. But if you talk to 20 people, and it was the first two or three who said it, then it’s a little more clear cut.
I hope that was helpful, Simon. Thanks for sending your voicemail in. As always, voicemails go to the top of the questions queue. Our next question is from Martin at quoshift.com.
He says, “Hey, Rob and Mike. My name is Martin. I’m from Australia. I’m looking to start a new SaaS business in a fairly mature space. There are about three competitors in the $10 million to $100 million range in annual revenue that I would eventually like to compete with. I’ve compiled a large list of current users of those solutions. I’m going to go ahead and reach out to schedule some interviews. My platform would be easier to use while providing an objectively better technical solution than other companies. Easier to use, objectively better. What are the top three questions you would be asking these users to see if they would be interested in switching to my product? By the same token, how can I get people to pretty sign up to my solution?”
What do you think?
Mike: I think I would start by asking them what is the single thing you hate the most about what they’re using now because that’s probably going to drive them to switch. It’s not going to be, “Oh, this could be a better solution. It’s going to be better, technically or the UI is going to be better.” You have to hone in on the things that they absolutely hate. Use that as a lever to try and move them from whatever else they’re using because they’re going to want to avoid that pain, more than to incrementally improve, what they have now. That’s where I would definitely focus. Beyond that, just the language, I’d say, in the email is a little bit concerning because you’re saying that it is objectively better, technically. Dude, your customers are not going to care. It’s more about their experience with it and what they are going to get out of it.
Rob: Yes. Switching costs, whether they’re high or not, in actuality, they are always high in someone’s mental–in their mind. You can’t make an app that is 30% better and expect people to switch. You need to make an app that is two times, three times better and have a real, compelling way to communicate that to the customers. Building a better mousetrap is a really hard way to get people to switch SaaS apps.
The switching cost on mousetrap is not high—I’ll put it that way. I like your idea, the number one question of like, “What do you hate the most? What are two or three things that you hate most about this app?” I think, to tie it in, you talked about Derrick Reimer earlier deciding not to do Level. He wrote the blog post on derrickreimer.com, about deciding to shut it down, and the process there. He felt like he didn’t do it as well as he should have. He referenced the book called, The Mom Test—the subtitle is—How to Talk to Customers & Learn If Your Business is a Good Idea When Everyone is Lying to You. One of the big questions in there is not just, “What’s your biggest pain?” But that then followed up with, “What have you done to try to get around this pain so far? What have you done to solve this pain so far?”
Because if they say, “My biggest pain is I can’t integrate with this other product. If you build that integration, it would be great.” What have you done to solve that pain? Well, if they haven’t tried to hire a developer, or write any code to do it, or tie into Zapier, or do anything to actually fix the pain, then the odds are good that that pain actually, isn’t that big of a deal. In their head, they’re thinking, “Yeah, this is a pain. This is something I dislike.” But if they haven’t taken the time, or the money, or made an effort to fix it, it starts to sound like, “Well, maybe this isn’t that big of a deal. I think that’d be the follow-up question that I would ask about each of those pain points and I would […] The Mom Test, of course, to even hope further because there’s a whole bunch of questions in that book.
You know one other thing I would consider asking is because from a customer development standpoint, you want to find out what to build, and the early things to build. I would be curious to ask, “How long have you been using this product? How hard would it be to switch? Have you considered switching in the past? If you have, why didn’t you switch to another?” You know what I mean? Go down that logic, that path, of trying to really get into it to figure out when it comes time have they actually thought through what switching to your product looked like because if they haven’t, they can get right up to the end. They actually build all these integrations, and then like, “Oh, I haven’t thought that I’d have to get a developer involved.” That’s a no go. Those are the types of questions. That’s the path I wouldn’t follow. Thanks for the question, Martin. I hope that’s helpful.
I think we have more time for one more question today. This one is also about customer development. It’s about setting up initial meetings when all you have is wireframes. It’s from Scott.
“Hi, guys. I have a question for you. I’m trying to validate my idea by talking through wireframes with people, but before that can happen, I’m sending cold emails to people that I’m assuming are the target decision makers. In my case, it’s HR Managers of companies with around 250 or so employees, which may or may not be right. I wondered if you could talk about your experiences with getting those initial meetings set up. I don’t have a website at the moment, just initial product wireframes, do you think that’s a mistake at these early stage?”
He gave us a sample email, which I think is well-written. Any thoughts on this?
Mike: I like he led off the email by saying, “We’re in the early stages of building an app,” because I think it conveys to the person on the other end that you’re, I’ll say, as an aspiring entrepreneur. I found that that’s actually, a really good opening way to position yourself because you’re essentially soliciting them for their expertise and their advice.
A couple of things I would keep in mind though, the people that you talk to very early on like this—depending on how long it takes you to get your app out the door—it could be that these people are just not going to ultimately, end up being your customers. Just bear that in mind. Don’t bend over backward for every single one of these people, thinking that you’re going to get all of them as a paying customer once you start shipping the app or you have something to ship.
There’s a bunch of different reasons for that. But the fact of the matter is people switch jobs or their priorities change. All kinds of things can happen between the time that you first talked to them, and then you have something that you can show to them. I don’t think it’s a mistake to just show them wireframes. I mean, you need something to show them especially if you want to get any sort of prepayment or commitment from them.
The reason I would lean more towards that prepayment is because it essentially overcomes a hurdle which is that they’re saying they would pay for something, versus they will pay for it. If they give you a credit card as a prepayment, then they are willing to pay for it versus, “Oh, this sounds like a good idea. I would pay for it.” But the reality is, they want to see it, and they want to be able to play around with it. There’s going to be a bunch of people who fall into that category where they would pay for it except, and then they’ve got all these different reasons, that until you ask them for their credit card, they’re not really going to tell you because they want to be helpful. Nobody wants to be the person who says, “Oh, this is a bad idea.” If they’re trying to give you advice, they’re going to say those types of nice things which is going to what you want to hear, not necessarily what you need to hear.
Rob: Yeah. The hard part here is, if you’re an HR Manager of a company with 250 employees, you’re not going to prepay for something like this. Prepayment is such an SMB thing. When you’re talking to a single founder or a founder of a five-person company, yeah, they’ll totally give you a hundred bucks or whatever, put it in a credit card or whatever, but that type of thing, it works very differently as you get to the mid-market where they have these massive budgets, and everything is tracked.
You could feasibly do prepayment. But it’s going to be like, “Would you pay us $5000 or $10,000?” Then you’re going to need contracts. You’re going to have to go through procurement. That’s what this process would be like at that point. You’re trying to fund this based on customer pre-sales with larger companies, then it is definitely, much different—we would think—than if you’re dealing with just smaller companies.
Mike: Well, I don’t think you necessarily need to get to the point where you’re funding at with their money. In my mind, it’s more a matter of are they willing to commit to paying for when it’s ready. It’s a different goal than if you’re trying to get money from them to fund the development of it. That’s two different things, depending which direction he was trying to go.
Rob: Yeah. That’s fair. You don’t have to fund it, fund it yourself, but getting someone who runs HR at a 250-person company to give you their credit card number and say, “Yes, I’ll give you a few hundred dollars.” I wouldn’t do that. I worked at larger companies, and I just know the politics and everything that goes on in there, and you’re just so busy trying to push things forward that unless the solution is there in front of me, there are so many people marketing and trying to sell to these HR managers or to any manager at a company. That it’s like, them giving you the time to even give you feedback, and then them going out on a limb and then giving you money with the thought that you might build something. I mean, if they don’t know you, did they know that you’re going to build good software? Did they trust that you’re going to deliver […] ever? It’s a whole different ball game.
You’re not going to have a reputation like you might if, let’s say, I went to our audience and was like, “Hey, I’m going to build something that is going to solve whatever your problems.” There would be reputation factors, right? People know me, and hopefully, like me, and trust that I’m going to build something good, but he’s not going to have that with these HR Managers because it’s just cold outreach.
Mike: I think, what I would lean towards doing in that case is saying, “If the products says this, this, and this, so what are the roadblocks to you purchasing it and pain for it?” That gives you a little bit of insight in to the internal politics of how that company operates. If you’re asking that company that specific question, you’re going to get, I would think, a reasonably decent cross-section of how companies at that level operate in terms of purchasing and requisition.
Like, “Some are going to need to go through the IT department and they have to hand it off to them and the IT department has to purchase it. Some of them are going to have a credit card, they’re going to be able to just buy it themselves, and tell the IT department afterwards. Some of them purchases above a certain dollar amount, they need to go through somebody.” You can ask them about, “If the pricing was this, what would you think? If the pricing was this other thing, what would you think? What are the roadblocks that lead to those different points?” That’s what you need to know is how are you going to sell to these people assuming you built what they want.
So, one line of question is, “What is it that you want and need and what would make it so that she would pull the trigger and buy it and say yes.?” The second part is, “What does it take to actually get it into here?”
Rob: Yep. I think those are good points. He asked two other questions or he asked two questions in the email, and I don’t know if we’d addressed them very well. His first one was, “I wondered if you could talk about your experience with getting those initial meeting set up.” Yeah, the experience is, you have to send a lot of emails to get very few meetings. The funnel is wide, and people are busy, and they aren’t going to want to talk to you.
Other thing that I’ve done is use my network/audience to try to get that. Whether you’re going on LinkedIn, whether you are emailing everybody you know to basically say, “Look, I’m an aspiring entrepreneur or I’m a founder, and I’m in the early stages, I need advice on an HR product. Could you make an intro?” That’s how you’re going to get people who will at least talk to you on the phone. My experience is that it’s frustrating, and takes longer than you want and you get a lot of, “No, I’m not going to talk to you.” Eventually, your persevere, you figure it out, you talk to enough people.
Then his second question is, “I don’t have a website at the moment, just the initial product wireframes. Do you think that’s a mistake at this early stage?” I could go either way on this. I think wireframes is fine, but I think non-technical people have a tough time feeling wireframes as real things, but I’m less worried about how the screens worked, and I’m more worried about what is the headline. What is the headline of the website? There’s kind of this old marketing thought, and I think it’s good, it’s something that I’ve done from time to time, where you build the marketing page first, you build the landing first page. You go from there to then building the product. By the time you get that headline in there and some bullets of what the copy is and what it does. I mean, that’s how we did with Drip.
I’m trying to think, my book was that way too where it was five sentences on a page and then I took that and said, “Now, I’m going to go manifest this into reality.” That’s what I like about you building a marketing site is whether you do it in Squarespace or WordPress SaaS theme, it doesn’t have to look amazing, but it’s really about you getting it on paper, getting the marketing thoughts and the copy even in front of yourself, and maybe if they asked, you can send them there, it’s just an email opt-in, it kind of depends, but I think I lean towards in doing that. I think it’s a helpful exercise, especially for those of us who tend to want to go to the code.
Mike: I was going to mention exactly that. I don’t think that having a website in and of itself is going to help you, but I think the process of putting together the website makes you seriously think about what it needs to say, and how you’re going to position it, and it helps you craft a better story when you’re talking to people about the solution on a call, and you’re demonstrating those wireframes. It just helps you position it better so that if they look at your email, “Well, let me just take a look at the website before I reply back to this.” That should tell them very quickly whether or not they want to even waste their time at all or whether you’re serious. If you don’t have any website at all, who knows?
I mean, I feel like, this is definitely more me than anything else, but if somebody sends me some email and says, “Hey, I’m thinking about this,” and they’ve got literally nothing on their website at all or they don’t mean to have a website, it’s really hard to take him seriously that they were even going down this road.
Rob: Yeah. I think that’s a good point. Hope those thoughts are helpful, Scott.
Rob: Well, thanks for the questions everyone. If you have a question for us, you can call it into our voicemail number 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 446 | How to Build More Successful Integrations
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to build more successful integrations. They discuss how to approach the different areas of risk including work estimates, API integration, co-marketing opportunities and more.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about how to build more successful integrations. This is Startups For The Rest Of Us episode 446.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing pretty good, man. Just doing a lot of work on TinySeed. It’s been fun to start have more and more exposure to more and more startups. We’ve had a lot of exposure to a lot of different founders of startups over the years through all the stuff that we do with MicroConf and book, blog, podcast, etc. Then I felt like I leveled up when I started angel investing and got in depth views, ongoing longitudinal of a more companies and TinySeed feels like another leveling up for me. It’s just seeing a lot of different data, a lot of different applications, and seeing what’s working, and what’s not, tactics, strategies, approaches, even what is working with the founders who are successful and not, that’s been a fun thing to continue to begin to.
Mike: That’s cool.
Rob: How about you?
Mike: Well, on my end, I’m in the midst of rolling out some Bluetick updates. The main focus here is to provide, I don’t want to say platform, but more of a mechanism for me to do more in the future in terms of displaying emails inside of the applications. Right now, I can send emails out and you could see those emails, but you can’t see the replies to those emails in there or see the history there. Some of these updates are going to allow people to do that and also, give people the capability to inject Bluetick into existing conversations which is not something that it’s capable of right now.
I had actually answered somebody’s question through Twitter the other day. They were asking, “Can it do that?” I was like, “Not yet, but that’s on the roadmap but it’s coming soon. It’s coming in the future.” This will put me in a much better position to be able to do that. And then there’s also various things with the Google authentication stuff that’s in there. Frankly, I’m worried about how that’s going to turn out because it’s a completely opaque process. I have no idea what the end result is going to be so I’m still, I don’t want to say sweating it out, but what is going to be the end result of this.
Rob: Sorry. I don’t know what else to say. That sucks. Goodluck is probably…
Mike: I guess. I mean, there’s really nothing to say. It’s just waiting for them to go in. I don’t know what their checklist looks like, I don’t know what they do or anything. It’s a huge hole, I’ve no visibility here and it sucks. There’s nothing I can do either which is the worst part. It’s just they’re going to either approve it or reject it and they’re going to move on with whatever their timeline is which they’ve been fairly vague about until just very recently where they’re like, “Oh, yeah. You only have three days left.” I’m still waiting to hear from them so if anyone here works in Google and is involved in that process, please email me.
Rob: Yeah, email Mike. Due to some recent fixes that I mentioned last episode, fixes to our WordPress theme, comments are now appearing to end-users and there were a couple that I want to read through.
Episode 436: How to Respond to Customer Suggestions. Steve says, “Great podcast. I’ve made every mistake mentioned in here plus a few more. We have one additional solution while working with customer request. I had found that if a customer wants a specific feature and it makes sense to them in a product, though they want it now and you see it down the road, charge them to put it in now. We charge it as an expedited feature release, it has helped us grow Skills DB Pro…” which is his product, “…to an enterprise level offering while getting paid along the way. One more bootstrapping thought.”
I think that’s a good one. It’s not something that I tend to do with SaaS apps, but back when I had these one more time downloadable stuff, we definitely did it on a number of my products especially the ones that were smaller where a few thousand dollars and kind of expedited feature, this actually moved the needle on the product versus if you’re doing million or more, worst if you have a seven-figure SaaS app then try to charge a few grand to expedite a feature, it’s almost not worth the hassle is how I found it. But I think that was a cool suggestion that some folks might be able to take advantage of.
Mike: Awesome. Anything else?
Rob: Yeah, we have a comment on episode 437 where we talked about MicroConf Europe. I think this was back when we were still trying to figure out where it’s going to be or maybe we even said Croatia, but Rob said, not me, a different Rob says, “Come to Barcelona.” What do we say to that, Mike?
Mike: Do you live in Barcelona?
Rob: No. Well, that’s the first thing because everybody wants us to come to their city, but we have. We came to Barcelona twice.
Mike: Yup.
Rob: We tend to go to cities two years in a row and then we move on to keep things varied. Episode 440, How to Build Case Studies That Don’t Suck. Sarah said, “Great episode as always. You mentioned a book called the Hero’s Journey. There seems to be a few around with that name, can you give any additional details of the right one?” I don’t know if I mentioned a book, but I did mention Joseph Campbell’s Hero’s Journey. I never read a book about it. I tend to go Google and there’s this amazing diagrams and in-depth articles. I mean, the first result on Google is amazing, and it’ll give you the whole overview. Then maybe Joseph Campbell wrote a book called the Hero’s Journey. You can totally go to Google for that but frankly, just getting the idea of what a hero’s journey is like is pretty easy to do from the googs.
Last comment for the day, episode 441 where we answered some listener questions, and then in our aftershow, we talked about the first MicroConf Dungeons and Dragons game. Patrick Mckenzie, his character died early on and he became the final enemy, he was the boss, he was voicing the boss. Christoph Engelhardt chimed in and he said, “My biggest question is what kind of enemy in Dungeons and Dragons game constantly mutters ‘charge more’. Okay, I’ll see myself out.” I thought that was worthy of mention. One of the few funny lines I’m sure that will happen in today’s episode; one of the very, very few, Mike.
Mike: I don’t think I’ll be in any of this.
Rob: That was it. That was all one and done. Today, we’re talking about successful integrations. You want to dig us in?
Mike: Sure. I kind of based this outline loosely on some of the challenges that I’ve encountered integrating with other apps, taking Bluetick and just whether it’s integrating with IMAP servers or going into Zapier or other third-party applications or even using certain libraries, like code libraries. Some of this is retrospective like, “If I were to go back and do it again, how would I approach it?” Because there’s certainly things that I look at now and I would’ve done very differently and then there’s other things where I don’t know how much I would have changed or how much it would have changed, what the end result of that was. I think that these are the things that I’ve learned along the way of doing it and that are generally applicable to most people if they’re going to look to integrations.
I’m sure you have a ton of experience here in terms of taking Drip and integrating it with, I think it was like 30 or 35 different other applications, and incorporating them with Drip throughout it’s, I’ll say, rise to fame.
Rob: Yeah, I mean there was that, there was HitTail. I did, I don’t know, it wasn’t half a dozen, but it was approaching that, DotNetInvoice did a few. I had multiple apps, many apps I would say, that we’ve done integrations. Some successful, some not, some technically successful but revenue-wise, they weren’t that great and then others that were pretty simple and easy-to-build that wound up having a big impact on revenue. Yeah, a lot of learning and some do’s and don’ts along the way.
Mike: Before we dive in, what I want to do is provide a definition of this so that we’re working from the same page here. I’ve loosely defined integration as, it’s a part of your business where there’s something that’s handled internally and is reliant upon a third-party. Essentially, it’s outside of your direct control and there’s varying degrees of visibility and influence that you have over whatever the processing is or procedure or how it works. Some of the examples of those are things like code libraries or third-party APIs. Baremetrics, for example, is heavily reliant upon Stripe’s APIs. If those Stripe APIs went away, the business goes away.
I think a lot of discussions we’ve had in years passed about integrating with Twitter is they decided on a whim to go a route and either change the process of who is authorized to interact with their APIs or who has them available or even what you can do with them. Obviously, all these large companies like Google, and Facebook, Twitter, they all have varying things that they want to do in the future and those may directly conflict with you as an entrepreneur. These are areas of risks. Those are the types of things that you want to keep in mind when you want to integrate with somebody or something outside of your company. That could be software integrations, it could be business processes, it could even be a joint venture that you’re doing with somebody.
But I think the focus today is going to be more on the technical side of things but also taking into account the inter-business relationships as well because you have to know that the person you’re working with or the business entity on the other side isn’t going to totally screw you and if they do or if they could, what ways might those be. It’s really just providing some visibility to those areas of risk.
Rob: Right. Building your app on someone else’s platform where if they turned off the knob, you would lose 50%-80% of your revenue overnight, that’s one thing, and that’s platform risk. You can de-risk it by going to multiple platforms, sometimes you don’t need to de-risk it. It does impact sales multiples, if you ever try to sell a SaaS app that is entirely reliant on a platform and you don’t have an official contract, it’s a risk, so it requires to look at it and factor it in.
We’re not going to dive into all of that today. This is more about building individual integrations. You’d think about Drip that has all these incoming stuff from Stripe and from Shopify and from Event Pride, any one of those going away would have been a bummer because people want it and used it but it would not have been business-ending. That’s really more of the integrations we’re talking about today. We’re talking about both the process, the dev side of building it, the business development side of, how can you leverage that to get more customers and leads and we could touch on like deployment support and that kind of stuff.
Mike: As you’ve said, the best case scenario is really, if something goes away maybe you’ve lost some time or money and that’s about it but the worst case is everything that you’ve built is effectively gone and that kind of leads towards building on somebody else’s platform and you just have to evaluate that as a risk. We’re going to start through this list.
The first one is what level of effort is going to take to build something. I’ll […] up this by saying that I think in most cases, your estimate to build an integration are going to be too low by a lot. That will change over time as you get more familiar with building integrations and you create more infrastructure in your own application in order to build those things but what I’ve found is that there’s a few different places where I thought things were going to be in a certain way and it turns out that they weren’t.
For example, documentation is an area where when you’re trying to build a third-party integration or integrating to something else, I found documentation tends to be lacking, even if the documentation is there and it seems to be extensive, what I’ve found is that a lot of times that documentation is inaccurate and it’s because companies don’t keep their documentation up to date. There are places where it will say one thing and is absolutely not true or it documents in a certain way and it says, “Hey, this is how it works.” When you go start implementing it, it turns out it doesn’t actually work that way. These things sound like they shouldn’t be that big of a deal but in some cases, they really are. If you designed everything in a certain way, those things really throw a wrench into your plans.
Rob: Yeah. There’s an interesting X factor or a variable that is outside of your control that gets thrown in when you’re dealing with someone else’s API. It could be bugginess or it could be docs that are out of date. There’s a bunch of different things. It’s different when you’re just building your own app. You know there are going to be things that you can’t control in terms of, “Oh, I run into this problem. I couldn’t solve it quick enough. There’s a bug I couldn’t find for two hours,” or whatever, but external APIs can be one of the most frustrating things to develop against.
Here’s the thing, we got to the point with Drip since we’ve built so many of them, we basically almost by looking at documentation and whether we knew the founders or not, whether it’s a big company or a small company, we could gauge like, “Oh, this is Fortune 500 integration and they’re using SOAP. This is going to take a week to build,” versus, “Oh, it’s a REST API written by some […] developers that we know. We can probably literally build what we need in four hours.” I mean there were integrations we would get done in half a day. It’s because we have a whole repeatable system and a bunch of code on our side to help do that copy/paste and polymorphism and that kind of stuff but we would ballpark engage, “Yeah, I think this one is going to be a lot worse.” It’s like all APIs are certainly not created equal.
Mike: Another thing I’ve run into is there’s time that you’re going to have to do some sort of black box testing to figure out how things really work especially when you’re going up against external resources or external APIs that are providing data for you. Interesting thing I ran into was there was a code library I was using that says, “Oh, if you pull this information back, you get a list of strings over here and you get a list of integers over there and they represent the same thing.” Early on, I was trying to work with those and pull the data back and one of them took five seconds and the other one took 60 but it’s supposed to be identical data. The numbers, the integers should have been a lot faster and they weren’t. I ended up using just the strings, that worked fine.
Recently, I’ve gone back, and I’ve been doing some more test performance on that section of things and came back and said, “Why is this taking so long? It shouldn’t take that long.” I found some access to some additional logging capabilities and I printed it out and it turns out they’re actually returning not just those numbers but also a set of dates. I was like, “Wait a second. Why is this requesting dates?” It’s not even actually requesting one of the information I asked for, it’s requesting this other thing, and then just interpreting it and throwing those integers in there. It actually doesn’t even work. Like, “Wow, that’s just painfully wrong.”
Rob: That’s amazing.
Mike: Yeah. It works but only because of some other thing that happens to be going on. It’s issuing the wrong command to the server but those are the types of things that you’re going to run into and you won’t, since you don’t have the visibility into those things, you can’t troubleshoot somebody else’s code or somebody else’s server. It makes it difficult to find those things and it just takes longer. You have to do timing performance, benchmarks, and see how much memory allocation needs to be done for different things. You may not be able to do everything all in one shot. Those are the types of things that—it just takes longer, makes the process of implementing especially the early integrations that you do, just makes it take that much longer.
Rob: Here’s something I’ll say on how to streamline this. If you’re only going to build a few, then just do what you’re going to do and go straightforward. There are reasons to do this: a, it makes your product more sticky because you can get data from more places and therefore users get more value out of it; b, it makes your customers lives easier; and c, it can be a co-promotion opportunity. Off the top of my head, those are the top three reasons to do it.
If you’re going to build a bunch of them, then you’re going to want to standardize on the code side and like I said, develop something where it’s easy to just pop them in, you don’t have to build custom UI for each one. I mean, again, look at the Drip UI and we just pop an item in the dropdown list to add the next trigger or action that’s triggering something in Drip or sending out an action, something that goes out of Drip.
The other thing to think about is or the way we were doing it was, if I recall, we have three levels. We had a V1, V2, V3 of any integration that we did almost without fail where we would build a very simple integration first, and that was our V1, and that would typically take less than a day to build. Sometimes, it only had one or two triggers, one or two actions, something like that. It was easy to build, we’ve got two, three API, we’d push it live, we’d promote it, we’d see who used it, we’d see the request.
The best-case scenario is that we’ve got a bunch of people saying, “Oh, this is cool except for it doesn’t do this for me.” It’s almost like customer development where we’re iterating on the feature, almost like it was its own product because Drip had—off the top of my head—I’m going to say 20 different triggers and Stripe has 20 or 30 different actions. Well, there is no reason to build essentially 50 endpoints, 20 in and 30 out. Again, don’t quote me on those exact numbers but you get the idea of what I’m saying. There’s a lot. It’s a lot of work, it’s a lot of code to do.
If you build two in, two out, pretty simple, you throw it live and then as people ask for stuff, you can add another one in almost minutes. I mean, you have to write unit test and stuff but it’s very trivial to add. If you get enough people asking about it, well, you take it to that next level where it’s a tighter integration, you can add OAuth later. At first you can paste an API key which is a little janky but then OAuth becomes the V2, and you just build tighter and invest more in that, the more people who use it. That was how we did it and it seemed to work out pretty well in general.
Having the ability to watch the actual user behavior on your integrations before investing weeks of time is hugely valuable because it can save you a lot of time. There were integrations that we built, that V1, and 20 people used it out of thousands of customers, and we never did OAuth and we never added that extra week or two of development on it because there was no business case to do.
Mike: What I like about the strategy you just outlined—doing the V1 and then V2 and then V3—is that it allows you to come back and start very simple. Then as you start to see the technical problems with it, but also the features and functionality they’re missing, that customers are asking for, it allows you to fill them in afterwards. You don’t have to worry about as much about going back and rewriting some of those things that you’ve already built in order to satisfy what the customers need because you didn’t build very much to begin with. You did it really more or less to help pull that information out of the customers and find out what it is that they wanted and then take that forward.
That’s actually a mistake that I’ve probably made early on with integrating with Zapier is that I put too many things in there, but it was partly because customers were asking me to do a lot. I don’t what to answer how I would change that, but I think that I would probably spend a little bit more time on going back and verifying with Zapier directly like how this should have been done.
Rob: Yeah, it’s easy to over build. You get in there and you think they need to be able to do everything that they can do through the Bluetick UI or everything that the API offers, they need to be able to do that in Zapier. I would say that’s not true for a V1. You may miss something, but take your best guess, 80/20 it. What are the 2 out of 10 things that you think or you know people are using or your gut feel of what you think they’ll use which is sometimes you just don’t have the data and then pop it in. When they’re like, “Oh, I also want to do XYZ.” Well then you put that in your queue, and you build it out as soon as you can.
Integrations are—they’re a curious thing because I remember with HitTail, we skipped this with Drip too, but it was like, “Do you integrate with Shopify?” It’s like, “What do you mean by that? What does an integration mean in your head? Does that mean that we’re taking data in from them and we’re triggering things? Does that mean you want us to pull data and display it as a report? Does that mean you want us to push things into your Shopify store?”
Same as Stripe, “Do you integrate with Stripe?” It’s like, “Yeah, we do but what do you need it to do?” It was often digging in questions and then they would have a use case typically. It’s like, “Well, I want once someone purchase, I want to be able to mark them as a customer and drip.” It’s like, “Well, yeah, of course. We do that.” Or, “Once an invoice is created on the second Tuesday of every month, I want this and that to happen.” It’s like, “Oh, we don’t handle that use case, but we can build that.”
Saying integrating with Basecamp or Highrise or with Slack, that can mean a whole slew of things. Integrating with Slack can literally be, “Oh, I’ll just dump a message in there when someone says something.” It’s an integration but it might not be what everyone has in mind. You often want to dig in if people are asking for these things and find out really what is your exact use case and then just build those one at a time but build it in a framework such that it’s easy to add other functions.
Mike: Yeah. The question that I’ve kind of usually responded to for those types of request is, “What is it that you’re trying to do?” Because usually, that’ll entice people enough to give you the information that you need to either extrapolate it or what you need to build or what sorts of things they’re trying to do and whether it’s even remotely possible. If it is, then you can dig in a little bit more with the technical stuff but usually, at a high-level, it gives you enough information to say, “Yes, this conversation is even worth pursuing or it isn’t.”
Rob: Right.
Mike: Next step we’re going to dig into is the actual API integration itself whether you’re calling an external API or they’re trying to call back to yours from an external application. What I found is that, because there’s so many different ways to design an API, it’s probably not going to be likely that your API is going to be able to be used directly by the other application. This applies whether it’s having to respond to webhooks or accepting them or tracking them or just make external function calls.
If you have an external application that’s calling into yours, they already have a standard way of doing it. You may need to change how your product works. If you’ve already built an API, it may not be the easiest thing in the world to change your API especially if you have other customers interacting with it or your application depends on it. Bluetick for example is a single-page application and it’s got an API specifically for the app itself, it’s also got a public API and then I have additional endpoints that I’ve created.
This is one of the, I’ll say, hacks that I’ve learned is that creating your own dedicated endpoints for other apps could be in your best interest to do. It sucks to have to maintain them in addition to the other code that you have, but it may be the best way to go about providing a mechanism for them to talk to your app without having to rewrite all the different things in your app. Even if you would have just two of them that need to call into your application, they may be doing things differently between each other and then your application may be doing something else as well which makes it hard. You can’t standardize on one thing that’s different for three different people. A dedicated endpoint for each of them is a good way around that. I won’t say the best way, but it is a way that is workable.
Rob: Another thing to think about is rate limiting. I think I’ve talked a little bit about how segment, well, there are few people, segment was the most notorious for it a couple of years ago, but they would accidentally DDoS us. Someone would activate something, and it would just hammer your API and we had rate limiting in place. We had a Ruby Gem that basically sent back, I believe it’s a 304 response, 403, there’s some response where you encode. It’s like, you’ve been rate limited, you can send this much per hour, and wait this long before you can send your next batch and they just weren’t honoring that. There were several that weren’t honoring so you have to code the work around those. I know that Zapier has rate limits and we coded early on to help with those.
It’s one of those things that in the early days doesn’t matter and as you scale, it matters a lot because it’ll either take your API down, it could take your app down, your database down, it can take web servers down, or it can mean, if you’re not queuing things and you’re hitting and you’re getting rate limited, you could lose customer data. If you are queuing them, it could back your queues up because you have all this retrial logic. If a failure happens, it’ll just fill your queues up and say you have to expect rate limits and it’s a bunch of code, it solve problem logically but it can require a lot of code on your end to properly implement rate limiting.
Mike: Another thing that’s similar to that which is parallel request. You may end up with request that are coming in on your API that are close enough to each other where if that resource doesn’t exist, for example, then it needs to be created. If you don’t have your transactions set up properly in your code, then you can end up with duplicate resources created inside your app and then suddenly, things start to fall over because it’s basically what amounts to a raise condition, which you never would’ve run into in normal interactions with your app because users aren’t clicking on things with milliseconds between each request. If that happens to your app, if it’s coming to an external API, that can easily happen. You do have to be careful and cautious about those types of things which some frameworks are good about transactions and some are not so much.
Another thing to think about when you’re looking to integrate with an external API is what customers are using that and what visibility do you have for the other side of things. If you’re receiving commands or queries from another system, can you log into that system and see what has been initiated, can you see what has been satisfied, can you see the errors that we’re running to? Because a lot of those things, you may not necessarily have the information on your own servers like there could be requests that’s going out. You may see the request come in, but you don’t necessarily know if it was responded to properly or it’s sending back the wrong data.
If your code is incorrect or it’s not responding properly, how would you know that? The only way to know that is to go to the other side and look from there. Being able to monitor things both internally and externally is important. You don’t always get that external viewpoint that you need, and you may not be able to track them down to particular customers either. If you see an incoming request not just, why did it come in, and where did it come from, who is the vendor, but what customer of yours is that request associated with. If you can’t see those things, it makes it difficult to troubleshoot, it makes it difficult for you to offer support for your own customers.
Rob: Another think to think about is when you are building the integration, who can you contact for support. Is the documentation—we’ve already covered a little bit—is it good, is it buggy, is it correct or not? Do you have email access, phone access to a developer on there? Because you’re going to run into problems, and do you have access to a developer? Do you just email their general support that they have specific integration support?
We love integrating with the three-person startup where two of the founders were developers. I mean, those went so smoothly, they could fix things so quickly, and they knew how everything worked. You’d email them and be like, “Hey, there’s a problem here. This is the result we’re getting.” And they’re like, “Fixed.” It was so good. The larger the teams get and if you’re sending an email again, to Salesforce, to their support, to try to get integration, it’s an absolute nightmare. You hear back a week later, and they don’t understand your question at all, and they don’t escalate you, blah, blah, blah. Those are kind of the two extremes that I’d point out but it’s something to think about when building this.
Mike: The last one, typically comes around when there are webhooks of like, “How do you go about testing them?” This also applies to just you sending information over but how do you go about making sure that the stuff you’re developing has a test area on the other side? Are you working with production data? I would hope not but there are cases where you are going to have to do that which means that you have to create an account on their side and use that to do all of your testing and effectively it’s in production but on your side it’s not. That makes it hard because you have to keep things straight locally like, “Oh, is this information here that we’re working with in production or not on their side?” You may have internal flags or toggles or fields that you use to keep track of that stuff, but it can get complicated especially if you’re trying to document that. It’s got to be documented in places where it’s easily accessible by you to understand what’s going on both side and which environment it’s going on.
Rob: And then, as you get it built, there’s going to be an approval in publication process and again, with smaller startups there’s typically not much of a process. You send an email, you say, “Hey, this is live. We’re going to push this live in our UI next Tuesday.” They’re like, “Cool.” With Zapier or Salesforce or someone who’s doing a lot of integrations or having a lot of people integrate with them, they are going to have a process, they’re going to have a checklist of requirements. You’re going to want to look at approval timelines because I know some apps take weeks and/or months to get approval publication timeline after it’s approved.
Is there a beta period? This is something that Zapier I think does well. It feels like a pain when you’re doing it, or it feels like hoops to jump through but they’re doing it because they want to keep the quality of the service side. If they don’t have the beta period and all that where you have to get 10 users using it because they want to force you to work out the bugs basically. I think they do a good job of that. Then how will you get support during beta? How will you provide support to your folks during beta? It’s all things to think about to get it live. Oftentimes, writing the code is the least time intensive piece of this whole process.
Mike: Yeah. I think the piece of this process that does take the most time is just making sure that there is that trust factor there on both sides that, “Hey, this is going to work and is generally going to be good for everyone who’s using it but if it’s not working or it’s buggy or there’s problems of any kind where there’s transaction delays or things are just overly slow or they’re using too much memory or there’s scaling issues on either side, all of those things can essentially erode the credibility of the integration.
At that point, one side of the other is going to want to back things off a little bit and introduces this additional delay. Delay factored just from becoming comfortable with it is important, but you also need to have ways to resolve that. This begs the question of, “How are discrepancies or disputes handled” Those disputes or discrepancies can be like, “We expected this data, we got this data instead.” Or it could be something along the lines of, “This isn’t working right. Why is it taking so long?” Or it maybe it could be a designer or an architectural issue, “Oh, you said that you want to send us data XY and Z but it’s also including this other thing. Why is it doing that? I don’t think that it should.” You have to have someone resolve that.
Sometimes, you’re talking directly to developers. Sometimes, you’re talking to an anonymous email box where you have no idea who’s answering it or what their ability to make change is or even knowledge of the entire system is. Each of those is going to be a different approach but they’re things that you have to be aware of especially when you’re working with larger companies or smaller ones.
Rob: Then something we’ve alluded to several times during the episode is I mentioned there my top three reasons for building integrations and one of them is the comarketing opportunity, the business development so to speak, which is to be able to both promote who you’re integrating with and for them to promote you in one way or another. There are a lot of ways to do this such as joint webinar is a pretty good way. You think about it, if you’re integrating with another startup, you both want the exposure to each other’s audience. If you’re integrating with Stripe or Facebook or Google or whoever, you’re not going to get that, but it’s nice to think about high-touch opportunity to show how the integrating works and the benefit it provides—so joint webinar is one.
Certainly, I found a lot of success with the joint email. We email our list, you email yours. Copromote blog posts also on both announcement blogs for each company. There are the functionality updates whether they handle that via email or in-app or whatever. You can offer in-app announcement on both. Even providing customized landing page that says, “Welcome, Pipedrive users. Welcome, Stripe users.” That they can link to from the other place that you can get is in their app directory, their integrations directory. There’s typically one in the app and out on their public market website. That’s another place you want to be.
From there, we found that building custom landing page for some of them, but not all, worked really well and increased conversions quite a bit. There were a couple of integrations where the clickthrough from the in-app or from their integrations directory on the marketing site to our landing page and then sign-up for a trial was something like 30%. It was outrageously high. We asked for credit card upfront. Typically, the number is very small, and it was 20%-30% and it was shocking. We did so much to tune that page and split test it but the ones where we were getting 3% or 4%, you obviously don’t care as much about those.
But those comarketing opportunities can be fascinating because if you get a big email sent out to 30,000 of their marketing list or customer list or whatever, you can get a nice bump there. But then if you get in their app directory or you get in these other longer, living links basically, you not only get the SEO juice from that, but you then get that flywheel of traffic. I’s not huge, again, maybe it’s 100 visitors a month, so it’s not a huge amount but if you’re getting 10%, 20%, 30% of those to sign-up for a trial, that’s 10, 20, 30 trials every month that shows up. Then you multiply that by 10, 20, 30 integrations and you start to see how you can potentially build a flywheel out of this.
Again, you can’t just take this advice and apply it to your app without thinking, “Does this make sense? Is it going to provide the value? Do I have the leverage for these folks to do all of this?” That is the integration marketing playbook that can help grow your business not only as a one-time thing but as a sustainable approach. With that, I think we’re wrapped up for the day.
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Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing pretty good, man. Just doing a lot of work on TinySeed. It’s been fun to start have more and more exposure to more and more startups. We’ve had a lot of exposure to a lot of different founders of startups over the years through all the stuff that we do with MicroConf and book, blog, podcast, etc. Then I felt like I leveled up when I started angel investing and got in depth views, ongoing longitudinal of a more companies and TinySeed feels like another leveling up for me. It’s just seeing a lot of different data, a lot of different applications, and seeing what’s working, and what’s not, tactics, strategies, approaches, even what is working with the founders who are successful and not, that’s been a fun thing to continue to begin to.
Mike: That’s cool.
Rob: How about you?
Mike: Well, on my end, I’m in the midst of rolling out some Bluetick updates. The main focus here is to provide, I don’t want to say platform, but more of a mechanism for me to do more in the future in terms of displaying emails inside of the applications. Right now, I can send emails out and you could see those emails, but you can’t see the replies to those emails in there or see the history there. Some of these updates are going to allow people to do that and also, give people the capability to inject Bluetick into existing conversations which is not something that it’s capable of right now.
I had actually answered somebody’s question through Twitter the other day. They were asking, “Can it do that?” I was like, “Not yet, but that’s on the roadmap but it’s coming soon. It’s coming in the future.” This will put me in a much better position to be able to do that. And then there’s also various things with the Google authentication stuff that’s in there. Frankly, I’m worried about how that’s going to turn out because it’s a completely opaque process. I have no idea what the end result is going to be so I’m still, I don’t want to say sweating it out, but what is going to be the end result of this.
Rob: Sorry. I don’t know what else to say. That sucks. Goodluck is probably…
Mike: I guess. I mean, there’s really nothing to say. It’s just waiting for them to go in. I don’t know what their checklist looks like, I don’t know what they do or anything. It’s a huge hole, I’ve no visibility here and it sucks. There’s nothing I can do either which is the worst part. It’s just they’re going to either approve it or reject it and they’re going to move on with whatever their timeline is which they’ve been fairly vague about until just very recently where they’re like, “Oh, yeah. You only have three days left.” I’m still waiting to hear from them so if anyone here works in Google and is involved in that process, please email me.
Rob: Yeah, email Mike. Due to some recent fixes that I mentioned last episode, fixes to our WordPress theme, comments are now appearing to end-users and there were a couple that I want to read through.
Episode 436: How to Respond to Customer Suggestions. Steve says, “Great podcast. I’ve made every mistake mentioned in here plus a few more. We have one additional solution while working with customer request. I had found that if a customer wants a specific feature and it makes sense to them in a product, though they want it now and you see it down the road, charge them to put it in now. We charge it as an expedited feature release, it has helped us grow Skills DB Pro…” which is his product, “…to an enterprise level offering while getting paid along the way. One more bootstrapping thought.”
I think that’s a good one. It’s not something that I tend to do with SaaS apps, but back when I had these one more time downloadable stuff, we definitely did it on a number of my products especially the ones that were smaller where a few thousand dollars and kind of expedited feature, this actually moved the needle on the product versus if you’re doing million or more, worst if you have a seven-figure SaaS app then try to charge a few grand to expedite a feature, it’s almost not worth the hassle is how I found it. But I think that was a cool suggestion that some folks might be able to take advantage of.
Mike: Awesome. Anything else?
Rob: Yeah, we have a comment on episode 437 where we talked about MicroConf Europe. I think this was back when we were still trying to figure out where it’s going to be or maybe we even said Croatia, but Rob said, not me, a different Rob says, “Come to Barcelona.” What do we say to that, Mike?
Mike: Do you live in Barcelona?
Rob: No. Well, that’s the first thing because everybody wants us to come to their city, but we have. We came to Barcelona twice.
Mike: Yup.
Rob: We tend to go to cities two years in a row and then we move on to keep things varied. Episode 440, How to Build Case Studies That Don’t Suck. Sarah said, “Great episode as always. You mentioned a book called the Hero’s Journey. There seems to be a few around with that name, can you give any additional details of the right one?” I don’t know if I mentioned a book, but I did mention Joseph Campbell’s Hero’s Journey. I never read a book about it. I tend to go Google and there’s this amazing diagrams and in-depth articles. I mean, the first result on Google is amazing, and it’ll give you the whole overview. Then maybe Joseph Campbell wrote a book called the Hero’s Journey. You can totally go to Google for that but frankly, just getting the idea of what a hero’s journey is like is pretty easy to do from the googs.
Last comment for the day, episode 441 where we answered some listener questions, and then in our aftershow, we talked about the first MicroConf Dungeons and Dragons game. Patrick Mckenzie, his character died early on and he became the final enemy, he was the boss, he was voicing the boss. Christoph Engelhardt chimed in and he said, “My biggest question is what kind of enemy in Dungeons and Dragons game constantly mutters ‘charge more’. Okay, I’ll see myself out.” I thought that was worthy of mention. One of the few funny lines I’m sure that will happen in today’s episode; one of the very, very few, Mike.
Mike: I don’t think I’ll be in any of this.
Rob: That was it. That was all one and done. Today, we’re talking about successful integrations. You want to dig us in?
Mike: Sure. I kind of based this outline loosely on some of the challenges that I’ve encountered integrating with other apps, taking Bluetick and just whether it’s integrating with IMAP servers or going into Zapier or other third-party applications or even using certain libraries, like code libraries. Some of this is retrospective like, “If I were to go back and do it again, how would I approach it?” Because there’s certainly things that I look at now and I would’ve done very differently and then there’s other things where I don’t know how much I would have changed or how much it would have changed, what the end result of that was. I think that these are the things that I’ve learned along the way of doing it and that are generally applicable to most people if they’re going to look to integrations.
I’m sure you have a ton of experience here in terms of taking Drip and integrating it with, I think it was like 30 or 35 different other applications, and incorporating them with Drip throughout it’s, I’ll say, rise to fame.
Rob: Yeah, I mean there was that, there was HitTail. I did, I don’t know, it wasn’t half a dozen, but it was approaching that, DotNetInvoice did a few. I had multiple apps, many apps I would say, that we’ve done integrations. Some successful, some not, some technically successful but revenue-wise, they weren’t that great and then others that were pretty simple and easy-to-build that wound up having a big impact on revenue. Yeah, a lot of learning and some do’s and don’ts along the way.
Mike: Before we dive in, what I want to do is provide a definition of this so that we’re working from the same page here. I’ve loosely defined integration as, it’s a part of your business where there’s something that’s handled internally and is reliant upon a third-party. Essentially, it’s outside of your direct control and there’s varying degrees of visibility and influence that you have over whatever the processing is or procedure or how it works. Some of the examples of those are things like code libraries or third-party APIs. Baremetrics, for example, is heavily reliant upon Stripe’s APIs. If those Stripe APIs went away, the business goes away.
I think a lot of discussions we’ve had in years passed about integrating with Twitter is they decided on a whim to go a route and either change the process of who is authorized to interact with their APIs or who has them available or even what you can do with them. Obviously, all these large companies like Google, and Facebook, Twitter, they all have varying things that they want to do in the future and those may directly conflict with you as an entrepreneur. These are areas of risks. Those are the types of things that you want to keep in mind when you want to integrate with somebody or something outside of your company. That could be software integrations, it could be business processes, it could even be a joint venture that you’re doing with somebody.
But I think the focus today is going to be more on the technical side of things but also taking into account the inter-business relationships as well because you have to know that the person you’re working with or the business entity on the other side isn’t going to totally screw you and if they do or if they could, what ways might those be. It’s really just providing some visibility to those areas of risk.
Rob: Right. Building your app on someone else’s platform where if they turned off the knob, you would lose 50%-80% of your revenue overnight, that’s one thing, and that’s platform risk. You can de-risk it by going to multiple platforms, sometimes you don’t need to de-risk it. It does impact sales multiples, if you ever try to sell a SaaS app that is entirely reliant on a platform and you don’t have an official contract, it’s a risk, so it requires to look at it and factor it in.
We’re not going to dive into all of that today. This is more about building individual integrations. You’d think about Drip that has all these incoming stuff from Stripe and from Shopify and from Event Pride, any one of those going away would have been a bummer because people want it and used it but it would not have been business-ending. That’s really more of the integrations we’re talking about today. We’re talking about both the process, the dev side of building it, the business development side of, how can you leverage that to get more customers and leads and we could touch on like deployment support and that kind of stuff.
Mike: As you’ve said, the best case scenario is really, if something goes away maybe you’ve lost some time or money and that’s about it but the worst case is everything that you’ve built is effectively gone and that kind of leads towards building on somebody else’s platform and you just have to evaluate that as a risk. We’re going to start through this list.
The first one is what level of effort is going to take to build something. I’ll […] up this by saying that I think in most cases, your estimate to build an integration are going to be too low by a lot. That will change over time as you get more familiar with building integrations and you create more infrastructure in your own application in order to build those things but what I’ve found is that there’s a few different places where I thought things were going to be in a certain way and it turns out that they weren’t.
For example, documentation is an area where when you’re trying to build a third-party integration or integrating to something else, I found documentation tends to be lacking, even if the documentation is there and it seems to be extensive, what I’ve found is that a lot of times that documentation is inaccurate and it’s because companies don’t keep their documentation up to date. There are places where it will say one thing and is absolutely not true or it documents in a certain way and it says, “Hey, this is how it works.” When you go start implementing it, it turns out it doesn’t actually work that way. These things sound like they shouldn’t be that big of a deal but in some cases, they really are. If you designed everything in a certain way, those things really throw a wrench into your plans.
Rob: Yeah. There’s an interesting X factor or a variable that is outside of your control that gets thrown in when you’re dealing with someone else’s API. It could be bugginess or it could be docs that are out of date. There’s a bunch of different things. It’s different when you’re just building your own app. You know there are going to be things that you can’t control in terms of, “Oh, I run into this problem. I couldn’t solve it quick enough. There’s a bug I couldn’t find for two hours,” or whatever, but external APIs can be one of the most frustrating things to develop against.
Here’s the thing, we got to the point with Drip since we’ve built so many of them, we basically almost by looking at documentation and whether we knew the founders or not, whether it’s a big company or a small company, we could gauge like, “Oh, this is Fortune 500 integration and they’re using SOAP. This is going to take a week to build,” versus, “Oh, it’s a REST API written by some […] developers that we know. We can probably literally build what we need in four hours.” I mean there were integrations we would get done in half a day. It’s because we have a whole repeatable system and a bunch of code on our side to help do that copy/paste and polymorphism and that kind of stuff but we would ballpark engage, “Yeah, I think this one is going to be a lot worse.” It’s like all APIs are certainly not created equal.
Mike: Another thing I’ve run into is there’s time that you’re going to have to do some sort of black box testing to figure out how things really work especially when you’re going up against external resources or external APIs that are providing data for you. Interesting thing I ran into was there was a code library I was using that says, “Oh, if you pull this information back, you get a list of strings over here and you get a list of integers over there and they represent the same thing.” Early on, I was trying to work with those and pull the data back and one of them took five seconds and the other one took 60 but it’s supposed to be identical data. The numbers, the integers should have been a lot faster and they weren’t. I ended up using just the strings, that worked fine.
Recently, I’ve gone back, and I’ve been doing some more test performance on that section of things and came back and said, “Why is this taking so long? It shouldn’t take that long.” I found some access to some additional logging capabilities and I printed it out and it turns out they’re actually returning not just those numbers but also a set of dates. I was like, “Wait a second. Why is this requesting dates?” It’s not even actually requesting one of the information I asked for, it’s requesting this other thing, and then just interpreting it and throwing those integers in there. It actually doesn’t even work. Like, “Wow, that’s just painfully wrong.”
Rob: That’s amazing.
Mike: Yeah. It works but only because of some other thing that happens to be going on. It’s issuing the wrong command to the server but those are the types of things that you’re going to run into and you won’t, since you don’t have the visibility into those things, you can’t troubleshoot somebody else’s code or somebody else’s server. It makes it difficult to find those things and it just takes longer. You have to do timing performance, benchmarks, and see how much memory allocation needs to be done for different things. You may not be able to do everything all in one shot. Those are the types of things that—it just takes longer, makes the process of implementing especially the early integrations that you do, just makes it take that much longer.
Rob: Here’s something I’ll say on how to streamline this. If you’re only going to build a few, then just do what you’re going to do and go straightforward. There are reasons to do this: a, it makes your product more sticky because you can get data from more places and therefore users get more value out of it; b, it makes your customers lives easier; and c, it can be a co-promotion opportunity. Off the top of my head, those are the top three reasons to do it.
If you’re going to build a bunch of them, then you’re going to want to standardize on the code side and like I said, develop something where it’s easy to just pop them in, you don’t have to build custom UI for each one. I mean, again, look at the Drip UI and we just pop an item in the dropdown list to add the next trigger or action that’s triggering something in Drip or sending out an action, something that goes out of Drip.
The other thing to think about is or the way we were doing it was, if I recall, we have three levels. We had a V1, V2, V3 of any integration that we did almost without fail where we would build a very simple integration first, and that was our V1, and that would typically take less than a day to build. Sometimes, it only had one or two triggers, one or two actions, something like that. It was easy to build, we’ve got two, three API, we’d push it live, we’d promote it, we’d see who used it, we’d see the request.
The best-case scenario is that we’ve got a bunch of people saying, “Oh, this is cool except for it doesn’t do this for me.” It’s almost like customer development where we’re iterating on the feature, almost like it was its own product because Drip had—off the top of my head—I’m going to say 20 different triggers and Stripe has 20 or 30 different actions. Well, there is no reason to build essentially 50 endpoints, 20 in and 30 out. Again, don’t quote me on those exact numbers but you get the idea of what I’m saying. There’s a lot. It’s a lot of work, it’s a lot of code to do.
If you build two in, two out, pretty simple, you throw it live and then as people ask for stuff, you can add another one in almost minutes. I mean, you have to write unit test and stuff but it’s very trivial to add. If you get enough people asking about it, well, you take it to that next level where it’s a tighter integration, you can add OAuth later. At first you can paste an API key which is a little janky but then OAuth becomes the V2, and you just build tighter and invest more in that, the more people who use it. That was how we did it and it seemed to work out pretty well in general.
Having the ability to watch the actual user behavior on your integrations before investing weeks of time is hugely valuable because it can save you a lot of time. There were integrations that we built, that V1, and 20 people used it out of thousands of customers, and we never did OAuth and we never added that extra week or two of development on it because there was no business case to do.
Mike: What I like about the strategy you just outlined—doing the V1 and then V2 and then V3—is that it allows you to come back and start very simple. Then as you start to see the technical problems with it, but also the features and functionality they’re missing, that customers are asking for, it allows you to fill them in afterwards. You don’t have to worry about as much about going back and rewriting some of those things that you’ve already built in order to satisfy what the customers need because you didn’t build very much to begin with. You did it really more or less to help pull that information out of the customers and find out what it is that they wanted and then take that forward.
That’s actually a mistake that I’ve probably made early on with integrating with Zapier is that I put too many things in there, but it was partly because customers were asking me to do a lot. I don’t what to answer how I would change that, but I think that I would probably spend a little bit more time on going back and verifying with Zapier directly like how this should have been done.
Rob: Yeah, it’s easy to over build. You get in there and you think they need to be able to do everything that they can do through the Bluetick UI or everything that the API offers, they need to be able to do that in Zapier. I would say that’s not true for a V1. You may miss something, but take your best guess, 80/20 it. What are the 2 out of 10 things that you think or you know people are using or your gut feel of what you think they’ll use which is sometimes you just don’t have the data and then pop it in. When they’re like, “Oh, I also want to do XYZ.” Well then you put that in your queue, and you build it out as soon as you can.
Integrations are—they’re a curious thing because I remember with HitTail, we skipped this with Drip too, but it was like, “Do you integrate with Shopify?” It’s like, “What do you mean by that? What does an integration mean in your head? Does that mean that we’re taking data in from them and we’re triggering things? Does that mean you want us to pull data and display it as a report? Does that mean you want us to push things into your Shopify store?”
Same as Stripe, “Do you integrate with Stripe?” It’s like, “Yeah, we do but what do you need it to do?” It was often digging in questions and then they would have a use case typically. It’s like, “Well, I want once someone purchase, I want to be able to mark them as a customer and drip.” It’s like, “Well, yeah, of course. We do that.” Or, “Once an invoice is created on the second Tuesday of every month, I want this and that to happen.” It’s like, “Oh, we don’t handle that use case, but we can build that.”
Saying integrating with Basecamp or Highrise or with Slack, that can mean a whole slew of things. Integrating with Slack can literally be, “Oh, I’ll just dump a message in there when someone says something.” It’s an integration but it might not be what everyone has in mind. You often want to dig in if people are asking for these things and find out really what is your exact use case and then just build those one at a time but build it in a framework such that it’s easy to add other functions.
Mike: Yeah. The question that I’ve kind of usually responded to for those types of request is, “What is it that you’re trying to do?” Because usually, that’ll entice people enough to give you the information that you need to either extrapolate it or what you need to build or what sorts of things they’re trying to do and whether it’s even remotely possible. If it is, then you can dig in a little bit more with the technical stuff but usually, at a high-level, it gives you enough information to say, “Yes, this conversation is even worth pursuing or it isn’t.”
Rob: Right.
Mike: Next step we’re going to dig into is the actual API integration itself whether you’re calling an external API or they’re trying to call back to yours from an external application. What I found is that, because there’s so many different ways to design an API, it’s probably not going to be likely that your API is going to be able to be used directly by the other application. This applies whether it’s having to respond to webhooks or accepting them or tracking them or just make external function calls.
If you have an external application that’s calling into yours, they already have a standard way of doing it. You may need to change how your product works. If you’ve already built an API, it may not be the easiest thing in the world to change your API especially if you have other customers interacting with it or your application depends on it. Bluetick for example is a single-page application and it’s got an API specifically for the app itself, it’s also got a public API and then I have additional endpoints that I’ve created.
This is one of the, I’ll say, hacks that I’ve learned is that creating your own dedicated endpoints for other apps could be in your best interest to do. It sucks to have to maintain them in addition to the other code that you have, but it may be the best way to go about providing a mechanism for them to talk to your app without having to rewrite all the different things in your app. Even if you would have just two of them that need to call into your application, they may be doing things differently between each other and then your application may be doing something else as well which makes it hard. You can’t standardize on one thing that’s different for three different people. A dedicated endpoint for each of them is a good way around that. I won’t say the best way, but it is a way that is workable.
Rob: Another thing to think about is rate limiting. I think I’ve talked a little bit about how segment, well, there are few people, segment was the most notorious for it a couple of years ago, but they would accidentally DDoS us. Someone would activate something, and it would just hammer your API and we had rate limiting in place. We had a Ruby Gem that basically sent back, I believe it’s a 304 response, 403, there’s some response where you encode. It’s like, you’ve been rate limited, you can send this much per hour, and wait this long before you can send your next batch and they just weren’t honoring that. There were several that weren’t honoring so you have to code the work around those. I know that Zapier has rate limits and we coded early on to help with those.
It’s one of those things that in the early days doesn’t matter and as you scale, it matters a lot because it’ll either take your API down, it could take your app down, your database down, it can take web servers down, or it can mean, if you’re not queuing things and you’re hitting and you’re getting rate limited, you could lose customer data. If you are queuing them, it could back your queues up because you have all this retrial logic. If a failure happens, it’ll just fill your queues up and say you have to expect rate limits and it’s a bunch of code, it solve problem logically but it can require a lot of code on your end to properly implement rate limiting.
Mike: Another thing that’s similar to that which is parallel request. You may end up with request that are coming in on your API that are close enough to each other where if that resource doesn’t exist, for example, then it needs to be created. If you don’t have your transactions set up properly in your code, then you can end up with duplicate resources created inside your app and then suddenly, things start to fall over because it’s basically what amounts to a raise condition, which you never would’ve run into in normal interactions with your app because users aren’t clicking on things with milliseconds between each request. If that happens to your app, if it’s coming to an external API, that can easily happen. You do have to be careful and cautious about those types of things which some frameworks are good about transactions and some are not so much.
Another thing to think about when you’re looking to integrate with an external API is what customers are using that and what visibility do you have for the other side of things. If you’re receiving commands or queries from another system, can you log into that system and see what has been initiated, can you see what has been satisfied, can you see the errors that we’re running to? Because a lot of those things, you may not necessarily have the information on your own servers like there could be requests that’s going out. You may see the request come in, but you don’t necessarily know if it was responded to properly or it’s sending back the wrong data.
If your code is incorrect or it’s not responding properly, how would you know that? The only way to know that is to go to the other side and look from there. Being able to monitor things both internally and externally is important. You don’t always get that external viewpoint that you need, and you may not be able to track them down to particular customers either. If you see an incoming request not just, why did it come in, and where did it come from, who is the vendor, but what customer of yours is that request associated with. If you can’t see those things, it makes it difficult to troubleshoot, it makes it difficult for you to offer support for your own customers.
Rob: Another think to think about is when you are building the integration, who can you contact for support. Is the documentation—we’ve already covered a little bit—is it good, is it buggy, is it correct or not? Do you have email access, phone access to a developer on there? Because you’re going to run into problems, and do you have access to a developer? Do you just email their general support that they have specific integration support?
We love integrating with the three-person startup where two of the founders were developers. I mean, those went so smoothly, they could fix things so quickly, and they knew how everything worked. You’d email them and be like, “Hey, there’s a problem here. This is the result we’re getting.” And they’re like, “Fixed.” It was so good. The larger the teams get and if you’re sending an email again, to Salesforce, to their support, to try to get integration, it’s an absolute nightmare. You hear back a week later, and they don’t understand your question at all, and they don’t escalate you, blah, blah, blah. Those are kind of the two extremes that I’d point out but it’s something to think about when building this.
Mike: The last one, typically comes around when there are webhooks of like, “How do you go about testing them?” This also applies to just you sending information over but how do you go about making sure that the stuff you’re developing has a test area on the other side? Are you working with production data? I would hope not but there are cases where you are going to have to do that which means that you have to create an account on their side and use that to do all of your testing and effectively it’s in production but on your side it’s not. That makes it hard because you have to keep things straight locally like, “Oh, is this information here that we’re working with in production or not on their side?” You may have internal flags or toggles or fields that you use to keep track of that stuff, but it can get complicated especially if you’re trying to document that. It’s got to be documented in places where it’s easily accessible by you to understand what’s going on both side and which environment it’s going on.
Rob: And then, as you get it built, there’s going to be an approval in publication process and again, with smaller startups there’s typically not much of a process. You send an email, you say, “Hey, this is live. We’re going to push this live in our UI next Tuesday.” They’re like, “Cool.” With Zapier or Salesforce or someone who’s doing a lot of integrations or having a lot of people integrate with them, they are going to have a process, they’re going to have a checklist of requirements. You’re going to want to look at approval timelines because I know some apps take weeks and/or months to get approval publication timeline after it’s approved.
Is there a beta period? This is something that Zapier I think does well. It feels like a pain when you’re doing it, or it feels like hoops to jump through but they’re doing it because they want to keep the quality of the service side. If they don’t have the beta period and all that where you have to get 10 users using it because they want to force you to work out the bugs basically. I think they do a good job of that. Then how will you get support during beta? How will you provide support to your folks during beta? It’s all things to think about to get it live. Oftentimes, writing the code is the least time intensive piece of this whole process.
Mike: Yeah. I think the piece of this process that does take the most time is just making sure that there is that trust factor there on both sides that, “Hey, this is going to work and is generally going to be good for everyone who’s using it but if it’s not working or it’s buggy or there’s problems of any kind where there’s transaction delays or things are just overly slow or they’re using too much memory or there’s scaling issues on either side, all of those things can essentially erode the credibility of the integration.
At that point, one side of the other is going to want to back things off a little bit and introduces this additional delay. Delay factored just from becoming comfortable with it is important, but you also need to have ways to resolve that. This begs the question of, “How are discrepancies or disputes handled” Those disputes or discrepancies can be like, “We expected this data, we got this data instead.” Or it could be something along the lines of, “This isn’t working right. Why is it taking so long?” Or it maybe it could be a designer or an architectural issue, “Oh, you said that you want to send us data XY and Z but it’s also including this other thing. Why is it doing that? I don’t think that it should.” You have to have someone resolve that.
Sometimes, you’re talking directly to developers. Sometimes, you’re talking to an anonymous email box where you have no idea who’s answering it or what their ability to make change is or even knowledge of the entire system is. Each of those is going to be a different approach but they’re things that you have to be aware of especially when you’re working with larger companies or smaller ones.
Rob: Then something we’ve alluded to several times during the episode is I mentioned there my top three reasons for building integrations and one of them is the comarketing opportunity, the business development so to speak, which is to be able to both promote who you’re integrating with and for them to promote you in one way or another. There are a lot of ways to do this such as joint webinar is a pretty good way. You think about it, if you’re integrating with another startup, you both want the exposure to each other’s audience. If you’re integrating with Stripe or Facebook or Google or whoever, you’re not going to get that, but it’s nice to think about high-touch opportunity to show how the integrating works and the benefit it provides—so joint webinar is one.
Certainly, I found a lot of success with the joint email. We email our list, you email yours. Copromote blog posts also on both announcement blogs for each company. There are the functionality updates whether they handle that via email or in-app or whatever. You can offer in-app announcement on both. Even providing customized landing page that says, “Welcome, Pipedrive users. Welcome, Stripe users.” That they can link to from the other place that you can get is in their app directory, their integrations directory. There’s typically one in the app and out on their public market website. That’s another place you want to be.
From there, we found that building custom landing page for some of them, but not all, worked really well and increased conversions quite a bit. There were a couple of integrations where the clickthrough from the in-app or from their integrations directory on the marketing site to our landing page and then sign-up for a trial was something like 30%. It was outrageously high. We asked for credit card upfront. Typically, the number is very small, and it was 20%-30% and it was shocking. We did so much to tune that page and split test it but the ones where we were getting 3% or 4%, you obviously don’t care as much about those.
But those comarketing opportunities can be fascinating because if you get a big email sent out to 30,000 of their marketing list or customer list or whatever, you can get a nice bump there. But then if you get in their app directory or you get in these other longer, living links basically, you not only get the SEO juice from that, but you then get that flywheel of traffic. I’s not huge, again, maybe it’s 100 visitors a month, so it’s not a huge amount but if you’re getting 10%, 20%, 30% of those to sign-up for a trial, that’s 10, 20, 30 trials every month that shows up. Then you multiply that by 10, 20, 30 integrations and you start to see how you can potentially build a flywheel out of this.
Again, you can’t just take this advice and apply it to your app without thinking, “Does this make sense? Is it going to provide the value? Do I have the leverage for these folks to do all of this?” That is the integration marketing playbook that can help grow your business not only as a one-time thing but as a sustainable approach. With that, I think we’re wrapped up for the day.
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Episode 445 | Why Absolute Thinking Is ALWAYS Bad
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about some of the pitfalls of absolute thinking. Things are rarely black and white, they are more nuanced and on a spectrum. The guys explore the advantages to this approach.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about why absolute thinking is always bad. This is Startups for the Rest of Us Episode 445.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. Did you catch the joke? The sarcasm in the title there?
Mike: Just a little. Is it always though? Is it always bad?
Rob: Always bad. We’re going to dive into always and never, absolute, thinking in this episode. But before we do that, what’s the word this week, sir?
Mike: I’m still going through hell that is the Google authentication approval process. I feel like it’s on of those ongoing sagas, kind of like Game of Thrones right now, where like the last episode’s coming up and you’re just like, “Ugh, just let it end.” It’s going to take a little while. They sent me an email. I asked them for more information. They said, “We signed up.” This is me going on a rant here. But they signed up for Bluetick apparently and then they ran into the credit card screen, and then they email me saying, “We need you to make our account so that we can log into your application and bypass the payment information.” I’m just thinking to myself, I’m like, “You’re Google. I imagine that somewhere, there’s a credit card that you could put it in for the 14-day trial.” I would just imagined it that would be the case some place.
Of course, I email them. It was a week later, still nothing from them. I was just like, “I need an email address. What email address did you signed up with?” I didn’t hear a word from them and then they’re like, “You have five days to comply.” I’m like, “Come on!”
Rob: Oh, boy.
Mike: This coming Monday is when they’re like, “You have five days to comply. These are the steps that we’re going through. We’re going to start notifying people, your users that are connected.” I’m like, “Come on!” It’s just ridiculous. I don’t know how that all is going to turnout over the next couple of weeks. It’s just frustrating and irritating.
Of course, at the bottom of it, it’s one of those worst case scenarios where they’re going to detail about, “You’re not going to be able to add any new users using Google Gmail accounts.” I’m like, “Come on!” Basically, they’re taking aim and saying, “Well, if you don’t do this, we’re going to tank your business” Like, “Thanks.”
Rob: It’s a little bit like dealing with the state government or the federal government.
Mike: Only with them, you can just pay a fine or penalty or late fee or something like that. They’re threatening to shut things off. I’m just like, “This just sucks!”
Rob: Would you say, never build on top of Google, Mike? […] for the next episode, never trust Google. It’s not never but know what you’re getting into. Is that it?
Mike: I think what it would boil down to is that if a company removes, don’t be evil from their company motto. It is probably not wise to rely on them not being evil.
Rob: Right. You might say, “I will never build on Google again.” Or, “Know the pros and cons of basically building a business that relies on them.” That’s tough. It’s a similar thing that I’ve dealt with with setting up payroll in multiple states where you like Gusto, I guess, Zenefits, and there’s a few others that like it appears that it makes it just magical like, “Get payroll running. It’s no problem.” Then you have to sign up for at least two janky online web accounts that were built in 1997 with state governments to get the revenue, Office of the Revenue of the state, and then, it’s like the unemployment stuff so that it can pay into this. Then, you have to give Gusto access. That never works the first four times.
It’s not threatening to tank a business but it is something that adds a bunch of back and forth, that’s frustrating, that you can’t actually get it done, that you really can’t outsource to someone. That was the thing that I always struggled with. You almost need a chief operating officer or an office manager who’s really going to dig in and do it but it’s kind of something you just have to deal with. It’s just a headache that wastes time and it’s not the fun part—one of the many not fun parts—of running a business.
Mike: Yeah. The other thing is how opaque the whole process is. It’s Google. They’re kind of like Facebook or Apple. You have no way to talk to a real person. I guess with Apple, it’s a little different, you could go to the Apple store. Even then, if you need to talk to somebody, an engineer or something like that, I’ve only heard of one situation where somebody was able to get an Apple engineer who was in the design engineering office in Apple. It was because something literally caught on fire, with some charging cable or something like that. It was like the second or third time that it happened. They’re like, “I want to talk to that person.” That’s the only one that I have ever heard of. Just getting somebody to talk to, to say, “How is this supposed to actually work? What’s the next step? How do I talk to somebody about getting either a waiver or something like that or an extension?” Nothing, there’s no information, and they’re not forthcoming with it. Anyway, I will leave it at that. How about you?
Rob: Yeah. We can stop. Google Rants for the Rest of Us. I wanted to give a shoutout and a thank you to Rich Staats. He runs secretstache.com which is a WordPress agency. It’s spelled s-t-a-c-h-e like a mustache, secretstache.com. It’s a WordPress agency. You and I have met him at different Big Snow Tiny Conf. He comes to MicroConf as well. We were having some issues, to put it mildly, some minor issues with the Startups for the Rest of Us website because it’s on a, do we think a nine-year-old WordPress theme? Eight-year-old? Nine-year-old? It’s pretty ancient. It’s like 70 in human years.
Mike: Yeah.
Rob: It’s not like an eight-year-old WordPress theme. I think it’s nine years.
Mike: Yeah.
Rob: Anyways, he dove in. He helped us out, really appreciated it. Now, our comments appear. When people are making comments, we can see them in the admin, but they wouldn’t appear on the actual episode. As such, we have few comments that I haven’t read through over the past couple of months.
Episode 432, you and I talked about How to Indirectly Overcome Sales Objections and Matt made a comment. He said, “Great episode! I love the idea of using KB articles to overcome sales objections. I’m trying to figure out what knowledgebase I should use. It looks like they can get pretty pricey. Mike, I like the look of your KB at support.bluetick.io. Is that something you built yourself or are you somehow using a service for that?
Mike: I’m using Teamwork Desk for that. It’s just a redirect with my DNS. It just redirects support.bluetick.io over to that. It’s all completely hosted there. They’ve got stuff where it integrates into their desk products as well. If I’m answering a question or somebody has a problem and there’s a KB article on it, I can link directly to that KB article from within Teamwork Desk. Works quite well. You can have multiple mailboxes setup, it’s charged per user. I found it to work pretty well so far. That’s what I use.
I think there’s a lot of other ones that do something similar where they will have a KB article hosted for you or a set of KB articles. But that was one that I found that was simple and easy to get into. It just kind of worked and met my needs for the time being.
Rob: It makes a lot of sense. When you’re small, you have a support system—email support—where you’re already using it. I would say Teamwork Desk or Help Scout would be my two top recommendations for that. Both of them have built in KBS. It’s probably a little bit of extra money per month. I don’t even know, but that’s a totally viable option if you want it hosted.
What we did at Drip, and it worked out fine. I don’t know at this point that I would do it again. I was trying to be budget conscious and I don’t want to pay a bunch of money at that time. We had a WordPress install, it was on WP Engine, and we used the KnowHow theme and customized it a little bit to look like we have Drip colors. It worked great for us. It was essentially free because I already was paying for this WP Engine account. That’s another option. Of course then, you have all the maintenance and all that stuff that goes along with WordPress. It just feels like it gets worse and worse overtime. Those are some two relatively inexpensive options depending on how you want to go.
Mike: Yeah. I went with Teamwork Desk mainly because it also offered—I forgot what they call them—but it’s basically a part time account as well for free. If you have somebody who needs to log into the ticketing system and they only need to see tickets once in a while or you only need them to have answer once in a while then, the part time agents basically takeover. They can answer, I think, up to 10 for free. Then, your regular users, I think, I’m still only paying $8 or $10 a month or something like that. It’s really cheap for what I’m using.
I didn’t need very much either. It’s not like I needed higher end stuff where I need to have advance workflows. I didn’t really care about sending out satisfactions surveys to people because it’s not like I was getting a larger number of tickets. I’m still not. It’s not like I need to move off it. It’s a great place to start though.
Rob: Indeed. We have another comment. It was episode 433 where we answered several listener questions. In that episode, we talked about VidHug which is a B2C service that, if I recall, was doing around 500 or 600 a month MRR. You could send out a link. It was kind of B2C. Let’s say it was your grandma’s birthday and you could send all the links out to all the relatives. They could record something on their iPhone and it was stitched together a happy birthday video. That was the concept.
Tyler made a comment. He said, “Hey, Rob and Mike. Don’t if they’d be interested, but VidHug sounds like a great idea for small businesses looking for testimonials. They can invite their customers to leave testimonials then the company can use those videos for Facebook ads as social proof. That could be a B2B opportunity with recurring revenue. Was wondering if you could pass that along because I would pay for that now. Just a thought I had while listening. Keep up the great work! Thanks, guys!”
I thought that was kind of clever. Probably a better use because I think the VidHug founder had asked about switching to B2B and going after HR and having them do welcome videos and stuff. I almost like this better because it’s an easier sales process than going after HR departments.
Mike: Yeah. The only downside, I would say, that I see there is if you’re going after testimonials, how many testimonials do people go after in a particular year? You’re not going to constantly be doing that. It almost feels like there’s a—I don’t want to say it’s a one time fee, but it’s like a fee for a three-month period or something like that. You’re using it and it’s used during that time period and then after that, you’re probably not going to use it again for another six months or year or something like that. The pricing might be an issue. How you price it might be an issue. But if you don’t care that it’s recurring then it doesn’t matter. If you’re just going after customers to get them as customers and try to establish revenue, then it doesn’t matter.
Rob: Yup. I would agree with that. You could do a three-month or you can do an annual and just make it annual-only pricing or something.
Last comment for the day before we dive in. Episode 434, SaaS KPIs You Should Focus on From Day 1. Oh, this is a comment relating to when you sent out, I believe it was this scholarship applications, and you forgot the email. You forgot to put the email in the form and you had something like 70 of them or something that you had to go through. Anna says, “Lol! I totally noticed that you didn’t have an email field in the MicroConf application. I just figured that we were living in a post-email world and you’d DM everyone on Twitter. That did make me feel like I was way too old though and that MicroConf was going to be too hip for me, so I’m glad to hear that it was an accident!” We’re not in a post-email world. […] of getting there, so I thought that was funny.
Mike: It’s funny because I was still able to track down pretty much everybody on there. I don’t think there was anyone I couldn’t trackdown or wasn’t able to eventually get an email address for. Yeah, I’m shocked. I had enough information to be able to track people down, but it was still time consuming. It’s not a post-email world, but I guess given enough time, you could make it a post-email world but you’d have to have enough information too.
Rob: Right. Cool. Let’s dive in. Today as I said, the title’s a bit of a joke, Why Absolute Thinking is Always Bad. The alternate title is Why Absolute Thinking Can be Toxic to you, your business, and other people who are kind of listening to you. I think, if you’re wondering what absolute thinking is, it’s that very black and white view of things. Examples of that are, if you see someone say, “This always works. You should always do this.” Always is the key. “This never works. You should never do this.” Often times, it’s like, “I should do this.” Maybe that’s an absolute feeling but it’s kind of like an assumption or a burden you’re putting on yourself.
The reason I want to talk about this today, because we were talking about it before recording, and you were like, “What’s the point of pointing out that something as bad?” It’s because I believe that successful founders, and frankly, successful humans, that I like to have conversations with, stay away from absolute thinking and see the nuance in complex things instead of trying to break them down to black or white or zero to ones. I believe the entire startup community itself will be better off if there’s just less of this. If there are fewer of us that believe that there are these absolute, “You should always never do this.” We have examples later on, on this episode of actual examples that I’ve heard over the years, frankly.
I believe it’s a fallacy. It’s thinking that it isn’t true. It’s more than semantics. It’s not digging in. When someone says, “Always,” and they mean 95% of the time, that’s a very different thing. There are exceptions to most of these things. There are times when absolute thinking is useful with ethics and in genocide. There are things when, “Yes, this is always bad.” That’s why the title is a joke. I think we’re going to give some specific examples of marketing approaches and that kind of stuff that I think will lend a little more detail to what we’re thinking about here.
Mike: This almost goes back a little bit to what I kind of opened up MicroConf with this year which is the fact that the matter is, when we go to MicroConf, and we’re talking to all these other founders, that we’re essentially raising the bar for every single person there just because we’re learning from each other. I definitely think this is one of those things where we can learn a lot from it.
I do want to dig a little bit to the piece that you said on, if somebody says, “Always do this.” What they really mean is 95% of the time. How do you differentiate between what they meant to say versus what they actually said? A lot of time, I see a lot of these stuff come up on Twitter, for example, or in places where there’s not a lot of room to expound upon what the person actually meant. Then, there will be people who’ll jumpin in the comments and just rip them apart and say, “That’s not always true.” Or, “Well, actually this and that” How do you differentiate between that? Is it just you have to rely on your own personal knowledge of that? Because if you don’t know anything about it, how would you know it’s 95% versus 50%?
Rob: Yeah. That’s the problem. That’s why words matter. If you say ‘almost’ without exception, or ‘in almost all cases’, or ‘nine times out of ten’, that tends to be how we talk in the podcast. That tends to be how Jason Fried talks now. He didn’t used to be. He used to be more absolute but something I like about his Q & A this year at MicroConf is that he wasn’t nearly as black and white on things as I thinks he was 10 years ago. When I hear Jason Cohen talk, I don’t know that I’ve heard him say ‘always’ or ‘never’. It’s very much same way we think and talk about things where it’s like, “Yeah, in some cases, this and that but as a general rule,” blah blah blah. “As a rule of thumb, I will always…” We already talked about that. You will probably never write another app that relies on Google but you wouldn’t say never do that. You’re not going to tell everyone else they shouldn’t do that because there are pros and cons to it.
That’s where I think it is, the words that matter, language does matter. I think, that’s something we’ve seen over the past 20 years of a lot of language being adopted and people not saying, “Hey, you guys,” anymore when it’s a group of men and women because words matter. That’s what I’m saying here. I think saying ‘always’ and ‘never’ especially if you all caps it on Twitter to make a point, I think that’s detrimental to the folks who don’t know the difference like you’re saying. I also think it can veer the conversation off in a direction that just doesn’t matter. Let’s not debate if it’s the last 5% or the last 1% or whatever. It’s just being careful about how you say things and how you think about things. I think that’s the important part.
Mike: Yeah. I agree with you. The conversation can easily go off into the weeds just because somebody said always and what they really meant was 95% of the time. I think that in most cases, a simple correction but Twitter is also not known for making it easy to go back and edit those things, and provide a correction in a way that makes it visible to everyone who’s going to see it. It just extends the conversation. Rather than continue going off into the weeds, let’s circle us back a little and talk a little bit about the nuances of that.
Rob: What I would say is just be more careful with your first post. Be very thoughtful when you’re going to write and publish a blogpost or say that tweet or whatever. I, very intentionally, try to avoid absolute language and I have for years. Again, the folks who I admire, the folks who I see who are successful, in general, they always do that. No, they don’t always do that but in general, that’s the behavior I see as well.
Coming back to nuance, most of the topics that we’re going to talk about is in the startup space, in the bootstrap space, or in the whole startup ecosystem world of tens and thousands, hundred of thousands of companies, there’s nuance to these things. It tends to be much more a spectrum or a continuum of 1-100 maybe instead of this 0-1 binary thinking.
I remember getting in a conversation, I believe it was on Hacker News, I don’t even remember. But someone posted, “You should never outsource the development of your SaaS product. Never. Never.” I mean, that’s okay advice. It was like, “If you don’t build it, you have zero chance of it working.” That’s just patently not true. It’s not even a 5% exception. I would say that there’s a bunch of stuff that can add up from 1-100. If you’re going to be a solo SaaS founder, let’s say, if you have any of these skills, it will mean you have a higher chance of success. One of those is the development […] is the ability to build your own product. The other one is the ability to manage and hire people. Another one is the ability to market. Another one is the ability to think about the product and build good UX. On and on and on.
If I recall, in that Hacker News article, I made a list of 10 things. I said, “Just weight each of them as a 10 if you have them or 9.9 because you never get to 100.” If you have all 10 of those then you’re at 99 out of 100, you just have the huge chance of success. But most of us don’t, most of us none of us have, all 10 of the things that I threw out. That was a way of thinking about it where it’s like if I were to add it for myself, I have 70 out of 100. People I really respect have 80 out of 100 or whatever.
They have a better chance than others but that’s all it is, it’s a chance. You should always never do these things. It’s more like, “Let’s look at the factors and the list of pros and cons.” I realized, looking at pros and cons is complicated. It takes an advanced frontal lobe developed. That’s why kids often have a hard time doing this. It can be hard and it hurts your brain to think about it. I think that’s important because higher level thinking involves this nuance.
Mike: I wonder if that nuance also comes with time and experience too. The couple of things you had mentioned about these examples of somebody going on social media saying, “She should never outsource those core things.”
I remember there was a couple of articles from Joel Spolsky—I’m looking at them now. One of them is titled, Things You Should Never Do, Part 1. This is from April 6, 2000. He’s talking about basically rewriting an entire application from scratch. It kind of goes into the history of Netscape. The next one is from October 14th of 2001 which is, In Defense of Not-Invented-Here Syndrome. He says, “The best advice I can offer: If it’s a core business function — do it yourself, no matter what.” Both of those things are incredibly absolute. He’s essentially saying, “Never ever do these things.”
I think if you start reading beyond the statements and looking into the context of what he’s providing and all the things around it, you’ll see the rationale. You’ll see the reason why he’s saying that. I think that that context is important for the statement, not necessarily just the statement itself. You’ve got to stake that context into account along with the statement. Staking the statement alone is essentially taking it out of that context. It’s very easy to manipulate it and twist it to say something that he didn’t quite mean. He said it, he didn’t mean that though.
Rob: Yeah. That’s a good point. I bet if you ask Joel today, in 19 years later, I bet he would see a little more nuance in it, I would guess. I think that comes with experience. I think that comes with knowledge and wisdom, just doing more things, and maybe he wouldn’t. Mike, I bet you and I could go to our—you’re in my blogs or essays—right now and find some evidence of some absolute thinking. I bet it’s 10 years ago. I bet it was when I thought I knew everything. I hear my kids, or I hear kids in general, say these black and white things like, “I never get to do this.” Actually, you did that last week. It’s a way of them kind of being dramatic or trying to call attention or showing how really bad it is for them when it’s kind of not, when they’re exaggerating for effect. That kind of leads into this thing about frontal lobe development.
Sherry and I had this conversation where, if you watch a lot of kids movies, they’re very black and white, there’s a good person and a bad person. A protagonist and an antagonist. As you develop and you watch shows like Game of Thrones or Breaking Bad, there’s this really strong nuance. Obviously, I haven’t watched Game of Thrones or Breaking Bad with my 13-year-old, but I have watched shows that have more nuance like in the MCU, in Black Panther, the villain in the first movie, he wasn’t bad. Thanos is another one. He does want to kill half of the people but he has a pretty good reason for it and he believes it. He’s not just doing things to be evil, he actually believe he’s doing good when he does it. It takes development to learn that.
Sherry has talked about how the frontal lobe is your advanced thinking and it doesn’t fully develop until early 20s. I think women are few years ahead of men with that. But this is one of the reasons why you thought you knew everything when you were 16 and why I thought I knew everything when I was 18 or when I was in high school. As you get older, if you get experience and you get knowledge outside of your little box, you don’t live in your little box but you travel and you meet other people with your thoughts. You’re allowed to be shaped. A lot of these happens in college. When you’re 18, you know everything. When you’re 28, you’ll realize you know less. When you’re 38, you’ll realize you know even less and so on.
Mike: Eventually, you get to be our age and you know nothing.
Rob: You know nothing.
Mike: You know nothing Rob Walling.
Rob: Yes. You know how little you know. That’s part of it.
Mike: I don’t want to say, but the way that this comes across is age is just in terms of people being younger. As you become more mature, you get older. You just naturally develop this. I think it’s a datapoint for you look in the mirror and say, “Is this type of thinking actually helpful for me or for other people?” The answer in general, I think, is no. But you have to be aware of it first. You just can’t just magically, you hit a certain age then suddenly you are aware of this. It’s something that develops over time through repeated experience and exposure. I think that’s what we’re trying to do here is, just expose people to the idea that those absolutes without the contexts are probably detrimental not just to you but to other people as well.
Rob: To your audience, that’s really the point. That’s right. It’s detrimental to you and the folks who you’re speaking to who don’t know better.
Mike: Right.
Rob: It’s not that. That’s something you pointed out over there. I am glad you called that out. My intent is not to say, “Oh, as you get older, you get out of absolute thinking.” That was one example of frontal lobe development. But I’ve known folks who were in their late teens who I felt like they had the life experience. They were 18 and they were as not absolute as I was when I was 38. You know what I mean, they were way ahead.
It’s not just some absolute scale of, “As you get older, you get better with this.” I do think it’s probably quite a bit of your upbringing. I was brought up for a black and white. It took me years to break free of that. I think if you’re brought up with more nuance and with parents who really talk things through in a non-absolute way. I think you’re ahead of the game. I think when you have life experience, you’ve traveled outside your home country, and you’ve met a lot of people with different viewpoints, and evaluated those, I think you’re ahead of the game. Again, I’ve know kids, 17, 18, 20, or whatever, who are way ahead of me and other folks that we might encounter on a day-to-day basis.
I think, piggybacking on the experience thing—I’m totally guilty of this, I was guilty of this—when I had my first success back in 2005, 2007, I was like, “Boom! I know it.” The first time entrepreneur typically thinks they have it all figured out. I did too. A few years later, you tend to realize that you didn’t. In research circles, they call it the N-of-1. N is how many subjects you have in an experiment or in a research study. An N of 10,000, meaning you’ve talked to 10,000 people or you researched them or whatever, that gets to be a pretty good number. It’s statistically significant. Depending on how everything varies, an N of 500 can be totally valid. An N-of-1 is a little bit of a joke. It’s basically an anecdote.
I say this because Sherry was a researcher for a while. She did a residency at Yale. There were a lot of researchers there and that was one of their jokes. It was, “Your anecdote is not my data.” Or the singular form of data is not anecdote.
Mike: That’s almost like when I see arguments of people, “Well, that didn’t happened to me,” and they’re arguing against data that they disagree with because of what their experience was. It doesn’t invalidate their experience but they feel like it does. But the data itself indicates something completely different. I can think of any number of things where that stuff has come up. One example that comes up specifically is Patrick Campbell of MicroConf had recently said and provided some data that said, “Companies that are remote first, I believe, are less successful or make less money.”
Rob: Grow slower.
Mike: Oh, that’s what it was. They grow slower than companies that are not which kind of flies in the face of a lot of kind of what we see. It’s not necessarily directly confrontational to it, but a lot of us don’t necessarily have the context of other companies either. I think that’s one of those dangerous things where you have a certain point of view and you believe it is correct but the data doesn’t necessarily prove or support that. You think that you’re right but you don’t necessarily have any data to prove that you’re right or wrong but you have that core belief. Because you’re growing a remote company, you don’t want to hear that growing a remote company is going to be slower or is going to slow down your growth.
Rob: Yeah. That’s a good example of that. Examples of it I talked about earlier, we looked at some specific things that I think I’ve heard people say over the past, let’s say 15 years of doing this. Common example is, they try a marketing approach, it doesn’t work and then saying, “This never works for anyone ever.” Or, “This can’t work with SaaS.” Or, “This can’t work with B2C.” It’s generalizing a single experience. Even if you try something two to three times, it doesn’t work, it’s not accurate to say it never works.
Paid acquisition is one that a lot of people try and give up on where we see a similar niche or the same vertical making it work. I think content marketing is another one or SEO. You can go on and on with success stories and failures stories. […] to say, “It never or always works.” It’s not helpful to say that.
I think another one I used to hear is never buy an app. You should build all your apps from scratch because the code will be too crappy, there’ll be too much risk, and too many problems. All those things are true that there is problems, and risks, and the code is crappy and all that stuff. But the absolute of always/never isn’t. There are just pros and cons and you have to look at them.
The, “Never hire contractors. Only hire W2 employees.” I think venture capital tends to lean towards that. I’m talking about building up a whole team. Let’s say I’m going to have a team of 20. Some folks might want to be a solopreneur and have 10 contractors or 20 contractors, for that matter. That can work. We see folks doing product-type of services and have it work but it’s a different model. There’s context to it. It’s like a venture capitalist says, “Your employees have to be loyal and your people are what make this company. If you’re going to build it into a $100 million venture-funded business then this is the model we see working and we’re pattern matching, and so they say do that. Similar to venture capitalists tend to want you to have an office versus having a remote team in general. That’s the pattern that they see working. It’s not an always/never thing.
Mike: I think that what’s make it difficult when you don’t necessarily have a lot of familiarity with that topic or that particular subject because you don’t have enough of your own context, so you’re relying on the words of somebody else. Kind of back to what you said, and we’ve reiterated it a couple of times, the words themselves matter. If you’re going to go down the road of trying to give advice or talk about a particular topic in whatever realm you’re doing it, it’s beneficial to most people to provide data points, provide context about what percentages of the time this is accurate. It’s not to say that you’re always going to be accurate.
I think I’ve just answered an email a couple of days ago from somebody asking about Bluetick and how it would integrate in with exchange server. I said, “I don’t know your environment, but the majority of the time,” I forget what percentage I said. It was like 80% or 90%. I was like, “80% or 90% of the time when I’ve see this, this is what it looks like. There are other cases when it looks like this or that. […] of my suspicions based on what you have said but I can’t be 100% accurate.” I distinctly remember saying, “I can’t be 100% accurate because I don’t know.” There’s always those little details that you’re not going to know.
I think it’s important to make sure that you quantify some of those details, so people would know where the dark areas are, so that they’d know where there might be more information or context that they may need to have to completely understand what it is you’re trying to say in the general sense as opposed to making things absolute.
Rob: I like to think of it like this. First, learn the rules. Then, master the rules. Then, learn when and how you should break the rules. When I say rules, I actually mean rules of thumb. A rule makes it sound like it’s an absolute, but rules of thumb that are generally accepted whether it’s common knowledge or whether you ask an expert and they have their own mental model of it. We pointed out Saas KPIs—that was a pretty popular episode a while back—those are just rule of thumbs that we’ve seen in over hundreds and hundreds of businesses.
First, learn those and then learn when they shouldn’t work. If you stop just learning the rules and then deciding you have all these rules and they’re always in ‘nevers’, you’ve stopped before mastery. It’s the same thing of like becoming a black belt in martial arts. Blackbelt is once you’ve learned the basics, then you start mastering it. Then, you become a 2nd, 3rd, 4th level. Black belt, it’s not the end, it’s really the beginning of knowing all the “rules of thumb” or all the tactics and techniques. From there, you then build on that.
Same thing with writing. You’ll see prolific successful writers. Whether it’s a Hemingway or a Stephen King or anyone in the middle, at some point they learn some rules. Then they master them. Then they learn how to break them. They did stuff differently and that’s what makes them great.
Picasso is another one. There’s a Picasso museum. I don’t remember if it’s the one in Barcelona or there’s one in Antibes in France where it shows him in his early years. He just sits and paint for a decade. He paints all the stuff that everyone else is doing. He starts of not good then he gets better and better and better. Eventually, he’s a really good painter. But he’s just one of many. He’s learned the rules and he’s master the rules. Then he started breaking the rules and everyone is like, “What the hell is this guy doing with these crazy paintings?” He invented cubism. That was mastery. He didn’t sit there and say, “A painting should always have this form and that form. This type of shape and that type of shape. He started trying to break those rules and seeing what happened. That’s how I feel about this––the absolute. These rules are helpful for giving us guardrails when you’re early on but at a certain point, you then learn. There’s nuance and pros and cons to them.
Mike: I do wonder whether you get to that certain point and how are you judged afterwards. If you’re trying to break those “rules”, is it because you’re trying to experiment to figure out something new and something that is completely and fundamentally different from everything else? Or you’re just a nutcase? But the results of that is kind of how you’re judged afterwards. He’d done that and created cubism. Nobody liked it or thought everything of it. We would not have ever heard about it right now.
I’m not saying that that’s bad and you should experiment. I’m just pointing out that, I think that is a natural evolution of what that process looks like. It may not turn into anything but that doesn’t mean you should experiment with it.
Rob: Right. That’s the thing. I think the bottomline is it’s important to form an opinion. It’s important that we’ll be able to discuss our opinions, be opened to being convinced otherwise by smart people who have different experiences, seeing the nuance and things. That’s the bottomline. Again, I come back to someone like the folks who I respect and who I see who are a, successful, and also, have good relationships with fellow humans whether it’s a spouse, or children, they have good family life, they have friends. They’re just people I want to be more like. Jason Cohen, Hiten Shah, we have dozens and dozens of folks that we know that do this. They are the folks who I see embodying this thinking, who learned the rules, that mastered the rules, and then learned when and where to break them. It’s very, very rare you’ll hear any of them say that, “It’s this hard and fast always/never.”
I really like Jason Cohen’s recent post on smartbear.com, it’s called Kung-fu. It was all about his rules; his rules of thumb. He said, “Look, everyone’s different. Your mileage may vary. But these are things that I’ve learned.” There were things like, it wasn’t, “Don’t do freemium.” It was, “I don’t like freemium. I’m not going to use it and here’s why.” I think that is super important to kind of couch something like that. It really comes back to flexibility and nuance.
Even a growth mindset versus a fixed mindset. I’ve talked about that book Mindset by Carol Dweck. Growth mindset believes you can and should change overtime. Even your opinions and some of your beliefs can be malleable. That’s helpful and leads to success in a lot of things.
Mike: I think overarching point here is just to educate yourself. Not just about the things you’re working on but about how other businesses in general work. Because I think it gives you more of a mental model or a framework to work from and be able to be a little bit more objective about the things you’re looking at. It seems like it would be easier in some ways to be more ignorant and just say, “I know what I’m doing. I’m going to do things in this particular way because I know that it is going to work.”
I think being able to second guess yourself and being able to be a little bit more objective about the decisions that you make, or that other people are making, the advice you’re receiving from people, is extremely beneficial just because it gives you enough mental model to work from something where you’re not sure. You’ve got these dark spots and you’re aware of those dark spots. You know that there’s places where there’s some—I don’t want to call it risk—but some percentages that could go either way. At least knowing where those places are is important.
Rob: Yeah. When I’m thinking about a decision or something like this where I might have an absolute in my head, I often will couch it as like, “Well, I’m 51/49 on this.” Or I’ll say, “I’m 95/5 on this.” I rarely go higher than 95. There tends to be the exception or the doubt. It’s not just so clear cut.
Before you take us out, Mike, there’s a few absolutes that I want to throw out that as you listen to them, each of them has totally valid exceptions even though they feel like, “Wow, maybe it should be true.” I challenge the listener to think about the complete valid sections to each of these things.
Always write unit test when coding. Always grandfather on price increases. Never trust Google or Facebook. Never build on someone else’s platform and have your business totally reliant on it. Never go B2C. Never raise funding. There are more we could throw out.
In general, are those things true? Yeah, I would say so. Yeah, I think those are good rules of thumb. Are there totally valid times to break them? Indeed, sir. Absolute thinking, while it’s not always bad, we would conjecture that, I think all of us, you and I included, I think we can all get better at.
Mike: You would say that it’s not always bad but it’s not always good?
Rob: Not always good. Let’s raise the bar. Let’s raise the bar of the conversation. I think that’s the point.
Mike: With that, we’ll wrap things up. If you have a question for us, you can call it in to our voicemail number of 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for full transcripts of each episode. Thanks for listening. 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 software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. Did you catch the joke? The sarcasm in the title there?
Mike: Just a little. Is it always though? Is it always bad?
Rob: Always bad. We’re going to dive into always and never, absolute, thinking in this episode. But before we do that, what’s the word this week, sir?
Mike: I’m still going through hell that is the Google authentication approval process. I feel like it’s on of those ongoing sagas, kind of like Game of Thrones right now, where like the last episode’s coming up and you’re just like, “Ugh, just let it end.” It’s going to take a little while. They sent me an email. I asked them for more information. They said, “We signed up.” This is me going on a rant here. But they signed up for Bluetick apparently and then they ran into the credit card screen, and then they email me saying, “We need you to make our account so that we can log into your application and bypass the payment information.” I’m just thinking to myself, I’m like, “You’re Google. I imagine that somewhere, there’s a credit card that you could put it in for the 14-day trial.” I would just imagined it that would be the case some place.
Of course, I email them. It was a week later, still nothing from them. I was just like, “I need an email address. What email address did you signed up with?” I didn’t hear a word from them and then they’re like, “You have five days to comply.” I’m like, “Come on!”
Rob: Oh, boy.
Mike: This coming Monday is when they’re like, “You have five days to comply. These are the steps that we’re going through. We’re going to start notifying people, your users that are connected.” I’m like, “Come on!” It’s just ridiculous. I don’t know how that all is going to turnout over the next couple of weeks. It’s just frustrating and irritating.
Of course, at the bottom of it, it’s one of those worst case scenarios where they’re going to detail about, “You’re not going to be able to add any new users using Google Gmail accounts.” I’m like, “Come on!” Basically, they’re taking aim and saying, “Well, if you don’t do this, we’re going to tank your business” Like, “Thanks.”
Rob: It’s a little bit like dealing with the state government or the federal government.
Mike: Only with them, you can just pay a fine or penalty or late fee or something like that. They’re threatening to shut things off. I’m just like, “This just sucks!”
Rob: Would you say, never build on top of Google, Mike? […] for the next episode, never trust Google. It’s not never but know what you’re getting into. Is that it?
Mike: I think what it would boil down to is that if a company removes, don’t be evil from their company motto. It is probably not wise to rely on them not being evil.
Rob: Right. You might say, “I will never build on Google again.” Or, “Know the pros and cons of basically building a business that relies on them.” That’s tough. It’s a similar thing that I’ve dealt with with setting up payroll in multiple states where you like Gusto, I guess, Zenefits, and there’s a few others that like it appears that it makes it just magical like, “Get payroll running. It’s no problem.” Then you have to sign up for at least two janky online web accounts that were built in 1997 with state governments to get the revenue, Office of the Revenue of the state, and then, it’s like the unemployment stuff so that it can pay into this. Then, you have to give Gusto access. That never works the first four times.
It’s not threatening to tank a business but it is something that adds a bunch of back and forth, that’s frustrating, that you can’t actually get it done, that you really can’t outsource to someone. That was the thing that I always struggled with. You almost need a chief operating officer or an office manager who’s really going to dig in and do it but it’s kind of something you just have to deal with. It’s just a headache that wastes time and it’s not the fun part—one of the many not fun parts—of running a business.
Mike: Yeah. The other thing is how opaque the whole process is. It’s Google. They’re kind of like Facebook or Apple. You have no way to talk to a real person. I guess with Apple, it’s a little different, you could go to the Apple store. Even then, if you need to talk to somebody, an engineer or something like that, I’ve only heard of one situation where somebody was able to get an Apple engineer who was in the design engineering office in Apple. It was because something literally caught on fire, with some charging cable or something like that. It was like the second or third time that it happened. They’re like, “I want to talk to that person.” That’s the only one that I have ever heard of. Just getting somebody to talk to, to say, “How is this supposed to actually work? What’s the next step? How do I talk to somebody about getting either a waiver or something like that or an extension?” Nothing, there’s no information, and they’re not forthcoming with it. Anyway, I will leave it at that. How about you?
Rob: Yeah. We can stop. Google Rants for the Rest of Us. I wanted to give a shoutout and a thank you to Rich Staats. He runs secretstache.com which is a WordPress agency. It’s spelled s-t-a-c-h-e like a mustache, secretstache.com. It’s a WordPress agency. You and I have met him at different Big Snow Tiny Conf. He comes to MicroConf as well. We were having some issues, to put it mildly, some minor issues with the Startups for the Rest of Us website because it’s on a, do we think a nine-year-old WordPress theme? Eight-year-old? Nine-year-old? It’s pretty ancient. It’s like 70 in human years.
Mike: Yeah.
Rob: It’s not like an eight-year-old WordPress theme. I think it’s nine years.
Mike: Yeah.
Rob: Anyways, he dove in. He helped us out, really appreciated it. Now, our comments appear. When people are making comments, we can see them in the admin, but they wouldn’t appear on the actual episode. As such, we have few comments that I haven’t read through over the past couple of months.
Episode 432, you and I talked about How to Indirectly Overcome Sales Objections and Matt made a comment. He said, “Great episode! I love the idea of using KB articles to overcome sales objections. I’m trying to figure out what knowledgebase I should use. It looks like they can get pretty pricey. Mike, I like the look of your KB at support.bluetick.io. Is that something you built yourself or are you somehow using a service for that?
Mike: I’m using Teamwork Desk for that. It’s just a redirect with my DNS. It just redirects support.bluetick.io over to that. It’s all completely hosted there. They’ve got stuff where it integrates into their desk products as well. If I’m answering a question or somebody has a problem and there’s a KB article on it, I can link directly to that KB article from within Teamwork Desk. Works quite well. You can have multiple mailboxes setup, it’s charged per user. I found it to work pretty well so far. That’s what I use.
I think there’s a lot of other ones that do something similar where they will have a KB article hosted for you or a set of KB articles. But that was one that I found that was simple and easy to get into. It just kind of worked and met my needs for the time being.
Rob: It makes a lot of sense. When you’re small, you have a support system—email support—where you’re already using it. I would say Teamwork Desk or Help Scout would be my two top recommendations for that. Both of them have built in KBS. It’s probably a little bit of extra money per month. I don’t even know, but that’s a totally viable option if you want it hosted.
What we did at Drip, and it worked out fine. I don’t know at this point that I would do it again. I was trying to be budget conscious and I don’t want to pay a bunch of money at that time. We had a WordPress install, it was on WP Engine, and we used the KnowHow theme and customized it a little bit to look like we have Drip colors. It worked great for us. It was essentially free because I already was paying for this WP Engine account. That’s another option. Of course then, you have all the maintenance and all that stuff that goes along with WordPress. It just feels like it gets worse and worse overtime. Those are some two relatively inexpensive options depending on how you want to go.
Mike: Yeah. I went with Teamwork Desk mainly because it also offered—I forgot what they call them—but it’s basically a part time account as well for free. If you have somebody who needs to log into the ticketing system and they only need to see tickets once in a while or you only need them to have answer once in a while then, the part time agents basically takeover. They can answer, I think, up to 10 for free. Then, your regular users, I think, I’m still only paying $8 or $10 a month or something like that. It’s really cheap for what I’m using.
I didn’t need very much either. It’s not like I needed higher end stuff where I need to have advance workflows. I didn’t really care about sending out satisfactions surveys to people because it’s not like I was getting a larger number of tickets. I’m still not. It’s not like I need to move off it. It’s a great place to start though.
Rob: Indeed. We have another comment. It was episode 433 where we answered several listener questions. In that episode, we talked about VidHug which is a B2C service that, if I recall, was doing around 500 or 600 a month MRR. You could send out a link. It was kind of B2C. Let’s say it was your grandma’s birthday and you could send all the links out to all the relatives. They could record something on their iPhone and it was stitched together a happy birthday video. That was the concept.
Tyler made a comment. He said, “Hey, Rob and Mike. Don’t if they’d be interested, but VidHug sounds like a great idea for small businesses looking for testimonials. They can invite their customers to leave testimonials then the company can use those videos for Facebook ads as social proof. That could be a B2B opportunity with recurring revenue. Was wondering if you could pass that along because I would pay for that now. Just a thought I had while listening. Keep up the great work! Thanks, guys!”
I thought that was kind of clever. Probably a better use because I think the VidHug founder had asked about switching to B2B and going after HR and having them do welcome videos and stuff. I almost like this better because it’s an easier sales process than going after HR departments.
Mike: Yeah. The only downside, I would say, that I see there is if you’re going after testimonials, how many testimonials do people go after in a particular year? You’re not going to constantly be doing that. It almost feels like there’s a—I don’t want to say it’s a one time fee, but it’s like a fee for a three-month period or something like that. You’re using it and it’s used during that time period and then after that, you’re probably not going to use it again for another six months or year or something like that. The pricing might be an issue. How you price it might be an issue. But if you don’t care that it’s recurring then it doesn’t matter. If you’re just going after customers to get them as customers and try to establish revenue, then it doesn’t matter.
Rob: Yup. I would agree with that. You could do a three-month or you can do an annual and just make it annual-only pricing or something.
Last comment for the day before we dive in. Episode 434, SaaS KPIs You Should Focus on From Day 1. Oh, this is a comment relating to when you sent out, I believe it was this scholarship applications, and you forgot the email. You forgot to put the email in the form and you had something like 70 of them or something that you had to go through. Anna says, “Lol! I totally noticed that you didn’t have an email field in the MicroConf application. I just figured that we were living in a post-email world and you’d DM everyone on Twitter. That did make me feel like I was way too old though and that MicroConf was going to be too hip for me, so I’m glad to hear that it was an accident!” We’re not in a post-email world. […] of getting there, so I thought that was funny.
Mike: It’s funny because I was still able to track down pretty much everybody on there. I don’t think there was anyone I couldn’t trackdown or wasn’t able to eventually get an email address for. Yeah, I’m shocked. I had enough information to be able to track people down, but it was still time consuming. It’s not a post-email world, but I guess given enough time, you could make it a post-email world but you’d have to have enough information too.
Rob: Right. Cool. Let’s dive in. Today as I said, the title’s a bit of a joke, Why Absolute Thinking is Always Bad. The alternate title is Why Absolute Thinking Can be Toxic to you, your business, and other people who are kind of listening to you. I think, if you’re wondering what absolute thinking is, it’s that very black and white view of things. Examples of that are, if you see someone say, “This always works. You should always do this.” Always is the key. “This never works. You should never do this.” Often times, it’s like, “I should do this.” Maybe that’s an absolute feeling but it’s kind of like an assumption or a burden you’re putting on yourself.
The reason I want to talk about this today, because we were talking about it before recording, and you were like, “What’s the point of pointing out that something as bad?” It’s because I believe that successful founders, and frankly, successful humans, that I like to have conversations with, stay away from absolute thinking and see the nuance in complex things instead of trying to break them down to black or white or zero to ones. I believe the entire startup community itself will be better off if there’s just less of this. If there are fewer of us that believe that there are these absolute, “You should always never do this.” We have examples later on, on this episode of actual examples that I’ve heard over the years, frankly.
I believe it’s a fallacy. It’s thinking that it isn’t true. It’s more than semantics. It’s not digging in. When someone says, “Always,” and they mean 95% of the time, that’s a very different thing. There are exceptions to most of these things. There are times when absolute thinking is useful with ethics and in genocide. There are things when, “Yes, this is always bad.” That’s why the title is a joke. I think we’re going to give some specific examples of marketing approaches and that kind of stuff that I think will lend a little more detail to what we’re thinking about here.
Mike: This almost goes back a little bit to what I kind of opened up MicroConf with this year which is the fact that the matter is, when we go to MicroConf, and we’re talking to all these other founders, that we’re essentially raising the bar for every single person there just because we’re learning from each other. I definitely think this is one of those things where we can learn a lot from it.
I do want to dig a little bit to the piece that you said on, if somebody says, “Always do this.” What they really mean is 95% of the time. How do you differentiate between what they meant to say versus what they actually said? A lot of time, I see a lot of these stuff come up on Twitter, for example, or in places where there’s not a lot of room to expound upon what the person actually meant. Then, there will be people who’ll jumpin in the comments and just rip them apart and say, “That’s not always true.” Or, “Well, actually this and that” How do you differentiate between that? Is it just you have to rely on your own personal knowledge of that? Because if you don’t know anything about it, how would you know it’s 95% versus 50%?
Rob: Yeah. That’s the problem. That’s why words matter. If you say ‘almost’ without exception, or ‘in almost all cases’, or ‘nine times out of ten’, that tends to be how we talk in the podcast. That tends to be how Jason Fried talks now. He didn’t used to be. He used to be more absolute but something I like about his Q & A this year at MicroConf is that he wasn’t nearly as black and white on things as I thinks he was 10 years ago. When I hear Jason Cohen talk, I don’t know that I’ve heard him say ‘always’ or ‘never’. It’s very much same way we think and talk about things where it’s like, “Yeah, in some cases, this and that but as a general rule,” blah blah blah. “As a rule of thumb, I will always…” We already talked about that. You will probably never write another app that relies on Google but you wouldn’t say never do that. You’re not going to tell everyone else they shouldn’t do that because there are pros and cons to it.
That’s where I think it is, the words that matter, language does matter. I think, that’s something we’ve seen over the past 20 years of a lot of language being adopted and people not saying, “Hey, you guys,” anymore when it’s a group of men and women because words matter. That’s what I’m saying here. I think saying ‘always’ and ‘never’ especially if you all caps it on Twitter to make a point, I think that’s detrimental to the folks who don’t know the difference like you’re saying. I also think it can veer the conversation off in a direction that just doesn’t matter. Let’s not debate if it’s the last 5% or the last 1% or whatever. It’s just being careful about how you say things and how you think about things. I think that’s the important part.
Mike: Yeah. I agree with you. The conversation can easily go off into the weeds just because somebody said always and what they really meant was 95% of the time. I think that in most cases, a simple correction but Twitter is also not known for making it easy to go back and edit those things, and provide a correction in a way that makes it visible to everyone who’s going to see it. It just extends the conversation. Rather than continue going off into the weeds, let’s circle us back a little and talk a little bit about the nuances of that.
Rob: What I would say is just be more careful with your first post. Be very thoughtful when you’re going to write and publish a blogpost or say that tweet or whatever. I, very intentionally, try to avoid absolute language and I have for years. Again, the folks who I admire, the folks who I see who are successful, in general, they always do that. No, they don’t always do that but in general, that’s the behavior I see as well.
Coming back to nuance, most of the topics that we’re going to talk about is in the startup space, in the bootstrap space, or in the whole startup ecosystem world of tens and thousands, hundred of thousands of companies, there’s nuance to these things. It tends to be much more a spectrum or a continuum of 1-100 maybe instead of this 0-1 binary thinking.
I remember getting in a conversation, I believe it was on Hacker News, I don’t even remember. But someone posted, “You should never outsource the development of your SaaS product. Never. Never.” I mean, that’s okay advice. It was like, “If you don’t build it, you have zero chance of it working.” That’s just patently not true. It’s not even a 5% exception. I would say that there’s a bunch of stuff that can add up from 1-100. If you’re going to be a solo SaaS founder, let’s say, if you have any of these skills, it will mean you have a higher chance of success. One of those is the development […] is the ability to build your own product. The other one is the ability to manage and hire people. Another one is the ability to market. Another one is the ability to think about the product and build good UX. On and on and on.
If I recall, in that Hacker News article, I made a list of 10 things. I said, “Just weight each of them as a 10 if you have them or 9.9 because you never get to 100.” If you have all 10 of those then you’re at 99 out of 100, you just have the huge chance of success. But most of us don’t, most of us none of us have, all 10 of the things that I threw out. That was a way of thinking about it where it’s like if I were to add it for myself, I have 70 out of 100. People I really respect have 80 out of 100 or whatever.
They have a better chance than others but that’s all it is, it’s a chance. You should always never do these things. It’s more like, “Let’s look at the factors and the list of pros and cons.” I realized, looking at pros and cons is complicated. It takes an advanced frontal lobe developed. That’s why kids often have a hard time doing this. It can be hard and it hurts your brain to think about it. I think that’s important because higher level thinking involves this nuance.
Mike: I wonder if that nuance also comes with time and experience too. The couple of things you had mentioned about these examples of somebody going on social media saying, “She should never outsource those core things.”
I remember there was a couple of articles from Joel Spolsky—I’m looking at them now. One of them is titled, Things You Should Never Do, Part 1. This is from April 6, 2000. He’s talking about basically rewriting an entire application from scratch. It kind of goes into the history of Netscape. The next one is from October 14th of 2001 which is, In Defense of Not-Invented-Here Syndrome. He says, “The best advice I can offer: If it’s a core business function — do it yourself, no matter what.” Both of those things are incredibly absolute. He’s essentially saying, “Never ever do these things.”
I think if you start reading beyond the statements and looking into the context of what he’s providing and all the things around it, you’ll see the rationale. You’ll see the reason why he’s saying that. I think that that context is important for the statement, not necessarily just the statement itself. You’ve got to stake that context into account along with the statement. Staking the statement alone is essentially taking it out of that context. It’s very easy to manipulate it and twist it to say something that he didn’t quite mean. He said it, he didn’t mean that though.
Rob: Yeah. That’s a good point. I bet if you ask Joel today, in 19 years later, I bet he would see a little more nuance in it, I would guess. I think that comes with experience. I think that comes with knowledge and wisdom, just doing more things, and maybe he wouldn’t. Mike, I bet you and I could go to our—you’re in my blogs or essays—right now and find some evidence of some absolute thinking. I bet it’s 10 years ago. I bet it was when I thought I knew everything. I hear my kids, or I hear kids in general, say these black and white things like, “I never get to do this.” Actually, you did that last week. It’s a way of them kind of being dramatic or trying to call attention or showing how really bad it is for them when it’s kind of not, when they’re exaggerating for effect. That kind of leads into this thing about frontal lobe development.
Sherry and I had this conversation where, if you watch a lot of kids movies, they’re very black and white, there’s a good person and a bad person. A protagonist and an antagonist. As you develop and you watch shows like Game of Thrones or Breaking Bad, there’s this really strong nuance. Obviously, I haven’t watched Game of Thrones or Breaking Bad with my 13-year-old, but I have watched shows that have more nuance like in the MCU, in Black Panther, the villain in the first movie, he wasn’t bad. Thanos is another one. He does want to kill half of the people but he has a pretty good reason for it and he believes it. He’s not just doing things to be evil, he actually believe he’s doing good when he does it. It takes development to learn that.
Sherry has talked about how the frontal lobe is your advanced thinking and it doesn’t fully develop until early 20s. I think women are few years ahead of men with that. But this is one of the reasons why you thought you knew everything when you were 16 and why I thought I knew everything when I was 18 or when I was in high school. As you get older, if you get experience and you get knowledge outside of your little box, you don’t live in your little box but you travel and you meet other people with your thoughts. You’re allowed to be shaped. A lot of these happens in college. When you’re 18, you know everything. When you’re 28, you’ll realize you know less. When you’re 38, you’ll realize you know even less and so on.
Mike: Eventually, you get to be our age and you know nothing.
Rob: You know nothing.
Mike: You know nothing Rob Walling.
Rob: Yes. You know how little you know. That’s part of it.
Mike: I don’t want to say, but the way that this comes across is age is just in terms of people being younger. As you become more mature, you get older. You just naturally develop this. I think it’s a datapoint for you look in the mirror and say, “Is this type of thinking actually helpful for me or for other people?” The answer in general, I think, is no. But you have to be aware of it first. You just can’t just magically, you hit a certain age then suddenly you are aware of this. It’s something that develops over time through repeated experience and exposure. I think that’s what we’re trying to do here is, just expose people to the idea that those absolutes without the contexts are probably detrimental not just to you but to other people as well.
Rob: To your audience, that’s really the point. That’s right. It’s detrimental to you and the folks who you’re speaking to who don’t know better.
Mike: Right.
Rob: It’s not that. That’s something you pointed out over there. I am glad you called that out. My intent is not to say, “Oh, as you get older, you get out of absolute thinking.” That was one example of frontal lobe development. But I’ve known folks who were in their late teens who I felt like they had the life experience. They were 18 and they were as not absolute as I was when I was 38. You know what I mean, they were way ahead.
It’s not just some absolute scale of, “As you get older, you get better with this.” I do think it’s probably quite a bit of your upbringing. I was brought up for a black and white. It took me years to break free of that. I think if you’re brought up with more nuance and with parents who really talk things through in a non-absolute way. I think you’re ahead of the game. I think when you have life experience, you’ve traveled outside your home country, and you’ve met a lot of people with different viewpoints, and evaluated those, I think you’re ahead of the game. Again, I’ve know kids, 17, 18, 20, or whatever, who are way ahead of me and other folks that we might encounter on a day-to-day basis.
I think, piggybacking on the experience thing—I’m totally guilty of this, I was guilty of this—when I had my first success back in 2005, 2007, I was like, “Boom! I know it.” The first time entrepreneur typically thinks they have it all figured out. I did too. A few years later, you tend to realize that you didn’t. In research circles, they call it the N-of-1. N is how many subjects you have in an experiment or in a research study. An N of 10,000, meaning you’ve talked to 10,000 people or you researched them or whatever, that gets to be a pretty good number. It’s statistically significant. Depending on how everything varies, an N of 500 can be totally valid. An N-of-1 is a little bit of a joke. It’s basically an anecdote.
I say this because Sherry was a researcher for a while. She did a residency at Yale. There were a lot of researchers there and that was one of their jokes. It was, “Your anecdote is not my data.” Or the singular form of data is not anecdote.
Mike: That’s almost like when I see arguments of people, “Well, that didn’t happened to me,” and they’re arguing against data that they disagree with because of what their experience was. It doesn’t invalidate their experience but they feel like it does. But the data itself indicates something completely different. I can think of any number of things where that stuff has come up. One example that comes up specifically is Patrick Campbell of MicroConf had recently said and provided some data that said, “Companies that are remote first, I believe, are less successful or make less money.”
Rob: Grow slower.
Mike: Oh, that’s what it was. They grow slower than companies that are not which kind of flies in the face of a lot of kind of what we see. It’s not necessarily directly confrontational to it, but a lot of us don’t necessarily have the context of other companies either. I think that’s one of those dangerous things where you have a certain point of view and you believe it is correct but the data doesn’t necessarily prove or support that. You think that you’re right but you don’t necessarily have any data to prove that you’re right or wrong but you have that core belief. Because you’re growing a remote company, you don’t want to hear that growing a remote company is going to be slower or is going to slow down your growth.
Rob: Yeah. That’s a good example of that. Examples of it I talked about earlier, we looked at some specific things that I think I’ve heard people say over the past, let’s say 15 years of doing this. Common example is, they try a marketing approach, it doesn’t work and then saying, “This never works for anyone ever.” Or, “This can’t work with SaaS.” Or, “This can’t work with B2C.” It’s generalizing a single experience. Even if you try something two to three times, it doesn’t work, it’s not accurate to say it never works.
Paid acquisition is one that a lot of people try and give up on where we see a similar niche or the same vertical making it work. I think content marketing is another one or SEO. You can go on and on with success stories and failures stories. […] to say, “It never or always works.” It’s not helpful to say that.
I think another one I used to hear is never buy an app. You should build all your apps from scratch because the code will be too crappy, there’ll be too much risk, and too many problems. All those things are true that there is problems, and risks, and the code is crappy and all that stuff. But the absolute of always/never isn’t. There are just pros and cons and you have to look at them.
The, “Never hire contractors. Only hire W2 employees.” I think venture capital tends to lean towards that. I’m talking about building up a whole team. Let’s say I’m going to have a team of 20. Some folks might want to be a solopreneur and have 10 contractors or 20 contractors, for that matter. That can work. We see folks doing product-type of services and have it work but it’s a different model. There’s context to it. It’s like a venture capitalist says, “Your employees have to be loyal and your people are what make this company. If you’re going to build it into a $100 million venture-funded business then this is the model we see working and we’re pattern matching, and so they say do that. Similar to venture capitalists tend to want you to have an office versus having a remote team in general. That’s the pattern that they see working. It’s not an always/never thing.
Mike: I think that what’s make it difficult when you don’t necessarily have a lot of familiarity with that topic or that particular subject because you don’t have enough of your own context, so you’re relying on the words of somebody else. Kind of back to what you said, and we’ve reiterated it a couple of times, the words themselves matter. If you’re going to go down the road of trying to give advice or talk about a particular topic in whatever realm you’re doing it, it’s beneficial to most people to provide data points, provide context about what percentages of the time this is accurate. It’s not to say that you’re always going to be accurate.
I think I’ve just answered an email a couple of days ago from somebody asking about Bluetick and how it would integrate in with exchange server. I said, “I don’t know your environment, but the majority of the time,” I forget what percentage I said. It was like 80% or 90%. I was like, “80% or 90% of the time when I’ve see this, this is what it looks like. There are other cases when it looks like this or that. […] of my suspicions based on what you have said but I can’t be 100% accurate.” I distinctly remember saying, “I can’t be 100% accurate because I don’t know.” There’s always those little details that you’re not going to know.
I think it’s important to make sure that you quantify some of those details, so people would know where the dark areas are, so that they’d know where there might be more information or context that they may need to have to completely understand what it is you’re trying to say in the general sense as opposed to making things absolute.
Rob: I like to think of it like this. First, learn the rules. Then, master the rules. Then, learn when and how you should break the rules. When I say rules, I actually mean rules of thumb. A rule makes it sound like it’s an absolute, but rules of thumb that are generally accepted whether it’s common knowledge or whether you ask an expert and they have their own mental model of it. We pointed out Saas KPIs—that was a pretty popular episode a while back—those are just rule of thumbs that we’ve seen in over hundreds and hundreds of businesses.
First, learn those and then learn when they shouldn’t work. If you stop just learning the rules and then deciding you have all these rules and they’re always in ‘nevers’, you’ve stopped before mastery. It’s the same thing of like becoming a black belt in martial arts. Blackbelt is once you’ve learned the basics, then you start mastering it. Then, you become a 2nd, 3rd, 4th level. Black belt, it’s not the end, it’s really the beginning of knowing all the “rules of thumb” or all the tactics and techniques. From there, you then build on that.
Same thing with writing. You’ll see prolific successful writers. Whether it’s a Hemingway or a Stephen King or anyone in the middle, at some point they learn some rules. Then they master them. Then they learn how to break them. They did stuff differently and that’s what makes them great.
Picasso is another one. There’s a Picasso museum. I don’t remember if it’s the one in Barcelona or there’s one in Antibes in France where it shows him in his early years. He just sits and paint for a decade. He paints all the stuff that everyone else is doing. He starts of not good then he gets better and better and better. Eventually, he’s a really good painter. But he’s just one of many. He’s learned the rules and he’s master the rules. Then he started breaking the rules and everyone is like, “What the hell is this guy doing with these crazy paintings?” He invented cubism. That was mastery. He didn’t sit there and say, “A painting should always have this form and that form. This type of shape and that type of shape. He started trying to break those rules and seeing what happened. That’s how I feel about this––the absolute. These rules are helpful for giving us guardrails when you’re early on but at a certain point, you then learn. There’s nuance and pros and cons to them.
Mike: I do wonder whether you get to that certain point and how are you judged afterwards. If you’re trying to break those “rules”, is it because you’re trying to experiment to figure out something new and something that is completely and fundamentally different from everything else? Or you’re just a nutcase? But the results of that is kind of how you’re judged afterwards. He’d done that and created cubism. Nobody liked it or thought everything of it. We would not have ever heard about it right now.
I’m not saying that that’s bad and you should experiment. I’m just pointing out that, I think that is a natural evolution of what that process looks like. It may not turn into anything but that doesn’t mean you should experiment with it.
Rob: Right. That’s the thing. I think the bottomline is it’s important to form an opinion. It’s important that we’ll be able to discuss our opinions, be opened to being convinced otherwise by smart people who have different experiences, seeing the nuance and things. That’s the bottomline. Again, I come back to someone like the folks who I respect and who I see who are a, successful, and also, have good relationships with fellow humans whether it’s a spouse, or children, they have good family life, they have friends. They’re just people I want to be more like. Jason Cohen, Hiten Shah, we have dozens and dozens of folks that we know that do this. They are the folks who I see embodying this thinking, who learned the rules, that mastered the rules, and then learned when and where to break them. It’s very, very rare you’ll hear any of them say that, “It’s this hard and fast always/never.”
I really like Jason Cohen’s recent post on smartbear.com, it’s called Kung-fu. It was all about his rules; his rules of thumb. He said, “Look, everyone’s different. Your mileage may vary. But these are things that I’ve learned.” There were things like, it wasn’t, “Don’t do freemium.” It was, “I don’t like freemium. I’m not going to use it and here’s why.” I think that is super important to kind of couch something like that. It really comes back to flexibility and nuance.
Even a growth mindset versus a fixed mindset. I’ve talked about that book Mindset by Carol Dweck. Growth mindset believes you can and should change overtime. Even your opinions and some of your beliefs can be malleable. That’s helpful and leads to success in a lot of things.
Mike: I think overarching point here is just to educate yourself. Not just about the things you’re working on but about how other businesses in general work. Because I think it gives you more of a mental model or a framework to work from and be able to be a little bit more objective about the things you’re looking at. It seems like it would be easier in some ways to be more ignorant and just say, “I know what I’m doing. I’m going to do things in this particular way because I know that it is going to work.”
I think being able to second guess yourself and being able to be a little bit more objective about the decisions that you make, or that other people are making, the advice you’re receiving from people, is extremely beneficial just because it gives you enough mental model to work from something where you’re not sure. You’ve got these dark spots and you’re aware of those dark spots. You know that there’s places where there’s some—I don’t want to call it risk—but some percentages that could go either way. At least knowing where those places are is important.
Rob: Yeah. When I’m thinking about a decision or something like this where I might have an absolute in my head, I often will couch it as like, “Well, I’m 51/49 on this.” Or I’ll say, “I’m 95/5 on this.” I rarely go higher than 95. There tends to be the exception or the doubt. It’s not just so clear cut.
Before you take us out, Mike, there’s a few absolutes that I want to throw out that as you listen to them, each of them has totally valid exceptions even though they feel like, “Wow, maybe it should be true.” I challenge the listener to think about the complete valid sections to each of these things.
Always write unit test when coding. Always grandfather on price increases. Never trust Google or Facebook. Never build on someone else’s platform and have your business totally reliant on it. Never go B2C. Never raise funding. There are more we could throw out.
In general, are those things true? Yeah, I would say so. Yeah, I think those are good rules of thumb. Are there totally valid times to break them? Indeed, sir. Absolute thinking, while it’s not always bad, we would conjecture that, I think all of us, you and I included, I think we can all get better at.
Mike: You would say that it’s not always bad but it’s not always good?
Rob: Not always good. Let’s raise the bar. Let’s raise the bar of the conversation. I think that’s the point.
Mike: With that, we’ll wrap things up. If you have a question for us, you can call it in to our voicemail number of 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for full transcripts of each episode. Thanks for listening. We’ll see you next time.
Episode 444 | Our Biggest Regrets, Feelings of Isolation, Impact of Management Tasks on Deep Work and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions on topics including what are their biggest regrets, how to deal with the loneliness of building a startup, and task management.
Items mentioned in this episode:
Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about our biggest regrets, feelings of isolation, the impact of management task on deep work, and more listener questions. This is Startups for the Rest of Us Episode 444.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve build your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m definitely not sick today.
Mike: And we are here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, definitely not sick today?
Rob: As bad as this sounds and as much as I hope not to be a pain in our listener’s ears, I actually feel better today than I did yesterday and the day before. You know how sometimes the voice stuff lags what actually feeling bad?
Mike: Yeah.
Rob: That’s how it is now. I’m not 100% for sure but definitely able to record a podcast. I just don’t know if my voice is going to hold, so at a certain point I may just drop off and be like, “I don’t know, Mike. You answer the questions.”
Mike: I’m just going to mute you and I’ll replace you with a text-to-speech converter or something like that.
Rob: Yes, that would be great. But the show must go on, am I right, Mike?
Mike: I suppose it does.
Rob: The show must go on. For me this week, I’m excited MicroConf Europe tickets are on sale. It’s in lovely Dubrovnik, Croatia again at that amazing hotel, where we’re amassing an ocean view, second week October. microconfeurope.com has the full details. Although I just look at it and the speakers are last year’s speakers. We’ll have to get that corrected. We haven’t selected any speakers yet, but know that it’ll be a good show.
Mike: I’m definitely looking forward to going back there although I do remember thinking to myself that because the hotel was built into a cliff right against the ocean, my engineering days came back to me as like I wonder what would happen or what it would take for the whole thing to fall into the ocean.
Rob: I’m hoping that they’ve thought of that. Way to go, Mike, five people just decided not to come because of what you said. I think they’ve thought of that and as far as I know they don’t have earthquakes there. You would never build something like that in California or if you did, you’d really have a lot of supports and such seismic stuff.
Mike: For whatever reason, my brain just goes to those types of things, whether it’s a plane or a giant bridge or something like that. I just think I remember one time, my wife and I were driving back from Massachusetts to New York because that’s where my family is, and there’s this bridge that goes over the Hudson where we stopped on the bridge because traffic was just so bad. We were at a complete standstill and the bridge was popping up and down. Not a lot but it was like four, five, six inches, something like that but you could feel it. The entire car was just bouncing up and down a little bit. All I could think of is that video from grade school or from high school where they show you this bridge that basically just rips itself apart in California.
Rob: It’s in Washington.
Mike: Was it Washington?
Rob: Yeah, in Seattle or that area.
Mike: Oh yes. The Seattle Sound, I think. So that just came to mind. We were out of reason like these giant structures like that is all I can think of sometimes.
Rob: Yeah, I find this as software engineers. Oftentimes, you’re trying to think of everything that could go wrong and when you transfer that into life, sometimes it’s not such an adaptive quality. Sherry will suggest things, “Hey, let’s go visit Mike.” “Here’s six things that could go wrong with that. Again, that’s actually not helpful. How about instead of that, you go on and you select an Airbnb and look-up for the tickets?”
What else? You have a webinar last week, right?
Mike: Yeah, I had a webinar. It was a couple of days ago and I went a little bit longer than I thought I would. I thought it was coming around 40 minutes and it ended up coming around 50–55 just because I went into more depth on a couple of things than I had probably originally expected to. But it was pretty good.
I think there were 46 or 48 people who registered for it. I got their contact information and the list that I got also included their company names, their job titles, where they’re located, the size of the companies, a lot of interesting things there. So, definitely adding those people into my mailing list and working from there.
It was fun. I’ll definitely do it again. It’s just a question of whether or not they would have me and whether it’s applicable to the audience still.
Rob: That makes sense. Did you get any positive feedback or did you get much feedback?
Mike: Very little feedback. There is one person who submitted feedback out of the people who attended. I also got information about who attended and who didn’t. So, there’s emails that go out to them after where it sends them a link to the video. I’ve got a copy of the video as well. It’s typical webinar stuff.
Rob: We did a bunch of webinars in the early days of Drip. Some of them we found worked really well and others were complete bust and waste of time. You don’t know for another week, another month, depending on who sticks around and listens and who basically stops reading your emails or whatever other way you contact them. Curious to hear a fit, figure if it’s worth your time, and maybe 2–3 weeks I think you have a decent sense of that.
Mike: Definitely. The other thing that I’ve been looking at lately is that I’ve been testing out a new email client called Mailbird. You and I talked about this very briefly before the podcast and we decided to talk about it on the podcast. I find that most of the time I look at my email through Google Chrome and I have most of my different emails from different domains forwarded in there so that I have the one email client.
I was looking at Mailbird just because it has a unified mailbox where you can see and view all of your emails in one place regardless of what IMAP servers they’re coming from and what domains they’re coming from, et cetera, so I can see everything there. I’m not going to have to forward things over if I don’t want to but I could. I could continue doing that, but the one problem I’ve had with that is that the mail servers tend to rewrite the headers. If it’s forwarded in email, then the SPF records are no longer valid because it’s basically being rewritten. It no longer matches the original, which isn’t a big deal because I’m the one receiving them. But it still screws up the reporting staff that they get on a weekly basis about my sent emails. But you said you were assessing out something else as well. What’s that and why?
Rob: Mailbird I can’t use because I’m on a Mac. It’s Windows only. I was going to check it out, I was on the site. I straight-up Google best Mac Gmail client because I like Gmail, I like the paradigm of it, and it’s so slow in my Chrome browser now. I will go to type an email, you know that I know all the keyboard shortcuts, I’m like, “Label this as that, then type five words,” and it’s playing catch up with me. It’s getting worse and worse.
I know everyone’s thinking Superhuman, “Go use Superhuman.” Yes, I will check them out at some point, but I really wanted to consider going back to a desktop client, both for the speed and just the native feel. I found an app called Mailplane and it basically mimics the Gmail interface in a desktop wrapper in a sense. There’s also a calendar you can flip back and forth.
At first I really struggled with the fact that it wasn’t just a tab in a browser, but now I’m starting to like it. I have it on a completely separate monitor than my browser and when I click a link it opens in a browser on the other side instead of opening it in a new tab and throwing me out Gmail for not holding Command-Down and opening a new tab. I started liking the workflow. I like that all the keyboard shortcuts as the same, I label things constantly, I archive things constantly, I delete things, and I snooze or boomerang them. Those are the four most important things I do. Of course I compose and send, but those four things have to be super fast, they have to be keyboard shortcuts, and I do that both on mobile and on my desktop in essence.
The one place where it falls down is it doesn’t have the snooze keyboard shortcut, which is B, and I can’t install Boomerang on it which also has the B keyboard shortcut. I may bail on it, go back to the drawing board, and try out something like Airmail, or I know Spark’s good, or take a look at Superhuman. I struggle with wanting to do Superhuman. I think some of the hype drives me away from it and also $30 a month, obviously, I can’t afford that. I struggle to pay that or something. It’s so stupid because I’m in my inbox constantly and if it saves me any amount of time, it will pay for itself in a day.
Mike: I think it’s probably the price anchoring you have to Gmail, which has been free for 15 years now and you’re like, I don’t want to pay $30 a month for something like that.
Rob: Yeah and it’s also I know that I have to relearn or I’m expecting to relearn a bunch of keyboard shortcuts. While I can totally do that when I switched from Windows to Mac, that was a complete trucking of my productivity at the time. But I got over. It took me two, three, four weeks, and I was good.
I’m sure that if I switch to Superhuman, it will be all good. But I also want to look the product mature a little bit and see what direction it heads because every time I do this switch, I’m always wary of like, “Here they go. They got acquired and now they shut them down,” which has happened with three of the mobile email clients I’ve used, or they themselves start getting slow over time, or things go wrong with the business model and they start showing so much ads, whatever.
I know they’re charging $30 a month, so that should mean that, (a) they shouldn’t get shut down or acquired, and (b) they’re not going to do ads. All of the objections I’ve actually brought up are probably not going to happen but I often don’t trust these Silicon Valley startups in these early days because you just don’t know what’s going to happen and I don’t want my whole world to be invested in this single app that is quite disruptive to leave.
Mike: Two things here. One is I was looking at the Mailplane app website and there is something there that says flat-out that they had support Boomerang as a third-party extension, so there might be a way to basically add that into the app itself, maybe as a plugin or an extension or something like that. The other thing is that, it’s interesting that you and I are probably on the same page there where just because it’s a Silicon Valley startup and they’ve got funding, we actually put less emphasis on them being a viable product, versus the bootstrap companies where the largest company say, “Hey, I’m not going to trust you because where’s your funding? You might go out of business tomorrow,” versus I almost feel the Silicon Valley startups.
Actually, it’s the opposite. That’s just the way I view it. It seems like you feel the same way about this and I think it’s partially a function of whether or not they’re charging for their service or it’s a, “Let’s try and get as many users as we can, and try to figure out a business model to make money later.”
Rob: That’s it and since Superhuman are charging, it does remove some of those doubts, but still I’m pretty skeptical on one side. I’m like, “Yeah, you’re going to make me switch over and learn all the stuff, it’s going to make me faster, and then in six months, you’re going to do whatever. You’re going to pull a medium.” Again, anything I can think of is unlikely to happen because I was gonna say, “You’re going to pull a medium and start charging,” but they are already charging.
It just makes me skeptical that they don’t have my best interest at heart and what they have is hyper growth at heart, and they’re going to be willing to sacrifice whether it’s my user experience or whatever in order to further their business. I’m just not convinced. I’m not trying to pick on them. Just in general that’s how I view these startups. I think I will move there, eventually. That’s probably where I’ll wind up. But the fact that you just told me Boomerang is available at Mailplane, I don’t know if I have a reason to move anymore because I just click down extensions, I installed it, and it looks like it’s working. That does change the game for me. Thanks, Mike. I appreciate that.
Mike: There’s a bunch of other extensions there, too. I know you use them, so.
Rob: Yeah, but Boomerang was at the top when I went to extensions. It was literally the first on the list and I just downloaded it while you are talking, I configured it, and it’s looks like I’m all good now. It will be interesting. I like to question my assumptions and one of my assumptions is that I really want to stick with the interface. I’ve been using Gmail since 2006. Is that when it came out? I mean, I was really early on.
Mike: It came out before then because Bluetick I can see where my earliest emails were sent and received and I didn’t get into Gmail for at least a year or two. I think it came out in 2003 but my earliest emails were from 2005.
Rob: And I’m somewhere in there, 2005–2006. It’s not just I’m used to it, but the keyboard shortcuts and the actions all makes sense, and I’m very fast. It’s like using them or using an “old” editor that people move on from, but when you’re really good you can actually be in the command-line the whole time. I feel like that’s how I sync with Gmail.
Obviously, there’s an Outlook mail client or there’s a bunch of good desktop Mac clients for Gmail, but enough of the paradigms or trying to be different, and it’s not just keyboard trope. It’s just the whole interface. When you’re looking in different places for different things, I’m not sure I want to give my productivity gap much of a hit over the course of weeks or months and I’m not just sure it’s worth it to relearn a new tool.
Mike: That’s actually what attracts me to Mailbird was because all of the keyboard shortcuts were the same as Gmail. It’s just like, “Oh, I can just hit the V or…” I honestly don’t remember what the shortcuts are. I just do them at this point, but adding a label to something, or moving it, or throwing it to the trash, those things are just keyboard shortcuts that I just use. I think one of them is Control-Pound or Shift-Pound or something like that, and there’s one, it’s a V and add a label to it and move, and all that stuff. It’s just there and it’s very intuitive, very much alike. Not intuitive because shortcuts are not intuitive, but once you learn them, they just become second nature. For the most part, the ones that I use are there and it’s helpful.
The only thing I don’t like is that in Gmail I have have stars in emails and then I have one’s that are marked important and then ones that basically everything else below that. I have three different sections and it doesn’t have that. It only has two. So, it’s like, “Oh, well.” I mean, I’ll live. It’s not like I’m going to stop using it because of that. It was cheap, so.
Rob: Yeah and it’s just keyboard shortcuts. I’m sure Superhuman probably duplicated the Gmail ones, but there’s other things. A little known fact, actually, Mike. Before I started Drip, I was actually pretty heavily considering building a mobile email client that was all the things. It was fast and there’s some add-on. I remember you and I talked about it. I was like,“Yeah, this is on my list,” and you’re like, “Boy, that’s kind of a Silicon Valley play.” You’re like, “How are you going to make money at that?” and I was like, “Yeah, that’s what I’m struggling with because it’s not a normal SaaS model.”
I thought for a bit of why I should do basically a SaaS email client and again, make it fast and make it do all the things, build on top of Gmail in a way that they’re not innovating on, and I thought to myself no one would pay for that. They wouldn’t pay a price. I don’t want to charge $5 a month. What’s funny is, I think that was my bias because I don’t want to pay for an email client, but also, it was 2012 and I don’t think Gmail had the problems that it has today with the slowness and all that. It didn’t have that problem in 2012.
I think timing is also a factor. It’s not just that I have the idea, but you also need to be there at the right time and you need to execute on it. The Superhuman guys has done a great job, as we’ve heard years of customer development in essence to get to where they are today, and that was obviously a ton of work to get there. It’s not just, “Oh, you had the same idea and the Superhuman guys did it.” They did a really good job of it, executed to perfection.
Mike: That’s actually a very odd coincidence that you mentioned those specific things about the speed because I think it was about two years before that that they had acquired the business that your co-founder in TinySeed, Einar has. He was building and it was to make mobile search very fast. Then fast forward a couple of years and the search is no longer dog slow.
Rob: Yeah, it’s a trip. You wonder if Gmail, in the background, are they’re innovating and they’re going to basically release something that’s going to makes them superfast and that implement some of the things Superhuman does. That’s the other thing. Since it’s on top of G Suite or Gmail, they have platform risk right now. As an idea like Gmail or Google could feasibly shut them down. It would be a bad move or an anti-competitive move, but we’ve seen this happen with Twitter API restrictions and all that stuff. Facebook do that, wouldn’t put a pass Google and it could be a pretty big issue for Superhuman moving forward if they become a multi-million dollar business, deck a million dollar business. Who’s to say Gmail won’t either just implement the features and it’s still free or screw around with API access and that kind of stuff?
Mike: It’s funny you mentioned that because I’ve actually been going through a bunch of approval processes with Google. I don’t know if I talked about this before, but because I’m accessing customer information through OAuth, I had to go through this approval process and they say…
Rob: You did talk about it. A couple of episodes ago you mentioned it’s pretty cumbersome.
Mike: And I’m still going through that. I’ve sent them a bunch more information and I’m just waiting now to see if anything else that they need and I haven’t heard anything back for at least a week or two. That’s certainly something that could happen, but it’s more of a result of me just accessing things through IMAP. I don’t know how they actually access that data but if it’s through IMAP, then there’s got to be a reasonable way to get access to it because there’s no way I could see that Google could say, “Look, nobody can access through IMAP anymore. You have to use OAuth tokens and et cetera. I suppose I could end-of-life that access down the road but they’re going to have to wait while people, their email clients switch over and add that type of support.
Rob: And that concludes this episode of Gmail Clients for the Rest of Us. That was a longer tangent that I thought we would go on, but I think it’s still interesting stuff. We touched on a couple of relevant points of platform risk, about finding the right client, because if you’re in it so many hours of the day, it’s important stuff, and then switching cost and that kind of stuff.
Mike: With all that said, I think we’ll switch over and actually start doing some of these listener questions that we get them in before the end of this episode. The first one comes from Steven Moon. It came into Twitter and he said, “With so many years of experience behind you, both in the startup space, what would you say were some of your biggest regrets?”
Rob: This is a tough one. I gave it some thought in advance of the episode because it’s not something I think about that much. I tend to make pretty calculated decisions, I tend take longer to makes decisions than some people, and I try to make it with all the information I have at the time. If I make a decision with that and it turns out to have a negative outcome, I don’t consider it a regret because I did what I thought was best at the time. I don’t make many impulsive decisions. Those are the decisions that I would tend to regret, are things that I didn’t take the time to think it through or made an emotional decision instead of trying to look at the data and making the best decision.
With that said, I think that something that I regret early on—this is 2005, maybe 2010—is that I was too timid. I was scared of making people mad. I was too much of a developer to do marketing. That transition actually happened during that time period, but in the early days, even before 2005, I didn’t want to market because I considered it some bad thing. SEO, AdWords, taking out ads. I don’t know adjusting to all that and even doing sales. It wasn’t something that I really wanted to do and I wished that I’ve gotten there sooner. Eventually, I realized, “Oh, this is valuable. A fun product provides value, reaching to people, for who it’s going to have value for, is an important thing.”
I think another thing that I regret is I thought that I could do everything myself early on. Frankly, I did everything myself for a while and then I hit the ceiling on that. Then I hired contractors and VAs, which worked to a point. I guess I don’t have regrets that I did that, but then eventually knowing that I needed a deeper network of people, has changed my world and allows me to do things a lot faster and a lot easier than just trying to go it on my own. These are lessons I’ve learned along the way and I guess my regret is I didn’t learn earlier. I think those tend to be my regrets. I have another one but how about you? You want to weigh in on something?
Mike: I think some of mine are similar to yours. Essentially, they were learning experiences and the one that definitely comes to mind is not really thinking through things before just doing them. I wouldn’t say that I was unnecessarily impulsive in many ways, but I would definitely say that I didn’t pause to look at the big picture enough.
For example, when I was in college, I did not do very well. Even going back into high school, I did very well in high school because it was high school and it was easy to make. But unfortunately, the by-product of that was I didn’t know how to learn things. I either figured it out and just did whatever needed to be done or I just said, “I’ll be able to figure this out.”
What tend to happen is I leave things to the last minute because I want to do other stuff and I wouldn’t spend the time to focus on my studies or actually really trying to understand stuff. It’s either I could do the problems or I couldn’t. I feel like I didn’t have a good understanding of how I learned when I got to college and I really struggled when I got to college because of that, because I relied on me just showing up and being in class to understand stuff. When I didn’t, I had a hard time sitting down and actually doing homework or studying because that was just not how I had wired myself.
That took a really long time to break. It took four or five years to break that habit. I fortunately did when by the time I got to grad school but it took way longer than it really should have. It was because I didn’t think about the longer term consequences of what those actions could potentially be but I didn’t necessarily know what those consequences would be, either.
Rob: Right because you’re 17. I think he was asking in terms of startups. How does that relate to your business? Your professional career? Or does it?
Mike: It does. I have to intentionally set aside time to think about the bigger picture and if I don’t, I could easily find myself just going down the rabbit hole and not thinking about, “Is this the right thing I should be doing? Is this the most important stuff for me to be spending my time on?” I can easily burn a lot of time doing stuff that actually doesn’t move the needle or isn’t very important if I’m not very cautious and conscious of that.
It’s more of being aware that that’s a flaw of mine that I have to keep in mind and being very intentional about setting aside time to come up and look at the big picture. If you look back in my day with AutoShark, that was a huge problem because I just put my head down and kept going. What I really should have done was take a few steps back and look at the bigger picture and be a little bit more objective about stuff.
Rob: That makes sense and knowing that’s your previous position, you should ask yourself that now, what it would look like to take a step back? It’s a rhetorical question but that’s the thing about knowing our strengths and weaknesses is now that I’m older, I know a lot of my weaknesses. I don’t know that I know them all but I really tune in when I start the same things that I realize, or maybe not 100% true, or just an emotional thought, or me just trying to justify what I feel like I want to do, rather than what should be done, and those are weaknesses.
Or when I am a negative self-talker. I talked before if I don’t get enough sleep, I’m super negative and I’m almost look like someone who’s depressed. I’m unmotivated for that day. I’m unmotivated and I’ll just be like, “Nothing’s going to work. This whole thing isn’t even going to work. Why are we even doing this?” I literally have that in my head and I will always say like, “Dude, this is a temporary thing. You’re just in a weird state. Go take a nap.” I’ll come back and I feel better about it, but I didn’t realize that until five or ten years ago. I think that that’s an important thing, to know yourself.
Mike: The way that I deal with it now is I do a lot of journaling and I use that to track whether or not I’m making progress on stuff or getting things done that I need to get done because I will write those things down, but again, that’s just a personal productivity hack more than anything else of make sure that I’m staying aware of those things.
I would say that the other major regret I have, I’m not sure if I label it as a regret but being under the belief or assumption that I would be youthful forever. I definitely found that as I’ve gotten older, things do not heal nearly as quickly as they used to, I need more sleep that I used to, and just a lot of stuff with my personal health that I was like, “Oh, I’m invincible. I’m twenty-something years old and nothing will ever happen to me.” Fast forward 10 or 15 years and your body starts to give out on you in certain ways and you’re like, “Huh, that sucks,” and there’s nothing you can do about it.
Rob: That makes sense. The other regret I can think of is that I didn’t take good enough care of myself while growing Drip. There’s self-care. What’s funny is it’s what my life talks about all the time. That’s what ZenFounder is, about taking care of yourself. There’s a certain point where I was just bearing the burden of a lot of stuff. I wasn’t working on the things I liked but I knew they had to get done and it’s that recipe for burnout where I’m capable of doing them but they don’t bring me joy and I didn’t want to interrupt anybody else’s day because everybody else was either selling or onboarding or writing code and that’s what’s needed to push the business forward.
If I pulled anyone else into it, this is a fallacy. You tell yourself like, “I’m just going to grind it out. The business is going fast, everything’s working. Why would I screw that up, pull people off, and move slower than these other things?” Anytime I got budget, I hired a support person or a developer or someone else to move the business forward and really should have made some different decisions there.
I didn’t take good enough care of myself, I did start to enter burnout at a certain point, and that sucks. There were a few times in my professional career and the most recent one was during Drip. I think I want to avoid it for the rest if possible, because it takes toll on you and your relationships is the problem. You can recover but if you’ve damaged relationships, it takes a while to repair those.
Mike: Moving on to our second question. This one comes from Dick Polipnick and he says, “What do you think of buying a small company that already serves your target customers and building your SaaS idea on top of it?”
Rob: He’s saying buying a small company that is not a SaaS company, right? It’s either one-time download software or it’s an info product? What do you think he’s implying here?
Mike: I think it could be either one of those. It could also be a services business of some kind? I wouldn’t say it’s as big as an agency. I think the implication here is it’s a small company that’s probably one person or maybe it’s just a book or something like that. That seems odd. I don’t think that’s it, actually.
Rob: If it’s a small consulting agency, I wouldn’t buy an agency unless I wanted to do agency work. Going from agency to product, the work is hard. Ask anyone who’s trying to do it because you have so many things going on. It’s a well-worn story. It’s possible, but it’s a slog. I would not invest money into acquiring an agency. If it’s like an ebook or a one-time downloadable software and there was an audience there that you felt like could buy a SaaS or would be interested in something that’s pretty a direct path to it, I’m not opposed to the idea of it.
The concern I have is, if you spend this money—let’s say it’s $30,000, $50,000, $100,000, it’s a chunk of change—then what if you’re wrong? What if now you have this info product that you don’t really want to run or you have this one-time download software that you don’t really want to maintain and they don’t really want the SaaS? You can’t ask them now because you don’t have access to the audience.
I’m not saying don’t do it, but I’m saying how can you prove that I bought this or disprove that hypothesis without spending the money? Can you work with the current owner to survey the audience to find out if they do want the SaaS? Or maybe you do? Maybe if it’s a one-time software and you buy it, and the SaaS doesn’t work out, you’re okay with that. One-time software is not terrible. I mean, I had done it, it was for years, and it was a great revenue stream.
So, I’m not opposed to it but I do feel like you have to answer a lot of questions. Even if you answer, I would ask, “It’s like acquiring yourself into the stair step?” which is something that I did and very few people do, but I didn’t intend to build SaaS on top of the things I acquired. Those were really just income revenue streams. So, not opposed to it, but I do have some questions that I want answered before doing it.
Mike: I think the piece that’s probably the most important is how you validate that is the right move and that those people are going to want to purchase a SaaS? If there’s already people who are purchasing the SaaS products in that particular target market that is similar to what it is that you want to build, then great. Are you buying it because of the company and what it offers? Or you buying it because you want to plug it in and you see it as a new channel that you can tap into because they’re offering something that nobody else does in this particular market?
So, thanks for the question. The next one that we have is from Daniel Fellows and he says, “Question for you. How do you deal with the loneliness of building your startup?
Rob: I think that’s the reason I started my blog back in 2005 was the loneliness of trying to do something that I didn’t know if anyone else was doing it. I didn’t know if any other single founder software startups that were raising funding. There was nobody.
I starting blogging and trying to find other people. That turned into my book, then this podcast, MicroConf, so I deal with the loneliness by having this community. Whether I have been part of building it like we have been or whether I just became a part of it later, I rely on this community as much as anyone to keep me from feeling that loneliness. That is a reason.
We did the podcast for a number of reasons, but I think part of it is to be able to talk about this stuff, both with you and with the audience, and to get questions and comments and all that stuff is helpful.
Going to MicroConf basically three times a year in essence is a big one for me and I always get a bump from there, realizing that there’s a bunch of other people doing this with us. On their own but with us. And then of course, Mastermind groups. That’s been a huge thing. I have always been a proponent of it years and years. That gives you that touch point every other week or however often your do it, to know that there are people that are in your corner.
I didn’t do this when I was growing startups because I was so focused on grinding out day to day, but finding founders, entrepreneurs locally, Sherry’s been doing a good job of that here in Minneapolis of finding local entrepreneurs and having them over for dinner once a month. We’ll just get two couples over here and have a nice dinner. Sometimes the conversation involves work and other times it doesn’t, but having that shared ethos of being a founder makes conversation super interesting and cool. How about you?
Mike: I agree with everything you said. The one other thing that I would add is finding something that is outside of your business where you can use to socialize with other people that is not work- or business-related. I think that’s something that I definitely neglected that early on in my career where it’s just I worked all the time and beyond that I didn’t do much else.
I didn’t really have a life outside of the business and I think that’s probably, I wouldn’t say a huge regret but it’s definitely something that I probably should have done a little differently if I were really thinking about it or thinking about the future. I think I’m definitely on the right track there these days, but it’s something that I would probably emphasize a lot more if I were to go back and do things over again.
I feel like having time away from your business when you’re not thinking about it and you’re not talking to people who are also running their own businesses as helpful just as a way to recharge. If you’re spending all of your time thinking about it, it starts to creep into places where it really shouldn’t, like when you try to sleep at night and you toss and turn just because you’ve got business on your mind at all times.
There are always interesting problems but it’s helpful to have something else that is completely distracting and completely irrelevant to your business that you can do that will take your mind off of it. I find a lot of times that there are problems that I’m working on where the solutions just come to me very quickly if I’m not thinking about it.
Rob: It’s a good point. It’s something I didn’t do until the last 2–3 years actually. I believe I was doing some tabletop gaming before that, but before the exit in 2016, that I really ramped it up after that. That’s something that I’ve enjoyed having as a hobby. I really neglected my hobbies for a decade plus and I don’t regret that actually and wished that I have done more hobbies because I did take that time and I got stuff done.
The reason I was able to put out as much content as I did and we’re into all the multiple things as I was thinking about them a lot. Eventually, that can take a toll on you. I think having maybe one hobby that’s not super time-consuming can be helpful. But since I didn’t do it, that’s not something I can necessarily recommend. I know it’s best practice, but I think the other stuff we’ve talked about with masterminds and such is that’s what I did, so that’s what I feel better about telling people with a straight face. Not to just do what I say now as I do, but you can do it as I do and I think just to keep from being lonely.
Mike: For our last question of the day, we’re going to take one from Graham Blake and he says, “As a single founder whose business has succeeded, I find I have less time to do the things that made it succeed. I delegated a fair bit but the management of a bunch of small areas reduces the time I have to deep dive on stuff. How do you organize things? You can still do the most valuable work while keeping the machine running smoothly. My biggest difficulties are that most of my valuable work involves deep focus, which is generally writing a video production. I have to give feedback on work that is being done for me, but if I ignore this for too long, it creates bottlenecks.”
Rob: This is a hard one. It’s the maker’s schedule versus the manager’s schedule from Paul Graham’s writings where the manager is interruptive, you’re responding, you’re trying to keep people going, and the maker is where you need deep focus. Trying to be both of those is very hard. I don’t know that there’s a great answer to it other than to hire someone to manage all the little ins and outs so that you are no longer a manager. Trying to be both is hard.
There’s really two solutions here. Step away from the making, hire somebody to do that, or step away from the managing and hire someone to do that. I realize neither of those is easy nor straightforward, but we’re entrepreneurs and we do things that are not easy or straightforward. That’s what I would look to do longer term if I look out six months or a year, I would look to get completely out of one of those or the other and you need to ask yourself which one you want to do.
We’re bootstrappers. You can do what it is that you want to do. That’s why we design these businesses around us and then figure out a path to get there. It may not be hire one person to manage everyone right from the start. Maybe it’s someone with enough skill that they can manage part of your team, part of the contractors or whatever. But you need to remove yourself from the deep dive if you don’t want to be doing that or you need to allow yourself to deep dive if you want to.
Mike: I think it’s really hard to cross that line because there’s a chasm between what you’re looking for from people versus what you’re actually getting. Until you get to a certain scale, it’s hard to put people in there if you can’t afford to hire managers, for example. I think that getting to the point where you’ve gone one direction or the other is the difficult choice the most people have in front of them.
I’m sure you’ve run into this in the past where you’ve got something that you’ve outsourced to someone and then they come back with it, but you still need to spend time going through it and looking at it, making sure everything’s right. Really, the only short-term solution I see for that is time-blocking in some way, shape, or form so that you are not trying to do too much context switching between the creative time versus that management time.
If you try to slot it in on a daily basis, it’s just not going to work. I’ve found that if I allocate time for it once or twice a week or something like that, maybe Tuesdays and Fridays or something along those lines, you can get more done because you’re not context-switching between those things as much. Anything else that comes up, you have to be diligent about making sure that those questions don’t come into a channel where it’s going to be disruptive to you.
I was constantly telling people, “Hey, don’t send me a Slack message. Send me an email and I will review it when I get it. Otherwise, that Slack message is going to be disruptive for me. It’s going to screw up my schedule of being able to work on this stuff.” You just have to be diligent about making sure that the expectations are that you will review stuff on Friday and you’ll go over it with them on Tuesday, for example. That way, you can email them, say, “This is what my thinking is,” or, “Here’s a short video of what my thoughts are.”
Got something else I would rather recommend is trying to cut down on the synchronize time that you have to spend with people. If you can do a short recording of it and send it to them as feedback versus getting on a call with them so you both have to be available. I find that calls tend to be disruptive just because if it’s 20 minutes or half an hour before the call, you’re really hesitant to start on anything that has any level of involvement because you know you’ve got a call coming up and you don’t want to have to stop. It’s about being conscious of where you’re time is going to be wasted and these are going to waste half an hour of your time before and after the call.
Rob: Those are all good points and I really want to highlight the one of just changing the expectation of communication and saying, “By default, use email because it asynchronous. By default, let’s not schedule calls. Maybe use Voxer where we can leave a voicemail and go back-and-forth on that, then turn off alerts, and check it twice a day or something. But if stuff is urgent, then you can text me or Slack me and interrupt me. If it’s super urgent, you are blocked, and you need an answer within, let’s say 10 or 15 minutes, then use an interruptive medium. But if not, don’t. Just use Slack for everything.”
That’s always when I would onboard new people. Anytime, actually, with TinySeed, with Drip, with whatever, that’s my thing. It’s like, “Let’s not Slack by default. This is dumb. Let’s not text by default. I don’t need to be interrupted and you’re interrupting what I’m trying to do.” That could be a first step. We just don’t know if it seems using Slack for everything is just throwing them into a loop, or you can say, “Hey, everybody. I’m going D&D. Do not disturb for the next two hours. I will not get back to you. If the building is burning down and the site is completely down, then break my D&D. Otherwise, do not expect a response.”
Frankly, if you’re a software video production company, that should be the default. I think two or three hours every morning, two or three hours every afternoon, everyone should be doing that. Now, that doesn’t work if you’re a manager and you have blah-blah-blah. Yeah, I get it. But that should be the default and you should be able to break that rule if you have a specific role, or if you have a specific week, or you need a lot of collaboration or whatever.
I can’t believe my voice at a certain point that I thought was not going to make it through this episode, but I’m glad you were talking at points because it gave me a chance to recharge it. I’m feeling good. We answered a bunch of listener questions today.
If you have a question for us, you can call them into our voicemail number at 888-801-9690. Voicemails always go to the top of the stack unless I screw up and forget to move them there. You can also email it to us. You can just attach or send us a Dropbox link to an audio file, or you can do the old-fashioned and just send us some text to questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. You can subscribe to us in iTunes, Stitcher, Overcast, Downcast, and all the other good ones. Just search for ‘startups.’ We tend to be in the top few. You can visit startupsfortherestofus.com to see a full transcript of each episode. Thanks for listening. 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 software products, whether you’ve build your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m definitely not sick today.
Mike: And we are here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, definitely not sick today?
Rob: As bad as this sounds and as much as I hope not to be a pain in our listener’s ears, I actually feel better today than I did yesterday and the day before. You know how sometimes the voice stuff lags what actually feeling bad?
Mike: Yeah.
Rob: That’s how it is now. I’m not 100% for sure but definitely able to record a podcast. I just don’t know if my voice is going to hold, so at a certain point I may just drop off and be like, “I don’t know, Mike. You answer the questions.”
Mike: I’m just going to mute you and I’ll replace you with a text-to-speech converter or something like that.
Rob: Yes, that would be great. But the show must go on, am I right, Mike?
Mike: I suppose it does.
Rob: The show must go on. For me this week, I’m excited MicroConf Europe tickets are on sale. It’s in lovely Dubrovnik, Croatia again at that amazing hotel, where we’re amassing an ocean view, second week October. microconfeurope.com has the full details. Although I just look at it and the speakers are last year’s speakers. We’ll have to get that corrected. We haven’t selected any speakers yet, but know that it’ll be a good show.
Mike: I’m definitely looking forward to going back there although I do remember thinking to myself that because the hotel was built into a cliff right against the ocean, my engineering days came back to me as like I wonder what would happen or what it would take for the whole thing to fall into the ocean.
Rob: I’m hoping that they’ve thought of that. Way to go, Mike, five people just decided not to come because of what you said. I think they’ve thought of that and as far as I know they don’t have earthquakes there. You would never build something like that in California or if you did, you’d really have a lot of supports and such seismic stuff.
Mike: For whatever reason, my brain just goes to those types of things, whether it’s a plane or a giant bridge or something like that. I just think I remember one time, my wife and I were driving back from Massachusetts to New York because that’s where my family is, and there’s this bridge that goes over the Hudson where we stopped on the bridge because traffic was just so bad. We were at a complete standstill and the bridge was popping up and down. Not a lot but it was like four, five, six inches, something like that but you could feel it. The entire car was just bouncing up and down a little bit. All I could think of is that video from grade school or from high school where they show you this bridge that basically just rips itself apart in California.
Rob: It’s in Washington.
Mike: Was it Washington?
Rob: Yeah, in Seattle or that area.
Mike: Oh yes. The Seattle Sound, I think. So that just came to mind. We were out of reason like these giant structures like that is all I can think of sometimes.
Rob: Yeah, I find this as software engineers. Oftentimes, you’re trying to think of everything that could go wrong and when you transfer that into life, sometimes it’s not such an adaptive quality. Sherry will suggest things, “Hey, let’s go visit Mike.” “Here’s six things that could go wrong with that. Again, that’s actually not helpful. How about instead of that, you go on and you select an Airbnb and look-up for the tickets?”
What else? You have a webinar last week, right?
Mike: Yeah, I had a webinar. It was a couple of days ago and I went a little bit longer than I thought I would. I thought it was coming around 40 minutes and it ended up coming around 50–55 just because I went into more depth on a couple of things than I had probably originally expected to. But it was pretty good.
I think there were 46 or 48 people who registered for it. I got their contact information and the list that I got also included their company names, their job titles, where they’re located, the size of the companies, a lot of interesting things there. So, definitely adding those people into my mailing list and working from there.
It was fun. I’ll definitely do it again. It’s just a question of whether or not they would have me and whether it’s applicable to the audience still.
Rob: That makes sense. Did you get any positive feedback or did you get much feedback?
Mike: Very little feedback. There is one person who submitted feedback out of the people who attended. I also got information about who attended and who didn’t. So, there’s emails that go out to them after where it sends them a link to the video. I’ve got a copy of the video as well. It’s typical webinar stuff.
Rob: We did a bunch of webinars in the early days of Drip. Some of them we found worked really well and others were complete bust and waste of time. You don’t know for another week, another month, depending on who sticks around and listens and who basically stops reading your emails or whatever other way you contact them. Curious to hear a fit, figure if it’s worth your time, and maybe 2–3 weeks I think you have a decent sense of that.
Mike: Definitely. The other thing that I’ve been looking at lately is that I’ve been testing out a new email client called Mailbird. You and I talked about this very briefly before the podcast and we decided to talk about it on the podcast. I find that most of the time I look at my email through Google Chrome and I have most of my different emails from different domains forwarded in there so that I have the one email client.
I was looking at Mailbird just because it has a unified mailbox where you can see and view all of your emails in one place regardless of what IMAP servers they’re coming from and what domains they’re coming from, et cetera, so I can see everything there. I’m not going to have to forward things over if I don’t want to but I could. I could continue doing that, but the one problem I’ve had with that is that the mail servers tend to rewrite the headers. If it’s forwarded in email, then the SPF records are no longer valid because it’s basically being rewritten. It no longer matches the original, which isn’t a big deal because I’m the one receiving them. But it still screws up the reporting staff that they get on a weekly basis about my sent emails. But you said you were assessing out something else as well. What’s that and why?
Rob: Mailbird I can’t use because I’m on a Mac. It’s Windows only. I was going to check it out, I was on the site. I straight-up Google best Mac Gmail client because I like Gmail, I like the paradigm of it, and it’s so slow in my Chrome browser now. I will go to type an email, you know that I know all the keyboard shortcuts, I’m like, “Label this as that, then type five words,” and it’s playing catch up with me. It’s getting worse and worse.
I know everyone’s thinking Superhuman, “Go use Superhuman.” Yes, I will check them out at some point, but I really wanted to consider going back to a desktop client, both for the speed and just the native feel. I found an app called Mailplane and it basically mimics the Gmail interface in a desktop wrapper in a sense. There’s also a calendar you can flip back and forth.
At first I really struggled with the fact that it wasn’t just a tab in a browser, but now I’m starting to like it. I have it on a completely separate monitor than my browser and when I click a link it opens in a browser on the other side instead of opening it in a new tab and throwing me out Gmail for not holding Command-Down and opening a new tab. I started liking the workflow. I like that all the keyboard shortcuts as the same, I label things constantly, I archive things constantly, I delete things, and I snooze or boomerang them. Those are the four most important things I do. Of course I compose and send, but those four things have to be super fast, they have to be keyboard shortcuts, and I do that both on mobile and on my desktop in essence.
The one place where it falls down is it doesn’t have the snooze keyboard shortcut, which is B, and I can’t install Boomerang on it which also has the B keyboard shortcut. I may bail on it, go back to the drawing board, and try out something like Airmail, or I know Spark’s good, or take a look at Superhuman. I struggle with wanting to do Superhuman. I think some of the hype drives me away from it and also $30 a month, obviously, I can’t afford that. I struggle to pay that or something. It’s so stupid because I’m in my inbox constantly and if it saves me any amount of time, it will pay for itself in a day.
Mike: I think it’s probably the price anchoring you have to Gmail, which has been free for 15 years now and you’re like, I don’t want to pay $30 a month for something like that.
Rob: Yeah and it’s also I know that I have to relearn or I’m expecting to relearn a bunch of keyboard shortcuts. While I can totally do that when I switched from Windows to Mac, that was a complete trucking of my productivity at the time. But I got over. It took me two, three, four weeks, and I was good.
I’m sure that if I switch to Superhuman, it will be all good. But I also want to look the product mature a little bit and see what direction it heads because every time I do this switch, I’m always wary of like, “Here they go. They got acquired and now they shut them down,” which has happened with three of the mobile email clients I’ve used, or they themselves start getting slow over time, or things go wrong with the business model and they start showing so much ads, whatever.
I know they’re charging $30 a month, so that should mean that, (a) they shouldn’t get shut down or acquired, and (b) they’re not going to do ads. All of the objections I’ve actually brought up are probably not going to happen but I often don’t trust these Silicon Valley startups in these early days because you just don’t know what’s going to happen and I don’t want my whole world to be invested in this single app that is quite disruptive to leave.
Mike: Two things here. One is I was looking at the Mailplane app website and there is something there that says flat-out that they had support Boomerang as a third-party extension, so there might be a way to basically add that into the app itself, maybe as a plugin or an extension or something like that. The other thing is that, it’s interesting that you and I are probably on the same page there where just because it’s a Silicon Valley startup and they’ve got funding, we actually put less emphasis on them being a viable product, versus the bootstrap companies where the largest company say, “Hey, I’m not going to trust you because where’s your funding? You might go out of business tomorrow,” versus I almost feel the Silicon Valley startups.
Actually, it’s the opposite. That’s just the way I view it. It seems like you feel the same way about this and I think it’s partially a function of whether or not they’re charging for their service or it’s a, “Let’s try and get as many users as we can, and try to figure out a business model to make money later.”
Rob: That’s it and since Superhuman are charging, it does remove some of those doubts, but still I’m pretty skeptical on one side. I’m like, “Yeah, you’re going to make me switch over and learn all the stuff, it’s going to make me faster, and then in six months, you’re going to do whatever. You’re going to pull a medium.” Again, anything I can think of is unlikely to happen because I was gonna say, “You’re going to pull a medium and start charging,” but they are already charging.
It just makes me skeptical that they don’t have my best interest at heart and what they have is hyper growth at heart, and they’re going to be willing to sacrifice whether it’s my user experience or whatever in order to further their business. I’m just not convinced. I’m not trying to pick on them. Just in general that’s how I view these startups. I think I will move there, eventually. That’s probably where I’ll wind up. But the fact that you just told me Boomerang is available at Mailplane, I don’t know if I have a reason to move anymore because I just click down extensions, I installed it, and it looks like it’s working. That does change the game for me. Thanks, Mike. I appreciate that.
Mike: There’s a bunch of other extensions there, too. I know you use them, so.
Rob: Yeah, but Boomerang was at the top when I went to extensions. It was literally the first on the list and I just downloaded it while you are talking, I configured it, and it’s looks like I’m all good now. It will be interesting. I like to question my assumptions and one of my assumptions is that I really want to stick with the interface. I’ve been using Gmail since 2006. Is that when it came out? I mean, I was really early on.
Mike: It came out before then because Bluetick I can see where my earliest emails were sent and received and I didn’t get into Gmail for at least a year or two. I think it came out in 2003 but my earliest emails were from 2005.
Rob: And I’m somewhere in there, 2005–2006. It’s not just I’m used to it, but the keyboard shortcuts and the actions all makes sense, and I’m very fast. It’s like using them or using an “old” editor that people move on from, but when you’re really good you can actually be in the command-line the whole time. I feel like that’s how I sync with Gmail.
Obviously, there’s an Outlook mail client or there’s a bunch of good desktop Mac clients for Gmail, but enough of the paradigms or trying to be different, and it’s not just keyboard trope. It’s just the whole interface. When you’re looking in different places for different things, I’m not sure I want to give my productivity gap much of a hit over the course of weeks or months and I’m not just sure it’s worth it to relearn a new tool.
Mike: That’s actually what attracts me to Mailbird was because all of the keyboard shortcuts were the same as Gmail. It’s just like, “Oh, I can just hit the V or…” I honestly don’t remember what the shortcuts are. I just do them at this point, but adding a label to something, or moving it, or throwing it to the trash, those things are just keyboard shortcuts that I just use. I think one of them is Control-Pound or Shift-Pound or something like that, and there’s one, it’s a V and add a label to it and move, and all that stuff. It’s just there and it’s very intuitive, very much alike. Not intuitive because shortcuts are not intuitive, but once you learn them, they just become second nature. For the most part, the ones that I use are there and it’s helpful.
The only thing I don’t like is that in Gmail I have have stars in emails and then I have one’s that are marked important and then ones that basically everything else below that. I have three different sections and it doesn’t have that. It only has two. So, it’s like, “Oh, well.” I mean, I’ll live. It’s not like I’m going to stop using it because of that. It was cheap, so.
Rob: Yeah and it’s just keyboard shortcuts. I’m sure Superhuman probably duplicated the Gmail ones, but there’s other things. A little known fact, actually, Mike. Before I started Drip, I was actually pretty heavily considering building a mobile email client that was all the things. It was fast and there’s some add-on. I remember you and I talked about it. I was like,“Yeah, this is on my list,” and you’re like, “Boy, that’s kind of a Silicon Valley play.” You’re like, “How are you going to make money at that?” and I was like, “Yeah, that’s what I’m struggling with because it’s not a normal SaaS model.”
I thought for a bit of why I should do basically a SaaS email client and again, make it fast and make it do all the things, build on top of Gmail in a way that they’re not innovating on, and I thought to myself no one would pay for that. They wouldn’t pay a price. I don’t want to charge $5 a month. What’s funny is, I think that was my bias because I don’t want to pay for an email client, but also, it was 2012 and I don’t think Gmail had the problems that it has today with the slowness and all that. It didn’t have that problem in 2012.
I think timing is also a factor. It’s not just that I have the idea, but you also need to be there at the right time and you need to execute on it. The Superhuman guys has done a great job, as we’ve heard years of customer development in essence to get to where they are today, and that was obviously a ton of work to get there. It’s not just, “Oh, you had the same idea and the Superhuman guys did it.” They did a really good job of it, executed to perfection.
Mike: That’s actually a very odd coincidence that you mentioned those specific things about the speed because I think it was about two years before that that they had acquired the business that your co-founder in TinySeed, Einar has. He was building and it was to make mobile search very fast. Then fast forward a couple of years and the search is no longer dog slow.
Rob: Yeah, it’s a trip. You wonder if Gmail, in the background, are they’re innovating and they’re going to basically release something that’s going to makes them superfast and that implement some of the things Superhuman does. That’s the other thing. Since it’s on top of G Suite or Gmail, they have platform risk right now. As an idea like Gmail or Google could feasibly shut them down. It would be a bad move or an anti-competitive move, but we’ve seen this happen with Twitter API restrictions and all that stuff. Facebook do that, wouldn’t put a pass Google and it could be a pretty big issue for Superhuman moving forward if they become a multi-million dollar business, deck a million dollar business. Who’s to say Gmail won’t either just implement the features and it’s still free or screw around with API access and that kind of stuff?
Mike: It’s funny you mentioned that because I’ve actually been going through a bunch of approval processes with Google. I don’t know if I talked about this before, but because I’m accessing customer information through OAuth, I had to go through this approval process and they say…
Rob: You did talk about it. A couple of episodes ago you mentioned it’s pretty cumbersome.
Mike: And I’m still going through that. I’ve sent them a bunch more information and I’m just waiting now to see if anything else that they need and I haven’t heard anything back for at least a week or two. That’s certainly something that could happen, but it’s more of a result of me just accessing things through IMAP. I don’t know how they actually access that data but if it’s through IMAP, then there’s got to be a reasonable way to get access to it because there’s no way I could see that Google could say, “Look, nobody can access through IMAP anymore. You have to use OAuth tokens and et cetera. I suppose I could end-of-life that access down the road but they’re going to have to wait while people, their email clients switch over and add that type of support.
Rob: And that concludes this episode of Gmail Clients for the Rest of Us. That was a longer tangent that I thought we would go on, but I think it’s still interesting stuff. We touched on a couple of relevant points of platform risk, about finding the right client, because if you’re in it so many hours of the day, it’s important stuff, and then switching cost and that kind of stuff.
Mike: With all that said, I think we’ll switch over and actually start doing some of these listener questions that we get them in before the end of this episode. The first one comes from Steven Moon. It came into Twitter and he said, “With so many years of experience behind you, both in the startup space, what would you say were some of your biggest regrets?”
Rob: This is a tough one. I gave it some thought in advance of the episode because it’s not something I think about that much. I tend to make pretty calculated decisions, I tend take longer to makes decisions than some people, and I try to make it with all the information I have at the time. If I make a decision with that and it turns out to have a negative outcome, I don’t consider it a regret because I did what I thought was best at the time. I don’t make many impulsive decisions. Those are the decisions that I would tend to regret, are things that I didn’t take the time to think it through or made an emotional decision instead of trying to look at the data and making the best decision.
With that said, I think that something that I regret early on—this is 2005, maybe 2010—is that I was too timid. I was scared of making people mad. I was too much of a developer to do marketing. That transition actually happened during that time period, but in the early days, even before 2005, I didn’t want to market because I considered it some bad thing. SEO, AdWords, taking out ads. I don’t know adjusting to all that and even doing sales. It wasn’t something that I really wanted to do and I wished that I’ve gotten there sooner. Eventually, I realized, “Oh, this is valuable. A fun product provides value, reaching to people, for who it’s going to have value for, is an important thing.”
I think another thing that I regret is I thought that I could do everything myself early on. Frankly, I did everything myself for a while and then I hit the ceiling on that. Then I hired contractors and VAs, which worked to a point. I guess I don’t have regrets that I did that, but then eventually knowing that I needed a deeper network of people, has changed my world and allows me to do things a lot faster and a lot easier than just trying to go it on my own. These are lessons I’ve learned along the way and I guess my regret is I didn’t learn earlier. I think those tend to be my regrets. I have another one but how about you? You want to weigh in on something?
Mike: I think some of mine are similar to yours. Essentially, they were learning experiences and the one that definitely comes to mind is not really thinking through things before just doing them. I wouldn’t say that I was unnecessarily impulsive in many ways, but I would definitely say that I didn’t pause to look at the big picture enough.
For example, when I was in college, I did not do very well. Even going back into high school, I did very well in high school because it was high school and it was easy to make. But unfortunately, the by-product of that was I didn’t know how to learn things. I either figured it out and just did whatever needed to be done or I just said, “I’ll be able to figure this out.”
What tend to happen is I leave things to the last minute because I want to do other stuff and I wouldn’t spend the time to focus on my studies or actually really trying to understand stuff. It’s either I could do the problems or I couldn’t. I feel like I didn’t have a good understanding of how I learned when I got to college and I really struggled when I got to college because of that, because I relied on me just showing up and being in class to understand stuff. When I didn’t, I had a hard time sitting down and actually doing homework or studying because that was just not how I had wired myself.
That took a really long time to break. It took four or five years to break that habit. I fortunately did when by the time I got to grad school but it took way longer than it really should have. It was because I didn’t think about the longer term consequences of what those actions could potentially be but I didn’t necessarily know what those consequences would be, either.
Rob: Right because you’re 17. I think he was asking in terms of startups. How does that relate to your business? Your professional career? Or does it?
Mike: It does. I have to intentionally set aside time to think about the bigger picture and if I don’t, I could easily find myself just going down the rabbit hole and not thinking about, “Is this the right thing I should be doing? Is this the most important stuff for me to be spending my time on?” I can easily burn a lot of time doing stuff that actually doesn’t move the needle or isn’t very important if I’m not very cautious and conscious of that.
It’s more of being aware that that’s a flaw of mine that I have to keep in mind and being very intentional about setting aside time to come up and look at the big picture. If you look back in my day with AutoShark, that was a huge problem because I just put my head down and kept going. What I really should have done was take a few steps back and look at the bigger picture and be a little bit more objective about stuff.
Rob: That makes sense and knowing that’s your previous position, you should ask yourself that now, what it would look like to take a step back? It’s a rhetorical question but that’s the thing about knowing our strengths and weaknesses is now that I’m older, I know a lot of my weaknesses. I don’t know that I know them all but I really tune in when I start the same things that I realize, or maybe not 100% true, or just an emotional thought, or me just trying to justify what I feel like I want to do, rather than what should be done, and those are weaknesses.
Or when I am a negative self-talker. I talked before if I don’t get enough sleep, I’m super negative and I’m almost look like someone who’s depressed. I’m unmotivated for that day. I’m unmotivated and I’ll just be like, “Nothing’s going to work. This whole thing isn’t even going to work. Why are we even doing this?” I literally have that in my head and I will always say like, “Dude, this is a temporary thing. You’re just in a weird state. Go take a nap.” I’ll come back and I feel better about it, but I didn’t realize that until five or ten years ago. I think that that’s an important thing, to know yourself.
Mike: The way that I deal with it now is I do a lot of journaling and I use that to track whether or not I’m making progress on stuff or getting things done that I need to get done because I will write those things down, but again, that’s just a personal productivity hack more than anything else of make sure that I’m staying aware of those things.
I would say that the other major regret I have, I’m not sure if I label it as a regret but being under the belief or assumption that I would be youthful forever. I definitely found that as I’ve gotten older, things do not heal nearly as quickly as they used to, I need more sleep that I used to, and just a lot of stuff with my personal health that I was like, “Oh, I’m invincible. I’m twenty-something years old and nothing will ever happen to me.” Fast forward 10 or 15 years and your body starts to give out on you in certain ways and you’re like, “Huh, that sucks,” and there’s nothing you can do about it.
Rob: That makes sense. The other regret I can think of is that I didn’t take good enough care of myself while growing Drip. There’s self-care. What’s funny is it’s what my life talks about all the time. That’s what ZenFounder is, about taking care of yourself. There’s a certain point where I was just bearing the burden of a lot of stuff. I wasn’t working on the things I liked but I knew they had to get done and it’s that recipe for burnout where I’m capable of doing them but they don’t bring me joy and I didn’t want to interrupt anybody else’s day because everybody else was either selling or onboarding or writing code and that’s what’s needed to push the business forward.
If I pulled anyone else into it, this is a fallacy. You tell yourself like, “I’m just going to grind it out. The business is going fast, everything’s working. Why would I screw that up, pull people off, and move slower than these other things?” Anytime I got budget, I hired a support person or a developer or someone else to move the business forward and really should have made some different decisions there.
I didn’t take good enough care of myself, I did start to enter burnout at a certain point, and that sucks. There were a few times in my professional career and the most recent one was during Drip. I think I want to avoid it for the rest if possible, because it takes toll on you and your relationships is the problem. You can recover but if you’ve damaged relationships, it takes a while to repair those.
Mike: Moving on to our second question. This one comes from Dick Polipnick and he says, “What do you think of buying a small company that already serves your target customers and building your SaaS idea on top of it?”
Rob: He’s saying buying a small company that is not a SaaS company, right? It’s either one-time download software or it’s an info product? What do you think he’s implying here?
Mike: I think it could be either one of those. It could also be a services business of some kind? I wouldn’t say it’s as big as an agency. I think the implication here is it’s a small company that’s probably one person or maybe it’s just a book or something like that. That seems odd. I don’t think that’s it, actually.
Rob: If it’s a small consulting agency, I wouldn’t buy an agency unless I wanted to do agency work. Going from agency to product, the work is hard. Ask anyone who’s trying to do it because you have so many things going on. It’s a well-worn story. It’s possible, but it’s a slog. I would not invest money into acquiring an agency. If it’s like an ebook or a one-time downloadable software and there was an audience there that you felt like could buy a SaaS or would be interested in something that’s pretty a direct path to it, I’m not opposed to the idea of it.
The concern I have is, if you spend this money—let’s say it’s $30,000, $50,000, $100,000, it’s a chunk of change—then what if you’re wrong? What if now you have this info product that you don’t really want to run or you have this one-time download software that you don’t really want to maintain and they don’t really want the SaaS? You can’t ask them now because you don’t have access to the audience.
I’m not saying don’t do it, but I’m saying how can you prove that I bought this or disprove that hypothesis without spending the money? Can you work with the current owner to survey the audience to find out if they do want the SaaS? Or maybe you do? Maybe if it’s a one-time software and you buy it, and the SaaS doesn’t work out, you’re okay with that. One-time software is not terrible. I mean, I had done it, it was for years, and it was a great revenue stream.
So, I’m not opposed to it but I do feel like you have to answer a lot of questions. Even if you answer, I would ask, “It’s like acquiring yourself into the stair step?” which is something that I did and very few people do, but I didn’t intend to build SaaS on top of the things I acquired. Those were really just income revenue streams. So, not opposed to it, but I do have some questions that I want answered before doing it.
Mike: I think the piece that’s probably the most important is how you validate that is the right move and that those people are going to want to purchase a SaaS? If there’s already people who are purchasing the SaaS products in that particular target market that is similar to what it is that you want to build, then great. Are you buying it because of the company and what it offers? Or you buying it because you want to plug it in and you see it as a new channel that you can tap into because they’re offering something that nobody else does in this particular market?
So, thanks for the question. The next one that we have is from Daniel Fellows and he says, “Question for you. How do you deal with the loneliness of building your startup?
Rob: I think that’s the reason I started my blog back in 2005 was the loneliness of trying to do something that I didn’t know if anyone else was doing it. I didn’t know if any other single founder software startups that were raising funding. There was nobody.
I starting blogging and trying to find other people. That turned into my book, then this podcast, MicroConf, so I deal with the loneliness by having this community. Whether I have been part of building it like we have been or whether I just became a part of it later, I rely on this community as much as anyone to keep me from feeling that loneliness. That is a reason.
We did the podcast for a number of reasons, but I think part of it is to be able to talk about this stuff, both with you and with the audience, and to get questions and comments and all that stuff is helpful.
Going to MicroConf basically three times a year in essence is a big one for me and I always get a bump from there, realizing that there’s a bunch of other people doing this with us. On their own but with us. And then of course, Mastermind groups. That’s been a huge thing. I have always been a proponent of it years and years. That gives you that touch point every other week or however often your do it, to know that there are people that are in your corner.
I didn’t do this when I was growing startups because I was so focused on grinding out day to day, but finding founders, entrepreneurs locally, Sherry’s been doing a good job of that here in Minneapolis of finding local entrepreneurs and having them over for dinner once a month. We’ll just get two couples over here and have a nice dinner. Sometimes the conversation involves work and other times it doesn’t, but having that shared ethos of being a founder makes conversation super interesting and cool. How about you?
Mike: I agree with everything you said. The one other thing that I would add is finding something that is outside of your business where you can use to socialize with other people that is not work- or business-related. I think that’s something that I definitely neglected that early on in my career where it’s just I worked all the time and beyond that I didn’t do much else.
I didn’t really have a life outside of the business and I think that’s probably, I wouldn’t say a huge regret but it’s definitely something that I probably should have done a little differently if I were really thinking about it or thinking about the future. I think I’m definitely on the right track there these days, but it’s something that I would probably emphasize a lot more if I were to go back and do things over again.
I feel like having time away from your business when you’re not thinking about it and you’re not talking to people who are also running their own businesses as helpful just as a way to recharge. If you’re spending all of your time thinking about it, it starts to creep into places where it really shouldn’t, like when you try to sleep at night and you toss and turn just because you’ve got business on your mind at all times.
There are always interesting problems but it’s helpful to have something else that is completely distracting and completely irrelevant to your business that you can do that will take your mind off of it. I find a lot of times that there are problems that I’m working on where the solutions just come to me very quickly if I’m not thinking about it.
Rob: It’s a good point. It’s something I didn’t do until the last 2–3 years actually. I believe I was doing some tabletop gaming before that, but before the exit in 2016, that I really ramped it up after that. That’s something that I’ve enjoyed having as a hobby. I really neglected my hobbies for a decade plus and I don’t regret that actually and wished that I have done more hobbies because I did take that time and I got stuff done.
The reason I was able to put out as much content as I did and we’re into all the multiple things as I was thinking about them a lot. Eventually, that can take a toll on you. I think having maybe one hobby that’s not super time-consuming can be helpful. But since I didn’t do it, that’s not something I can necessarily recommend. I know it’s best practice, but I think the other stuff we’ve talked about with masterminds and such is that’s what I did, so that’s what I feel better about telling people with a straight face. Not to just do what I say now as I do, but you can do it as I do and I think just to keep from being lonely.
Mike: For our last question of the day, we’re going to take one from Graham Blake and he says, “As a single founder whose business has succeeded, I find I have less time to do the things that made it succeed. I delegated a fair bit but the management of a bunch of small areas reduces the time I have to deep dive on stuff. How do you organize things? You can still do the most valuable work while keeping the machine running smoothly. My biggest difficulties are that most of my valuable work involves deep focus, which is generally writing a video production. I have to give feedback on work that is being done for me, but if I ignore this for too long, it creates bottlenecks.”
Rob: This is a hard one. It’s the maker’s schedule versus the manager’s schedule from Paul Graham’s writings where the manager is interruptive, you’re responding, you’re trying to keep people going, and the maker is where you need deep focus. Trying to be both of those is very hard. I don’t know that there’s a great answer to it other than to hire someone to manage all the little ins and outs so that you are no longer a manager. Trying to be both is hard.
There’s really two solutions here. Step away from the making, hire somebody to do that, or step away from the managing and hire someone to do that. I realize neither of those is easy nor straightforward, but we’re entrepreneurs and we do things that are not easy or straightforward. That’s what I would look to do longer term if I look out six months or a year, I would look to get completely out of one of those or the other and you need to ask yourself which one you want to do.
We’re bootstrappers. You can do what it is that you want to do. That’s why we design these businesses around us and then figure out a path to get there. It may not be hire one person to manage everyone right from the start. Maybe it’s someone with enough skill that they can manage part of your team, part of the contractors or whatever. But you need to remove yourself from the deep dive if you don’t want to be doing that or you need to allow yourself to deep dive if you want to.
Mike: I think it’s really hard to cross that line because there’s a chasm between what you’re looking for from people versus what you’re actually getting. Until you get to a certain scale, it’s hard to put people in there if you can’t afford to hire managers, for example. I think that getting to the point where you’ve gone one direction or the other is the difficult choice the most people have in front of them.
I’m sure you’ve run into this in the past where you’ve got something that you’ve outsourced to someone and then they come back with it, but you still need to spend time going through it and looking at it, making sure everything’s right. Really, the only short-term solution I see for that is time-blocking in some way, shape, or form so that you are not trying to do too much context switching between the creative time versus that management time.
If you try to slot it in on a daily basis, it’s just not going to work. I’ve found that if I allocate time for it once or twice a week or something like that, maybe Tuesdays and Fridays or something along those lines, you can get more done because you’re not context-switching between those things as much. Anything else that comes up, you have to be diligent about making sure that those questions don’t come into a channel where it’s going to be disruptive to you.
I was constantly telling people, “Hey, don’t send me a Slack message. Send me an email and I will review it when I get it. Otherwise, that Slack message is going to be disruptive for me. It’s going to screw up my schedule of being able to work on this stuff.” You just have to be diligent about making sure that the expectations are that you will review stuff on Friday and you’ll go over it with them on Tuesday, for example. That way, you can email them, say, “This is what my thinking is,” or, “Here’s a short video of what my thoughts are.”
Got something else I would rather recommend is trying to cut down on the synchronize time that you have to spend with people. If you can do a short recording of it and send it to them as feedback versus getting on a call with them so you both have to be available. I find that calls tend to be disruptive just because if it’s 20 minutes or half an hour before the call, you’re really hesitant to start on anything that has any level of involvement because you know you’ve got a call coming up and you don’t want to have to stop. It’s about being conscious of where you’re time is going to be wasted and these are going to waste half an hour of your time before and after the call.
Rob: Those are all good points and I really want to highlight the one of just changing the expectation of communication and saying, “By default, use email because it asynchronous. By default, let’s not schedule calls. Maybe use Voxer where we can leave a voicemail and go back-and-forth on that, then turn off alerts, and check it twice a day or something. But if stuff is urgent, then you can text me or Slack me and interrupt me. If it’s super urgent, you are blocked, and you need an answer within, let’s say 10 or 15 minutes, then use an interruptive medium. But if not, don’t. Just use Slack for everything.”
That’s always when I would onboard new people. Anytime, actually, with TinySeed, with Drip, with whatever, that’s my thing. It’s like, “Let’s not Slack by default. This is dumb. Let’s not text by default. I don’t need to be interrupted and you’re interrupting what I’m trying to do.” That could be a first step. We just don’t know if it seems using Slack for everything is just throwing them into a loop, or you can say, “Hey, everybody. I’m going D&D. Do not disturb for the next two hours. I will not get back to you. If the building is burning down and the site is completely down, then break my D&D. Otherwise, do not expect a response.”
Frankly, if you’re a software video production company, that should be the default. I think two or three hours every morning, two or three hours every afternoon, everyone should be doing that. Now, that doesn’t work if you’re a manager and you have blah-blah-blah. Yeah, I get it. But that should be the default and you should be able to break that rule if you have a specific role, or if you have a specific week, or you need a lot of collaboration or whatever.
I can’t believe my voice at a certain point that I thought was not going to make it through this episode, but I’m glad you were talking at points because it gave me a chance to recharge it. I’m feeling good. We answered a bunch of listener questions today.
If you have a question for us, you can call them into our voicemail number at 888-801-9690. Voicemails always go to the top of the stack unless I screw up and forget to move them there. You can also email it to us. You can just attach or send us a Dropbox link to an audio file, or you can do the old-fashioned and just send us some text to questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. You can subscribe to us in iTunes, Stitcher, Overcast, Downcast, and all the other good ones. Just search for ‘startups.’ We tend to be in the top few. You can visit startupsfortherestofus.com to see a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 443 | Determining Which Signals Matter, Staying on Task Without Extrinsic Motivation, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions on topics including which signals matter, staying on task without external motivation, and how they manage their time.
Items mentioned in this episode:
Rob: Hey, Mike. Do you know what the Exeˈcutor is in Star Wars?
Mike: Yes. It’s one of the Star Destroyers but I don’t remember which one. I figure whether it’s the Super Star Destroyer or is it just one of the other ones?
Rob: I believe it’s Darth Vader’s Star Destroyer.
Mike: Yeah? Okay.
Rob: Exeˈcutor. What’s funny is I used to call it the Eˈxecutor when I was I kid because it’s spelled like that but I learned it’s called the Exeˈcutor. Here’s my question for the day. How many bounty hunters are on the Exeˈcutor when the rebels are hiding in the asteroid field?
Mike: Bounty hunters? Geeze.
Rob: This is The Empire Strikes Back.
Mike: Yup. They’re all standing around and he says like, “No disintegrations.”
Rob: Exactly and Robot Chicken has done a great parody of this. If anyone has not seen that, go type it. ‘Robot Chicken Star Wars Bounty Hunters.’ How many?
Mike: Oh gosh. How many exactly? There’s between four and six. If I had to guess, I’d go on the higher end. There’s probably six or seven, actually. I’ll go with seven.
Rob: Final answer?
Mike: Sure.
Rob: It is six. Very close, sir. I was at five, but Boba Fett, Dengar, Zuckuss, 4-LOM, Bossk, and IG-88.
In this episode of Startups for the Rest of Us, Mike and I discuss determining which signals matter, staying on task without extrinsic motivation, and more listener questions. This is Startups for the Rest of Us Episode 443.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve build your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: Yesterday, I was putting together a video for Google. Last fall, they’ve decided that they were going to come out with their new privacy policy and they’re basically pushing it on everybody who’s using their APIs. They’re saying, “Oh well, if you are using our API and you’re getting data from our customers,” technically they are my customers, “if you’re getting data from Google from those people because they are supplying their credentials and it’s passing through us, you have to conform to these new rules around what you’re going to be doing with data and how you surface that to the users.”
They just basically announced it in October or something like that and they said, “Oh, these new things are coming but we don’t really have any details on it yet.” But over the past couple of months they’ve really started pushing forward with the approval process and I had to send them a video that walk through exactly how people authenticate through Bluetick, every single place where data that I get from Google is used, how it’s used, show in the privacy policy and everything else, and I’m just like, “This sucks.”
What sucked even more is I created this 30-minute video and then I went to basically dump it unto YouTube, because of course you can’t submit it in any other way except by putting the video on YouTube, and I found out that there was no sound so I had to do it all over again. I had to re-record it. I was like, “This sucks,” and I tested the sound before like the first time, too. I tested it, it worked, then I did the video, and no sound. I was like, “Come on.”
Rob: That is no good. So, you basically just […] a bunch of times on something that really did not move you business forward.
Mike: Exactly. Of course, this whole thing does not really move my business forward, but I don’t know. I still have concerns about the whole thing because they say that depending on what you’re doing, you may need to go through a third party security review and I’m like, “Oh and that will cost anywhere from $15,000–$75,000,” and I’m like, “Uh, yeah. I don’t know about that.”
Rob: Interesting. They must have an exception, I’m guessing, for small companies? I mean, that seems like an odd thing to saddle you with.
Mike: Yeah, I don’t know.
Rob: It’s like it’s PCI has self-certification. There are often things like that where it’s a pain in the neck to do but there is some out. I guess it gets serious backlash. If there’s not, that’s not good because you’ve had this in place for a while and then they’ve changed policy?
Mike: Mm-hmm.
Rob: Huh? Google changing something and hurting someone’s business? That’s news. Shocker.
Mike: The sad part about that is that I specifically built Bluetick using IMAPS so I wouldn’t rely on their API, so that if they decided to change things on me then I basically wouldn’t be affected. Guess how that is working out for me right now?
Rob: Yeah, sorry to hear that. It’s tough to rely on any third-party. I talked about when I had HitTail, how we were reliant on Google keywords, and then they did not provide it. Then we got into the Webmaster Tools and then they broke that. They break that every six months. It was really frustrating.
That was a big reason that when I wanted to start my next startup, I didn’t want to be reliant, and then you just wound up being reliant. You’re relying on somebody at some point. You’re relying on Amazon or Google for hosting and it’s hard to switch. Yes, there are options but it’s a tremendous amount of effort to switch.
Even just sending emails, as you and I know, getting in spam, inboxes, and on blacklists like that, you become reliant on them, and then you have to go build all this infrastructure to keep you from spamming people. This is another example. You do something, it makes sense, it makes it easier for your customers, and in this case it kind of get you into a bunch of extra work to just maintain this thing.
Mike: It is a double-edged sword, though, and it creates this hurdle that if anyone wants to come in after the fact and try to build that, it just makes it more difficult for them. Just by virtue of building your app and making it better over time, that does the same thing, certainly so. I don’t know. Still trying to work through it. I sent it off to them. I send the video to them and in less than an hour later, they got back to me and said, “Okay, now this other thing needs to be fixed.” I’m like, “All right.” I fixed that and burned another three or four hours fixing that because they’re like, “You can’t have non-production systems using the same client ID.” I’m like, “Dear God, it’s the same thing.” So, I’m like, “All right.” I don’t know. I have to switch everything over, modify my build server and everything else.
Rob: Anything else beside from technical and integration challenges going on with old Bluetick?
Mike: I’ve got my webinar that I’m doing which, by the time this episode comes out, it will have been yesterday. I’m doing that for hr.com and we’ll see how that goes. I got to get them the final PDFs to the slides so that they can post it in the website and then get the presentation on Monday. It ought to be good.
Rob: Sounds good. On my end, just opposite pushing forward with TinySeed and things are going well there. I’m having a great time and I’m very excited about the batch that’s coming together quickly. We have almost all of the startups you selected, made offers, sent paperwork and that kind of stuff.
There’s a bunch of stuff I think I’ve said on the podcast in the past, like legal is the bottleneck and had been now for a month of two. We’ve been selecting and making offers but without the final paperwork, which is […] third party who isn’t moving nearly as fast, isn’t moving with the same urgency that we are, put it that way, has been a little bit frustrating.
I’m looking forward to getting past this point because not only did we have to incorporate and set-up multiple, where now all I see is a limited partnership in all this stuff, which takes time. Then we have to have all these docs drawn up and we won’t next time. Batch number two will not have the same level of foundation-building and will have a lot more way. We’ll know more of what we’re getting into and have better systems to do it. But realistically, the systems are not what are holding us back at this point. It really is this reliance on a third party who is moving at a glacial pace compared to us. So, I look forward to being out from under that here pretty soon
Mike: It’s interesting that you say that because it reminds me of, don’t know the inside story on this but my guess is that, that’s probably the exact reason why Stripe came out with Atlas was to help founders get past all of that stuff, so that they just didn’t have to worry about the pace of getting all the legal stuff taken cared of. It just reminds me of that.
Rob: Totally. It’s friction and it’s something, specifically with Atlas, that every company that’s not a sole proprietorship has to do. They just want there to be more of those companies. They want to have that rising tide so they can remove that friction. I remember the first time with […] I was like, “Wow, they’re really going outside their core competency,” but now I get what their long-term vision is, is that they just want more businesses that are able to get online. Of course, that’s what Stripe Atlas allows you to do super easy.
I said it before. I wish there was Stripe Atlas for accelerators and for funds. There are some pre-made things for it. They’re ridiculously expensive to the point of being a non-starter. So, we get to do it from scratch. Good thing I’m used to doing that, huh? No one thinks from scratch.
In other news, we have a few more podcast reviews. I’ll just read one of them. From wking-io, he said, “I could listen all day. I do not own my own SaaS but I work for a small info product startup and this information is so valuable. I’m able to see this information in practice and know that I will have a head start whenever the moment strikes for my own app from all the info Rob and Mike shares.”
Thank you for that review. We love a five star rating or if you’d prefer spending more time writing review, either one is fine, in […], Apple podcast, wherever greater podcast are sold, we appreciate it. Mike, when is the last time that you got something useful from Twitter?
Mike: I connected last week when somebody had lunch with them and we connected over Twitter directly. So, we coordinated that […] as you could say.
Rob: That was a very long pause. The editor edited that out but to the listener, Mike was silent for about seven on eight seconds. Number two, did you have each other’s email or did you literally meet and connect? If Twitter had not existed, would you guys have been able to coordinate that?
Mike: We probably would have. It was somebody who joined the MicroConf Academy years ago and he’s been eyeing MicroConf. It’s Josh from […]. We did lunch maybe Tuesday. Monday or Tuesday. It was Monday this week. He was in town from Maryland and just wanted to say hi, so we got together and chatted for a while about our businesses and how things were going.
It was a good time but other than that, it’s been a while since I’ve ever gotten any real value from Twitter. You’re right. Evidently, there’s a huge pause because quite frankly, I don’t log into Twitter very often anymore because it’s a lot of noise. I guess that’s what Twitter is for is for noise.
Rob: Noise and arguments. I’m not a hater but I’m been trying to figure out how do I get myself off of it because I find it a bit more of a distraction than anything. With that said, I haven’t gotten anything valuable from Twitter in a for a very long time except for yesterday and today. I knew we were recording this episode. We didn’t have enough questions to fill out a full episode and with one tweet, got frankly enough for probably two episodes or more. So, I want to give a shout out to Twitter for bringing the thunder once every six months for me or whatever.
Anyway, enough of the Twitterating. Our first question was posed on Twitter. It wasn’t even directly to us. It was probably a few weeks ago when I emailed it to my Trello board and got it over here. Justin Jackson posted on Twitter and he said, “One challenge I’d had as a founder, tracking and trying to triangulate thousands of qualitative data points. Somehow, you have to decide which signals matter. But even then, plotting all those data points on a map and deciding on a direction is tough.” Then Alli Blum replied then and said, “Same. I think about this pretty much all day, everyday.”
I think we should discuss because I have thoughts on this. Basically, how do you do this? That’s the question here is how do you as a founder do that? Probably the best question is, you have a bunch of qualitative data, how do you decide on a direction when there are conflicting signals?
Mike: I don’t like this answer. I’ll tell you that before I give it.
Rob: It depends? No, just kidding.
Mike: No. Even worse than that. It’s like a lot of gut feel. You go with what feels important at the time because it’s hard to take some of that data and say, “This is justifiably more important than that,” really based on whatever rules you try to put in place. It’s hard to put rules down on paper that are immutable. There’s always things that are changing and there’s always stuff that’s going to factor in to those decisions.
For example, the video that I had to do for Google. It wasn’t really all that important and I pushed it off for a long time because it just wasn’t important. Then, there was a deadline where it’s like, “Okay, you got a week before we just outright reject your application.” It’s like, “Okay, I have to do this now.” It’s because the priority has bumped up, because there’s a hard line in the sand, and it has to get done by that time or there’s consequences.
I feel like a lot of my decision-making around priorities tends to be driven by negative consequences of not doing something, as opposed to there’s going to be positive outcome for X, Y, or Z. There’s so many things that are going on at any given time and you have to try and juggle them all at once. It’s hard to do that.
Rob: I actually think that’s a good answer. I think gut feel is the first thing that came to my mind. I think rules of thumb are something that, if you could possibly apply rules of thumb or expertise from other people who’ve gone down before it, then start there. If not, it’s a ton of gut feel.
Justin has identified the edges of where we can have a startup blueprint and where you’re drawing your own map, with a map ends in essence. I actually have a tattoo on my shoulder that is a map and there’s a hand drawing at the edges. It’s a metaphor for exactly this, of going off the beaten path. Originally, it was like, “Well, I’m not going to work 9–5, a salary job. I’m going to go be a contractor,” and people are like, “Woah. that’s risky,” and then, “I’m not going to do salaried work anymore. I’m going to build products.” “Wow. that’s really risky. You’re hard. Can you even do that?” Then while you’re building those products, there’s no map anymore or very little map.
Frankly 10–15 years ago there was almost no map. Things like this podcast, even lean startup, customer development, SaaStr, and MicroConf have enabled us to develop a mental model. There are books that come out on the topic as […]. It helps all of us have kind of a lose map or a lose blueprint, but there’s always an edge to that. This is the point where you have a bunch of data points to decide another action. There’s no map and this is where what separates the, I would say, a poor founder from a mediocre one, a mediocre from a good, a good from a great, is how well they’re able to make these decisions.
I would also say that this is, at least for me, gotten easier over time. I feel like I’ve gotten better at it because here’s what it is. It’s making decisions without sufficient data. You don’t have all the necessary data to actually make the decisions, so you have to fill the rest in in your head. I believe there’s almost never a right answer to these things. There’s always multiple right, multiple tough, wrong answers.
I also believe that most decisions are reversible; almost all decisions. There are very few that are not. To some, you may think are not reversible. They may come with a monetary cost. They may come with a relationship cost. They may come with agony, pain, time, whatever, but almost every decision is reversible. The ones that are truly not are the ones that I now agonize over and everything else. I tend to make a pretty quick gut feel decision, realizing that if we need to change course later, you can.
Mike: I’ve looked at all these different data points and see them as signals that point at a certain direction. But some of them are more important than others, and based on the situation or timeline or things that you’re dealing with, some of them are going to come out on top. If you have rules on paper, it’s very hard to create a set of rules that say exactly what to do or how to track those things and to determine what matters.
As you said, I think that that’s a really good point about the fact that there are these guidelines and rules of thumb that you can follow. But at the same time, they’re just signals. That’s all it means. There isn’t a right or wrong answer, unless you’re looking at it in retrospect. In retrospect, there is always a right answer, or a best answer, or an optimal answer. But because you probably are working with only about 30%–40% of the complete picture at any given time, I call it guessing a little bit. It’s more like educated model recognition of what’s going on.
That’s why MicroConf is just so important and these conferences and communities where other people have seen those types of things. They can recognize it essentially on your behalf, if you have not been there before and you are not able to directly recognize it. That’s why mentors help. that’s why accelerator programs work. Like Paul Graham, I would imagine who walk into just about any startup and give pretty solid feedback about why it will or won’t work, and probably be very reasonably accurate on it, just by virtue of having talked to 1500 to 2000 or 3000 startup founders, and helping them through all those different situations.
Rob: There’s a book called Decisive by Chip and Dan Heath. It’s about how to make decisions. I believe Ruben Gomez from […] turn me onto that. I listened to it a couple of years ago and something they say in that book is, just because the outcome turns out bad doesn’t mean it was the wrong decision. Those two things are not linked. You make the best decision you can, with the data you have, and with the information, the gut feeling or whatever else, the intuition, whatever you want to call it, and then you do the best you can. You reverse it if you need to or you correct-course as you move forward.
Mike: I think that’s actually a problem for a lot of people, myself included. A large extent is trying to figure out, “Can I just make a decision and move on?” or even just recognizing that you’re a reasonably smart person, you’re going to make the best decision with the information you have at the time, and it may turn out to have been a sub-optimal answer or solution to whatever it is that you’re trying to do.
Waiting is not necessarily going to help you very much. You’re basically just wasting time at that point when you could have been trying to move something forward in one direction or the other. Maybe it was the wrong direction but, as you said, those types of things tend to be reversible. It could take some pain but if you wait around for enough information, you have wasted so much time and then you still have to do it. So, moving is better than not moving.
Rob: Yeah. Opportunity cost of postponing, or agonizing, or waiting, procrastinating, whatever word you want to look for of a decision. It’s hard and that’s why most people don’t do this, don’t start companies because it’s too uncharted, it scary, it takes a while to get used to, and it’s uncomfortable. I think that that’s when you know that you probably want to doing things right, but you know that when you’re in a zone of personal growth, is when you’re doing things that are making you feel not comfortable. That’s when you’re going to get better. So, cool. Glad that Justin threw that out on Twitter.
Our next question is about how to stay on task with no extrinsic motivation, no external motivation. It’s from Mike Manfrin. He’s @manfrin on Twitter. He says, “How the hell do you stay on task when you have no extrinsic motivation? I’ve been letting myself spiral out second- and third-guessing design decisions and getting absolutely paralyzed with choice and scope, that I end up doing no work towards my startup.” Ken Wallace chimed in, “Think about having a mastermind because those folks can guide you,” and I actually think that’s a good thing we should throw out. I mean, that’s often with the bigger decisions. That’s where I rely on is someone in a mastermind. What other thoughts do you have here for Mr. Manfrin?
Mike: It’s interesting that this question comes out because I just talked about it. It’s very easy to run into that situation where you are not sure what to do, so you wait and you second-guess yourself. You don’t do the work because you’re second- and third-guessing your design decisions, thinking that if you look at the problem more or you try to gather more data is going to help you in some way shape or form, and it usually doesn’t. I think that’s a very different problem than not having motivation, whether it’s intrinsic or extrinsic. That’s a different problem than being in a situation where you second-guess yourself and you’re not sure what to do, so you try and gather more information. I think those are two completely different problems.
Rob: I agree. He says, “How do you stay on task when you have no external motivation?” I definitely had time especially when I start to burn out, or when I’m feeling depressed, or when I don’t get enough sleep, there are seasonal times when it’s dark outside and cold and stuff, where I am unmotivated to do things, and I really struggle just to stay on task. Those are the times where I strategically break out caffeine, I turn on bright lights, I turn on loud music. I use all the sensory options that I have to try to get myself into a zone. I try to get into a routine where when I hear this playlist start or when I hear this single song and listening looping start, that I force myself to get in and do things. Now, the nice part is it’s probably been a year or more since I felt that way, but I’ve gone through months and months of stretches of that. That’s how I do it.
He’s also then asking, he’s spiraling out second-guessing design decisions, getting paralyzed with choice and scope. This does tie into that first question or first proclamation that Justin made of how do you make these decisions and not get paralyzed with choice. That’s where we said this is hard, it’s gut feel, you can undo things later. I think a lot of us as developers don’t want to make the wrong choice because we feel like we’ll have to rewrite all this code. Refactoring’s a pain in the butt and if we make this decision decision in the database, then we’ll never live it down, never be able to correct it.
While it will be painful to correct, these things are reversible. That’s where I tell myself actively if I find myself being hung up and for the first thing is to identify that you’re doing this, and being like, “I’m not being productive right now because of this, because of this decision, or this item in my Trello board, or this email. Why am I not doing that? Am I stressed about it? I just don’t want to face it, am I scared that I’m going to make the wrong decision?”
There’s a bunch of things that I will try to identify and then I’ll say, “Okay, if I’m stressed about it, then why? And then why? And then why? Keep asking the whys to get to the true source of it, to figure out if I’m actually stressed, or if it’s a design decision then I will either think to myself like, “Well, I’m going to call up XYZ person, who I know has a great design and usability sense, and I’m going to ask for 15 minute of their time and say, ‘Can you help me with this?’ so that I have some sense of calm about the decision.” Or maybe I just make a gut feel, I go forward, and hope it’s the right decision.
These are tactics that I would use trying to get other people involved. I do think Ken Wallace’s suggestion of having a mastermind so that you can bring these things to people on a regular basis, is a good one. Can of course run MastermindJam, which matches people up in the startup space into a mastermind.
Mike: But I think that those are also with two different pieces. One was recognizing it and then two actually addressing the problem. I think the recognition of it is something that tends to take much longer than it probably should for most people. I found that myself. I mentally know that I’m not making progress on something, but I don’t necessarily allocate time to analyze my productivity at noon, for example. I don’t have 15 minutes of this to decide and say, “Am I making progress today? Am I doing what I expected to do? Am I procrastinating doing stuff or just not doing things because I don’t want to or I’m afraid to make mistakes?”
I think the identification pieces, the part that creeps up on us, and it last fast longer than it should if we aren’t on the lookout for it at all times. What I do, for example, I do a lot of journaling. I have an app that sends me an email and says like, “Hey, write into this little thing here and you can explain what your day is supposed to be like,” for example. I do that on a fairly regular basis. I’d say probably at least three or four, if not five days a week. Then I will notice the following day if I’m not making progress on something because I’ll be a little annoyed, usually my sleep will be suffering, and I’ll say, “Oh, I didn’t get a good night sleep last night because I was thinking about this,” and it makes me think about that stuff.
So, it’s kind of a forcing function. That’s something that people can think about. I won’t say journal your way out of it. I don’t look at it as full-fledged journaling. I might write a couple of sentences or maybe a paragraph or two. It’s usually the stuff that bothers me and that just brings it to my attention. Maybe if I start writing a lot, I know that I need to pay attention to it, maybe take a step back, but otherwise I could easily go a couple of weeks or a month or two without really noticing, and then all of a sudden it’s like, “Oh I’ve burned two months and I’ve got nothing done.”
Rob: That’s a good point. The faster you get basically knowing yourself at noticing that you’re having negative thought patterns, or negative behaviors, or behaviors that are causing you to procrastinate, or go in circles or whatever, the faster you’re able to do that and identify it, the faster you’re then able to actively attack it, get through it, and make progress. I think this is something that all of us struggle with in one form or another and I think this is something that you get better at over time if you focus on it.
This is so much of what my wife, Sherry, does on the ZenFounder podcast and in her writings and such, is looking at how these thought patterns come about, how to identify them, how to get through them. I’ve been saying for quite a while that I think 60%–70% of entrepreneurship is mental. I think more than half of entrepreneurship is purely just dealing with your own psychology, your own things, that self-sabotaging behavior, procrastination, whatever it is that you struggle with, if you can learn to overcome that, you will have such an easier time and make so much more progress so much faster.
I’m saying this from personal experience, that getting into you own psychology, whether that’s with a spouse, or a mastermind, or trained professional who is either a therapist or business coach or whatever, I think it’s invaluable. Thanks for the question. I hope that was helpful.
Our next question is from @GregDigneo on Twitter. He says, “My question revolves how you and Mike manage your time. Rob you’ve built and exited a company. You guys are both parents, you run a conference, you have the podcast, you write books. My loose question is, what is your day/week look like?” He’s asking in a couple of different ways. It’s like, how do you manage your time and what is a typical day/week look like? I think he’s probably looking for the days or the weeks where we’re more productive, not the ones where I stare at my computer for three hours, don’t get anything done, and then just wander off to go for a walk because I realize I’m not actually focused.
Mike: I tend to look at it on a weekly basis. My week’s, for the most part, are pretty similar. I work from home and the weeks that I tend to get screwed up is when the kids are home from school. Let’s see here. If I’m starting on Monday, Monday is usually my heavy work day, so I have it blocked off from my calendar. Even if somebody wants to schedule time with me using Calendly, they simply can’t. I have a hidden calendar that I can send them a link if I really needed to talk to somebody on a Monday, but typically I don’t hand that out to people and it’s usually on a case-by-case basis.
Tuesdays is not blocked off but I tend to get a fair amount of work done on Tuesdays as well Monday. I usually will work late, so seven or eight o’clock at night just because I tend not to have anything else going on. Tuesdays is a little bit lighter. In the evenings on Tuesday night, I have a D&D game that I play every week and then Seeker Wednesdays, I probably do less work. On Thursday, I do less work. Fridays, I try to get things done and set up for the following week. Saturdays, do a bunch of stuff around the house and take the kids to whatever they have, music lessons, or soccer, or what have you. Saturday night I have another online D&D game that I play and then Sunday is usually do whatever, usually cleaning up around the house and stuff like that. My week is pretty straightforward for the most part. How about you? Do you do it on a daily basis or a weekly basis?
Rob: I tend to think about things on a daily basis. Most of my days are different from one another. Sherry and I collaboratively home school one of our kids. He’s older, he’s almost 13, so it’s not like we’re sitting there teaching him stuff. He’s online taking courses, making progress on his own, and then we just have to monitor and poke in.
Some of my days I’m on and I know I can schedule fewer calls that day because I don’t want to be interrupted, and then other days I’m just completely focused on work. I look at it at a day-by-day basis. What I’ve noticed about myself is that I used to code. When I was writing code, I could sit and write it for 12 hours straight. I used to do that. That was actually my optimal way of functioning is to sit down, get momentum, break very briefly to eat or use the bathroom, and then get back. I would do 12-, 14-hour code days and get two or three days worth of progress done in that amount of time.
I don’t know if it has since I’ve gotten older or if it’s that I don’t code anymore because the coding was a very logical left brain. There’s some creative in it, but compared to what I’m doing now where I’m actually actively producing content, having to think things through, and these higher-level decisions, they’re a lot more taxing on my good glucose, so to speak. There’s only so much good brain functioning that you can have.
Writers who write books, Stephen King, these highly productive writers, they don’t write for 10 hours a day. They tend to get up, write in the morning between three and four hours tops, and then they spend the rest of the day doing other things because there’s only so much good focus you have.
Now, what I’ve found is that I’m highly productive in short bursts of, say, one to two hours. I try to have a forcing function that forces me to stop, because if I don’t, I will tend to just work two, three, four hours straight, and I feel my productivity just descend over the subsequent last one or two hours that I’m working. I have different forcing functions. Oftentimes, it is a child getting home from school or I take two of the kids to Jiu-jitsu. It’s only about an hour that we’re sitting there and I get so much done in that hour. And it’s the worst working conditions. It is terrible. I’m hunched, I have no plug, I have no chair. I’m literally hunched against the wall like I’m in junior high gym or something. I’m sitting almost like Indian style with my back to the wall, terrible posture, I have a laptop there, and I get more email done in that 45–60 minutes than I do two hours sitting at my house. I have no external monitors, I have nothing. It’s loud but there’s something about that space and the fact that I know my time is so compressed that I just hammer through to-dos and I hammer through emails.
That’s just one example but I have a bunch of times like that during the week that I’m finding there’s kids’ music lessons, there’s other things where I find that if I force myself to only have this much time, that I get the work done faster. That’s kind of a personal hack that I’ve been doing lately.
I think another thing is these are low-level how to get things done quicker on a higher level. I say ‘no’ to everything except for what’s on my goal list for the year. If you look at running a conference, you and I just do that. That’s on the to-do list. I feel like I’m pretty efficient about it, I feel like I focus on it when I need to, and then I make it a priority. The podcast is something that we’ve essentially automated almost all of it. You and I show up for two hours every other week and that’s two episodes. We walk away and the next two episodes go live. We don’t do anything else. We’ve automated, we paid for years. Since 10 episodes in, we paid for an editor who post the episode, who writes the show notes, who does all that stuff.
Writing the books. When I’m going to write a book I will make that a priority and I will work on it everyday. If I was writing or revising my book right now, I would probably do at least an hour of that once a day and then I would continue to do my other stuff. I wouldn’t say ‘yes’ to a bunch of things. I say no to some interviews. I say no to a lot of opportunities to jump on a call with someone to explore this or that. I say no to speaking at some conferences. Not all, but if I don’t think it’s a valid use of my time, I save the two travel days and the time to write the talk and all that. I push that towards things that I feel like are my highest priorities, that are in my goals, and things that hopefully will bring the most value to me, but also most valuable to this community that we’ve built and more value to more people.
That’s something else that I had to tone down is I don’t do as nearly as many as one-on-one things because I find that I can be more valuable by writing a book, or recording a podcast, or writing a conference talk that is going to be distributed to thousands or tens of thousands of people. I also don’t like things that are ephemeral, things that don’t stick around. To me, a blog post is better than a tweet because a tweet’s gone. A book is better than a blog post because a book sticks around for a long term. This is a lesson I that I’ve learned over the years is to focus on those things that help more people, that stick around longer, that have deeper meaning, and that bring more value to both yourself and people that will be consuming it.
That was a longer answer than I thought. It was more than I had thought to say on that topic but I think that was a good question. I think at a higher level it’s about priorities and saying no to everything else, number one, and then number two it’s about staying motivated over the long term, showing up every day, and getting […] done. Relentless execution is this phrase that I’ve used. It’s a personal moniker that I have adopted. Relentless execution.
That doesn’t mean you go crazy and work 20-hour days. I haven’t work more than 40 hours a week during the decade. There may have been these short stints like when I was revamping HitTail. I worked 60-hour weeks for about six weeks and then I pair back. To me, a 35- to 40-hour a week schedule is ideal, sometimes 30 depending on the season of the year, but I find that I get more done when I actually have shorter weeks and I’m forced to make quick decisions and get stuff done.
Mike: I do as well. You know at the back of your mind that you have as much time to work on something as you want, when you can just take as much time as you need, then it will take forever. I think it’s, what is it? Taylor’s Law that the amount of work will expand to fill the available time. I find the same thing. I will hold off on making decisions because I know that I have time to ruminate on it, or I will take longer to do something just because I have the time available. That’s actually what makes my Mondays a little bit tough is that, because I get myself a lot more time on that day, sometimes I’m not necessarily as productive. Then I find that sometimes on Tuesdays I will be more productive even though I have less time available to me to do work.
Rob: I can totally see that. To come back to Greg’s question, he says, “What is your day or week look like?” I feel like everyday for me tends to be different. I do like hitting things hard Monday morning by getting up and I ask myself the question, what has to get done today or what has to get done this week? What will move the business forward the most?
When it was Drip it was like, “Well, it’s getting everyone on the whole team on the same page and getting this decision made about what feature to build or this big deal we’re trying to close.” Now with TinySeed, it’s choosing the batch and it’s getting that forward. Those go right to the top of the list even if I get in my email box and it has 50 things, the things that are on the topic of what I have to get done that day, I skim through it. I take care of all that stuff first and everything else is on the side.
I would say that my days probably don’t look like you think they do. I start work a bit later than you probably think and I end it earlier that you think. I didn’t used to do that. Again, I think that’s where we’re coming back to is forcing yourself to get stuff done on a shorter time frame. It comes back to the cult of the Silicon Valley startup hours where they’re like, “I’m working 80-hour weeks or 90-hour weeks,” or whatever.
Your productivity plummets. There been a bunch of studies that have shown that it plummets after 40, 50, 60 hours a week. They’ve done it in construction, with construction workers when they go to 610s and 710s. When you were estimating those jobs, you have this major markdown factor. There’s books published by the electrical contractors who say, “These are guidelines and it will drop 30% over 50 hours and it drops 40% over 60 hours. It’s not just for those last 20 hours. It starts to fatigue and then your entire 70 hours that you’re working become 60% as effective.
It’s this crazy thing and that’s where the Silicon Valley startups who say or the founders who say, “Oh, I’m just working all these hours.” I’m always thinking, “What are you doing? What are you actually accomplishing during that time?” I find that I’ve been able to get quite a bit done in my career and my life. I don’t do that, really never have, even when I was coding. When I talk about coding, there’s 12- or 14-hour days. It was my early 20s, we had no kids, and what I would do as a contractor-consultant I would code that long day and I take the next day off.
It wasn’t that I was working long weeks. It was that I prefer to batch my work into a single stint, so to speak. I felt like it was more productive once I’ve got everything loaded up into my head—the mental model—I hated stopping and losing all of that, and had to regain that the next time that I sat down.
Mike: I would agree with that. I do wonder about some of the studies and stuff where they say, “Oh if you’re working more hours, then it’s not as good. You’re not nearly as productive.” I do find that there are times when you just get into a rhythm and you’re in the zone. If you break out of it, take breaks and shorter days or something like that, it’s kind of hard to load your brain up with all the stuff and all the little details that need to be there in order for you to get certain types of work done. I’m not necessarily saying that it’s broadly applicable, but there are times especially when it’s coding, taking a break is extremely disruptive. It’s so much easier to just down there and bang that stuff for four or six hours or eight hours, and if you’re still being productive then there’s not a great reason to stop except for those forcing functions.
Rob: Thanks for the question, Greg. I hope that one was helpful. If you want to connect with Mike or I on Twitter, I am @robwalling and he is @SingleFounder. I feel like that probably wraps this up for the week, Mike.
Mike: I think it does. If you have a question for us, you can call into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for a full transcript to each episode. Thanks for listening and we’ll see you next time.
Mike: Yes. It’s one of the Star Destroyers but I don’t remember which one. I figure whether it’s the Super Star Destroyer or is it just one of the other ones?
Rob: I believe it’s Darth Vader’s Star Destroyer.
Mike: Yeah? Okay.
Rob: Exeˈcutor. What’s funny is I used to call it the Eˈxecutor when I was I kid because it’s spelled like that but I learned it’s called the Exeˈcutor. Here’s my question for the day. How many bounty hunters are on the Exeˈcutor when the rebels are hiding in the asteroid field?
Mike: Bounty hunters? Geeze.
Rob: This is The Empire Strikes Back.
Mike: Yup. They’re all standing around and he says like, “No disintegrations.”
Rob: Exactly and Robot Chicken has done a great parody of this. If anyone has not seen that, go type it. ‘Robot Chicken Star Wars Bounty Hunters.’ How many?
Mike: Oh gosh. How many exactly? There’s between four and six. If I had to guess, I’d go on the higher end. There’s probably six or seven, actually. I’ll go with seven.
Rob: Final answer?
Mike: Sure.
Rob: It is six. Very close, sir. I was at five, but Boba Fett, Dengar, Zuckuss, 4-LOM, Bossk, and IG-88.
In this episode of Startups for the Rest of Us, Mike and I discuss determining which signals matter, staying on task without extrinsic motivation, and more listener questions. This is Startups for the Rest of Us Episode 443.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve build your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: Yesterday, I was putting together a video for Google. Last fall, they’ve decided that they were going to come out with their new privacy policy and they’re basically pushing it on everybody who’s using their APIs. They’re saying, “Oh well, if you are using our API and you’re getting data from our customers,” technically they are my customers, “if you’re getting data from Google from those people because they are supplying their credentials and it’s passing through us, you have to conform to these new rules around what you’re going to be doing with data and how you surface that to the users.”
They just basically announced it in October or something like that and they said, “Oh, these new things are coming but we don’t really have any details on it yet.” But over the past couple of months they’ve really started pushing forward with the approval process and I had to send them a video that walk through exactly how people authenticate through Bluetick, every single place where data that I get from Google is used, how it’s used, show in the privacy policy and everything else, and I’m just like, “This sucks.”
What sucked even more is I created this 30-minute video and then I went to basically dump it unto YouTube, because of course you can’t submit it in any other way except by putting the video on YouTube, and I found out that there was no sound so I had to do it all over again. I had to re-record it. I was like, “This sucks,” and I tested the sound before like the first time, too. I tested it, it worked, then I did the video, and no sound. I was like, “Come on.”
Rob: That is no good. So, you basically just […] a bunch of times on something that really did not move you business forward.
Mike: Exactly. Of course, this whole thing does not really move my business forward, but I don’t know. I still have concerns about the whole thing because they say that depending on what you’re doing, you may need to go through a third party security review and I’m like, “Oh and that will cost anywhere from $15,000–$75,000,” and I’m like, “Uh, yeah. I don’t know about that.”
Rob: Interesting. They must have an exception, I’m guessing, for small companies? I mean, that seems like an odd thing to saddle you with.
Mike: Yeah, I don’t know.
Rob: It’s like it’s PCI has self-certification. There are often things like that where it’s a pain in the neck to do but there is some out. I guess it gets serious backlash. If there’s not, that’s not good because you’ve had this in place for a while and then they’ve changed policy?
Mike: Mm-hmm.
Rob: Huh? Google changing something and hurting someone’s business? That’s news. Shocker.
Mike: The sad part about that is that I specifically built Bluetick using IMAPS so I wouldn’t rely on their API, so that if they decided to change things on me then I basically wouldn’t be affected. Guess how that is working out for me right now?
Rob: Yeah, sorry to hear that. It’s tough to rely on any third-party. I talked about when I had HitTail, how we were reliant on Google keywords, and then they did not provide it. Then we got into the Webmaster Tools and then they broke that. They break that every six months. It was really frustrating.
That was a big reason that when I wanted to start my next startup, I didn’t want to be reliant, and then you just wound up being reliant. You’re relying on somebody at some point. You’re relying on Amazon or Google for hosting and it’s hard to switch. Yes, there are options but it’s a tremendous amount of effort to switch.
Even just sending emails, as you and I know, getting in spam, inboxes, and on blacklists like that, you become reliant on them, and then you have to go build all this infrastructure to keep you from spamming people. This is another example. You do something, it makes sense, it makes it easier for your customers, and in this case it kind of get you into a bunch of extra work to just maintain this thing.
Mike: It is a double-edged sword, though, and it creates this hurdle that if anyone wants to come in after the fact and try to build that, it just makes it more difficult for them. Just by virtue of building your app and making it better over time, that does the same thing, certainly so. I don’t know. Still trying to work through it. I sent it off to them. I send the video to them and in less than an hour later, they got back to me and said, “Okay, now this other thing needs to be fixed.” I’m like, “All right.” I fixed that and burned another three or four hours fixing that because they’re like, “You can’t have non-production systems using the same client ID.” I’m like, “Dear God, it’s the same thing.” So, I’m like, “All right.” I don’t know. I have to switch everything over, modify my build server and everything else.
Rob: Anything else beside from technical and integration challenges going on with old Bluetick?
Mike: I’ve got my webinar that I’m doing which, by the time this episode comes out, it will have been yesterday. I’m doing that for hr.com and we’ll see how that goes. I got to get them the final PDFs to the slides so that they can post it in the website and then get the presentation on Monday. It ought to be good.
Rob: Sounds good. On my end, just opposite pushing forward with TinySeed and things are going well there. I’m having a great time and I’m very excited about the batch that’s coming together quickly. We have almost all of the startups you selected, made offers, sent paperwork and that kind of stuff.
There’s a bunch of stuff I think I’ve said on the podcast in the past, like legal is the bottleneck and had been now for a month of two. We’ve been selecting and making offers but without the final paperwork, which is […] third party who isn’t moving nearly as fast, isn’t moving with the same urgency that we are, put it that way, has been a little bit frustrating.
I’m looking forward to getting past this point because not only did we have to incorporate and set-up multiple, where now all I see is a limited partnership in all this stuff, which takes time. Then we have to have all these docs drawn up and we won’t next time. Batch number two will not have the same level of foundation-building and will have a lot more way. We’ll know more of what we’re getting into and have better systems to do it. But realistically, the systems are not what are holding us back at this point. It really is this reliance on a third party who is moving at a glacial pace compared to us. So, I look forward to being out from under that here pretty soon
Mike: It’s interesting that you say that because it reminds me of, don’t know the inside story on this but my guess is that, that’s probably the exact reason why Stripe came out with Atlas was to help founders get past all of that stuff, so that they just didn’t have to worry about the pace of getting all the legal stuff taken cared of. It just reminds me of that.
Rob: Totally. It’s friction and it’s something, specifically with Atlas, that every company that’s not a sole proprietorship has to do. They just want there to be more of those companies. They want to have that rising tide so they can remove that friction. I remember the first time with […] I was like, “Wow, they’re really going outside their core competency,” but now I get what their long-term vision is, is that they just want more businesses that are able to get online. Of course, that’s what Stripe Atlas allows you to do super easy.
I said it before. I wish there was Stripe Atlas for accelerators and for funds. There are some pre-made things for it. They’re ridiculously expensive to the point of being a non-starter. So, we get to do it from scratch. Good thing I’m used to doing that, huh? No one thinks from scratch.
In other news, we have a few more podcast reviews. I’ll just read one of them. From wking-io, he said, “I could listen all day. I do not own my own SaaS but I work for a small info product startup and this information is so valuable. I’m able to see this information in practice and know that I will have a head start whenever the moment strikes for my own app from all the info Rob and Mike shares.”
Thank you for that review. We love a five star rating or if you’d prefer spending more time writing review, either one is fine, in […], Apple podcast, wherever greater podcast are sold, we appreciate it. Mike, when is the last time that you got something useful from Twitter?
Mike: I connected last week when somebody had lunch with them and we connected over Twitter directly. So, we coordinated that […] as you could say.
Rob: That was a very long pause. The editor edited that out but to the listener, Mike was silent for about seven on eight seconds. Number two, did you have each other’s email or did you literally meet and connect? If Twitter had not existed, would you guys have been able to coordinate that?
Mike: We probably would have. It was somebody who joined the MicroConf Academy years ago and he’s been eyeing MicroConf. It’s Josh from […]. We did lunch maybe Tuesday. Monday or Tuesday. It was Monday this week. He was in town from Maryland and just wanted to say hi, so we got together and chatted for a while about our businesses and how things were going.
It was a good time but other than that, it’s been a while since I’ve ever gotten any real value from Twitter. You’re right. Evidently, there’s a huge pause because quite frankly, I don’t log into Twitter very often anymore because it’s a lot of noise. I guess that’s what Twitter is for is for noise.
Rob: Noise and arguments. I’m not a hater but I’m been trying to figure out how do I get myself off of it because I find it a bit more of a distraction than anything. With that said, I haven’t gotten anything valuable from Twitter in a for a very long time except for yesterday and today. I knew we were recording this episode. We didn’t have enough questions to fill out a full episode and with one tweet, got frankly enough for probably two episodes or more. So, I want to give a shout out to Twitter for bringing the thunder once every six months for me or whatever.
Anyway, enough of the Twitterating. Our first question was posed on Twitter. It wasn’t even directly to us. It was probably a few weeks ago when I emailed it to my Trello board and got it over here. Justin Jackson posted on Twitter and he said, “One challenge I’d had as a founder, tracking and trying to triangulate thousands of qualitative data points. Somehow, you have to decide which signals matter. But even then, plotting all those data points on a map and deciding on a direction is tough.” Then Alli Blum replied then and said, “Same. I think about this pretty much all day, everyday.”
I think we should discuss because I have thoughts on this. Basically, how do you do this? That’s the question here is how do you as a founder do that? Probably the best question is, you have a bunch of qualitative data, how do you decide on a direction when there are conflicting signals?
Mike: I don’t like this answer. I’ll tell you that before I give it.
Rob: It depends? No, just kidding.
Mike: No. Even worse than that. It’s like a lot of gut feel. You go with what feels important at the time because it’s hard to take some of that data and say, “This is justifiably more important than that,” really based on whatever rules you try to put in place. It’s hard to put rules down on paper that are immutable. There’s always things that are changing and there’s always stuff that’s going to factor in to those decisions.
For example, the video that I had to do for Google. It wasn’t really all that important and I pushed it off for a long time because it just wasn’t important. Then, there was a deadline where it’s like, “Okay, you got a week before we just outright reject your application.” It’s like, “Okay, I have to do this now.” It’s because the priority has bumped up, because there’s a hard line in the sand, and it has to get done by that time or there’s consequences.
I feel like a lot of my decision-making around priorities tends to be driven by negative consequences of not doing something, as opposed to there’s going to be positive outcome for X, Y, or Z. There’s so many things that are going on at any given time and you have to try and juggle them all at once. It’s hard to do that.
Rob: I actually think that’s a good answer. I think gut feel is the first thing that came to my mind. I think rules of thumb are something that, if you could possibly apply rules of thumb or expertise from other people who’ve gone down before it, then start there. If not, it’s a ton of gut feel.
Justin has identified the edges of where we can have a startup blueprint and where you’re drawing your own map, with a map ends in essence. I actually have a tattoo on my shoulder that is a map and there’s a hand drawing at the edges. It’s a metaphor for exactly this, of going off the beaten path. Originally, it was like, “Well, I’m not going to work 9–5, a salary job. I’m going to go be a contractor,” and people are like, “Woah. that’s risky,” and then, “I’m not going to do salaried work anymore. I’m going to build products.” “Wow. that’s really risky. You’re hard. Can you even do that?” Then while you’re building those products, there’s no map anymore or very little map.
Frankly 10–15 years ago there was almost no map. Things like this podcast, even lean startup, customer development, SaaStr, and MicroConf have enabled us to develop a mental model. There are books that come out on the topic as […]. It helps all of us have kind of a lose map or a lose blueprint, but there’s always an edge to that. This is the point where you have a bunch of data points to decide another action. There’s no map and this is where what separates the, I would say, a poor founder from a mediocre one, a mediocre from a good, a good from a great, is how well they’re able to make these decisions.
I would also say that this is, at least for me, gotten easier over time. I feel like I’ve gotten better at it because here’s what it is. It’s making decisions without sufficient data. You don’t have all the necessary data to actually make the decisions, so you have to fill the rest in in your head. I believe there’s almost never a right answer to these things. There’s always multiple right, multiple tough, wrong answers.
I also believe that most decisions are reversible; almost all decisions. There are very few that are not. To some, you may think are not reversible. They may come with a monetary cost. They may come with a relationship cost. They may come with agony, pain, time, whatever, but almost every decision is reversible. The ones that are truly not are the ones that I now agonize over and everything else. I tend to make a pretty quick gut feel decision, realizing that if we need to change course later, you can.
Mike: I’ve looked at all these different data points and see them as signals that point at a certain direction. But some of them are more important than others, and based on the situation or timeline or things that you’re dealing with, some of them are going to come out on top. If you have rules on paper, it’s very hard to create a set of rules that say exactly what to do or how to track those things and to determine what matters.
As you said, I think that that’s a really good point about the fact that there are these guidelines and rules of thumb that you can follow. But at the same time, they’re just signals. That’s all it means. There isn’t a right or wrong answer, unless you’re looking at it in retrospect. In retrospect, there is always a right answer, or a best answer, or an optimal answer. But because you probably are working with only about 30%–40% of the complete picture at any given time, I call it guessing a little bit. It’s more like educated model recognition of what’s going on.
That’s why MicroConf is just so important and these conferences and communities where other people have seen those types of things. They can recognize it essentially on your behalf, if you have not been there before and you are not able to directly recognize it. That’s why mentors help. that’s why accelerator programs work. Like Paul Graham, I would imagine who walk into just about any startup and give pretty solid feedback about why it will or won’t work, and probably be very reasonably accurate on it, just by virtue of having talked to 1500 to 2000 or 3000 startup founders, and helping them through all those different situations.
Rob: There’s a book called Decisive by Chip and Dan Heath. It’s about how to make decisions. I believe Ruben Gomez from […] turn me onto that. I listened to it a couple of years ago and something they say in that book is, just because the outcome turns out bad doesn’t mean it was the wrong decision. Those two things are not linked. You make the best decision you can, with the data you have, and with the information, the gut feeling or whatever else, the intuition, whatever you want to call it, and then you do the best you can. You reverse it if you need to or you correct-course as you move forward.
Mike: I think that’s actually a problem for a lot of people, myself included. A large extent is trying to figure out, “Can I just make a decision and move on?” or even just recognizing that you’re a reasonably smart person, you’re going to make the best decision with the information you have at the time, and it may turn out to have been a sub-optimal answer or solution to whatever it is that you’re trying to do.
Waiting is not necessarily going to help you very much. You’re basically just wasting time at that point when you could have been trying to move something forward in one direction or the other. Maybe it was the wrong direction but, as you said, those types of things tend to be reversible. It could take some pain but if you wait around for enough information, you have wasted so much time and then you still have to do it. So, moving is better than not moving.
Rob: Yeah. Opportunity cost of postponing, or agonizing, or waiting, procrastinating, whatever word you want to look for of a decision. It’s hard and that’s why most people don’t do this, don’t start companies because it’s too uncharted, it scary, it takes a while to get used to, and it’s uncomfortable. I think that that’s when you know that you probably want to doing things right, but you know that when you’re in a zone of personal growth, is when you’re doing things that are making you feel not comfortable. That’s when you’re going to get better. So, cool. Glad that Justin threw that out on Twitter.
Our next question is about how to stay on task with no extrinsic motivation, no external motivation. It’s from Mike Manfrin. He’s @manfrin on Twitter. He says, “How the hell do you stay on task when you have no extrinsic motivation? I’ve been letting myself spiral out second- and third-guessing design decisions and getting absolutely paralyzed with choice and scope, that I end up doing no work towards my startup.” Ken Wallace chimed in, “Think about having a mastermind because those folks can guide you,” and I actually think that’s a good thing we should throw out. I mean, that’s often with the bigger decisions. That’s where I rely on is someone in a mastermind. What other thoughts do you have here for Mr. Manfrin?
Mike: It’s interesting that this question comes out because I just talked about it. It’s very easy to run into that situation where you are not sure what to do, so you wait and you second-guess yourself. You don’t do the work because you’re second- and third-guessing your design decisions, thinking that if you look at the problem more or you try to gather more data is going to help you in some way shape or form, and it usually doesn’t. I think that’s a very different problem than not having motivation, whether it’s intrinsic or extrinsic. That’s a different problem than being in a situation where you second-guess yourself and you’re not sure what to do, so you try and gather more information. I think those are two completely different problems.
Rob: I agree. He says, “How do you stay on task when you have no external motivation?” I definitely had time especially when I start to burn out, or when I’m feeling depressed, or when I don’t get enough sleep, there are seasonal times when it’s dark outside and cold and stuff, where I am unmotivated to do things, and I really struggle just to stay on task. Those are the times where I strategically break out caffeine, I turn on bright lights, I turn on loud music. I use all the sensory options that I have to try to get myself into a zone. I try to get into a routine where when I hear this playlist start or when I hear this single song and listening looping start, that I force myself to get in and do things. Now, the nice part is it’s probably been a year or more since I felt that way, but I’ve gone through months and months of stretches of that. That’s how I do it.
He’s also then asking, he’s spiraling out second-guessing design decisions, getting paralyzed with choice and scope. This does tie into that first question or first proclamation that Justin made of how do you make these decisions and not get paralyzed with choice. That’s where we said this is hard, it’s gut feel, you can undo things later. I think a lot of us as developers don’t want to make the wrong choice because we feel like we’ll have to rewrite all this code. Refactoring’s a pain in the butt and if we make this decision decision in the database, then we’ll never live it down, never be able to correct it.
While it will be painful to correct, these things are reversible. That’s where I tell myself actively if I find myself being hung up and for the first thing is to identify that you’re doing this, and being like, “I’m not being productive right now because of this, because of this decision, or this item in my Trello board, or this email. Why am I not doing that? Am I stressed about it? I just don’t want to face it, am I scared that I’m going to make the wrong decision?”
There’s a bunch of things that I will try to identify and then I’ll say, “Okay, if I’m stressed about it, then why? And then why? And then why? Keep asking the whys to get to the true source of it, to figure out if I’m actually stressed, or if it’s a design decision then I will either think to myself like, “Well, I’m going to call up XYZ person, who I know has a great design and usability sense, and I’m going to ask for 15 minute of their time and say, ‘Can you help me with this?’ so that I have some sense of calm about the decision.” Or maybe I just make a gut feel, I go forward, and hope it’s the right decision.
These are tactics that I would use trying to get other people involved. I do think Ken Wallace’s suggestion of having a mastermind so that you can bring these things to people on a regular basis, is a good one. Can of course run MastermindJam, which matches people up in the startup space into a mastermind.
Mike: But I think that those are also with two different pieces. One was recognizing it and then two actually addressing the problem. I think the recognition of it is something that tends to take much longer than it probably should for most people. I found that myself. I mentally know that I’m not making progress on something, but I don’t necessarily allocate time to analyze my productivity at noon, for example. I don’t have 15 minutes of this to decide and say, “Am I making progress today? Am I doing what I expected to do? Am I procrastinating doing stuff or just not doing things because I don’t want to or I’m afraid to make mistakes?”
I think the identification pieces, the part that creeps up on us, and it last fast longer than it should if we aren’t on the lookout for it at all times. What I do, for example, I do a lot of journaling. I have an app that sends me an email and says like, “Hey, write into this little thing here and you can explain what your day is supposed to be like,” for example. I do that on a fairly regular basis. I’d say probably at least three or four, if not five days a week. Then I will notice the following day if I’m not making progress on something because I’ll be a little annoyed, usually my sleep will be suffering, and I’ll say, “Oh, I didn’t get a good night sleep last night because I was thinking about this,” and it makes me think about that stuff.
So, it’s kind of a forcing function. That’s something that people can think about. I won’t say journal your way out of it. I don’t look at it as full-fledged journaling. I might write a couple of sentences or maybe a paragraph or two. It’s usually the stuff that bothers me and that just brings it to my attention. Maybe if I start writing a lot, I know that I need to pay attention to it, maybe take a step back, but otherwise I could easily go a couple of weeks or a month or two without really noticing, and then all of a sudden it’s like, “Oh I’ve burned two months and I’ve got nothing done.”
Rob: That’s a good point. The faster you get basically knowing yourself at noticing that you’re having negative thought patterns, or negative behaviors, or behaviors that are causing you to procrastinate, or go in circles or whatever, the faster you’re able to do that and identify it, the faster you’re then able to actively attack it, get through it, and make progress. I think this is something that all of us struggle with in one form or another and I think this is something that you get better at over time if you focus on it.
This is so much of what my wife, Sherry, does on the ZenFounder podcast and in her writings and such, is looking at how these thought patterns come about, how to identify them, how to get through them. I’ve been saying for quite a while that I think 60%–70% of entrepreneurship is mental. I think more than half of entrepreneurship is purely just dealing with your own psychology, your own things, that self-sabotaging behavior, procrastination, whatever it is that you struggle with, if you can learn to overcome that, you will have such an easier time and make so much more progress so much faster.
I’m saying this from personal experience, that getting into you own psychology, whether that’s with a spouse, or a mastermind, or trained professional who is either a therapist or business coach or whatever, I think it’s invaluable. Thanks for the question. I hope that was helpful.
Our next question is from @GregDigneo on Twitter. He says, “My question revolves how you and Mike manage your time. Rob you’ve built and exited a company. You guys are both parents, you run a conference, you have the podcast, you write books. My loose question is, what is your day/week look like?” He’s asking in a couple of different ways. It’s like, how do you manage your time and what is a typical day/week look like? I think he’s probably looking for the days or the weeks where we’re more productive, not the ones where I stare at my computer for three hours, don’t get anything done, and then just wander off to go for a walk because I realize I’m not actually focused.
Mike: I tend to look at it on a weekly basis. My week’s, for the most part, are pretty similar. I work from home and the weeks that I tend to get screwed up is when the kids are home from school. Let’s see here. If I’m starting on Monday, Monday is usually my heavy work day, so I have it blocked off from my calendar. Even if somebody wants to schedule time with me using Calendly, they simply can’t. I have a hidden calendar that I can send them a link if I really needed to talk to somebody on a Monday, but typically I don’t hand that out to people and it’s usually on a case-by-case basis.
Tuesdays is not blocked off but I tend to get a fair amount of work done on Tuesdays as well Monday. I usually will work late, so seven or eight o’clock at night just because I tend not to have anything else going on. Tuesdays is a little bit lighter. In the evenings on Tuesday night, I have a D&D game that I play every week and then Seeker Wednesdays, I probably do less work. On Thursday, I do less work. Fridays, I try to get things done and set up for the following week. Saturdays, do a bunch of stuff around the house and take the kids to whatever they have, music lessons, or soccer, or what have you. Saturday night I have another online D&D game that I play and then Sunday is usually do whatever, usually cleaning up around the house and stuff like that. My week is pretty straightforward for the most part. How about you? Do you do it on a daily basis or a weekly basis?
Rob: I tend to think about things on a daily basis. Most of my days are different from one another. Sherry and I collaboratively home school one of our kids. He’s older, he’s almost 13, so it’s not like we’re sitting there teaching him stuff. He’s online taking courses, making progress on his own, and then we just have to monitor and poke in.
Some of my days I’m on and I know I can schedule fewer calls that day because I don’t want to be interrupted, and then other days I’m just completely focused on work. I look at it at a day-by-day basis. What I’ve noticed about myself is that I used to code. When I was writing code, I could sit and write it for 12 hours straight. I used to do that. That was actually my optimal way of functioning is to sit down, get momentum, break very briefly to eat or use the bathroom, and then get back. I would do 12-, 14-hour code days and get two or three days worth of progress done in that amount of time.
I don’t know if it has since I’ve gotten older or if it’s that I don’t code anymore because the coding was a very logical left brain. There’s some creative in it, but compared to what I’m doing now where I’m actually actively producing content, having to think things through, and these higher-level decisions, they’re a lot more taxing on my good glucose, so to speak. There’s only so much good brain functioning that you can have.
Writers who write books, Stephen King, these highly productive writers, they don’t write for 10 hours a day. They tend to get up, write in the morning between three and four hours tops, and then they spend the rest of the day doing other things because there’s only so much good focus you have.
Now, what I’ve found is that I’m highly productive in short bursts of, say, one to two hours. I try to have a forcing function that forces me to stop, because if I don’t, I will tend to just work two, three, four hours straight, and I feel my productivity just descend over the subsequent last one or two hours that I’m working. I have different forcing functions. Oftentimes, it is a child getting home from school or I take two of the kids to Jiu-jitsu. It’s only about an hour that we’re sitting there and I get so much done in that hour. And it’s the worst working conditions. It is terrible. I’m hunched, I have no plug, I have no chair. I’m literally hunched against the wall like I’m in junior high gym or something. I’m sitting almost like Indian style with my back to the wall, terrible posture, I have a laptop there, and I get more email done in that 45–60 minutes than I do two hours sitting at my house. I have no external monitors, I have nothing. It’s loud but there’s something about that space and the fact that I know my time is so compressed that I just hammer through to-dos and I hammer through emails.
That’s just one example but I have a bunch of times like that during the week that I’m finding there’s kids’ music lessons, there’s other things where I find that if I force myself to only have this much time, that I get the work done faster. That’s kind of a personal hack that I’ve been doing lately.
I think another thing is these are low-level how to get things done quicker on a higher level. I say ‘no’ to everything except for what’s on my goal list for the year. If you look at running a conference, you and I just do that. That’s on the to-do list. I feel like I’m pretty efficient about it, I feel like I focus on it when I need to, and then I make it a priority. The podcast is something that we’ve essentially automated almost all of it. You and I show up for two hours every other week and that’s two episodes. We walk away and the next two episodes go live. We don’t do anything else. We’ve automated, we paid for years. Since 10 episodes in, we paid for an editor who post the episode, who writes the show notes, who does all that stuff.
Writing the books. When I’m going to write a book I will make that a priority and I will work on it everyday. If I was writing or revising my book right now, I would probably do at least an hour of that once a day and then I would continue to do my other stuff. I wouldn’t say ‘yes’ to a bunch of things. I say no to some interviews. I say no to a lot of opportunities to jump on a call with someone to explore this or that. I say no to speaking at some conferences. Not all, but if I don’t think it’s a valid use of my time, I save the two travel days and the time to write the talk and all that. I push that towards things that I feel like are my highest priorities, that are in my goals, and things that hopefully will bring the most value to me, but also most valuable to this community that we’ve built and more value to more people.
That’s something else that I had to tone down is I don’t do as nearly as many as one-on-one things because I find that I can be more valuable by writing a book, or recording a podcast, or writing a conference talk that is going to be distributed to thousands or tens of thousands of people. I also don’t like things that are ephemeral, things that don’t stick around. To me, a blog post is better than a tweet because a tweet’s gone. A book is better than a blog post because a book sticks around for a long term. This is a lesson I that I’ve learned over the years is to focus on those things that help more people, that stick around longer, that have deeper meaning, and that bring more value to both yourself and people that will be consuming it.
That was a longer answer than I thought. It was more than I had thought to say on that topic but I think that was a good question. I think at a higher level it’s about priorities and saying no to everything else, number one, and then number two it’s about staying motivated over the long term, showing up every day, and getting […] done. Relentless execution is this phrase that I’ve used. It’s a personal moniker that I have adopted. Relentless execution.
That doesn’t mean you go crazy and work 20-hour days. I haven’t work more than 40 hours a week during the decade. There may have been these short stints like when I was revamping HitTail. I worked 60-hour weeks for about six weeks and then I pair back. To me, a 35- to 40-hour a week schedule is ideal, sometimes 30 depending on the season of the year, but I find that I get more done when I actually have shorter weeks and I’m forced to make quick decisions and get stuff done.
Mike: I do as well. You know at the back of your mind that you have as much time to work on something as you want, when you can just take as much time as you need, then it will take forever. I think it’s, what is it? Taylor’s Law that the amount of work will expand to fill the available time. I find the same thing. I will hold off on making decisions because I know that I have time to ruminate on it, or I will take longer to do something just because I have the time available. That’s actually what makes my Mondays a little bit tough is that, because I get myself a lot more time on that day, sometimes I’m not necessarily as productive. Then I find that sometimes on Tuesdays I will be more productive even though I have less time available to me to do work.
Rob: I can totally see that. To come back to Greg’s question, he says, “What is your day or week look like?” I feel like everyday for me tends to be different. I do like hitting things hard Monday morning by getting up and I ask myself the question, what has to get done today or what has to get done this week? What will move the business forward the most?
When it was Drip it was like, “Well, it’s getting everyone on the whole team on the same page and getting this decision made about what feature to build or this big deal we’re trying to close.” Now with TinySeed, it’s choosing the batch and it’s getting that forward. Those go right to the top of the list even if I get in my email box and it has 50 things, the things that are on the topic of what I have to get done that day, I skim through it. I take care of all that stuff first and everything else is on the side.
I would say that my days probably don’t look like you think they do. I start work a bit later than you probably think and I end it earlier that you think. I didn’t used to do that. Again, I think that’s where we’re coming back to is forcing yourself to get stuff done on a shorter time frame. It comes back to the cult of the Silicon Valley startup hours where they’re like, “I’m working 80-hour weeks or 90-hour weeks,” or whatever.
Your productivity plummets. There been a bunch of studies that have shown that it plummets after 40, 50, 60 hours a week. They’ve done it in construction, with construction workers when they go to 610s and 710s. When you were estimating those jobs, you have this major markdown factor. There’s books published by the electrical contractors who say, “These are guidelines and it will drop 30% over 50 hours and it drops 40% over 60 hours. It’s not just for those last 20 hours. It starts to fatigue and then your entire 70 hours that you’re working become 60% as effective.
It’s this crazy thing and that’s where the Silicon Valley startups who say or the founders who say, “Oh, I’m just working all these hours.” I’m always thinking, “What are you doing? What are you actually accomplishing during that time?” I find that I’ve been able to get quite a bit done in my career and my life. I don’t do that, really never have, even when I was coding. When I talk about coding, there’s 12- or 14-hour days. It was my early 20s, we had no kids, and what I would do as a contractor-consultant I would code that long day and I take the next day off.
It wasn’t that I was working long weeks. It was that I prefer to batch my work into a single stint, so to speak. I felt like it was more productive once I’ve got everything loaded up into my head—the mental model—I hated stopping and losing all of that, and had to regain that the next time that I sat down.
Mike: I would agree with that. I do wonder about some of the studies and stuff where they say, “Oh if you’re working more hours, then it’s not as good. You’re not nearly as productive.” I do find that there are times when you just get into a rhythm and you’re in the zone. If you break out of it, take breaks and shorter days or something like that, it’s kind of hard to load your brain up with all the stuff and all the little details that need to be there in order for you to get certain types of work done. I’m not necessarily saying that it’s broadly applicable, but there are times especially when it’s coding, taking a break is extremely disruptive. It’s so much easier to just down there and bang that stuff for four or six hours or eight hours, and if you’re still being productive then there’s not a great reason to stop except for those forcing functions.
Rob: Thanks for the question, Greg. I hope that one was helpful. If you want to connect with Mike or I on Twitter, I am @robwalling and he is @SingleFounder. I feel like that probably wraps this up for the week, Mike.
Mike: I think it does. If you have a question for us, you can call into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for a full transcript to each episode. Thanks for listening and we’ll see you next time.
Episode 442 | Corporate Structures and How the Choice You Make Now Can Impact You Years Down the Line
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Einar Vollset talk through the different kinds of corporate entities, how they differ, and how they can impact you in the future.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, Einar and I talk about US corporate structures, taxes, and why what you do now can impact you years down the line. This is Startups for the Rest of Us Episode 442.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve build your first product or you’re just thinking about it. I’m Rob.
Einar: And I’m Einar.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Einar: You know, it’s same old, same old. I’m mostly spending my time arguing with lawyers and accountants and things around Tiny Seed. That’s always exciting. It’s probably been since before MicroConf it’s been nonstop lawyering pretty much. That’s both expensive and frustrating at the same time.
Rob: Yeah. I was looking at some notes I had from a couple of years ago, I found this old notebook, and I had some personal goals that I didn’t announce in the podcast but personal goals for myself. One of the bullets was, “I don’t want to talk to any lawyers this year for any reason.” It was like 2017 or something.
Einar: It’s been unavoidable for me lately. Mostly with Tiny Seed stuff. Actually the main hurdle–which I guess we’ll get into this later–has been there are lawyers who specialize in whatever. You wouldn’t go to a securities lawyer if you need to be defended for a hit and run. But you talk to lawyers and their specialist and the expensive ones for securities and fund formation and they have their way of doing it, and it’s the way that venture capital is normally done. Essentially, you’re having to spend $1000 an hour arguing with somebody about how things should be done.
Rob: Right. Trying to educate them that we’re not traditional venture capital. It’s not going to all be Delaware or C Corps. We mentioned early on to the lawyers, we’ve been now through a couple of different firms but we told early on, it’s going to be more bootstrap startups, that’s our thing. We’re going to fund LLCs, we’re going to fund C Corps and they’re not all going to be in Delaware but then when rubber meets the road, all the docs made the assumption of Delaware C.
Einar: Delaware C Corp, a ban on issuing dividends which clearly doesn’t work with us, and all sorts of things. It’s been quite frustrating and a bit more expensive than I expected too.
Rob: Yeah. Because we’re just going against the tide of so many funds, right?
Einar: Oh yeah. The standard is like we only take Delaware C Corporations, at a corporate level disallow any kind of dividends because people want to reinvest and just do Delaware C Corps and that’s it and issue SAFEs ideally. The standard one, which again, assumes that there is a price around coming. That’s been interesting.
Rob: Yup. And that’s really the impetus for this episode is to give folks a little more background in case you don’t know who you are, you and I have co-founded Tiny Seed, we spoke about this about 20 episodes ago. It’s episode 420, an alternative form of startup funding where we talk to Tiny Seed and the mission and all that.
Einar: Yup.
Rob: Folks can go back and listen to that if they want more background. But you and I are in the midst of getting this off the ground and we’re picking the first batch and closing in all that stuff. But really, legal has now become the bottleneck and it’s getting these terms in there and as we were knee deep in this having these conversations via email when I was London and then get back in doing calls and stuff, you brought up. You’re like, you know there’s a lot of misunderstanding or just lack of knowledge with startup founders about the different entity types. Granted, this episode we’re going to focus on US entities, and there’s a few reasons for that.
One is even if you’re not in the US, a lot of folks do start US entities, they’re going to take any funding or if they’re going to cater to the US market or there’s tax reasons, there’s a bunch of reasons. If you’re living in Europe right now, some of this still may apply to you. You very well may wind up setting up a US entity at some point. But even beyond that, what I’ve often seen is while laws don’t translate one to one, there is generally in England, and in most of Europe, there’s the equivalent of these things, an equivalent of a C Corp that has double tax. And there’s equivalent of the LLC even though it’s not called the same thing.
Einar: That’s right.
Rob: The standard disclaimer applies, you and I are not lawyers, this is not legal advice and all that. But damn it, I kind of feel like I’m becoming a lawyer.
Einar: We’re going to go and ask all around, this is a plan whose […] all the Tiny Seed stuff and sign up […].
Rob: That would be my worst nightmare. We’re having to get pretty knee deep into it and I think the fact that traditionally bootstrapped companies typically form as LLCs or S Corps. And VC backed companies almost always form as Delaware C Corps, right?
Einar: The standard thing in YCs, you come into YC and you have A another entity, a foreign entity, or no entity, they kick you to I think it’s another YC Company, Clerky? And they just spin you up with like a, “Here’s how to do a Delaware C Corporation, that’s what you need in order to get the investment from us.”
Rob: Yup.
Einar: That’s very much to stay. With their investment structure, and YC is so dominant that pretty much whatever YC does on the accelerator early stage fund side, that’s what everyone else copies. It becomes a Delaware C Corp and a SAFE.
Rob: Right. What we’re going to talk through today is talk through the different corporate entities. We’re going to attempt and not make it the most boring episode ever of this podcast.
Einar: You should call it the most boring episode ever.
Rob: That should be the title, that’ll be something. And we’ll touch on points like liability versus taxes. Any tax is really the big thing with most of these, right? Because once you have an LLC, S Corp, C Crop, you do have a certain amount of liability shield. I’ve heard that if you’re a single member LLC in certain states, if you got sued, court will often consider you a sole proprietor, you don’t have a liability but we’re not going to get into that.
We’re going to talk a lot about taxes today because that’s the thing. Because if you pull dividends out, how are they taxed differently?
Einar: How you mean different? That’s the difference between a traditional YC Venture style company and like a bootstrapped “lifestyle” business. You’re going to basically go through several rounds of funding while you run at a loss. That’s the goal. It doesn’t really matter like tax optimization for dividends or the owners pulling out cash doesn’t really apply because there should be none. And in fact you might find that your investors are more than a little upset if you start actually running out of profit because that’s not the goal. The goal is become, burn all the money, dominate the market, and IPO.
Rob: Right. Raise every 18 months and if you’re not burning through that cash, you’re not spending it well, you’re wasting time and wasting their money. Because if they’re going to give you money and have you let it sit in your back account, it would be better served doing something else. That’s the mentality.
Einar: That’s true. Honestly, a lot of DCs will basically tell you they would prefer, like if you’re in a company that’s growing reasonably well. Tiny Seed or most bootstrap founders would consider a success so you get the $5 million, $6 million a year and you’re profitable but you don’t then need anymore a venture fund, that’s a loss for them. They would actually prefer you just to sell the company, pocket some money and try again and have a run at a bigger success.
Rob: Yup. That brings us into the meat of this episode. In the US structure, aside from just being a sole proprietor, there are really these three entities that are most common. I already mentioned them in this episode. Every Fortune 500 company I’m guessing is a C Corp. If you go public, you’re a C Corp. I don’t know that you can go public with other structures but that’s the big one and it’s as we’ve said, that’s what the venture capitalist typically Delaware C Corp. The nice part about that is there’s no past through income so that if you had a hundred different people on your cap table, you had a hundred different people or entities that owned a piece of your C Corp, at the end of the year, if you make a million dollars and keep it inside the company, nobody else gets taxed on it.
They’re like shielded from the taxes. It doesn’t count as income until you pull that money out of the company and actually distribute it to your shareholders.
Einar: Yeah, because that’s the challenge. That’s really the challenge with LLCs in that regard in general path through entities whether that’s partnerships, or a single member, or sole proprietor, or a C Corp doing it, S selection. You end up basically passing through whatever losses and gains to the people who own the company whether that’s investors or just the owners. You can be in a situation where there’s a gain but you’re not actually kicking out the gain so that there’s taxes to be paid but without any profits, any cash to pay for the investors. Which is partly why traditional venture funds don’t like to do it.
In some cases actually, the investors into the fund themselves, there’s a disregard of entities. They could be not for profits, they could be university endowments, they can be wealthy individuals who invest through like a self directed IRA. In most of those cases, they actually don’t pay taxes, so they don’t file tax returns. If you pass through a gain or a loss to them, all of a sudden they have to start filing tax returns not because of you, which is problematic in a lot of cases which is partly why it’s disallowed.
Rob: In my experience forming corporate entities, my consulting firm that then was this umbrella entity over all of my early small software products, and it still is frankly, I’ve changed the name of it now but it was called The Numa Group for years. I ran it for five years just as a sole proprietorship and then I made it an LLC. Certainly I wouldn’t have done a C Corp because I was just pulling up a bunch of cash off. That’s the thing we didn’t say.
The negatives of a C Corp, if you’re bootstrapped, the corporation itself will pay taxes at the end of the year and if you want to pull dividends out, you then pay another round of income tax. It’s called double taxation. If you’re pulling cash off a business, you do not want it in general to be C Corp. When I was forming The Numa Group as an entity and it was really more for liability reasons at the time just to shield me from anything. I could do an LLC or an S Corp and I was advised that an LLC, if you do a single member pass through LLC, that it has a less filing requirements, even less bookkeeping stringency complexity. I did that and that’s been fine. That was a good call for me.
When I went to spin Drip out, Drip started as just like hittail on all my other stuff, it was just under Numa Group LLC. Eventually, Drip got big enough for it has to be its own thing. When I spun that out, I could make it an LLC or an S Corp. Really, an S Corp as you said earlier, it’s just a C Corp with an S filing something or rather, like an option.
Einar: Yeah. It’s basically to do a federal taxes. You make what’s called a S Selection, and again, I am not a lawyer or a tax accountant, thank God, but you basically file an election with the IRS essentially you’ll be taxed in a very similar way to an LLC despite the fact that you’re a corporation. Doing so has benefits either from certain tax standpoints but it comes with certain issues related to it. For example, if you’re an S Corporation, typically becomes very hard to take investments, there’s a limit on the number of stockholders you can hold in the company, there is actually a limit on whether you’re allowed to have a non US persons as investors or owners. There’s a bunch of things that come into play there if you do the S Selection for sure.
Rob: Yeah. Because the advice we’ve been given is that Tiny Seed can fund C Corps and LLCs but we cannot fund the S Corps.
Einar: Definitely not, yeah.
Rob: Right. I didn’t know that. I believe it’s that another corporate entity cannot own a portion of an S Corp, is that correct?
Einar: I think that’s right.
Rob: Yeah. Again, not a lawyer but that was how it was explained to me but that was news because Drip was an S Corp and I didn’t realize when we formed it that that was a drawback. We hadn’t planned to take institutional funding. When we got acquired, I was looking around to try to do an angel round. That would’ve worked because it probably would have been a bunch of individuals but I just wasn’t aware of that at that time.
Einar: I think most people aren’t. You start up, people go to like Clerky or LegalZoom or ask their friendly neighborhood lawyer and it’s just like, “Oh yeah, yeah, yeah. Just do a single member LLC. Don’t think about it.” Or just do XYZ. in certain cases, people will optimize for their current tax situation but not necessarily for what’s going to happen if I want to sell the business or do a small angel round or that kind of thing.
Rob: That’s an interesting point because again, over the years when things were really simple for me, I just did an LLC and it filed its taxes as a sole proprietorship. Everything passed through to me, I didn’t take a salary. It was none of that. Now at a certain point, it started making enough money that my CPA said, “Look, keep it as an LLC but you file taxes as an S Corp and that allows you to now take a salary and you set a fair market salary, what does a CEO of a small software company make in the town you live in?” And since it was Fresno, it isn’t that high actually. “Everything above that, you just take out as an owner’s draw and then you don’t pay FICA,” is that social security?
Einar: Taxes and things or anything above that.
Rob: Yup. That’s a strategy that’s used by a lot of folks with both S Corps and LLCs filing as S Corps in essence. I think there are some number and I’ve heard varying, it depends on the CPA. My CPA said it’s when you’re making between about $60,000 and $70,000 from the entity. But I talked to someone the other day, they said their CPA told them $50,000 and someone else said $90,000. There’s some range in there.
Einar: My CPA is pretty mellow. She’s like I think $95,000. I live in the Bay Area too so she’s like $95,000 she’s fine with. I was like, “Why don’t we make it $50,000?” And she’s like, “Why don’t we not?”
Rob: Yeah. The salary?
Einar: Yeah, yeah, yeah. Because of the employment taxes in California held their own taxes on things on top of the Federal FICA taxes.
Rob: Right. It seems if you’re bootstrapping in business, the odds are pretty high. You’re going to do an S Corp or you’re going to do an LLC just because C Corp wouldn’t make sense. If you plan to raise venture funding, you’re probably going to go the C Corp route.
Einar: After you take funding from us. Maybe.
Rob: Yeah, exactly. Anyways, but it’s interesting because someone could go anywhere on the internet and research the taxes and stuff we just talked about but the interesting thing you and I are talking about before this episode started is the difference of if you decide to sell the company at some point, and the difference between if you never sold a company, you’ve never been thought about selling the asset within the corporate but not actually selling the corp itself versus a stock sale. Which is where you literally hand someone all the stock and they take the corporate entity with it.
Einar: Correct. Including the assets and liability crucially.
Rob: Right. That’s the thing that I’ve seen is, and you have more experience in this in the work you’ve been doing with Discretion Capital over the past couple of years. But my vague understanding has been that in smaller acquisitions, smaller meaning some $10 million, some $20 million whatever, they tend to be asset sales. Where you as the business owner, you keep the corporate entity and you keep all the liabilities in essence and the acquirer buys the assets, whereas if it’s some big, my guess is when Mark Zuckerberg bought Instagram, they probably bought all the stock.
Einar: Yeah. They bought the whole thing. Typically, a stock sale is essentially you’re taking the whole company, all assets, all liabilities, every single contract of this thing, including like if you buy a company and employee from three years ago sues you over something, sues the company, then you have to defend that claim. There’s a bunch of challenges around doing a stock sale. It includes the fact that if you purchase a company as a stock sale, that’s actually not as beneficial as doing it as an asset sale for the buyer.
With an asset sale, what you can do as a buyer, they come in and they say, “We want to buy just this specific piece. We might buy the technology, the goodwill, the existing contracts with customers, that sort of thing and we’ll explicitly exclude everything else.” Any liability that you sign, any contracts that they don’t want to assume, all that kind of thing will remain in the ship, was now essentially a shell entity. The other benefit which is often why buyers will push forward an asset sale, is that they get a tax break from doing an asset sale versus stock purchase so they often will pay more for exactly the same thing in an asset sale compared to a stock sale. And the specifics here gets into tax law and accounting. You definitely don’t want my advice on that.
Fundamentally, with an asset sale, what you’re able to do is to essentially reset the depreciation on those assets, and the value of those assets essentially becomes the purchase price. If you paid $5 million for an asset, my understanding is you essentially can reset the depreciation of those assets AKA those $5 million and then going forward, you can have that offset any income. If you’re doing a $5 million asset thing on something like this, it’s quite easily a million dollar tax break in the coming years which might translate to the buyers paying significantly more for an asset purchases.
Rob: The buyer gets that tax break, right?
Einar: Right. Essentially, you say like, “I bought this asset and it depreciates over time.” With the stock sale, you can’t do that. You’re just taking it over and essentially, you can’t reset the depreciation on the asset. Whereas with an asset sale, you’re allowed to do that which is so beneficial.
Rob: Right. Let me say that I bootstrapped a company, and for some reason I set it up as a C Corp because I think I’m going to raise funding at some point and I get acquired for $5 million but it’s an asset sale. Meaning they buy all the assets within the C Corp but I keep the C Corp. $5 million gets dumped into the C Corp, the C Corp pays income tax on that, then if I want to pull that money out to myself, I then pay my own personal income tax. You get double tax, it can be a huge amount of money, right?
Einar: It can be a really big difference. Because essentially, that corporate tax levels turn at least 21%. A lot of the time what happens is people essentially shot down the company because they sold essentially the core of it. They take the $5 million that goes in and then they’ll kick out whatever expenses they can but most people don’t have regular expenses that would wipe out $5 million. They then have to pay corporate taxes on it which is 21% and then they have whatever is left. At that point they can then pass it through to the owners. The benefit is that that can be long term capital gains, if you hold the company for long enough but it adds up quite quickly.
Rob: Whereas if you had that C Corp and it was a stock sale then, you would just sell stock and it’d be hopefully long term gains, assuming you own that stock for more than a year. But that’s the tricky part. Whereas if you had that S Corp and you would bootstrap it and it was an asset sale, then you’d save that 21% of extra tax. That’s the tricky thing. You don’t know what’s going to happen but you’re just doing your best to prepare for it.
Something you said to me, I’ve never heard of this but this almost sounds like a bizarre loophole is this qualifying small business stocks. Just to throw another wrench into this is if you have a C Corp and you’ve owned it for five years.
Einar: There’s a bunch qualifiers here. Although it’s like if you have the C Corp that was formed after this law came in. It’s a while ago now. Probably if you hold it for a fair amount of time, it’s probably after this date but essentially if after a certain date, if you formed it but on top of that you hold it for five years and it qualifies under these other criteria which I don’t have right in front of me but essentially they’re like sub $25 million or something like that and there’s a bunch of other qualifier stuff here. But if you do that and essentially your stock in the C Corp is counted as a qualifying small business stock, then you pay no federal taxes whatsoever including no long term capital gains.
Rob: That’s crazy. Is that if it’s a stock sale or an asset sale?
Einar: That would have to be a stock sale specifically on a C Corp.
Rob: Got it. Okay.
Einar: If you’ve done with an S Corporation election like a couple of years before, because that’s tax beneficial, then you don’t qualify.
Rob: There you go. It’s complicated stuff. I think what we’ve realized to turn it to Tiny Seed because we’ve been trying to figure out what can we fund, what should we fund. At this point, it looks like we’re able to fund C Corps and LLCs with some specific tax structures. I don’t think we can do individual single member LLCs due to some type of tax complexity or whatever.
Einar: Rob, it’s not even tax complexies. The fact that if we own a stake in that LLC it becomes a multi member LLC. It’s no longer a single member.
Rob: That’s right. You can’t do this thing. So it has to convert to a partnership. Now, it will mean that we have folks applying who might have a Colorado LLC so Tiny Seed will get a K1, which is an LLC equivalent of saying, “Hey, you own part of this and we file taxes and here’s a document showing how much your portion made or lost.” And then Tiny Seed will likely have to file a state income tax return in that state.
Einar: Income taxes and yeah, there’s actually even a question about whether our investors will then have to turn around and find their own income taxes in various plates. There’s a reason why the lawyers say, “You know just do the SAFE and the C Corp,” and why it’s more complicated doing this the other way. Certainly, most venture investing isn’t setup to do what we’re trying to do.
Rob: Right. And that’s been one of the challenges, that’s also one of the ways that we’re trying to change this, right? Is change this landscape to allow people to have an LLC and to take funding from essentially, it’s institutional. We are institutional money technically because we are investing our own money but in addition to other people who have put the money into our fund.
I think that sums up the feelings and the hots that we’ve been digging into all the stuff surrounding these corporate entities because frankly, I’ve been running a business for approaching 20 years now, different businesses. I felt like I had a handle on most of this and it turns out everytime I dig into this stuff I learn something new about it.
Einar: Yeah. That happens to me too. I had a conversation with somebody and this qualifying small business talk thing. He was looking at the sales business and I told him, and it turns out he qualified and he was quite surprised. Pleasantly so, I think. It’s an odd thing. You got to think about how easy is it to convert between the various things. If you’re already filed as an S Corp, it’s not actually straight forward, just to go back to a C Corp. There are some hangovers there.
Actually, different states treat these things differently. It’s not easy. It’s actually quite hard for us, I think that people come and they’re like, “What should we do? Should we do an LLC or an S Corp? Or a C Corp? What should we do?” In part, it’s up to them. They have to decide what they think is the most important. We can only sort of just lay it out for them to say, “Okay, here is the pros ann the cons.” It depends roughly what you’re looking to do.
Rob: Because if you wind up selling in an assets sale versus a stock sale versus never selling and just run and pulling dividends out being profitable, each of those has its own ideal structure.
Einar: I think that’s true. At a very high level, I think it’s fair to say that if you don’t think you’re going to take a bunch of investment, if you don’t think you’re going to IPO or sell for hundreds of millions of dollars, you can imagine this business becoming something that sells for sub $20 million say, then chances are that with the tax structure and the fact that you’ll probably get more money for an asset sale versus a stock sale, you’re probably better off with an LLC, I should think. But it’s hard to know. Who knows that any given company can turn around and becoming much bigger than you thought and then you have to deal with the headaches for the choices you made earlier.
Rob: Yep. Talk to a lawyer for sure. I did when I spun Drip out. It was essentially just an asset under that umbrella corp I had. While it was painful and took a few months, I basically spun it out into its own S Corp and all that worked out well. These things are doable. It’s just how complicated, how further the line you are, if it’s a taxable event.
Einar: That’s part of the main thing. There are certain things that are easy, like you can go from one to another and might be easy but going back might be hard or might be delayed or take time or have tax implications. There’s a reason tax accountants get paid so much money.
Rob: Indeed. Hopefully we haven’t bored you to death today for those of you who are still with us.
Einar: I’m feeling kind of sleepy.
Rob: You got to go drink some coffee. If you have a question for us, not about this topic because I hope to never speak about it again, you can call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for a full transcript to each episode. Thanks 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 software products, whether you’ve build your first product or you’re just thinking about it. I’m Rob.
Einar: And I’m Einar.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Einar: You know, it’s same old, same old. I’m mostly spending my time arguing with lawyers and accountants and things around Tiny Seed. That’s always exciting. It’s probably been since before MicroConf it’s been nonstop lawyering pretty much. That’s both expensive and frustrating at the same time.
Rob: Yeah. I was looking at some notes I had from a couple of years ago, I found this old notebook, and I had some personal goals that I didn’t announce in the podcast but personal goals for myself. One of the bullets was, “I don’t want to talk to any lawyers this year for any reason.” It was like 2017 or something.
Einar: It’s been unavoidable for me lately. Mostly with Tiny Seed stuff. Actually the main hurdle–which I guess we’ll get into this later–has been there are lawyers who specialize in whatever. You wouldn’t go to a securities lawyer if you need to be defended for a hit and run. But you talk to lawyers and their specialist and the expensive ones for securities and fund formation and they have their way of doing it, and it’s the way that venture capital is normally done. Essentially, you’re having to spend $1000 an hour arguing with somebody about how things should be done.
Rob: Right. Trying to educate them that we’re not traditional venture capital. It’s not going to all be Delaware or C Corps. We mentioned early on to the lawyers, we’ve been now through a couple of different firms but we told early on, it’s going to be more bootstrap startups, that’s our thing. We’re going to fund LLCs, we’re going to fund C Corps and they’re not all going to be in Delaware but then when rubber meets the road, all the docs made the assumption of Delaware C.
Einar: Delaware C Corp, a ban on issuing dividends which clearly doesn’t work with us, and all sorts of things. It’s been quite frustrating and a bit more expensive than I expected too.
Rob: Yeah. Because we’re just going against the tide of so many funds, right?
Einar: Oh yeah. The standard is like we only take Delaware C Corporations, at a corporate level disallow any kind of dividends because people want to reinvest and just do Delaware C Corps and that’s it and issue SAFEs ideally. The standard one, which again, assumes that there is a price around coming. That’s been interesting.
Rob: Yup. And that’s really the impetus for this episode is to give folks a little more background in case you don’t know who you are, you and I have co-founded Tiny Seed, we spoke about this about 20 episodes ago. It’s episode 420, an alternative form of startup funding where we talk to Tiny Seed and the mission and all that.
Einar: Yup.
Rob: Folks can go back and listen to that if they want more background. But you and I are in the midst of getting this off the ground and we’re picking the first batch and closing in all that stuff. But really, legal has now become the bottleneck and it’s getting these terms in there and as we were knee deep in this having these conversations via email when I was London and then get back in doing calls and stuff, you brought up. You’re like, you know there’s a lot of misunderstanding or just lack of knowledge with startup founders about the different entity types. Granted, this episode we’re going to focus on US entities, and there’s a few reasons for that.
One is even if you’re not in the US, a lot of folks do start US entities, they’re going to take any funding or if they’re going to cater to the US market or there’s tax reasons, there’s a bunch of reasons. If you’re living in Europe right now, some of this still may apply to you. You very well may wind up setting up a US entity at some point. But even beyond that, what I’ve often seen is while laws don’t translate one to one, there is generally in England, and in most of Europe, there’s the equivalent of these things, an equivalent of a C Corp that has double tax. And there’s equivalent of the LLC even though it’s not called the same thing.
Einar: That’s right.
Rob: The standard disclaimer applies, you and I are not lawyers, this is not legal advice and all that. But damn it, I kind of feel like I’m becoming a lawyer.
Einar: We’re going to go and ask all around, this is a plan whose […] all the Tiny Seed stuff and sign up […].
Rob: That would be my worst nightmare. We’re having to get pretty knee deep into it and I think the fact that traditionally bootstrapped companies typically form as LLCs or S Corps. And VC backed companies almost always form as Delaware C Corps, right?
Einar: The standard thing in YCs, you come into YC and you have A another entity, a foreign entity, or no entity, they kick you to I think it’s another YC Company, Clerky? And they just spin you up with like a, “Here’s how to do a Delaware C Corporation, that’s what you need in order to get the investment from us.”
Rob: Yup.
Einar: That’s very much to stay. With their investment structure, and YC is so dominant that pretty much whatever YC does on the accelerator early stage fund side, that’s what everyone else copies. It becomes a Delaware C Corp and a SAFE.
Rob: Right. What we’re going to talk through today is talk through the different corporate entities. We’re going to attempt and not make it the most boring episode ever of this podcast.
Einar: You should call it the most boring episode ever.
Rob: That should be the title, that’ll be something. And we’ll touch on points like liability versus taxes. Any tax is really the big thing with most of these, right? Because once you have an LLC, S Corp, C Crop, you do have a certain amount of liability shield. I’ve heard that if you’re a single member LLC in certain states, if you got sued, court will often consider you a sole proprietor, you don’t have a liability but we’re not going to get into that.
We’re going to talk a lot about taxes today because that’s the thing. Because if you pull dividends out, how are they taxed differently?
Einar: How you mean different? That’s the difference between a traditional YC Venture style company and like a bootstrapped “lifestyle” business. You’re going to basically go through several rounds of funding while you run at a loss. That’s the goal. It doesn’t really matter like tax optimization for dividends or the owners pulling out cash doesn’t really apply because there should be none. And in fact you might find that your investors are more than a little upset if you start actually running out of profit because that’s not the goal. The goal is become, burn all the money, dominate the market, and IPO.
Rob: Right. Raise every 18 months and if you’re not burning through that cash, you’re not spending it well, you’re wasting time and wasting their money. Because if they’re going to give you money and have you let it sit in your back account, it would be better served doing something else. That’s the mentality.
Einar: That’s true. Honestly, a lot of DCs will basically tell you they would prefer, like if you’re in a company that’s growing reasonably well. Tiny Seed or most bootstrap founders would consider a success so you get the $5 million, $6 million a year and you’re profitable but you don’t then need anymore a venture fund, that’s a loss for them. They would actually prefer you just to sell the company, pocket some money and try again and have a run at a bigger success.
Rob: Yup. That brings us into the meat of this episode. In the US structure, aside from just being a sole proprietor, there are really these three entities that are most common. I already mentioned them in this episode. Every Fortune 500 company I’m guessing is a C Corp. If you go public, you’re a C Corp. I don’t know that you can go public with other structures but that’s the big one and it’s as we’ve said, that’s what the venture capitalist typically Delaware C Corp. The nice part about that is there’s no past through income so that if you had a hundred different people on your cap table, you had a hundred different people or entities that owned a piece of your C Corp, at the end of the year, if you make a million dollars and keep it inside the company, nobody else gets taxed on it.
They’re like shielded from the taxes. It doesn’t count as income until you pull that money out of the company and actually distribute it to your shareholders.
Einar: Yeah, because that’s the challenge. That’s really the challenge with LLCs in that regard in general path through entities whether that’s partnerships, or a single member, or sole proprietor, or a C Corp doing it, S selection. You end up basically passing through whatever losses and gains to the people who own the company whether that’s investors or just the owners. You can be in a situation where there’s a gain but you’re not actually kicking out the gain so that there’s taxes to be paid but without any profits, any cash to pay for the investors. Which is partly why traditional venture funds don’t like to do it.
In some cases actually, the investors into the fund themselves, there’s a disregard of entities. They could be not for profits, they could be university endowments, they can be wealthy individuals who invest through like a self directed IRA. In most of those cases, they actually don’t pay taxes, so they don’t file tax returns. If you pass through a gain or a loss to them, all of a sudden they have to start filing tax returns not because of you, which is problematic in a lot of cases which is partly why it’s disallowed.
Rob: In my experience forming corporate entities, my consulting firm that then was this umbrella entity over all of my early small software products, and it still is frankly, I’ve changed the name of it now but it was called The Numa Group for years. I ran it for five years just as a sole proprietorship and then I made it an LLC. Certainly I wouldn’t have done a C Corp because I was just pulling up a bunch of cash off. That’s the thing we didn’t say.
The negatives of a C Corp, if you’re bootstrapped, the corporation itself will pay taxes at the end of the year and if you want to pull dividends out, you then pay another round of income tax. It’s called double taxation. If you’re pulling cash off a business, you do not want it in general to be C Corp. When I was forming The Numa Group as an entity and it was really more for liability reasons at the time just to shield me from anything. I could do an LLC or an S Corp and I was advised that an LLC, if you do a single member pass through LLC, that it has a less filing requirements, even less bookkeeping stringency complexity. I did that and that’s been fine. That was a good call for me.
When I went to spin Drip out, Drip started as just like hittail on all my other stuff, it was just under Numa Group LLC. Eventually, Drip got big enough for it has to be its own thing. When I spun that out, I could make it an LLC or an S Corp. Really, an S Corp as you said earlier, it’s just a C Corp with an S filing something or rather, like an option.
Einar: Yeah. It’s basically to do a federal taxes. You make what’s called a S Selection, and again, I am not a lawyer or a tax accountant, thank God, but you basically file an election with the IRS essentially you’ll be taxed in a very similar way to an LLC despite the fact that you’re a corporation. Doing so has benefits either from certain tax standpoints but it comes with certain issues related to it. For example, if you’re an S Corporation, typically becomes very hard to take investments, there’s a limit on the number of stockholders you can hold in the company, there is actually a limit on whether you’re allowed to have a non US persons as investors or owners. There’s a bunch of things that come into play there if you do the S Selection for sure.
Rob: Yeah. Because the advice we’ve been given is that Tiny Seed can fund C Corps and LLCs but we cannot fund the S Corps.
Einar: Definitely not, yeah.
Rob: Right. I didn’t know that. I believe it’s that another corporate entity cannot own a portion of an S Corp, is that correct?
Einar: I think that’s right.
Rob: Yeah. Again, not a lawyer but that was how it was explained to me but that was news because Drip was an S Corp and I didn’t realize when we formed it that that was a drawback. We hadn’t planned to take institutional funding. When we got acquired, I was looking around to try to do an angel round. That would’ve worked because it probably would have been a bunch of individuals but I just wasn’t aware of that at that time.
Einar: I think most people aren’t. You start up, people go to like Clerky or LegalZoom or ask their friendly neighborhood lawyer and it’s just like, “Oh yeah, yeah, yeah. Just do a single member LLC. Don’t think about it.” Or just do XYZ. in certain cases, people will optimize for their current tax situation but not necessarily for what’s going to happen if I want to sell the business or do a small angel round or that kind of thing.
Rob: That’s an interesting point because again, over the years when things were really simple for me, I just did an LLC and it filed its taxes as a sole proprietorship. Everything passed through to me, I didn’t take a salary. It was none of that. Now at a certain point, it started making enough money that my CPA said, “Look, keep it as an LLC but you file taxes as an S Corp and that allows you to now take a salary and you set a fair market salary, what does a CEO of a small software company make in the town you live in?” And since it was Fresno, it isn’t that high actually. “Everything above that, you just take out as an owner’s draw and then you don’t pay FICA,” is that social security?
Einar: Taxes and things or anything above that.
Rob: Yup. That’s a strategy that’s used by a lot of folks with both S Corps and LLCs filing as S Corps in essence. I think there are some number and I’ve heard varying, it depends on the CPA. My CPA said it’s when you’re making between about $60,000 and $70,000 from the entity. But I talked to someone the other day, they said their CPA told them $50,000 and someone else said $90,000. There’s some range in there.
Einar: My CPA is pretty mellow. She’s like I think $95,000. I live in the Bay Area too so she’s like $95,000 she’s fine with. I was like, “Why don’t we make it $50,000?” And she’s like, “Why don’t we not?”
Rob: Yeah. The salary?
Einar: Yeah, yeah, yeah. Because of the employment taxes in California held their own taxes on things on top of the Federal FICA taxes.
Rob: Right. It seems if you’re bootstrapping in business, the odds are pretty high. You’re going to do an S Corp or you’re going to do an LLC just because C Corp wouldn’t make sense. If you plan to raise venture funding, you’re probably going to go the C Corp route.
Einar: After you take funding from us. Maybe.
Rob: Yeah, exactly. Anyways, but it’s interesting because someone could go anywhere on the internet and research the taxes and stuff we just talked about but the interesting thing you and I are talking about before this episode started is the difference of if you decide to sell the company at some point, and the difference between if you never sold a company, you’ve never been thought about selling the asset within the corporate but not actually selling the corp itself versus a stock sale. Which is where you literally hand someone all the stock and they take the corporate entity with it.
Einar: Correct. Including the assets and liability crucially.
Rob: Right. That’s the thing that I’ve seen is, and you have more experience in this in the work you’ve been doing with Discretion Capital over the past couple of years. But my vague understanding has been that in smaller acquisitions, smaller meaning some $10 million, some $20 million whatever, they tend to be asset sales. Where you as the business owner, you keep the corporate entity and you keep all the liabilities in essence and the acquirer buys the assets, whereas if it’s some big, my guess is when Mark Zuckerberg bought Instagram, they probably bought all the stock.
Einar: Yeah. They bought the whole thing. Typically, a stock sale is essentially you’re taking the whole company, all assets, all liabilities, every single contract of this thing, including like if you buy a company and employee from three years ago sues you over something, sues the company, then you have to defend that claim. There’s a bunch of challenges around doing a stock sale. It includes the fact that if you purchase a company as a stock sale, that’s actually not as beneficial as doing it as an asset sale for the buyer.
With an asset sale, what you can do as a buyer, they come in and they say, “We want to buy just this specific piece. We might buy the technology, the goodwill, the existing contracts with customers, that sort of thing and we’ll explicitly exclude everything else.” Any liability that you sign, any contracts that they don’t want to assume, all that kind of thing will remain in the ship, was now essentially a shell entity. The other benefit which is often why buyers will push forward an asset sale, is that they get a tax break from doing an asset sale versus stock purchase so they often will pay more for exactly the same thing in an asset sale compared to a stock sale. And the specifics here gets into tax law and accounting. You definitely don’t want my advice on that.
Fundamentally, with an asset sale, what you’re able to do is to essentially reset the depreciation on those assets, and the value of those assets essentially becomes the purchase price. If you paid $5 million for an asset, my understanding is you essentially can reset the depreciation of those assets AKA those $5 million and then going forward, you can have that offset any income. If you’re doing a $5 million asset thing on something like this, it’s quite easily a million dollar tax break in the coming years which might translate to the buyers paying significantly more for an asset purchases.
Rob: The buyer gets that tax break, right?
Einar: Right. Essentially, you say like, “I bought this asset and it depreciates over time.” With the stock sale, you can’t do that. You’re just taking it over and essentially, you can’t reset the depreciation on the asset. Whereas with an asset sale, you’re allowed to do that which is so beneficial.
Rob: Right. Let me say that I bootstrapped a company, and for some reason I set it up as a C Corp because I think I’m going to raise funding at some point and I get acquired for $5 million but it’s an asset sale. Meaning they buy all the assets within the C Corp but I keep the C Corp. $5 million gets dumped into the C Corp, the C Corp pays income tax on that, then if I want to pull that money out to myself, I then pay my own personal income tax. You get double tax, it can be a huge amount of money, right?
Einar: It can be a really big difference. Because essentially, that corporate tax levels turn at least 21%. A lot of the time what happens is people essentially shot down the company because they sold essentially the core of it. They take the $5 million that goes in and then they’ll kick out whatever expenses they can but most people don’t have regular expenses that would wipe out $5 million. They then have to pay corporate taxes on it which is 21% and then they have whatever is left. At that point they can then pass it through to the owners. The benefit is that that can be long term capital gains, if you hold the company for long enough but it adds up quite quickly.
Rob: Whereas if you had that C Corp and it was a stock sale then, you would just sell stock and it’d be hopefully long term gains, assuming you own that stock for more than a year. But that’s the tricky part. Whereas if you had that S Corp and you would bootstrap it and it was an asset sale, then you’d save that 21% of extra tax. That’s the tricky thing. You don’t know what’s going to happen but you’re just doing your best to prepare for it.
Something you said to me, I’ve never heard of this but this almost sounds like a bizarre loophole is this qualifying small business stocks. Just to throw another wrench into this is if you have a C Corp and you’ve owned it for five years.
Einar: There’s a bunch qualifiers here. Although it’s like if you have the C Corp that was formed after this law came in. It’s a while ago now. Probably if you hold it for a fair amount of time, it’s probably after this date but essentially if after a certain date, if you formed it but on top of that you hold it for five years and it qualifies under these other criteria which I don’t have right in front of me but essentially they’re like sub $25 million or something like that and there’s a bunch of other qualifier stuff here. But if you do that and essentially your stock in the C Corp is counted as a qualifying small business stock, then you pay no federal taxes whatsoever including no long term capital gains.
Rob: That’s crazy. Is that if it’s a stock sale or an asset sale?
Einar: That would have to be a stock sale specifically on a C Corp.
Rob: Got it. Okay.
Einar: If you’ve done with an S Corporation election like a couple of years before, because that’s tax beneficial, then you don’t qualify.
Rob: There you go. It’s complicated stuff. I think what we’ve realized to turn it to Tiny Seed because we’ve been trying to figure out what can we fund, what should we fund. At this point, it looks like we’re able to fund C Corps and LLCs with some specific tax structures. I don’t think we can do individual single member LLCs due to some type of tax complexity or whatever.
Einar: Rob, it’s not even tax complexies. The fact that if we own a stake in that LLC it becomes a multi member LLC. It’s no longer a single member.
Rob: That’s right. You can’t do this thing. So it has to convert to a partnership. Now, it will mean that we have folks applying who might have a Colorado LLC so Tiny Seed will get a K1, which is an LLC equivalent of saying, “Hey, you own part of this and we file taxes and here’s a document showing how much your portion made or lost.” And then Tiny Seed will likely have to file a state income tax return in that state.
Einar: Income taxes and yeah, there’s actually even a question about whether our investors will then have to turn around and find their own income taxes in various plates. There’s a reason why the lawyers say, “You know just do the SAFE and the C Corp,” and why it’s more complicated doing this the other way. Certainly, most venture investing isn’t setup to do what we’re trying to do.
Rob: Right. And that’s been one of the challenges, that’s also one of the ways that we’re trying to change this, right? Is change this landscape to allow people to have an LLC and to take funding from essentially, it’s institutional. We are institutional money technically because we are investing our own money but in addition to other people who have put the money into our fund.
I think that sums up the feelings and the hots that we’ve been digging into all the stuff surrounding these corporate entities because frankly, I’ve been running a business for approaching 20 years now, different businesses. I felt like I had a handle on most of this and it turns out everytime I dig into this stuff I learn something new about it.
Einar: Yeah. That happens to me too. I had a conversation with somebody and this qualifying small business talk thing. He was looking at the sales business and I told him, and it turns out he qualified and he was quite surprised. Pleasantly so, I think. It’s an odd thing. You got to think about how easy is it to convert between the various things. If you’re already filed as an S Corp, it’s not actually straight forward, just to go back to a C Corp. There are some hangovers there.
Actually, different states treat these things differently. It’s not easy. It’s actually quite hard for us, I think that people come and they’re like, “What should we do? Should we do an LLC or an S Corp? Or a C Corp? What should we do?” In part, it’s up to them. They have to decide what they think is the most important. We can only sort of just lay it out for them to say, “Okay, here is the pros ann the cons.” It depends roughly what you’re looking to do.
Rob: Because if you wind up selling in an assets sale versus a stock sale versus never selling and just run and pulling dividends out being profitable, each of those has its own ideal structure.
Einar: I think that’s true. At a very high level, I think it’s fair to say that if you don’t think you’re going to take a bunch of investment, if you don’t think you’re going to IPO or sell for hundreds of millions of dollars, you can imagine this business becoming something that sells for sub $20 million say, then chances are that with the tax structure and the fact that you’ll probably get more money for an asset sale versus a stock sale, you’re probably better off with an LLC, I should think. But it’s hard to know. Who knows that any given company can turn around and becoming much bigger than you thought and then you have to deal with the headaches for the choices you made earlier.
Rob: Yep. Talk to a lawyer for sure. I did when I spun Drip out. It was essentially just an asset under that umbrella corp I had. While it was painful and took a few months, I basically spun it out into its own S Corp and all that worked out well. These things are doable. It’s just how complicated, how further the line you are, if it’s a taxable event.
Einar: That’s part of the main thing. There are certain things that are easy, like you can go from one to another and might be easy but going back might be hard or might be delayed or take time or have tax implications. There’s a reason tax accountants get paid so much money.
Rob: Indeed. Hopefully we haven’t bored you to death today for those of you who are still with us.
Einar: I’m feeling kind of sleepy.
Rob: You got to go drink some coffee. If you have a question for us, not about this topic because I hope to never speak about it again, you can call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for a full transcript to each episode. Thanks for listening and we’ll see you next time.
Episode 441 | Revisiting 2019 Goals, Why Remote Companies Grow Slower, and A Couple Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike revisit their 2019 goals. The guys check in to see if they are on pace with their 2019 goals as well as discuss some other topics including why remote companies grow slower.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, Mike and I revisit our 2019 goals. We pontificate on why remote companies might grow slower than collocated ones and we answer a couple of listener questions. This is Startups for the Rest of Us Episode 441.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: I know that we’re only a couple of weeks out from MicroConf in Vegas. We are just in the process of selling MicroConf Europe tickets. That will be in the 20th to 22nd of October and it will be in Dubrovnik, Croatia again. Looking forward to that. It’ll be awesome and it’ll be back in the same location and one that has a fantastic view of the ocean.
Rob: Yup. I loved that hotel last year. I’m very much looking forward to that, October 22nd, 23rd, and 24th, is that right?
Mike: I believe so, yes. I have to look at the calendar.
Rob: Yeah.
Mike: That’s hard.
Rob: Go to Eventbrite and they’ll be on sale soon. That’s good. I’ve got to start looking for speakers for that here, soon.
One thing I wanted to throw out that I’ve been thinking about, there’s this book called Mindset. I believe it’s by Carol Dweck. Is that right? I wish there was some device that I could type a name of a book into and figure out who wrote it. But anyway, it’s about having a growth mindset versus a fixed mindset. It’s about expanding your thinking and not being caught up with the same beliefs you had your whole life, as well as just believing that you can get better, and that you can change and do more.
I loved this book when I read it. When trying to instill growth mindsets into our children so they don’t go through life thinking, “Well, this is what I have. I’m like this the whole time and I can’t learn new things. Whatever I believed when I was 10 or whatever was instilled in me can’t change.” I really think that this runs true and there’s a parallel here with successful founders. Successful founders I know have growth mindset. They’re always trying to learn, they’re always trying to get better, and they’re always questioning their beliefs.
There are certain moral beliefs implicit that you probably never shared. There are beliefs that you shouldn’t. There are these other ones like, I remember talking about Split Testing in 2008. People were telling me like, “Oh, that’s tricking people. You’re tricking people.” That’s what internet marketers do and we don’t do that in Startups.
Let’s try and talk about email marketing in 2009–2010. It’s like, “Oh, you’re a spammer.” I’m talking about SEO to market a business. It’s like, “Yeah, it’s just gaming and Google. You should just write great content and you’ll rank.” I feel like those are fixed mindsets. Things like, “Well, this is bad and what I believe is going to hold true forever.” But the folks who are able to embrace those new things, if you’re able to do it quickly, and if you’re able to implement these things and take advantage of them, these are the founders that I see succeeding.
The reason I bring this up is there’s a constant ongoing flux of new ideas coming in and trends that come in and out of the whole startup scene. Part of my talk at MicroConf was about trends that I have observed over the past 14 years of being involved in the scene. One of which, of course, is the changing nature of funding, that being bootstrapped and venture-funded used to be this binary thing and then self-funding is introduced where [00:03:33] bank. That’s a little different than being bootstrapped. There’s taking a $100,000 from friends and family. You don’t have an institutional investor. How different is that?
Then, there’s obviously TinySeed, there’s a [00:03:45], and there’s other players. Technically, yes you took a dollar, so you have now taken funding but it’s not the same as the VC funding of 10, 15, and 20 years ago. It doesn’t come with the same negative things.
Some thoughts I’ve been doing and really going back to first principles of what is bootstrapping about? Is it bootstrapping? The reason that I bootstrap—I would assume for most of us—is we want the freedom to run our own company and we want to have purpose working on something interesting. We want to have healthy relationships with our families, not get a divorce, not never be around our kids. If we could do that, whether we take a little bit of money, don’t take any money, which is totally a viable thing, or take a lot of money or whatever, I guess I’ve always had those three goals, that freedom, purpose, and relationship. I think that funding has traditionally been at odds with those—10–15 years ago it would have been—but in my head, there are more shades of gray than perhaps has been the case in the past.
Mike: Part of those things that you just talked about are the change in definitions or understanding of specific pieces. For example, bootstrapping. What does bootstrapping mean? I think that question has come up a lot more recently because of things like TinySeed and [00:04:57]. What does it mean to be a bootstrapper? If you have a very specific or fixed view of that in your head, then it’s going to impact how you view taking money for your company or somebody else taking money for their company. I don’t think that a lot of those definitions are necessarily static because bootstrapping itself is relatively new. It’s really only become a household word in our circles in the last 10 or 15 years. Our circles didn’t even really exist 10 or 15 years ago.
The landscape itself is changing and those definitions are changing at the same time. It makes it difficult to not adjust with it. You’re going to be left behind if you can’t adjust your definitions or mindset along the way.
Rob: Yeah and that’s the thing. This is something that I’ve struggled with. I’m an engineer. I wrote code for decades. I do think in very binary and I used to think in very black and white terms. I used to be more opinionated, more fixed in my thoughts. The older I get and the more experienced I get, the more I realized that that has been a detriment to me in my career and the things that held me back early on were holding on to these ideals that I truly believed and later found out were not as black and white and not as “true” as I thought they were.
Anyway, that’s it. I’ve been thinking a lot about that and how to continue. It’s all up for me to continue to grow. I ask myself the question, “What things do I believe today that I will look back on five years and think that wasn’t correct or that was holding me back then?”
On a lighter note, did you know you can get a refund for audible books that you don’t like?
Mike: I did not know that.
Rob: This is crazy. Remember how I talked about how I’ve backed 185 kickstarters? The only thing worse than Kickstarter for me is Audible. I believe—I would have to look at the library—we have close to 500 audio books.
Mike: Wow.
Rob: I’ve been a member for nine years. It’s nuts. Granted my kids listen to audio books. Sherry listens to them. We all share the same account. Hundreds and hundreds. That’s how I read. I don’t buy physical books. I really don’t buy books on Kindle. I have a lot of them. But I also will go and just try a book and if I don’t like it—I get two, three, or four chapters in—if it’s not doing for me what I thought it was doing, or if it’s too way academic, or just a crappy book, I bail on it. I’ve always, at least for the past 10 years, valued my time more than the cost of an audio book which runs around, let’s say, $10 with a membership.
I have a bunch of audio books that I haven’t listen to. If they’re good, I listen all the way through, I take notes, and I do all that stuff, but if they’re not, I bail on them. I’ve always hate that cost and I realized the other day, you can go back and just say, “Hey, I didn’t like the book.” I’m sure if you abuse this, they have some repercussions or something if you listen on every book and then return it or whatever, but it’s interesting. It’s buried to find it but I definitely went back. I looked to about a year. I went back and refund maybe seven or eight books that I only got a little bit into. I remember specifically why they were crappy. I got some extra credits and you know what I do with those credits?
Mike: You got more books?
Rob: I even [00:08:10] bought more books. Of course I did, Mike. It’s got a voice, I love the information, and learning new things. I’m listening to books everywhere, on topics anywhere from growing your business to negotiation. I have a book on Leonardo Da Vinci, one on World War II, one about dungeons and dragons, two about dungeons and dragons, I listen to Profit First based on a recommendation from Patrick Folly, and I have something about dealing with challenges mentally and blah-blah-blah. All of those won’t stand up to the scrutiny but I do like having a very plethora of books to be able to listen to based on the mood and goals I have at that time.
Mike: The only thing that shocks me about any of that is that you waited until you got the credit before going and buying more books.
Rob: No. It’s true. I didn’t actually spend all the credit.
Mike: You lied. You lied to thousands of people.
Rob: I did spend several of credits but yeah, I’m kind of backed up. I don’t have a big wish list, but I don’t tend to buy a lot of books until I’m ready. Right when I’m ready to listen to it then I’ll buy one or two more and then go into it. Right now, I’m a little overbought because of this credit glut that I experienced after the refund.
All that said, let’s talk about some 2019 goals. You and I make goals each year. I know they’re varied opinions on goals. I’ve always been a goal-driven person. I find that goals help me focus for the year. Not get shiny object syndrome, not wander off and do other crap because there are always more opportunities that are super interesting than I can ever do. The goals help keep me focused.
I sometimes do re-evaluate goals and say, “You know what? I screwed up when I made that goal in the last year. I shouldn’t do that this year. I should pivot the goal.” These are things that I spend a lot of time thinking about. I’ll try to do it on a retreat to make sure that I spend a day or two thinking about it and I really want to accomplish that in the next year. That’s a high-level thing that I then try to focus on the next 12 months.
With that said, we set some goals back in December. It is now second week of April. We kind of just passed the first quarter of our goals. You had two goals with a bunch of subpoints under that. It might be five or six. I had four goals. Why don’t you talk through your first one and let us know how you’re doing? This is either going to be the walk of shame or a celebratory episode where we can high five each other.
Mike: I think it’s going to be a walk between them because I didn’t exactly have a lot of heads-up on the particular piece of this podcast episode. I did not go back and take a look to see what exactly all these numbers looked like. I can give you a ballpark idea but probably not exact.
In terms of exercise, I know that at least halfway through the first quarter I was ahead, and then it really dropped off the end of the quarter as MicroConf got closer. I think that I’m close to what it should’ve been but I’m not absolutely sure.
Rob: You’re saying that you’re not sure if you’re on track for two times a week?
Mike: I think that it’s close. I mean they’re still a little ahead or a little behind but I’m not too far off. Twice a week would’ve been 25 times by the end of the quarter. I know that I was at least 15 or 20 at one point. There is one point where I was six or eight weeks ahead or something like that. I was doing very well but then as MicroConf got closer, I got busy and I stopped going to the gym. Now that MicroConf is over, I can start going back. I haven’t gone back and actually looked at the numbers. I think I’m on track, but I could be a little ahead or a little behind it. I’m not sure.
Rob: Yeah, give or take. You’re on track, it sounds like. I’m way behind. The winter decimated me. I’ve talked about this in the past. It started getting warm here a couple weeks ago. I actually started exercising. My first goal is three days of exercise a week. We’ve got six or seven inches of snow yesterday. It’s like halfway through April. It’s a train wreck for me so far. This is a good reminder. If I didn’t have this goal, I would just not care. I care because I have this goal. It is something that I need to change and is something that I want to be doing. I don’t enjoy exercises. It’s not something I’ve ever really want to on purpose, but they did something that I need to get motivated for. This is a friendly reminder that I’m walk of shaming with the exercise one and I need to figure out a way to do better with this.
Mike: The second one for my getting my health back on track was having a normal sleep schedule. Part of that involved using my CPAP machine at least five times a week and average usage of at least 6½ hours at night. I can say with absolute certainty that I am actually beating that if not exceeding it in a number of different ways. The app that I use for this only goes back, I think, about 30 days or so. I can get more data then, that if I needed to. But even over the last 30 days, the lowest I have on here is 5½ hours and that’s actually a lower one. Most of the rest of them are six plus. Some of them were highest. One of them on here is 9½. We got 10 hours and 40 minutes on here for one of them. I’m doing well on that one.
Rob: Very nice. My second one is about TinySeed. It’s to build it into the de facto brand when bootstrappers look for early-stage funding. The subpoint for that was first batch of founders chosen and they have a good chance of success, good progress, growth, and all that stuff. That’s by the end of the year.
Yes, I would say I’m on track for these. I think the de facto brand thing comes over time. Maybe it’s not a year but it’s kind of a long-term goal. The first batch of founders are on track. We wanted to have everybody chosen by MicroConf. We didn’t get that done but we are most of the way there. To be honest, the biggest hang up as per usual is legal rather than any actual conversations or phone calls or any of that. It’s just getting everything in, bullet points and the legal docs. I’m feeling good about this. This is my main thing that I’m working on. I would say on track for that.
Mike: My next one was to lose 15 pounds. Do we cue the audience’s laughter here now?
Rob: Not there.
Mike: No. I think after MicroConf, I actually gained eight pounds but then the day after or two days after, I was back down to a normal weight or whatever. I hadn’t really lost. I think this is all water weight. I really haven’t lost any measurable amount of weight at this point. I’ve got to work on that. I think that’ll go back to the exercise thing.
Rob: My third goal is to not panic when the stock market crashes. I don’t really think that’s happened. I mean it’s been a little up and down but there hasn’t been a crash. I don’t know yet, we’ll see. This one’s a little bit out of my hands but it’s just something nice to be in the back of my mind.
Mike: You can go out and buy a bottle of whiskey so that when it does crash then you can drink the whiskey and hopefully forget about the stock market.
Rob: Yup, indeed.
Mike: My next one was to have more regular and in-person social contact. I would say that I’m actually succeeding there. Still meeting up with a bunch of people once a week. Obviously, there is a massive injection of social contact at MicroConf, but yeah, I’m still meeting up with people. I wouldn’t say that this is in-person social contact, but I’m also meeting up with a group of people online, usually on Saturday evenings. But we’re going to take a break for a couple of weeks, then startup back again in May. It should be good.
Rob: Very nice. My fourth and final goal is to write or rewrite a book. I have not started on this nor I thought about it. It’s been because of MicroConf and TinySeed all happening here at the first of the year. I’m not on track to do this because I haven’t started it and it hasn’t been on my radar. I want to see once we get the batch chosen, we get things rolling, I want to see how my time works out and if I’m able to do this. As I said when we set this for the first time, writing another book aligns with the main thing I’m doing because writing another book about startups didn’t align with growing Drip. It didn’t align with growing HitTail but it does align with TinySeed. I have more of a reason or an excuse because I really want to do it. There’s more of an excuse to do it. I just got to figure out if I can carve out the time.
One thing that’ll hopefully help with that is, we actually just announced that we hired a program manager with TinySeed who’s going to help in the accelerator because there’s so much work to do. We hired Tracy Osborne formerly of Wedding Lovely. She’s spoke at MicroConf in 2016, did really good talk there. I’ve been a longtime fan and we’ve kept in touch. It just worked out really well for her to come and join us. She’s a developer, a designer, she’s written several books on design, and I believe in some development as well. She’s a public speaker. She’s got a lot of chops. I’m stoked to be working with her on this. That should help achieve, hopefully, a few of the goals on this list in terms of freeing up time, hopefully, for me to do something with the book as well as helping us grow TinySeed into that brand I was talking about.
Mike: Congratulations. It’ll be great to have her around.
Rob: Indeed.
Mike: My last one on here was for Bluetick. It was to establish attraction and move on to something else. The comments I had on here was that it’s fuzzy, not exactly what it should been, whether it should be revenue-target or customer-based. For this, I would say it has meandered the past couple of months. It’s probably largely for the same reasons that you have not gotten around to writing a book was because of MicroConf.
It was about a week or two before MicroConf. I was sitting down and working on stuff. I realized that basically the first three months of this year were basically taken up by MicroConf. I did very little else. It got me thinking about how much of my time is actually spent working Bluetick. My current estimate is between 30% and 40% of my time throughout the course of the year is spent working on Bluetick, whereas I previously thought it was closer to 100%. That’s totally not the case. It changes things in my mind more than anything else, but it’s just a perception or a recognition, I’ll say that I’m not really working on it full time. I’m working on it about a third of the time. That would probably explain how it meanders a little bit and how I’m not getting as much done on it sometimes than I feel like I should be.
Rob: That makes it tough. It’s hard to not have that focus. It’s almost like you’re basically working almost nights and weekends on it. You’re kind of doing it as a side project.
Mike: Yeah. That’s really what it is which in part explains why it can meander along if I’m not paying attention to it. It grows when I am. But if I’m only paying attention to it 30% of the time, it’s really not enough to offset turn out of it, to be perfectly honest. I don’t know. I have to give some more thought to that at exactly how to address that particular problem, but I’ll figure something out.
Rob: Indeed. We’ll there were a couple of other things that I want to talk about. We do have a couple of listener questions but something I thought was interesting from Patrick Campbell from ProfitWell spoke at MicroConf a few weeks ago. A couple of the things or slides that he put up that, I believe challenged people’s thinking, were from some research they have done. They have a lot recurring [00:19:44] SaaS companies using ProfitWell and he posted up two different slides. He posted several that agreed with our mindset of, like this one agrees with your internal monologue of how you believe the world to be.
But how about this one? This is from data. This is from 1800 respondents. The slide said, “Remote companies have considerably worst growth and retention than collocated companies.” The room went silent. He’s like, “I know. None of us want to hear this because we’re building remote companies. We want to build remote companies.” How does that make you feel? You instantly question the data. Whereas, seven of these different slides that had statements like this, some were totally in the MicroConf wheelhouse and totally agreed with bootstrapping and all that stuff, others were like this and they’ve challenged our thinking. This one in particular, he had 1800 respondents. The growth was between 21% and 29% slower for remote companies than it was for companies located in the same location.
The other one was companies with founders with a hobby grow slower. This is when the hobby takes 10 hours a week and the study was done four years in a row. It was 2014, 2015, 2016, and 2017. Each year, the growth was 10% or 12% slower with founders with a hobby.
It’s interesting. I want to back these around really quick. I don’t want to dispute the number because he asked these questions. They’re pretty rigorous company, I believe, in terms of data and research. What do you make of them? What are your thoughts on this?
Mike: I thought that the way he positioned these was to let people think about them and understand their default position on what their beliefs were about the data, whether it conflicted with their worldview. I found that more interesting than the actual data itself because I don’t have access to this data directly. It’s not stuff that I look at or actively thinking about. The data itself makes sense to me, but I don’t have anything to dispute it either way.
Remote companies have a worst growth of retention or founders with a hobby grow slower. That intuitively makes sense. The first one, remote companies having a worst growth rate and worst retention rate, I don’t know what he meant by collocated. Does that mean they have an office?
Rob: Just local companies having an office that are not remote.
Mike: I could see that because I think a lot of people have issues working remotely. Some people are just not wired that way. They can’t do it.
Rob: Yeah. I can see that the retention part of it makes a little bit of sense to me. When you’re working remotely, you don’t have as much of a connection to the people whereas if you cut to lunch with folks every day, there is more of that team or family depending on how you couch it. There’s that feel that really is different. I could see that one being causation because obviously, correlation is not causation. That’s where I look at. The fact that remote companies have considerably worst growth, it doesn’t mean that being remote causes worst growth.
Again, I’m not trying to challenge these numbers but I always thinking, most venture-funded companies, the VCs, do not want them to be remote. They frown on remote. I would hypothesize that most remote companies, the majority, are actually bootstrap companies—bootstrap, self-funded, whatever—not venture-backed, anything but venture-backed.
As a guess, I would also say that venture-backed companies tend to grow faster overall than bootstrap or self-funded companies. One, because that’s the mandate. For better or worse, it’s growth at all cost a lot of times. That’s the number one KPI, it’s growth, and that’s not necessarily with folks in our community. Number two, venture-funded companies tend to have just more money at their disposal. They can goose the growth almost; they can force the growth.
That was something that has gone through my head. Perhaps growth is not caused by them being remote but it’s one factor in that.
Mike: It seems to me like you’re trying to justify what those numbers are and kind of fit them into your mental model. I think that was one of the things that I took away from the talk is if there’s data, there’s two ways to approach it. One is this is factual and how do I relate to it? Or you trying to either pick it apart or trying to make sure that it doesn’t conflict with your worldview. I can see both ways on both of them. I think you can as well. But you’re trying to map these things to your mental model of why these things could be true even though you don’t necessarily want to go out and get funding, for example.
Rob: Totally. That’s the thing. Companies with founders with a hobby grow slower. Remote companies grow slower. It’s like, “So what?” When I come back to my values of freedom, purpose, and relationship, the growth is not one of those three core values. I did like having companies that grew in revenue because it led to a certain amount of success. It lends a bunch of things. I can impact more people; I can make more money. It led to more purpose and I can have more impact. There was just a bunch of stuff with it.
But frankly, if I’m going to have a hobby and I’m going to play my guitar, or I’m going to play tabletop games, or my hobby is hanging out with my kids, but I grow slower by 10%, 12%, or 15% a year, I’m actually okay with that. That’s a personal thing of mine.
While these things might say, “Oh my gosh,” it might make you rethink everything. It’s like we’re not in the venture-funded space, so, can we just have profitable businesses? Isn’t it that what Startups for The Rest Of Us and MicroConf our movement, or community, or whatever you want to call it, it’s kind of about it? Is it growth at all cost? It’s nothing we’ve ever espouse.
Frankly, just growth in general is good, it feels good, and it’s a goal. It should be a goal somewhere in your radar but it’s not the number one, end-all-be-all for me or for a lot of people, I think.
Mike: Yeah. Just growing headcount is not the major goal for most people that I know. Whereas you said, if for a VC or a funded company, it kind of is, to be honest. It would make sense that those types of companies would do that. Again, I think that even in just saying that or kind of going that part of the conversation, we’re really drawing attention to the fact that now we’re starting to try to pick apart the data and question, “Is this data accurate?” or, “How good is the data?” That’s exactly what I took away from Patrick’s talk, which was when you see data that conflicts with what you think, consider why that is.
Rob: Yeah. I don’t think it’s what we’re doing here. I wasn’t saying that data’s not correct. I was saying, let’s say this is correct. Am I okay with that? Am I okay with growing a business? Am I okay having a hobby? Yeah. That’s the beauty of being in control of my business is that I can make these decisions.
Mike: Yup. Totally.
Rob: Cool. Listener questions. Let’s dive-in. We have a voicemail from Josh Doody. It’s about metrics rules of thumb for B2C products.
Josh: Hey, Rob and Mike. It’s Josh Doody here, MicroConf attendee frequently. Also, I run my business at fearlesssalarynegotiation.com. I have a question that might be a little bit outside your wheelhouse, but I’d really love to get your perspective on some metrics and things for my business, as people who think about SaaS a lot.
I run a B2C business that has two sides. One side is coaching. That side’s great, I’ve done marketing, it works really well, that’s where I make most of my living. But then, I have a product side of my business that, again, is B2C mostly driven by organic search traffic on Google.
Really, what I’m struggling with is trying to figure out what are good metrics for my business? How do I know if I’m doing well in terms of converting email subscribers to customers, primarily, but even top-of-funnel, converting visitors to email subscribers? I use a sort of typical nurture campaign sales sequence-type funnel in my business.
I’m just curious if you could point me to some resources or other examples of folks who do B2C organic search-driven businesses online? I’m in the career space, salary negotiation, getting rated, and that sort of thing. We’re just really curious if you have any ideas from a SaaS perspective of what a good funnel from search visitors to converted customer at an info product would be? My products range from about $47 for some email templates going up to about $240 for the complete bundle, is what I call it.
Thanks so much for all you do for the Startups for the Rest of Us. Love the podcast, been listening since the beginning, and looking forward to what you guys think. Thanks for your time. Bye.
Rob: Mike, for a question like this, I’d like to take us out to our remote correspondent. He’s a growth expert. He does some B2B, but he does even more B2C. MicroConf speaker, TinySeed mentor, Taylor Hendricksen. Taylor, what are your thoughts for Josh?
Taylor: Hey, Rob and Mike. Thanks for having me on. Josh, thanks for submitting your question.
Before we jump in to the rule of the metrics on B2C products, I’d like to note that it really does differ greatly from business to business and product to product, depending on the few things. The two of the biggest ones being the purchase price, that you’re obviously selling the products for, and what kind of hunger towards the offer there is. Some things that are solved here [00:29:05] would generate much better returns in these metrics than other ones that really don’t have that.
Jumping in, there’s three of the rules of thumbs I’d like to go for in general B2C offers. For onsite opt-in rate for a website visitor using organic to an email opt-in, we like to see conversion rate of about 2%-3%. We see this as low; you could have nothing. Or as high is anywhere from 6%-7% if you have a really great offer dialed-in into that content.
After they are on your email list, a list-to-sale rate, we’ll purchase any of your products, let’s assume you have a 60-90 day sale cycle that you could go to. But a list-to-sale rate we would generally see about 1%-2% rate in there.
Lastly, the value per email subscriber. How much each email subscriber’s worth is around $3-$5 in the first 60-90 day period. That’s the one that differs the most. Depending on this, the financial niches can go up even higher and some of the more hobby niches can go lower.
A way to improve some of those metrics for your current setup, first off, for the opt-in rate, looking through some of your content, some of the content upgrades can definitely be improved, brought to attention more, maybe some more standout design around it. Specifically, it feels like the sour negotiation guide. I thought it was one of the best phrases you ranked for. It could be a tremendous opportunity to send people into that opt-in funnel. The current opt-ins you have were kind of just gray and not really that eye-catching.
How to improve the list of sale? This is something where it sounds like you already got a lot of the core pieces in place with the nurture sequence, the sales sequences, and stuff like that. I haven’t gone through your funnel yet but I’m sure those are pretty good. A way to boost that is to flash sales. It’s something I like to do and hopefully you can generate custom coupons with your setup. I’m not sure SendOwl can, which is the platform you’re using. Other platforms like Ontraport, ActiveCampaign, WooCommerce can do hacks to basically allow you to generate custom coupons for that user that expire in, let’s say, 24 hours. We like to push those. We’ve seen people have engaged maybe the business sales page, but they haven’t purchase yet. That’s one way to cheaply get them over the hump to make a purchase.
Last way to improve your value per email subscriber is after you gone to your main sales sequences, really link that out as long as you can. A good long-term content and an affiliate marketing sequence. After you pitch your products, go through all the good, relevant ones that you’d actually recommend to your audience just to increase that visitor value over time.
Another easy thing to add on that I didn’t see you have, is a push notification list. That’s a really easy thing to plug in. We’re seeing great opt-in rates that are really low friction ways to get that audience out and then you can actually set those automated campaigns to go out over time. Drip out the same content you normally would. Mix it with sales stuff.
In terms of resources to look for, these metrics as well as learning more how to improve those, the biggest one that comes to mind is just DigitalMarketer. Their Customer Value Ascension Journey is a good way to map that. Some of their tactics are a little bit more aggressive in terms of the rule of thumbs. They’ll say $1 per email subscriber per month, especially if you plan financial world, they can achieve this. They’re mailing pretty often and have very aggressive sales tactics within those emails.
I hope this was helpful. Back to you, Rob and Mike.
Rob: Thanks, Taylor, for your onsite commentary. Mike, anything to add?
Mike: No. That was fantastic. That was a great addition.
Rob: I know. This comes back to the whole thing of you and I have certain wheelhouses and experiences, but it’s so cool when we’re able to call on other people in the community.
Mike: Because this isn’t one of them.
Rob: Exactly. I would have had to go and research this. I had some B2C stuff way back in the day, but it was over a decade ago. It’s just not something that we would have. That was awesome for someone who, day-to-day, is doing a lot of B2C stuff. He also does some B2B but he’s one of the folks I know who’s really knee-deep in these stuff. Thanks for the question, Josh. I hope that was helpful. Thanks, Taylor, for chiming in on that.
Other question for the day comes to us from Justin Wolfe from positionhealth.co. He says, “Hey, guys. First off, thanks for the show. Very informative. I have a question about some case studies that we’ve produced for my company, Position Health, which provide real-time notifications whenever people enter or exit medical facilities. Right now, I’ve got a webpage where interested people can fill out a form to request to download the case study by entering their contact info. When people make this request, we sent it to them and add that person as a sales prospect.”
“My question is around indexing for the content in the case study. Right now, the case study isn’t published on our website, but it has lots of good content, and would probably help with making our website more findable in search engines. How would we go about making the case study’s content count towards our website in the SEO sense while still making it available by request only via our email opt-in? Thanks, and keep up the good work.”
What do you think, Mike?
Mike: There’s two things I can think of off the top of my head. The first one would be more related to SEO. I’ll say the second one first which is you could do paid ads for the content. That way, you’re essentially driving people to a landing page and you’re getting their email address. That’s not quite what you’re looking for. I think what you’re looking for is something along the lines of publishing some of the contents or a partial excerpt of it and then providing it as a download if you enter in your email address. Maybe give the title or maybe a brief synopsis of it, and then first couple of paragraphs of it or something like that, or maybe some images from it. They’re a little bit blurred out, so to speak. You can entice people using something like that. You can use excerpts from that content or from that case study around on your website in various places even in other content, use it as a content upgrade, and help capture email addresses using that.
Otherwise, if you are looking to expanding the amount of information that’s on your website, you could post it there as well. I get what you’re trying to do in terms of forcing people to download it. I didn’t mention it on our last podcast except where we talked specifically about case studies. But it’s possible you could get away with posting it for free and publicly to your website, and then also make it available in different places as something that people can just download. You put the content on the site and if you want the downloadable version of it you could say, “Okay, enter in your email address over here.” I don’t know. I have mixed feelings on how that’ll actually even work.
Rob: The last one that you said was the last one I was thinking about was basically if you have a blog or an article section or an essay section, then you put this in there as a text case study. When people land on that, then you say, “Hey, opt-in and get this epically formatted, amazing downloadable PDF thing of this. Plus, an audio version.” Frankly, that’s recording an audio version or something like that is super-fast and easy to do.
If you have just a landing page, whether it’s your homepage, or it’s a squeeze page, or it’s something you’re sending your ads to, and you’re saying, “Hey, I have this great case study and it has great content. Enter your email and download it here,” the odds of someone wandering over and digging through archives of your essays to find this one post that is the same content, is not that likely. That was my initial thought about it. Just offer it in two places as long as it’s not linked to from your header by the same name or linked to in your footer by the same name. It’s more of a section someone has to go to and search from. That’s what Google’s going to want to crawl. If you have these collections of things, then you have this group of content.
If your website is literally a homepage with an opt-in to get the case study, then just this one article off of it, that’s a little weird then. I don’t really know an easy way around that. Frankly, two pages is a thin side anyway. Google is probably not going to rank you for anything. You have to have more built out of that.
Once you get more built out, when you’re at 20, 30, 40 different pages on the site, that becomes easier to put it in the section, then Google index it—assuming they’re indexing your site—and then you rank accordingly.
I wouldn’t be too hung-up since it’s behind an email gate through this route that I can never publish it on my site to this other route because people will find it and then they won’t opt-in their email. It’s such a 5% use case that it wouldn’t be something I’d be particularly concerned about.
Mike: Well, Rob. I think that about wraps this up for today. If you have a question for us, you can call into our voicemail number at 888-801-9690. Or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for full transcript to each episode. Thanks 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 software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: I know that we’re only a couple of weeks out from MicroConf in Vegas. We are just in the process of selling MicroConf Europe tickets. That will be in the 20th to 22nd of October and it will be in Dubrovnik, Croatia again. Looking forward to that. It’ll be awesome and it’ll be back in the same location and one that has a fantastic view of the ocean.
Rob: Yup. I loved that hotel last year. I’m very much looking forward to that, October 22nd, 23rd, and 24th, is that right?
Mike: I believe so, yes. I have to look at the calendar.
Rob: Yeah.
Mike: That’s hard.
Rob: Go to Eventbrite and they’ll be on sale soon. That’s good. I’ve got to start looking for speakers for that here, soon.
One thing I wanted to throw out that I’ve been thinking about, there’s this book called Mindset. I believe it’s by Carol Dweck. Is that right? I wish there was some device that I could type a name of a book into and figure out who wrote it. But anyway, it’s about having a growth mindset versus a fixed mindset. It’s about expanding your thinking and not being caught up with the same beliefs you had your whole life, as well as just believing that you can get better, and that you can change and do more.
I loved this book when I read it. When trying to instill growth mindsets into our children so they don’t go through life thinking, “Well, this is what I have. I’m like this the whole time and I can’t learn new things. Whatever I believed when I was 10 or whatever was instilled in me can’t change.” I really think that this runs true and there’s a parallel here with successful founders. Successful founders I know have growth mindset. They’re always trying to learn, they’re always trying to get better, and they’re always questioning their beliefs.
There are certain moral beliefs implicit that you probably never shared. There are beliefs that you shouldn’t. There are these other ones like, I remember talking about Split Testing in 2008. People were telling me like, “Oh, that’s tricking people. You’re tricking people.” That’s what internet marketers do and we don’t do that in Startups.
Let’s try and talk about email marketing in 2009–2010. It’s like, “Oh, you’re a spammer.” I’m talking about SEO to market a business. It’s like, “Yeah, it’s just gaming and Google. You should just write great content and you’ll rank.” I feel like those are fixed mindsets. Things like, “Well, this is bad and what I believe is going to hold true forever.” But the folks who are able to embrace those new things, if you’re able to do it quickly, and if you’re able to implement these things and take advantage of them, these are the founders that I see succeeding.
The reason I bring this up is there’s a constant ongoing flux of new ideas coming in and trends that come in and out of the whole startup scene. Part of my talk at MicroConf was about trends that I have observed over the past 14 years of being involved in the scene. One of which, of course, is the changing nature of funding, that being bootstrapped and venture-funded used to be this binary thing and then self-funding is introduced where [00:03:33] bank. That’s a little different than being bootstrapped. There’s taking a $100,000 from friends and family. You don’t have an institutional investor. How different is that?
Then, there’s obviously TinySeed, there’s a [00:03:45], and there’s other players. Technically, yes you took a dollar, so you have now taken funding but it’s not the same as the VC funding of 10, 15, and 20 years ago. It doesn’t come with the same negative things.
Some thoughts I’ve been doing and really going back to first principles of what is bootstrapping about? Is it bootstrapping? The reason that I bootstrap—I would assume for most of us—is we want the freedom to run our own company and we want to have purpose working on something interesting. We want to have healthy relationships with our families, not get a divorce, not never be around our kids. If we could do that, whether we take a little bit of money, don’t take any money, which is totally a viable thing, or take a lot of money or whatever, I guess I’ve always had those three goals, that freedom, purpose, and relationship. I think that funding has traditionally been at odds with those—10–15 years ago it would have been—but in my head, there are more shades of gray than perhaps has been the case in the past.
Mike: Part of those things that you just talked about are the change in definitions or understanding of specific pieces. For example, bootstrapping. What does bootstrapping mean? I think that question has come up a lot more recently because of things like TinySeed and [00:04:57]. What does it mean to be a bootstrapper? If you have a very specific or fixed view of that in your head, then it’s going to impact how you view taking money for your company or somebody else taking money for their company. I don’t think that a lot of those definitions are necessarily static because bootstrapping itself is relatively new. It’s really only become a household word in our circles in the last 10 or 15 years. Our circles didn’t even really exist 10 or 15 years ago.
The landscape itself is changing and those definitions are changing at the same time. It makes it difficult to not adjust with it. You’re going to be left behind if you can’t adjust your definitions or mindset along the way.
Rob: Yeah and that’s the thing. This is something that I’ve struggled with. I’m an engineer. I wrote code for decades. I do think in very binary and I used to think in very black and white terms. I used to be more opinionated, more fixed in my thoughts. The older I get and the more experienced I get, the more I realized that that has been a detriment to me in my career and the things that held me back early on were holding on to these ideals that I truly believed and later found out were not as black and white and not as “true” as I thought they were.
Anyway, that’s it. I’ve been thinking a lot about that and how to continue. It’s all up for me to continue to grow. I ask myself the question, “What things do I believe today that I will look back on five years and think that wasn’t correct or that was holding me back then?”
On a lighter note, did you know you can get a refund for audible books that you don’t like?
Mike: I did not know that.
Rob: This is crazy. Remember how I talked about how I’ve backed 185 kickstarters? The only thing worse than Kickstarter for me is Audible. I believe—I would have to look at the library—we have close to 500 audio books.
Mike: Wow.
Rob: I’ve been a member for nine years. It’s nuts. Granted my kids listen to audio books. Sherry listens to them. We all share the same account. Hundreds and hundreds. That’s how I read. I don’t buy physical books. I really don’t buy books on Kindle. I have a lot of them. But I also will go and just try a book and if I don’t like it—I get two, three, or four chapters in—if it’s not doing for me what I thought it was doing, or if it’s too way academic, or just a crappy book, I bail on it. I’ve always, at least for the past 10 years, valued my time more than the cost of an audio book which runs around, let’s say, $10 with a membership.
I have a bunch of audio books that I haven’t listen to. If they’re good, I listen all the way through, I take notes, and I do all that stuff, but if they’re not, I bail on them. I’ve always hate that cost and I realized the other day, you can go back and just say, “Hey, I didn’t like the book.” I’m sure if you abuse this, they have some repercussions or something if you listen on every book and then return it or whatever, but it’s interesting. It’s buried to find it but I definitely went back. I looked to about a year. I went back and refund maybe seven or eight books that I only got a little bit into. I remember specifically why they were crappy. I got some extra credits and you know what I do with those credits?
Mike: You got more books?
Rob: I even [00:08:10] bought more books. Of course I did, Mike. It’s got a voice, I love the information, and learning new things. I’m listening to books everywhere, on topics anywhere from growing your business to negotiation. I have a book on Leonardo Da Vinci, one on World War II, one about dungeons and dragons, two about dungeons and dragons, I listen to Profit First based on a recommendation from Patrick Folly, and I have something about dealing with challenges mentally and blah-blah-blah. All of those won’t stand up to the scrutiny but I do like having a very plethora of books to be able to listen to based on the mood and goals I have at that time.
Mike: The only thing that shocks me about any of that is that you waited until you got the credit before going and buying more books.
Rob: No. It’s true. I didn’t actually spend all the credit.
Mike: You lied. You lied to thousands of people.
Rob: I did spend several of credits but yeah, I’m kind of backed up. I don’t have a big wish list, but I don’t tend to buy a lot of books until I’m ready. Right when I’m ready to listen to it then I’ll buy one or two more and then go into it. Right now, I’m a little overbought because of this credit glut that I experienced after the refund.
All that said, let’s talk about some 2019 goals. You and I make goals each year. I know they’re varied opinions on goals. I’ve always been a goal-driven person. I find that goals help me focus for the year. Not get shiny object syndrome, not wander off and do other crap because there are always more opportunities that are super interesting than I can ever do. The goals help keep me focused.
I sometimes do re-evaluate goals and say, “You know what? I screwed up when I made that goal in the last year. I shouldn’t do that this year. I should pivot the goal.” These are things that I spend a lot of time thinking about. I’ll try to do it on a retreat to make sure that I spend a day or two thinking about it and I really want to accomplish that in the next year. That’s a high-level thing that I then try to focus on the next 12 months.
With that said, we set some goals back in December. It is now second week of April. We kind of just passed the first quarter of our goals. You had two goals with a bunch of subpoints under that. It might be five or six. I had four goals. Why don’t you talk through your first one and let us know how you’re doing? This is either going to be the walk of shame or a celebratory episode where we can high five each other.
Mike: I think it’s going to be a walk between them because I didn’t exactly have a lot of heads-up on the particular piece of this podcast episode. I did not go back and take a look to see what exactly all these numbers looked like. I can give you a ballpark idea but probably not exact.
In terms of exercise, I know that at least halfway through the first quarter I was ahead, and then it really dropped off the end of the quarter as MicroConf got closer. I think that I’m close to what it should’ve been but I’m not absolutely sure.
Rob: You’re saying that you’re not sure if you’re on track for two times a week?
Mike: I think that it’s close. I mean they’re still a little ahead or a little behind but I’m not too far off. Twice a week would’ve been 25 times by the end of the quarter. I know that I was at least 15 or 20 at one point. There is one point where I was six or eight weeks ahead or something like that. I was doing very well but then as MicroConf got closer, I got busy and I stopped going to the gym. Now that MicroConf is over, I can start going back. I haven’t gone back and actually looked at the numbers. I think I’m on track, but I could be a little ahead or a little behind it. I’m not sure.
Rob: Yeah, give or take. You’re on track, it sounds like. I’m way behind. The winter decimated me. I’ve talked about this in the past. It started getting warm here a couple weeks ago. I actually started exercising. My first goal is three days of exercise a week. We’ve got six or seven inches of snow yesterday. It’s like halfway through April. It’s a train wreck for me so far. This is a good reminder. If I didn’t have this goal, I would just not care. I care because I have this goal. It is something that I need to change and is something that I want to be doing. I don’t enjoy exercises. It’s not something I’ve ever really want to on purpose, but they did something that I need to get motivated for. This is a friendly reminder that I’m walk of shaming with the exercise one and I need to figure out a way to do better with this.
Mike: The second one for my getting my health back on track was having a normal sleep schedule. Part of that involved using my CPAP machine at least five times a week and average usage of at least 6½ hours at night. I can say with absolute certainty that I am actually beating that if not exceeding it in a number of different ways. The app that I use for this only goes back, I think, about 30 days or so. I can get more data then, that if I needed to. But even over the last 30 days, the lowest I have on here is 5½ hours and that’s actually a lower one. Most of the rest of them are six plus. Some of them were highest. One of them on here is 9½. We got 10 hours and 40 minutes on here for one of them. I’m doing well on that one.
Rob: Very nice. My second one is about TinySeed. It’s to build it into the de facto brand when bootstrappers look for early-stage funding. The subpoint for that was first batch of founders chosen and they have a good chance of success, good progress, growth, and all that stuff. That’s by the end of the year.
Yes, I would say I’m on track for these. I think the de facto brand thing comes over time. Maybe it’s not a year but it’s kind of a long-term goal. The first batch of founders are on track. We wanted to have everybody chosen by MicroConf. We didn’t get that done but we are most of the way there. To be honest, the biggest hang up as per usual is legal rather than any actual conversations or phone calls or any of that. It’s just getting everything in, bullet points and the legal docs. I’m feeling good about this. This is my main thing that I’m working on. I would say on track for that.
Mike: My next one was to lose 15 pounds. Do we cue the audience’s laughter here now?
Rob: Not there.
Mike: No. I think after MicroConf, I actually gained eight pounds but then the day after or two days after, I was back down to a normal weight or whatever. I hadn’t really lost. I think this is all water weight. I really haven’t lost any measurable amount of weight at this point. I’ve got to work on that. I think that’ll go back to the exercise thing.
Rob: My third goal is to not panic when the stock market crashes. I don’t really think that’s happened. I mean it’s been a little up and down but there hasn’t been a crash. I don’t know yet, we’ll see. This one’s a little bit out of my hands but it’s just something nice to be in the back of my mind.
Mike: You can go out and buy a bottle of whiskey so that when it does crash then you can drink the whiskey and hopefully forget about the stock market.
Rob: Yup, indeed.
Mike: My next one was to have more regular and in-person social contact. I would say that I’m actually succeeding there. Still meeting up with a bunch of people once a week. Obviously, there is a massive injection of social contact at MicroConf, but yeah, I’m still meeting up with people. I wouldn’t say that this is in-person social contact, but I’m also meeting up with a group of people online, usually on Saturday evenings. But we’re going to take a break for a couple of weeks, then startup back again in May. It should be good.
Rob: Very nice. My fourth and final goal is to write or rewrite a book. I have not started on this nor I thought about it. It’s been because of MicroConf and TinySeed all happening here at the first of the year. I’m not on track to do this because I haven’t started it and it hasn’t been on my radar. I want to see once we get the batch chosen, we get things rolling, I want to see how my time works out and if I’m able to do this. As I said when we set this for the first time, writing another book aligns with the main thing I’m doing because writing another book about startups didn’t align with growing Drip. It didn’t align with growing HitTail but it does align with TinySeed. I have more of a reason or an excuse because I really want to do it. There’s more of an excuse to do it. I just got to figure out if I can carve out the time.
One thing that’ll hopefully help with that is, we actually just announced that we hired a program manager with TinySeed who’s going to help in the accelerator because there’s so much work to do. We hired Tracy Osborne formerly of Wedding Lovely. She’s spoke at MicroConf in 2016, did really good talk there. I’ve been a longtime fan and we’ve kept in touch. It just worked out really well for her to come and join us. She’s a developer, a designer, she’s written several books on design, and I believe in some development as well. She’s a public speaker. She’s got a lot of chops. I’m stoked to be working with her on this. That should help achieve, hopefully, a few of the goals on this list in terms of freeing up time, hopefully, for me to do something with the book as well as helping us grow TinySeed into that brand I was talking about.
Mike: Congratulations. It’ll be great to have her around.
Rob: Indeed.
Mike: My last one on here was for Bluetick. It was to establish attraction and move on to something else. The comments I had on here was that it’s fuzzy, not exactly what it should been, whether it should be revenue-target or customer-based. For this, I would say it has meandered the past couple of months. It’s probably largely for the same reasons that you have not gotten around to writing a book was because of MicroConf.
It was about a week or two before MicroConf. I was sitting down and working on stuff. I realized that basically the first three months of this year were basically taken up by MicroConf. I did very little else. It got me thinking about how much of my time is actually spent working Bluetick. My current estimate is between 30% and 40% of my time throughout the course of the year is spent working on Bluetick, whereas I previously thought it was closer to 100%. That’s totally not the case. It changes things in my mind more than anything else, but it’s just a perception or a recognition, I’ll say that I’m not really working on it full time. I’m working on it about a third of the time. That would probably explain how it meanders a little bit and how I’m not getting as much done on it sometimes than I feel like I should be.
Rob: That makes it tough. It’s hard to not have that focus. It’s almost like you’re basically working almost nights and weekends on it. You’re kind of doing it as a side project.
Mike: Yeah. That’s really what it is which in part explains why it can meander along if I’m not paying attention to it. It grows when I am. But if I’m only paying attention to it 30% of the time, it’s really not enough to offset turn out of it, to be perfectly honest. I don’t know. I have to give some more thought to that at exactly how to address that particular problem, but I’ll figure something out.
Rob: Indeed. We’ll there were a couple of other things that I want to talk about. We do have a couple of listener questions but something I thought was interesting from Patrick Campbell from ProfitWell spoke at MicroConf a few weeks ago. A couple of the things or slides that he put up that, I believe challenged people’s thinking, were from some research they have done. They have a lot recurring [00:19:44] SaaS companies using ProfitWell and he posted up two different slides. He posted several that agreed with our mindset of, like this one agrees with your internal monologue of how you believe the world to be.
But how about this one? This is from data. This is from 1800 respondents. The slide said, “Remote companies have considerably worst growth and retention than collocated companies.” The room went silent. He’s like, “I know. None of us want to hear this because we’re building remote companies. We want to build remote companies.” How does that make you feel? You instantly question the data. Whereas, seven of these different slides that had statements like this, some were totally in the MicroConf wheelhouse and totally agreed with bootstrapping and all that stuff, others were like this and they’ve challenged our thinking. This one in particular, he had 1800 respondents. The growth was between 21% and 29% slower for remote companies than it was for companies located in the same location.
The other one was companies with founders with a hobby grow slower. This is when the hobby takes 10 hours a week and the study was done four years in a row. It was 2014, 2015, 2016, and 2017. Each year, the growth was 10% or 12% slower with founders with a hobby.
It’s interesting. I want to back these around really quick. I don’t want to dispute the number because he asked these questions. They’re pretty rigorous company, I believe, in terms of data and research. What do you make of them? What are your thoughts on this?
Mike: I thought that the way he positioned these was to let people think about them and understand their default position on what their beliefs were about the data, whether it conflicted with their worldview. I found that more interesting than the actual data itself because I don’t have access to this data directly. It’s not stuff that I look at or actively thinking about. The data itself makes sense to me, but I don’t have anything to dispute it either way.
Remote companies have a worst growth of retention or founders with a hobby grow slower. That intuitively makes sense. The first one, remote companies having a worst growth rate and worst retention rate, I don’t know what he meant by collocated. Does that mean they have an office?
Rob: Just local companies having an office that are not remote.
Mike: I could see that because I think a lot of people have issues working remotely. Some people are just not wired that way. They can’t do it.
Rob: Yeah. I can see that the retention part of it makes a little bit of sense to me. When you’re working remotely, you don’t have as much of a connection to the people whereas if you cut to lunch with folks every day, there is more of that team or family depending on how you couch it. There’s that feel that really is different. I could see that one being causation because obviously, correlation is not causation. That’s where I look at. The fact that remote companies have considerably worst growth, it doesn’t mean that being remote causes worst growth.
Again, I’m not trying to challenge these numbers but I always thinking, most venture-funded companies, the VCs, do not want them to be remote. They frown on remote. I would hypothesize that most remote companies, the majority, are actually bootstrap companies—bootstrap, self-funded, whatever—not venture-backed, anything but venture-backed.
As a guess, I would also say that venture-backed companies tend to grow faster overall than bootstrap or self-funded companies. One, because that’s the mandate. For better or worse, it’s growth at all cost a lot of times. That’s the number one KPI, it’s growth, and that’s not necessarily with folks in our community. Number two, venture-funded companies tend to have just more money at their disposal. They can goose the growth almost; they can force the growth.
That was something that has gone through my head. Perhaps growth is not caused by them being remote but it’s one factor in that.
Mike: It seems to me like you’re trying to justify what those numbers are and kind of fit them into your mental model. I think that was one of the things that I took away from the talk is if there’s data, there’s two ways to approach it. One is this is factual and how do I relate to it? Or you trying to either pick it apart or trying to make sure that it doesn’t conflict with your worldview. I can see both ways on both of them. I think you can as well. But you’re trying to map these things to your mental model of why these things could be true even though you don’t necessarily want to go out and get funding, for example.
Rob: Totally. That’s the thing. Companies with founders with a hobby grow slower. Remote companies grow slower. It’s like, “So what?” When I come back to my values of freedom, purpose, and relationship, the growth is not one of those three core values. I did like having companies that grew in revenue because it led to a certain amount of success. It lends a bunch of things. I can impact more people; I can make more money. It led to more purpose and I can have more impact. There was just a bunch of stuff with it.
But frankly, if I’m going to have a hobby and I’m going to play my guitar, or I’m going to play tabletop games, or my hobby is hanging out with my kids, but I grow slower by 10%, 12%, or 15% a year, I’m actually okay with that. That’s a personal thing of mine.
While these things might say, “Oh my gosh,” it might make you rethink everything. It’s like we’re not in the venture-funded space, so, can we just have profitable businesses? Isn’t it that what Startups for The Rest Of Us and MicroConf our movement, or community, or whatever you want to call it, it’s kind of about it? Is it growth at all cost? It’s nothing we’ve ever espouse.
Frankly, just growth in general is good, it feels good, and it’s a goal. It should be a goal somewhere in your radar but it’s not the number one, end-all-be-all for me or for a lot of people, I think.
Mike: Yeah. Just growing headcount is not the major goal for most people that I know. Whereas you said, if for a VC or a funded company, it kind of is, to be honest. It would make sense that those types of companies would do that. Again, I think that even in just saying that or kind of going that part of the conversation, we’re really drawing attention to the fact that now we’re starting to try to pick apart the data and question, “Is this data accurate?” or, “How good is the data?” That’s exactly what I took away from Patrick’s talk, which was when you see data that conflicts with what you think, consider why that is.
Rob: Yeah. I don’t think it’s what we’re doing here. I wasn’t saying that data’s not correct. I was saying, let’s say this is correct. Am I okay with that? Am I okay with growing a business? Am I okay having a hobby? Yeah. That’s the beauty of being in control of my business is that I can make these decisions.
Mike: Yup. Totally.
Rob: Cool. Listener questions. Let’s dive-in. We have a voicemail from Josh Doody. It’s about metrics rules of thumb for B2C products.
Josh: Hey, Rob and Mike. It’s Josh Doody here, MicroConf attendee frequently. Also, I run my business at fearlesssalarynegotiation.com. I have a question that might be a little bit outside your wheelhouse, but I’d really love to get your perspective on some metrics and things for my business, as people who think about SaaS a lot.
I run a B2C business that has two sides. One side is coaching. That side’s great, I’ve done marketing, it works really well, that’s where I make most of my living. But then, I have a product side of my business that, again, is B2C mostly driven by organic search traffic on Google.
Really, what I’m struggling with is trying to figure out what are good metrics for my business? How do I know if I’m doing well in terms of converting email subscribers to customers, primarily, but even top-of-funnel, converting visitors to email subscribers? I use a sort of typical nurture campaign sales sequence-type funnel in my business.
I’m just curious if you could point me to some resources or other examples of folks who do B2C organic search-driven businesses online? I’m in the career space, salary negotiation, getting rated, and that sort of thing. We’re just really curious if you have any ideas from a SaaS perspective of what a good funnel from search visitors to converted customer at an info product would be? My products range from about $47 for some email templates going up to about $240 for the complete bundle, is what I call it.
Thanks so much for all you do for the Startups for the Rest of Us. Love the podcast, been listening since the beginning, and looking forward to what you guys think. Thanks for your time. Bye.
Rob: Mike, for a question like this, I’d like to take us out to our remote correspondent. He’s a growth expert. He does some B2B, but he does even more B2C. MicroConf speaker, TinySeed mentor, Taylor Hendricksen. Taylor, what are your thoughts for Josh?
Taylor: Hey, Rob and Mike. Thanks for having me on. Josh, thanks for submitting your question.
Before we jump in to the rule of the metrics on B2C products, I’d like to note that it really does differ greatly from business to business and product to product, depending on the few things. The two of the biggest ones being the purchase price, that you’re obviously selling the products for, and what kind of hunger towards the offer there is. Some things that are solved here [00:29:05] would generate much better returns in these metrics than other ones that really don’t have that.
Jumping in, there’s three of the rules of thumbs I’d like to go for in general B2C offers. For onsite opt-in rate for a website visitor using organic to an email opt-in, we like to see conversion rate of about 2%-3%. We see this as low; you could have nothing. Or as high is anywhere from 6%-7% if you have a really great offer dialed-in into that content.
After they are on your email list, a list-to-sale rate, we’ll purchase any of your products, let’s assume you have a 60-90 day sale cycle that you could go to. But a list-to-sale rate we would generally see about 1%-2% rate in there.
Lastly, the value per email subscriber. How much each email subscriber’s worth is around $3-$5 in the first 60-90 day period. That’s the one that differs the most. Depending on this, the financial niches can go up even higher and some of the more hobby niches can go lower.
A way to improve some of those metrics for your current setup, first off, for the opt-in rate, looking through some of your content, some of the content upgrades can definitely be improved, brought to attention more, maybe some more standout design around it. Specifically, it feels like the sour negotiation guide. I thought it was one of the best phrases you ranked for. It could be a tremendous opportunity to send people into that opt-in funnel. The current opt-ins you have were kind of just gray and not really that eye-catching.
How to improve the list of sale? This is something where it sounds like you already got a lot of the core pieces in place with the nurture sequence, the sales sequences, and stuff like that. I haven’t gone through your funnel yet but I’m sure those are pretty good. A way to boost that is to flash sales. It’s something I like to do and hopefully you can generate custom coupons with your setup. I’m not sure SendOwl can, which is the platform you’re using. Other platforms like Ontraport, ActiveCampaign, WooCommerce can do hacks to basically allow you to generate custom coupons for that user that expire in, let’s say, 24 hours. We like to push those. We’ve seen people have engaged maybe the business sales page, but they haven’t purchase yet. That’s one way to cheaply get them over the hump to make a purchase.
Last way to improve your value per email subscriber is after you gone to your main sales sequences, really link that out as long as you can. A good long-term content and an affiliate marketing sequence. After you pitch your products, go through all the good, relevant ones that you’d actually recommend to your audience just to increase that visitor value over time.
Another easy thing to add on that I didn’t see you have, is a push notification list. That’s a really easy thing to plug in. We’re seeing great opt-in rates that are really low friction ways to get that audience out and then you can actually set those automated campaigns to go out over time. Drip out the same content you normally would. Mix it with sales stuff.
In terms of resources to look for, these metrics as well as learning more how to improve those, the biggest one that comes to mind is just DigitalMarketer. Their Customer Value Ascension Journey is a good way to map that. Some of their tactics are a little bit more aggressive in terms of the rule of thumbs. They’ll say $1 per email subscriber per month, especially if you plan financial world, they can achieve this. They’re mailing pretty often and have very aggressive sales tactics within those emails.
I hope this was helpful. Back to you, Rob and Mike.
Rob: Thanks, Taylor, for your onsite commentary. Mike, anything to add?
Mike: No. That was fantastic. That was a great addition.
Rob: I know. This comes back to the whole thing of you and I have certain wheelhouses and experiences, but it’s so cool when we’re able to call on other people in the community.
Mike: Because this isn’t one of them.
Rob: Exactly. I would have had to go and research this. I had some B2C stuff way back in the day, but it was over a decade ago. It’s just not something that we would have. That was awesome for someone who, day-to-day, is doing a lot of B2C stuff. He also does some B2B but he’s one of the folks I know who’s really knee-deep in these stuff. Thanks for the question, Josh. I hope that was helpful. Thanks, Taylor, for chiming in on that.
Other question for the day comes to us from Justin Wolfe from positionhealth.co. He says, “Hey, guys. First off, thanks for the show. Very informative. I have a question about some case studies that we’ve produced for my company, Position Health, which provide real-time notifications whenever people enter or exit medical facilities. Right now, I’ve got a webpage where interested people can fill out a form to request to download the case study by entering their contact info. When people make this request, we sent it to them and add that person as a sales prospect.”
“My question is around indexing for the content in the case study. Right now, the case study isn’t published on our website, but it has lots of good content, and would probably help with making our website more findable in search engines. How would we go about making the case study’s content count towards our website in the SEO sense while still making it available by request only via our email opt-in? Thanks, and keep up the good work.”
What do you think, Mike?
Mike: There’s two things I can think of off the top of my head. The first one would be more related to SEO. I’ll say the second one first which is you could do paid ads for the content. That way, you’re essentially driving people to a landing page and you’re getting their email address. That’s not quite what you’re looking for. I think what you’re looking for is something along the lines of publishing some of the contents or a partial excerpt of it and then providing it as a download if you enter in your email address. Maybe give the title or maybe a brief synopsis of it, and then first couple of paragraphs of it or something like that, or maybe some images from it. They’re a little bit blurred out, so to speak. You can entice people using something like that. You can use excerpts from that content or from that case study around on your website in various places even in other content, use it as a content upgrade, and help capture email addresses using that.
Otherwise, if you are looking to expanding the amount of information that’s on your website, you could post it there as well. I get what you’re trying to do in terms of forcing people to download it. I didn’t mention it on our last podcast except where we talked specifically about case studies. But it’s possible you could get away with posting it for free and publicly to your website, and then also make it available in different places as something that people can just download. You put the content on the site and if you want the downloadable version of it you could say, “Okay, enter in your email address over here.” I don’t know. I have mixed feelings on how that’ll actually even work.
Rob: The last one that you said was the last one I was thinking about was basically if you have a blog or an article section or an essay section, then you put this in there as a text case study. When people land on that, then you say, “Hey, opt-in and get this epically formatted, amazing downloadable PDF thing of this. Plus, an audio version.” Frankly, that’s recording an audio version or something like that is super-fast and easy to do.
If you have just a landing page, whether it’s your homepage, or it’s a squeeze page, or it’s something you’re sending your ads to, and you’re saying, “Hey, I have this great case study and it has great content. Enter your email and download it here,” the odds of someone wandering over and digging through archives of your essays to find this one post that is the same content, is not that likely. That was my initial thought about it. Just offer it in two places as long as it’s not linked to from your header by the same name or linked to in your footer by the same name. It’s more of a section someone has to go to and search from. That’s what Google’s going to want to crawl. If you have these collections of things, then you have this group of content.
If your website is literally a homepage with an opt-in to get the case study, then just this one article off of it, that’s a little weird then. I don’t really know an easy way around that. Frankly, two pages is a thin side anyway. Google is probably not going to rank you for anything. You have to have more built out of that.
Once you get more built out, when you’re at 20, 30, 40 different pages on the site, that becomes easier to put it in the section, then Google index it—assuming they’re indexing your site—and then you rank accordingly.
I wouldn’t be too hung-up since it’s behind an email gate through this route that I can never publish it on my site to this other route because people will find it and then they won’t opt-in their email. It’s such a 5% use case that it wouldn’t be something I’d be particularly concerned about.
Mike: Well, Rob. I think that about wraps this up for today. If you have a question for us, you can call into our voicemail number at 888-801-9690. Or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for full transcript to each episode. Thanks for listening and we’ll see you next time.
Episode 440 | How to Build Case Studies That Don’t Suck
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the process of putting together a case study and reasons why you would do it. They also share some additional thoughts on this years MicroConf and its future.
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Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about how to build case studies that don’t suck. This is Startups for the Rest of Us episode 440.
Welcome to Startups for the Rest of Us, the podcast helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products whether you’re built your first products or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: I’m back from London, sir. MicroConf for a week and then I flew home and the next day flew out to London with my wife and the kids for 9 days, 10 days–it was a long time. It was a long time to be away from home. As much as I’d like being in new places, I find that I’m more productive at home and just being gone for that long with the kids and just being gone for basically two-and-a-half weeks including MicroConf was stressful. It kind of takes the toll on you plus the time change, plus all the stuff.
London was fun. Sheri and I had been there before. The kids have not so we took them around all the fun sites. We watched five-hour play called Harry Potter and the Cursed Child. It had a two-and-a-half-hour intermission, so you get dinner in between the two parts. That was really good though, very well done.
Mike: Wait, was the two-and-a-half-hours inclusive of the play itself?
Rob: No.
Mike: Okay. It was two-and-a-half-hours of play, a two-and-a-half-hour dinner, and then two-and-a-half-hours of play?
Rob: Yep.
Mike: Wow.
Rob: It started at 1:00 in the afternoon and ended at 9:00 PM.
Mike: Wow.
Rob: With a two-and-a-half, three-hour gap in the middle so we went out to dinner. It was quite expensive as well. It was a big expense being there. She’s like, “Do we want to do this?” This is one of those things, it’s getting rave reviews and it’s got Broadway quality play. It’s really pretty cool. J.K Rowling was heavily involved in this. She’s not writing books anymore but she’s now doing movies and this play.
I know when it started that it came out as a book format or in book format—I didn’t read it—but it was basically a play in book format. There was no description, it was all just dialogue, and people didn’t really like it but play itself got rave reviews. My kids loved it. I enjoyed it as well. I was surprised that we all made it through because it’s like 5 ½ hours-ish of sitting in a play is a long time, but I think it’s kind of one of those lifelong experiences of crazy thing to say, “Yeah, we saw it in the first year or two and it was good.” I imagine they’ll make it into a movie at some point and we’ll say, “We like the play better,” because isn’t that what you do? You always like the book or the play better, the pretentiousness of, “I saw it first, […].
Mike: I know. I think that that’s always whichever one you saw first; it happens to be the one that you like.
Rob: Totally.
Mike: It’s nothing else. I saw you were going to London. I was like, “Oh, god.” Because I got back and then I saw some things on Facebook I think, it was like, “Oh, yeah. We’re headed to London,” or something about the play. I’m just like, I cannot imagine getting on the plane after having gone to MicroConf for a full week and then taking the eight-hour flight back and then have to get on another plane.
Rob: It was exhausting. I don’t travel well as it is. I’d tire a lot. Sheri travels really well, I don’t, so it took a toll on me but all in all, I had a good time. It’s good to be back.
In addition, Sheri and I hosted a founder meetup. I had mentioned that on the podcast here and then tweeted it. We got about 30 people who showed up. I had to rent a space. This was kind of a misstep. I was imagining like, “Yeah, we’re getting 10 or 15 people together and we’ll just show-up at a restaurant or I’ll call them in advance and get a back room.” When we did that, I got 57 people who entered their email and contact information. I was like, “This is like an event now. I can’t just show up somewhere.”
It was a mistake because I didn’t want to plan anything. You know what I mean? I then had to get in touch with venues and do all this stuff. Actually, thanks to Stephanie who works for FE International. She actually stepped in. I was talking to Thomas at MicroConf and he recommended connecting me with someone there and she ended up researching venues and handling a lot of that for me but still with a lot of back and forth. Even just trying to get the venue paid, I’m in London and I’m trying to wire them money and bank transfer and of course, it has to text me in order to add a recipient and I don’t have my sim card because I’m in a London sim card. It’s just all that friction and you don’t want to be doing that when you’re sitting there on a bus going to Stonehenge.
Mike: Really? You don’t?
Rob: You don’t. But overall, it was a super good experience. The cool part is when we do that, there’s so many folks who listen to the podcast, or read your book, or follow us on Twitter or whatever, but then they don’t come to MicroConf so you’ve never met them in person. The original goal obviously with MicroConf, as we said, was to get everybody together back in 2011. Just people we knew that we felt like should be talking to one another. But there’s 10, 20, 30x that many people that are out there that have never been to a MicroConf but still are bootstrappers. They still are a part of this community. They still follow the movement and all of that stuff.
That’s where this meetup was cool was that being able to show up. If I’d planned it better, easily today, if I’ve actually emailed the list and promoted it and figured out the dates in advance, I could’ve had 50-75 people there. I have no doubt about it. I think that’s something that could be an interesting thing moving forward although it takes time and effort and such to do, I did enjoy meeting folks that normally we wouldn’t get to meet in the course of the year.
Mike: That’s always cool, to just drop into some place. I mean, I certainly am not the one who don’t want to go around and call the venues and stuff like that because that’s a total pain in the neck. But you’re right, there’s people all over the place that you know through various social media outlets, or through email list, or they bought your book as you said, and you know of them or they know of you. It’d be nice to get together but not everybody has got the flexibility to be able to do that. When you do travel, it’s nice to be able to just get together with people.
Rob: I agree. How about you? What’s been going on in the past week or two?
Mike: Well, I’ve been cleaning up after MicroConf. I’ve also been looking at 4K monitors. Bringing my computer into the 21st century I guess because my monitor is, I think it’s like eight years old at this point. But I’ve got a 30-inch monitor, so I haven’t needed to upgrade it because it’s been fine, but I’ve also got a pair of 20-inch monitors on the side. I’ve kind of been eyeing 4K monitors for a while now.
I was talking to Andrew Culver, who apparently—if people are not familiar or follow him on Twitter—he runs Bullet Train and he’s got a pair of 55-inch LED TVs that he uses. They’re both 4K. He’s got one in front of him and one he uses actually as the top of his desk and he just sits there and works between the two of them which is crazy, like that’s massive amounts of screen real estate but it works for him. I’ve seen pictures of it but I don’t think I would want to go to that level.
Rob: Oh, yeah. That sounds crazy. I’m still using, what do I have, two 24-inch Dell IPS and stuff. It’s probably time for me to revisit that because it definitely has been, I’m thinking it’s probably been about four years, I think since I upgraded my monitors. I actually have a ton of desk space here and so; I don’t know that I could do something that’s that large or that it would benefit me. It’s nice to rethink that every once in a while.
Mike: Most of the ones that I’ve been looking at, they tend to be 27-inch monitors that are 4K. The one I have right now is the 30-inch monitor and it’s 2560×1600 screen resolution. I basically get 50% more screen real estate by going to a 4K and it would be in a smaller area. I just question whether my eyes are good enough to keep on it.
Rob: Yeah, that makes sense. I’ve had some time to reflect on MicroConf this year. We recorded our recap episode when we were there still and you’re in the midst of it and everything. But after talking to more folks and reading their feedback and even just thinking about it over the past week, I realized that this was a less tactical MicroConf than in previous years. I guess I’m speaking specifically about Growth. I think Starter we’re still quite tactical.
It definitely gets hard to find qualified speakers who can speak at the level of Growth who everyone hasn’t heard from a dozen times. It included a diverse line-up of speakers and it’s about tactical things. That’s the challenge and it’s a needle we try thread every year. But yeah, I looked through the list and we had five of the nine Growth talks that should have been fairly tactical. Hanne from Thrive Themes talking about how to handle feature requests. It was Maron talking about hiring, and the Joanna Wiebe talking about copywriting. Taylor Hendricksen talking about SEO and Alli Blum talking about reducing churn through customer feedback.
Typically, I have more marketing talks. I think this year, I struggled. I asked a few other people who would’ve done talks more in line with prior years, but they weren’t available. Unfortunately, Marron had to cancel last minute due to a personal thing that came up. Really, we only had four of our nine talks were tactical and that doesn’t line up with prior years. We’ve tended to do 70%-80% tactical which is the couple of inspirational.
What’s interesting is that we’ve done 18 of these now. Some years, that’s just what happens. It happens because there’d be last minute pivots in a talk or the speaker’s like, “Hey, I just decided to do this other thing.” It’s like, “Cool, let’s do that.” And it changes the line-up. Or one year, we can’t get a bunch of people. Or one year, we’ll get good speakers who have delivered great talks in the past and they just have a bad year; they have a bad talk that doesn’t come across.
What I’ve learned, I think I’ve learned with the first three, four, five MicroConfs we did, I was always ranking them in my head. “Oh, this next one has to be the best one ever.” At certain point, you just can’t all be doing the best one ever. You just have to do the best that you can and hope it turns up. But there’s a bunch of stuff that’s not within our control, frankly. Whether it’s the speaker canceling or just someone showing up and not doing the best talk they’ve ever done, whether it’s someone who you’ve vetted, and they pivot the talk at the last minute.
I think that in my head, I’m pretty careful not to draw trendlines based on one event and say, “Alright, that’s it. Now, MicroConf is different than it always has been. It’s not tactical anymore.” And it’s like, “No, that’s not actually true because the next time, we’re going to double down on the same vision.” We’ve had pretty good consistency through the 18 events but it’s just an observation I made. Again, I heard a couple of people mention it to me and I was kind of like, “Yeah, that’s a good point.” I think that it’ll be different next time. No two MicroConfs are the same.”
Mike: Yeah. You and I have had this conversation before. I think that we had the conversation especially early on after the first two to three years where things were getting progressively better, we’re like, “Okay. How do we top the previous year? How do we make it better? How do we improve?” At a certain point, I think that’s actually detrimental especially when it comes to a conference where there’s so many things that are outside of your control.
What you really need to do is be concentrating on how can I maintain a consistently high-level of quality doing the same thing? Because you’re never going to consistently beat what you did before. You’re not always going to grow your numbers. You’re not always going to have better and better speakers. As you said, some people are going to have an off year here or there or a talk you think is going to go over well just falls flat or something like that. Those things happen and just aiming for consistently high quality I think is the better way to approach it because you’ll maintain your sanity a lot better as well.
Rob: Totally. I mean other examples I realized, again, I was reflecting. I was going through all the talks and thinking, “How are they different than I thought they would be? How is this MicroConf different?” There were more talks that had perhaps a hint of negativity in them. It wasn’t that the whole talk was negativity but during my talk I said, “Look, bootstrapping is getting harder. There’s more money coming into SaaS. It is harder.” Some people are like, “Oh my gosh, it’s just doom and gloom everywhere.” It’s like, “No, it’s not. It’s just a trend that I’m seeing.”
Patrick Campbell mentioned something that were part of his talk was, remote companies don’t grow as fast and have higher churn than co-located companies. We can talk about that probably in a future episode but there were just little tangents of it. Even Gumroad, Sahil’s talk, I’ve never met him, but his talk was more of a downer than I thought it would be and you just don’t know that going in. His story of starting Gumroad and raising the money and failing to become a billion-dollar company, it can come off inspirational, there could be tactics, or it can have undertones of thoughtful introspection.
Or even talking about bootstrapping versus not. This happened to be a year where there were with Chris Savage and Sahil talking about that weren’t necessarily super related to or in the wheelhouse of bootstrapping. Even patio11 having to step in. Maron wasn’t able to do it, patio11 stepped in and talked about what Silicon Valley does and this and that.
Again, one could paint it with a brush and look at it and be like, “Oh well, MicroConf now is about depressing talks that are less tactical and not focused on bootstrapping.” You could say that and it’s not true. No one is saying that, I am definitely just reflecting on this and looking at it, painting it in my head, but I think it’s one experience, one year, does not make a trend. It’s just the way things kind of fall in a given year. Again, it’s because a lot of the things that can be outside of your control that have changed last minute or just the way things fall certain years.
Mike: Your comment about Patrick Campbell’s data points about the companies that are remote growing slower than ones that aren’t, that maybe a general trend or a general conclusion that you could draw but it doesn’t mean that that happens every single time. Because there’s obviously individual situations that fall on one side or the other. Some of them are going to skew the data and some of them are going to stick pretty close to it. It’s more about what your path is as opposed to, “Oh, this trend line over here says this,” or, “This data point I have says X.” Well, a data point in and of itself doesn’t mean a whole lot. There’s a bigger picture that you’re not always looking at.
Rob: Totally. It’s been good. I think when you’re building anything—you’re building software, you’re building a personal brand, or you’re building a conference—you should reflect on it, figure out what went well, what went not so well, and figure out how to build an event or a thing that you’re proud and that brings value to people. That’s how we’ve done that. We’ve done that over and over for the past 18 conferences, so I think it was a good exercise. It was like a mini retreat. I had a lot of time on airplanes over the past two weeks, so I was able to think about this kind of stuff.
With that, what are we talking about today?
Mike: Well, today we’re going to be talking about case studies that don’t suck. I have a bunch of sources that I’ve drawn from and will put those into the show notes. But I want to talk about the process of putting together a case study and why would we even do it.
To start out, what’s the purpose of a case study? You can use case studies in a lot of different ways. But you can use them to drive traffic to your website, you can use them help convert leads, increase sales and the biggest thing that I’ve looked at for case studies is that when you have case study that is fully written out, it’s treated by people as different than if you have a conversation with them and you start relaying facts to them. Because there’s this, I don’t want to say a wall of, “I don’t believe you,” in front of them. But if you have something in a case study and it’s spelled out in black and white, they could look at it, and they can download it and see the data and pick it apart in their head. As opposed to trying to process it on the fly when you’re having the conversations. It feels a little bit more tangible to them.
You can use it as a reference point not just to hand to them but also you can relate back to those data points in conversations that you have during sales calls or demos or just everyday conversation where you point back to it and then say, “Oh well, we have a case study on exactly this. I will send it to you.”
Rob: Yeah. The cool part about case studies is they can function at the top of the funnel like you said to drive traffic, they can function in the middle of the funnel to convert leads, and they can function more towards the bottom of the funnel to convert leads and increase sales. They are very versatile piece of content depending on how they’re written. You can even do different variations of the exact same case study to make it more general and have a broader headline that could go towards top of the funnel or be super specific and just use the same content and tweak it to make it applicable to someone who’s deep in your sales funnel.
I’ve always liked them because they make your customer the hero which, in essence, tries to make your prospect the hero of the story. The prospect is thinking about it can look at it and say, “Well, I want that to be me.” In addition, the versatility to be able to be at all stages of the funnel is a unique aspect of case studies.
Mike: I think that one of the things you just mentioned is you’re positioning those prospects as the hero and that’s one of the reasons why this thing is so effective. It allows you to directly position your product as the best solution for that particular case study and you’ve got claims that are backed by results because you’re documenting them as part of the case study.
All these things combined make it helpful to have those because you can put them in front of somebody and it’s not something that everybody else has. Not every company puts together case studies that they can hand out to their prospects or their soon-to-be customers. And that makes them extremely effective in helping to convert those people into paying customers.
Rob: I think one of the critical things to think about when you’re building a case study is to identify who its targeting, or to be very specific. Oftentimes you’ll see a case study done for each of several market verticals. If your app serves other SaaS apps and WordPress plugins and info marketers, then you could do one case study for each of those three verticals. That could be a start.
If you serve different company sizes, whether they’re horizontal over the verticals, you can do Fortune 500 case study, and then a solopreneur case study, and then an SMB case study. Job titles, job responsibilities, is another one that you can look at. They have to go a bunch of course from the CEO of a small company or the CFO or even the marketing director or whatever. I think that doubling down, figuring out the 80/20 of this, and starting with kind of the one and focusing it on the place you have the most traction with. Like, what’s the job title or responsibility, is it founder, is it CEO, is it CFO, whatever; the company size whether SMB enterprise etc., and the market vertical, and then doing your first one based on that and seeing how it goes I think is how I would start.
Mike: I think the other thing that you mentioned earlier which was the fact that a case study can apply at the top, middle, or the bottom of the funnel, that’s another important thing to keep in mind when you are trying to identify who it is that you’re targeting because you want to know which of those types of people that you are targeting in your sales funnel. Is it somebody who you want to be able to run Facebook ads and promote this case study to? Or is it somebody who’s much closer to being a paying customer and they just need that last little bit of a push, and you can hand them a case study that maps them into the shoes of a current customer that you have who’s being successful with your product.
Once you have that information, you have to find customers who fit that profile and interview them. The very first thing you’re going to want to do is get their permission to use their name, photo, company, logo, things like that as part of a case study. Obviously, they’re going to want to be interested in being the subject of that case study. You want to look specifically who are being successful with your products. You don’t necessarily have to have had them for a long time, but they have to be excited about your product and using it a lot.
A lot of times this can happen when they just signed-on, if you’ve had a sales conversation and you maybe manually onboarded them because it was complicated. They were moving from another product to yours, and you had to do some upgraded or new feature improvements, or something like that, in order to get them over on to using your product. Those people are typically good candidates because they were experiencing pain enough from an existing solution that they were using. It also allows you to position your product against that other product as saying, “Hey, this was a better fit for this type of person and here are the reasons why.”
Rob: From there, you can use an introductory questionnaire in essence whether it’s a Google form or whether it’s just an email with four, five bullets on it. Get someone to give you their initial thoughts, initial feedback and you use that to then construct a deeper set of questions that you would typically ask during a phone interview that you then record. You can either then listen back, turn it out into the case study or you can transcribe it and try to manipulate that. But basically, what we’re talking about here is a do level of interviews. This first one is this short introductory questionnaire that’s typically done via email. What that allows you to do is to make the best use of this person’s time when you jump on the phone and interview for 30-45 minutes.
Mike: And that introductory questionnaire is something that you can inject as part of your marketing automation. When they have paid for the third or fourth time, they made three credit card payments, you can then send them a question that says, “Hey, would you be interested in doing a case study?” And then maybe highlight some of the other ones that you’ve done or if you’re early on, you don’t have a pool of case studies that you’ve done, what you could send them over is an individual email.
Rob: What you’re trying to dig into with all of this is you’re trying to find the through line for their story and then tell that story from start to finish. To be honest, I would look at The Hero’s Journey by Joseph Campbell, and you can just read a summary of that, you don’t have to read the whole book but just figure out what that is. You’ll see a lot of interviews. I actually base a lot of my talk outlines on The Hero’s Journey as much as I can. But it’s basically showing this person where they ended up and then tracing back and walking through the steps that they got to get there.
You want to identify who they are, what they do, what their goals were, what their needs were, what challenges they ran into along the way, how did your product meet these goals and help them get to that next level, helped them go from Mario to Super Mario, in essence, and what were the benefits that they received from your team or from your product or whatever to be able to level-up.
Mike: The most important thing that you want to keep in mind when you’re going through that story and identifying what that through line is to folks almost exclusively on the story. Because it has to resonate with whoever your target prospect is. The brand recognition for the hero of the story matters a lot less than the story itself. If you have a person or a company that you’re highlighting and nobody knows who they are, it doesn’t matter. But what really matters is making sure that the story is going to be relatable to the person who’s reading it because if it isn’t, then case study itself is not going to be nearly as powerful or as effective.
I’ve seen case studies where they’re written for a completely different type of company like an enterprise company. I read the case study and it means absolutely mean nothing to me because my problems are wildly different than that of an enterprise company. But if you have a different case study that is targeted at one or two-person companies then that’s something that resonates a lot better with me. It doesn’t matter to me if I know who the subject of that particular case study is or not.
Rob: Yeah. Story, story, story—those are the first three rules of anything, right? First three rules of starting a podcast, of writing a book—even if it’s a non-fiction book about marketing—having a story in there will […], writing a talk, there’s so many things, a blog post, that story can do and case studies are no different.
Something to think about once you’ve nailed this down, thinking about your formats. There’s a lot of formats you can put a case study into. You could obviously do a video, one. I hesitate when I say that because a, it’s expensive to do high-quality. I think fewer people watch videos than they listen to audio or read written version but if you can do a high-end one—if you could pay a videographer to actually put it together, if you can afford that—they can be pretty cool and they can have a lot of […]. There’s video, there’s PDF, there’s audio, there’s infographics.
The idea is if you can provide it in multiple formats, it’s kind of cool, because you can then take that same content and the content often takes the bulk of the time to produce but then you can rework it and reposition it and send it out in these many ways so that it feels like you have a bunch of case studies but it’s actually just one thing reworked into multiple formats.
Mike: Part of the reason you’d want to do that is just because people like to consume content in different ways. Some people like videos, some people like audios, some people like to read a PDF, other people will glance at an infographic and they’ll sign-up for a mailing list in order to find out more information. But all those things can be used in different capacities and in different channel. You want to make the most use of that content that you generated as you possibly can. The way to do it is using multiple formats.
One thing that we kind of skipped though or we didn’t talk about earlier was the fact that when you’re writing these case stories, try and drill in to find real numbers that you can reference. If you say, “Grew by 100% or 200%,” that’s a lot less meaningful than saying, “Grew by 97%.” That’s kind of a classic marketing technique but the fact is that having real numbers that prospects can reference and can relate to is a huge difference.
If somebody’s getting, let’s say, 10,000 visitors a month to their website and you have a case study where somebody is talking about growing from 9,000 to 17,000 visitors a month, that’s going to be powerful to them. Whereas if that same person reads a case study and it references 180,000 visitors going to 360,000, it’s not as meaningful to them because they can’t relate to it; it doesn’t mean as much. That’s why having those numbers in there helps you to position your case study directly towards the type of person you’re targeting.
And then the last thing is to make sure that you have a place where people can go to get these case studies. It’s not enough to just promote them through various channels or to send them into people when they’re asking for them or to put them into your marketing automation. What you really want to do is make sure that these case studies are available so that if somebody is just browsing through your website and they want to see some of the different case studies, they’re right there. That serves a lot of different purposes, but the bottom line is you want people to be able to see these out if they’re interested in them and then download them whenever they feel like it.
Rob: Of course, the thing that most people forget about and that is should probably be at least half of the work is the promotion. Maybe it should be 80/20 but it’s promotion. You’re going to build this thing; it’s not going to promote itself.
Mike: It’s not?
Rob: It’s not going to promote… Mike, if you have learned nothing in 440 episodes of this, “Build it and they will come,” is not going to work. This is where you have to inject this case study into your sales or your marketing funnel. It can be published on the website at a place where it gets a lot of traffic. You can put it in email welcome sequence. You can put it in an email marketing sequence. But just some way to get this in front of people’s eyeballs. Promote it on social media periodically, if it holds up, if it’s evergreen. If it’s a one-time thing obviously, promote it on social media for a week or two and then let it go.
Getting it out to folks via email really is probably the best way. We know that email engagement is so much higher than other things, but the idea here is to get out in front of people. I’ve heard folks doing the case study running ads to get people to go download or read the case study, is certainly a viable option. That’s a marketing tactic that you’re going to have to spend quite a bit of time honing the funnel and all that stuff but there are lots of ways to get people in front of it. If the case study is well-written, it impacts people, it can lead to people converting. It can have that positive ROI pretty quickly.
Mike: You could even go so far as to put these as a content upgrade on your website in various places throughout your content marketing. If there’s an article that you have about some particular topic and you have a case study that is discussing that topic or challenge that people were having and explicitly walks through how one of your customers was able to overcome it with your product, then that’s a fantastic content upgrade that you can promote inside of that particular blog post.
Rob: We have four sourced articles that you compiled this outline from as well as some of your own magic. We will include those links in our show notes, startupsfortherestofus.com, look for episode 440 if you want to learn more about this topic. With that, we’re wrapped up for the day.
If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us in iTunes, Stitcher, Overcast, Downcast, Spotify or wherever podcasts are sold, just search for Startups For The Rest Of Us. If you want a full transcript of each episode, you can hit our website startupsfortherestofus.com. thanks for listening, we’ll see you next time.
Welcome to Startups for the Rest of Us, the podcast helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products whether you’re built your first products or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: I’m back from London, sir. MicroConf for a week and then I flew home and the next day flew out to London with my wife and the kids for 9 days, 10 days–it was a long time. It was a long time to be away from home. As much as I’d like being in new places, I find that I’m more productive at home and just being gone for that long with the kids and just being gone for basically two-and-a-half weeks including MicroConf was stressful. It kind of takes the toll on you plus the time change, plus all the stuff.
London was fun. Sheri and I had been there before. The kids have not so we took them around all the fun sites. We watched five-hour play called Harry Potter and the Cursed Child. It had a two-and-a-half-hour intermission, so you get dinner in between the two parts. That was really good though, very well done.
Mike: Wait, was the two-and-a-half-hours inclusive of the play itself?
Rob: No.
Mike: Okay. It was two-and-a-half-hours of play, a two-and-a-half-hour dinner, and then two-and-a-half-hours of play?
Rob: Yep.
Mike: Wow.
Rob: It started at 1:00 in the afternoon and ended at 9:00 PM.
Mike: Wow.
Rob: With a two-and-a-half, three-hour gap in the middle so we went out to dinner. It was quite expensive as well. It was a big expense being there. She’s like, “Do we want to do this?” This is one of those things, it’s getting rave reviews and it’s got Broadway quality play. It’s really pretty cool. J.K Rowling was heavily involved in this. She’s not writing books anymore but she’s now doing movies and this play.
I know when it started that it came out as a book format or in book format—I didn’t read it—but it was basically a play in book format. There was no description, it was all just dialogue, and people didn’t really like it but play itself got rave reviews. My kids loved it. I enjoyed it as well. I was surprised that we all made it through because it’s like 5 ½ hours-ish of sitting in a play is a long time, but I think it’s kind of one of those lifelong experiences of crazy thing to say, “Yeah, we saw it in the first year or two and it was good.” I imagine they’ll make it into a movie at some point and we’ll say, “We like the play better,” because isn’t that what you do? You always like the book or the play better, the pretentiousness of, “I saw it first, […].
Mike: I know. I think that that’s always whichever one you saw first; it happens to be the one that you like.
Rob: Totally.
Mike: It’s nothing else. I saw you were going to London. I was like, “Oh, god.” Because I got back and then I saw some things on Facebook I think, it was like, “Oh, yeah. We’re headed to London,” or something about the play. I’m just like, I cannot imagine getting on the plane after having gone to MicroConf for a full week and then taking the eight-hour flight back and then have to get on another plane.
Rob: It was exhausting. I don’t travel well as it is. I’d tire a lot. Sheri travels really well, I don’t, so it took a toll on me but all in all, I had a good time. It’s good to be back.
In addition, Sheri and I hosted a founder meetup. I had mentioned that on the podcast here and then tweeted it. We got about 30 people who showed up. I had to rent a space. This was kind of a misstep. I was imagining like, “Yeah, we’re getting 10 or 15 people together and we’ll just show-up at a restaurant or I’ll call them in advance and get a back room.” When we did that, I got 57 people who entered their email and contact information. I was like, “This is like an event now. I can’t just show up somewhere.”
It was a mistake because I didn’t want to plan anything. You know what I mean? I then had to get in touch with venues and do all this stuff. Actually, thanks to Stephanie who works for FE International. She actually stepped in. I was talking to Thomas at MicroConf and he recommended connecting me with someone there and she ended up researching venues and handling a lot of that for me but still with a lot of back and forth. Even just trying to get the venue paid, I’m in London and I’m trying to wire them money and bank transfer and of course, it has to text me in order to add a recipient and I don’t have my sim card because I’m in a London sim card. It’s just all that friction and you don’t want to be doing that when you’re sitting there on a bus going to Stonehenge.
Mike: Really? You don’t?
Rob: You don’t. But overall, it was a super good experience. The cool part is when we do that, there’s so many folks who listen to the podcast, or read your book, or follow us on Twitter or whatever, but then they don’t come to MicroConf so you’ve never met them in person. The original goal obviously with MicroConf, as we said, was to get everybody together back in 2011. Just people we knew that we felt like should be talking to one another. But there’s 10, 20, 30x that many people that are out there that have never been to a MicroConf but still are bootstrappers. They still are a part of this community. They still follow the movement and all of that stuff.
That’s where this meetup was cool was that being able to show up. If I’d planned it better, easily today, if I’ve actually emailed the list and promoted it and figured out the dates in advance, I could’ve had 50-75 people there. I have no doubt about it. I think that’s something that could be an interesting thing moving forward although it takes time and effort and such to do, I did enjoy meeting folks that normally we wouldn’t get to meet in the course of the year.
Mike: That’s always cool, to just drop into some place. I mean, I certainly am not the one who don’t want to go around and call the venues and stuff like that because that’s a total pain in the neck. But you’re right, there’s people all over the place that you know through various social media outlets, or through email list, or they bought your book as you said, and you know of them or they know of you. It’d be nice to get together but not everybody has got the flexibility to be able to do that. When you do travel, it’s nice to be able to just get together with people.
Rob: I agree. How about you? What’s been going on in the past week or two?
Mike: Well, I’ve been cleaning up after MicroConf. I’ve also been looking at 4K monitors. Bringing my computer into the 21st century I guess because my monitor is, I think it’s like eight years old at this point. But I’ve got a 30-inch monitor, so I haven’t needed to upgrade it because it’s been fine, but I’ve also got a pair of 20-inch monitors on the side. I’ve kind of been eyeing 4K monitors for a while now.
I was talking to Andrew Culver, who apparently—if people are not familiar or follow him on Twitter—he runs Bullet Train and he’s got a pair of 55-inch LED TVs that he uses. They’re both 4K. He’s got one in front of him and one he uses actually as the top of his desk and he just sits there and works between the two of them which is crazy, like that’s massive amounts of screen real estate but it works for him. I’ve seen pictures of it but I don’t think I would want to go to that level.
Rob: Oh, yeah. That sounds crazy. I’m still using, what do I have, two 24-inch Dell IPS and stuff. It’s probably time for me to revisit that because it definitely has been, I’m thinking it’s probably been about four years, I think since I upgraded my monitors. I actually have a ton of desk space here and so; I don’t know that I could do something that’s that large or that it would benefit me. It’s nice to rethink that every once in a while.
Mike: Most of the ones that I’ve been looking at, they tend to be 27-inch monitors that are 4K. The one I have right now is the 30-inch monitor and it’s 2560×1600 screen resolution. I basically get 50% more screen real estate by going to a 4K and it would be in a smaller area. I just question whether my eyes are good enough to keep on it.
Rob: Yeah, that makes sense. I’ve had some time to reflect on MicroConf this year. We recorded our recap episode when we were there still and you’re in the midst of it and everything. But after talking to more folks and reading their feedback and even just thinking about it over the past week, I realized that this was a less tactical MicroConf than in previous years. I guess I’m speaking specifically about Growth. I think Starter we’re still quite tactical.
It definitely gets hard to find qualified speakers who can speak at the level of Growth who everyone hasn’t heard from a dozen times. It included a diverse line-up of speakers and it’s about tactical things. That’s the challenge and it’s a needle we try thread every year. But yeah, I looked through the list and we had five of the nine Growth talks that should have been fairly tactical. Hanne from Thrive Themes talking about how to handle feature requests. It was Maron talking about hiring, and the Joanna Wiebe talking about copywriting. Taylor Hendricksen talking about SEO and Alli Blum talking about reducing churn through customer feedback.
Typically, I have more marketing talks. I think this year, I struggled. I asked a few other people who would’ve done talks more in line with prior years, but they weren’t available. Unfortunately, Marron had to cancel last minute due to a personal thing that came up. Really, we only had four of our nine talks were tactical and that doesn’t line up with prior years. We’ve tended to do 70%-80% tactical which is the couple of inspirational.
What’s interesting is that we’ve done 18 of these now. Some years, that’s just what happens. It happens because there’d be last minute pivots in a talk or the speaker’s like, “Hey, I just decided to do this other thing.” It’s like, “Cool, let’s do that.” And it changes the line-up. Or one year, we can’t get a bunch of people. Or one year, we’ll get good speakers who have delivered great talks in the past and they just have a bad year; they have a bad talk that doesn’t come across.
What I’ve learned, I think I’ve learned with the first three, four, five MicroConfs we did, I was always ranking them in my head. “Oh, this next one has to be the best one ever.” At certain point, you just can’t all be doing the best one ever. You just have to do the best that you can and hope it turns up. But there’s a bunch of stuff that’s not within our control, frankly. Whether it’s the speaker canceling or just someone showing up and not doing the best talk they’ve ever done, whether it’s someone who you’ve vetted, and they pivot the talk at the last minute.
I think that in my head, I’m pretty careful not to draw trendlines based on one event and say, “Alright, that’s it. Now, MicroConf is different than it always has been. It’s not tactical anymore.” And it’s like, “No, that’s not actually true because the next time, we’re going to double down on the same vision.” We’ve had pretty good consistency through the 18 events but it’s just an observation I made. Again, I heard a couple of people mention it to me and I was kind of like, “Yeah, that’s a good point.” I think that it’ll be different next time. No two MicroConfs are the same.”
Mike: Yeah. You and I have had this conversation before. I think that we had the conversation especially early on after the first two to three years where things were getting progressively better, we’re like, “Okay. How do we top the previous year? How do we make it better? How do we improve?” At a certain point, I think that’s actually detrimental especially when it comes to a conference where there’s so many things that are outside of your control.
What you really need to do is be concentrating on how can I maintain a consistently high-level of quality doing the same thing? Because you’re never going to consistently beat what you did before. You’re not always going to grow your numbers. You’re not always going to have better and better speakers. As you said, some people are going to have an off year here or there or a talk you think is going to go over well just falls flat or something like that. Those things happen and just aiming for consistently high quality I think is the better way to approach it because you’ll maintain your sanity a lot better as well.
Rob: Totally. I mean other examples I realized, again, I was reflecting. I was going through all the talks and thinking, “How are they different than I thought they would be? How is this MicroConf different?” There were more talks that had perhaps a hint of negativity in them. It wasn’t that the whole talk was negativity but during my talk I said, “Look, bootstrapping is getting harder. There’s more money coming into SaaS. It is harder.” Some people are like, “Oh my gosh, it’s just doom and gloom everywhere.” It’s like, “No, it’s not. It’s just a trend that I’m seeing.”
Patrick Campbell mentioned something that were part of his talk was, remote companies don’t grow as fast and have higher churn than co-located companies. We can talk about that probably in a future episode but there were just little tangents of it. Even Gumroad, Sahil’s talk, I’ve never met him, but his talk was more of a downer than I thought it would be and you just don’t know that going in. His story of starting Gumroad and raising the money and failing to become a billion-dollar company, it can come off inspirational, there could be tactics, or it can have undertones of thoughtful introspection.
Or even talking about bootstrapping versus not. This happened to be a year where there were with Chris Savage and Sahil talking about that weren’t necessarily super related to or in the wheelhouse of bootstrapping. Even patio11 having to step in. Maron wasn’t able to do it, patio11 stepped in and talked about what Silicon Valley does and this and that.
Again, one could paint it with a brush and look at it and be like, “Oh well, MicroConf now is about depressing talks that are less tactical and not focused on bootstrapping.” You could say that and it’s not true. No one is saying that, I am definitely just reflecting on this and looking at it, painting it in my head, but I think it’s one experience, one year, does not make a trend. It’s just the way things kind of fall in a given year. Again, it’s because a lot of the things that can be outside of your control that have changed last minute or just the way things fall certain years.
Mike: Your comment about Patrick Campbell’s data points about the companies that are remote growing slower than ones that aren’t, that maybe a general trend or a general conclusion that you could draw but it doesn’t mean that that happens every single time. Because there’s obviously individual situations that fall on one side or the other. Some of them are going to skew the data and some of them are going to stick pretty close to it. It’s more about what your path is as opposed to, “Oh, this trend line over here says this,” or, “This data point I have says X.” Well, a data point in and of itself doesn’t mean a whole lot. There’s a bigger picture that you’re not always looking at.
Rob: Totally. It’s been good. I think when you’re building anything—you’re building software, you’re building a personal brand, or you’re building a conference—you should reflect on it, figure out what went well, what went not so well, and figure out how to build an event or a thing that you’re proud and that brings value to people. That’s how we’ve done that. We’ve done that over and over for the past 18 conferences, so I think it was a good exercise. It was like a mini retreat. I had a lot of time on airplanes over the past two weeks, so I was able to think about this kind of stuff.
With that, what are we talking about today?
Mike: Well, today we’re going to be talking about case studies that don’t suck. I have a bunch of sources that I’ve drawn from and will put those into the show notes. But I want to talk about the process of putting together a case study and why would we even do it.
To start out, what’s the purpose of a case study? You can use case studies in a lot of different ways. But you can use them to drive traffic to your website, you can use them help convert leads, increase sales and the biggest thing that I’ve looked at for case studies is that when you have case study that is fully written out, it’s treated by people as different than if you have a conversation with them and you start relaying facts to them. Because there’s this, I don’t want to say a wall of, “I don’t believe you,” in front of them. But if you have something in a case study and it’s spelled out in black and white, they could look at it, and they can download it and see the data and pick it apart in their head. As opposed to trying to process it on the fly when you’re having the conversations. It feels a little bit more tangible to them.
You can use it as a reference point not just to hand to them but also you can relate back to those data points in conversations that you have during sales calls or demos or just everyday conversation where you point back to it and then say, “Oh well, we have a case study on exactly this. I will send it to you.”
Rob: Yeah. The cool part about case studies is they can function at the top of the funnel like you said to drive traffic, they can function in the middle of the funnel to convert leads, and they can function more towards the bottom of the funnel to convert leads and increase sales. They are very versatile piece of content depending on how they’re written. You can even do different variations of the exact same case study to make it more general and have a broader headline that could go towards top of the funnel or be super specific and just use the same content and tweak it to make it applicable to someone who’s deep in your sales funnel.
I’ve always liked them because they make your customer the hero which, in essence, tries to make your prospect the hero of the story. The prospect is thinking about it can look at it and say, “Well, I want that to be me.” In addition, the versatility to be able to be at all stages of the funnel is a unique aspect of case studies.
Mike: I think that one of the things you just mentioned is you’re positioning those prospects as the hero and that’s one of the reasons why this thing is so effective. It allows you to directly position your product as the best solution for that particular case study and you’ve got claims that are backed by results because you’re documenting them as part of the case study.
All these things combined make it helpful to have those because you can put them in front of somebody and it’s not something that everybody else has. Not every company puts together case studies that they can hand out to their prospects or their soon-to-be customers. And that makes them extremely effective in helping to convert those people into paying customers.
Rob: I think one of the critical things to think about when you’re building a case study is to identify who its targeting, or to be very specific. Oftentimes you’ll see a case study done for each of several market verticals. If your app serves other SaaS apps and WordPress plugins and info marketers, then you could do one case study for each of those three verticals. That could be a start.
If you serve different company sizes, whether they’re horizontal over the verticals, you can do Fortune 500 case study, and then a solopreneur case study, and then an SMB case study. Job titles, job responsibilities, is another one that you can look at. They have to go a bunch of course from the CEO of a small company or the CFO or even the marketing director or whatever. I think that doubling down, figuring out the 80/20 of this, and starting with kind of the one and focusing it on the place you have the most traction with. Like, what’s the job title or responsibility, is it founder, is it CEO, is it CFO, whatever; the company size whether SMB enterprise etc., and the market vertical, and then doing your first one based on that and seeing how it goes I think is how I would start.
Mike: I think the other thing that you mentioned earlier which was the fact that a case study can apply at the top, middle, or the bottom of the funnel, that’s another important thing to keep in mind when you are trying to identify who it is that you’re targeting because you want to know which of those types of people that you are targeting in your sales funnel. Is it somebody who you want to be able to run Facebook ads and promote this case study to? Or is it somebody who’s much closer to being a paying customer and they just need that last little bit of a push, and you can hand them a case study that maps them into the shoes of a current customer that you have who’s being successful with your product.
Once you have that information, you have to find customers who fit that profile and interview them. The very first thing you’re going to want to do is get their permission to use their name, photo, company, logo, things like that as part of a case study. Obviously, they’re going to want to be interested in being the subject of that case study. You want to look specifically who are being successful with your products. You don’t necessarily have to have had them for a long time, but they have to be excited about your product and using it a lot.
A lot of times this can happen when they just signed-on, if you’ve had a sales conversation and you maybe manually onboarded them because it was complicated. They were moving from another product to yours, and you had to do some upgraded or new feature improvements, or something like that, in order to get them over on to using your product. Those people are typically good candidates because they were experiencing pain enough from an existing solution that they were using. It also allows you to position your product against that other product as saying, “Hey, this was a better fit for this type of person and here are the reasons why.”
Rob: From there, you can use an introductory questionnaire in essence whether it’s a Google form or whether it’s just an email with four, five bullets on it. Get someone to give you their initial thoughts, initial feedback and you use that to then construct a deeper set of questions that you would typically ask during a phone interview that you then record. You can either then listen back, turn it out into the case study or you can transcribe it and try to manipulate that. But basically, what we’re talking about here is a do level of interviews. This first one is this short introductory questionnaire that’s typically done via email. What that allows you to do is to make the best use of this person’s time when you jump on the phone and interview for 30-45 minutes.
Mike: And that introductory questionnaire is something that you can inject as part of your marketing automation. When they have paid for the third or fourth time, they made three credit card payments, you can then send them a question that says, “Hey, would you be interested in doing a case study?” And then maybe highlight some of the other ones that you’ve done or if you’re early on, you don’t have a pool of case studies that you’ve done, what you could send them over is an individual email.
Rob: What you’re trying to dig into with all of this is you’re trying to find the through line for their story and then tell that story from start to finish. To be honest, I would look at The Hero’s Journey by Joseph Campbell, and you can just read a summary of that, you don’t have to read the whole book but just figure out what that is. You’ll see a lot of interviews. I actually base a lot of my talk outlines on The Hero’s Journey as much as I can. But it’s basically showing this person where they ended up and then tracing back and walking through the steps that they got to get there.
You want to identify who they are, what they do, what their goals were, what their needs were, what challenges they ran into along the way, how did your product meet these goals and help them get to that next level, helped them go from Mario to Super Mario, in essence, and what were the benefits that they received from your team or from your product or whatever to be able to level-up.
Mike: The most important thing that you want to keep in mind when you’re going through that story and identifying what that through line is to folks almost exclusively on the story. Because it has to resonate with whoever your target prospect is. The brand recognition for the hero of the story matters a lot less than the story itself. If you have a person or a company that you’re highlighting and nobody knows who they are, it doesn’t matter. But what really matters is making sure that the story is going to be relatable to the person who’s reading it because if it isn’t, then case study itself is not going to be nearly as powerful or as effective.
I’ve seen case studies where they’re written for a completely different type of company like an enterprise company. I read the case study and it means absolutely mean nothing to me because my problems are wildly different than that of an enterprise company. But if you have a different case study that is targeted at one or two-person companies then that’s something that resonates a lot better with me. It doesn’t matter to me if I know who the subject of that particular case study is or not.
Rob: Yeah. Story, story, story—those are the first three rules of anything, right? First three rules of starting a podcast, of writing a book—even if it’s a non-fiction book about marketing—having a story in there will […], writing a talk, there’s so many things, a blog post, that story can do and case studies are no different.
Something to think about once you’ve nailed this down, thinking about your formats. There’s a lot of formats you can put a case study into. You could obviously do a video, one. I hesitate when I say that because a, it’s expensive to do high-quality. I think fewer people watch videos than they listen to audio or read written version but if you can do a high-end one—if you could pay a videographer to actually put it together, if you can afford that—they can be pretty cool and they can have a lot of […]. There’s video, there’s PDF, there’s audio, there’s infographics.
The idea is if you can provide it in multiple formats, it’s kind of cool, because you can then take that same content and the content often takes the bulk of the time to produce but then you can rework it and reposition it and send it out in these many ways so that it feels like you have a bunch of case studies but it’s actually just one thing reworked into multiple formats.
Mike: Part of the reason you’d want to do that is just because people like to consume content in different ways. Some people like videos, some people like audios, some people like to read a PDF, other people will glance at an infographic and they’ll sign-up for a mailing list in order to find out more information. But all those things can be used in different capacities and in different channel. You want to make the most use of that content that you generated as you possibly can. The way to do it is using multiple formats.
One thing that we kind of skipped though or we didn’t talk about earlier was the fact that when you’re writing these case stories, try and drill in to find real numbers that you can reference. If you say, “Grew by 100% or 200%,” that’s a lot less meaningful than saying, “Grew by 97%.” That’s kind of a classic marketing technique but the fact is that having real numbers that prospects can reference and can relate to is a huge difference.
If somebody’s getting, let’s say, 10,000 visitors a month to their website and you have a case study where somebody is talking about growing from 9,000 to 17,000 visitors a month, that’s going to be powerful to them. Whereas if that same person reads a case study and it references 180,000 visitors going to 360,000, it’s not as meaningful to them because they can’t relate to it; it doesn’t mean as much. That’s why having those numbers in there helps you to position your case study directly towards the type of person you’re targeting.
And then the last thing is to make sure that you have a place where people can go to get these case studies. It’s not enough to just promote them through various channels or to send them into people when they’re asking for them or to put them into your marketing automation. What you really want to do is make sure that these case studies are available so that if somebody is just browsing through your website and they want to see some of the different case studies, they’re right there. That serves a lot of different purposes, but the bottom line is you want people to be able to see these out if they’re interested in them and then download them whenever they feel like it.
Rob: Of course, the thing that most people forget about and that is should probably be at least half of the work is the promotion. Maybe it should be 80/20 but it’s promotion. You’re going to build this thing; it’s not going to promote itself.
Mike: It’s not?
Rob: It’s not going to promote… Mike, if you have learned nothing in 440 episodes of this, “Build it and they will come,” is not going to work. This is where you have to inject this case study into your sales or your marketing funnel. It can be published on the website at a place where it gets a lot of traffic. You can put it in email welcome sequence. You can put it in an email marketing sequence. But just some way to get this in front of people’s eyeballs. Promote it on social media periodically, if it holds up, if it’s evergreen. If it’s a one-time thing obviously, promote it on social media for a week or two and then let it go.
Getting it out to folks via email really is probably the best way. We know that email engagement is so much higher than other things, but the idea here is to get out in front of people. I’ve heard folks doing the case study running ads to get people to go download or read the case study, is certainly a viable option. That’s a marketing tactic that you’re going to have to spend quite a bit of time honing the funnel and all that stuff but there are lots of ways to get people in front of it. If the case study is well-written, it impacts people, it can lead to people converting. It can have that positive ROI pretty quickly.
Mike: You could even go so far as to put these as a content upgrade on your website in various places throughout your content marketing. If there’s an article that you have about some particular topic and you have a case study that is discussing that topic or challenge that people were having and explicitly walks through how one of your customers was able to overcome it with your product, then that’s a fantastic content upgrade that you can promote inside of that particular blog post.
Rob: We have four sourced articles that you compiled this outline from as well as some of your own magic. We will include those links in our show notes, startupsfortherestofus.com, look for episode 440 if you want to learn more about this topic. With that, we’re wrapped up for the day.
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Episode 439 | 9 Key Takeaways from MicroConf 2019
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Show Note
In this episode of Startups For The Rest Of Us, Rob and Mike talk about their 9 key takeaways from MicroConf 2019. They give a brief synopsis of some of the talks from both starter and growth edition.
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Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about nine key takeaways from MicroConf 2019. This is Startups For The Rest Of Us episode 439.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re going to share our experiences to help you avoid the same mistakes we’ve made. We’re in this week, man? You sound a little tired.
Mike: It’s mostly the voice, it’s just a little scratchy. I am a little tired, but it could be worse. I mean after seven days in Vegas, that will do it to you.
Rob: That’s the thing, right? Normally, we record this MicroConf recap episode the week after or at least a day or two after MicroConf and this year due to my travel schedule, I’m heading to London in a couple of days. We basically have been in Vegas for six and seven days respectively, and voices are shut, and all the things. Hopefully, it will go well. Aren’t we also both drinking rye whiskey right now?
Mike: Yes, it’s a WhistlePig rye, it’s called WhistlePig, but it’s a rye whiskey. It’s quite nice. They make it up in Vermont.
Rob: It’s very nice. This will be a fun episode. We have some takeaways that I pulled away from Starter and Growth, let’s see how many we can get through. What’s new with you in terms of the past week hanging out here at MicroConf?
Mike: One thing I noticed that was sort of a recurring theme was I saw people increasing their prices all over the place which was kind of interesting there. I was sitting outside while Starter edition was happening, and there’s some group of people around the table and one of them had been convinced to double his prices on the spot. They basically made him open up his laptop, change the pricing on his website, and then shut down his laptop. It was pretty cool.
Rob: There was someone else that did that. Someone 12xd their pricing. They were obviously priced quite a bit too low and they said that sales continued to come in after doing that. I heard a rumor, you may confirm or deny, that Bluetick’s pricing might be rising soon.
Mike: Yes, it will be going up in the very near future. Actually, probably by the time this podcast goes live, prices will be tripling.
Rob: That’s the way to do it.
Mike: We’ll see what happens. It’s an experiment like anything else, but that’s what you want to know is that price too high or is it not.
Rob: For me, obviously, I had a great week here. It’s super inspiring to see up and coming entrepreneurs, successful entrepreneurs, and have my laptop charger fail in the middle of the conference. Luis run the conference off our laptops and in this case, we did not, but it was a trip. I have a new MacBook and so I needed the USBC charger and not many people have one. The brick died, the cables all worked. I was like begging, stealing, and borrowing […] at the conference to keep my laptop charged.
Mike: I thought that was funny that of all the things that you had more than one of, the one thing you didn’t was the actual brick itself.
Rob: That’s the thing. I literally have extra this cable, extra that cable. I have two things of ChapStick, I have two or three phone, and iPad chargers. I carry multiples of everything, but I don’t bring an extra brick because it’s the heaviest piece, and I’ve never had one go out on me before just at the time when I needed it, it was kind of funny.
Mike: Actually, I love this, I just saw on Twitter that there is a photo proof of you sitting down on the job while I do all the work.
Rob: That’s fast. I’ll go look for that. You have this whole list of things to do at the end of the conference and I didn’t really know. They’re normally passing back and forth and I just kind of hang out. It was like Tom Sawyer in full effect. MicroConf is a conference you and I started in 2011. It’s for self-funded founders and now, even some not so self-funded founders with the kind of rise of folks like CartHook and LeadFuze who take small rounds of funding, but it’s bootstrappers at heart.
We split the conference three years ago. This week, we ran back-to-back conferences. Monday-Tuesday is MicroConf Growth. We had around, I believe 265 on total attendees including speaker sponsors attendees. At Starter which was the three days following Wednesday, Thursday, 180 people, […] at least this year and last year at the Tropicana in Las Vegas. I think a goal that we made while we were here is to do it somewhere other than Las Vegas next year.
Mike: That would be quite nice, I think.
Rob: We have tried to do that many times and every time, it winds up being so expensive to move out of here. That’s kind of the trap of Vegas, is it’s relatively easy to get to, and the hotel, and that the venue, and the rooms, like just everything is not that expensive, and it’s like less than a 10-minute drive from the airport, it’s all these things that make it, I don’t know, it’s seductive. Because if you look at San Diego, for example, it’s more expensive and it’s a 45-minute drive from the airport to a hotel. I think I’m at the point where I’m just kind of ready to pony up and realize it’s not going have all the pros at Vegas, but we will give up the con, which is it in Las Vegas.
Mike: It’s in Vegas, yes.
Rob: It’s like dry here. I don’t know how you feel. You can tell by our voices, they’re not usual perky Startups For The Rest Of Us, Rob and Mike today.
Mike: Yup.
Rob: We have nine takeaways, give or take. We might want to put eight or ten, but takeaways from MicroConf, we’re going to look at both. Growth and Starter, we obviously don’t have time to go through every talk. I believe we had 19 sessions, 19 speakers, our Q&A folks, not including the 12 attendee talks, so 31 talks. Of course, we couldn’t possibly cover those in a podcast episode. If you’re interested in seeing an awesome recap in writing, written by Christian Genco, it’s microconfrecap.com. You can go there and see his notes of all the sessions.
For now, let’s dive into our first talk of the entire conference. It was Chris Savage, co-founder of Wistia. The takeaway I took away from Chris was, know what you’re getting into when raising funding. It’s interesting because you could have watched his talk and thought about funding is bad, but I don’t think that’s the message. It was that they didn’t think it through when they raised their funding. The talk title was, How an Offer to Sell Inspired Us to Take On $17 Million In Debt. Wistia, they blogged about it as well, is that they raise funding because it just seemed like the right thing to do. They followed the typical venture path, they actually had pretty high expenses because they are video hosting, obviously, and they weren’t really aware bootstrapping what I understand, so they raise multiple rounds.
At certain point, they got an offer to sell Wistia, but they really thought it over, and agonized, and said, “If we sold it, we would probably start another Wistia. This is really the space we want to be in. We don’t necessarily want to exit this.” But once they realized that, they realized they had a responsibility to their investors of, “Look, if we never sell, how do they get a return?” Now, one thing he never thought about pulling dividends out, but I think they’re probably a C-Corp, and frankly, their investors probably didn’t want that. I guess that’s been a thing lately with alternative funding, the Indie.vc and TinySeed is that from the start or set up that if you wanted to just do dividends, and run it, and not sell it, works; if you decide to sell it works. That’s the optionality I don’t feel like Wistia had.
Mike: Yeah, I think you’re take on this is a little different than mine, where you had said that, you know what you’re getting into, when raising funding. I took it more as a revelation on their part that they realized after a while, after they take in the funding, and obviously, well after that because—I think they funded it in 2008 or 2009, well after that, things changed, and they decided that they wanted something different.
Because of that change, because of the way that they view things was different, the original path no longer suited them. They had to look for ways to change that. That’s how I interpreted it, but I can definitely see how there’s probably three or four different ways that his talk could be interpreted. I don’t think any of them are bad, it’s just that whatever lessons you take away from it, I think you’re going to be great. It was a fantastic talk, it was well put together. I do think that the story of what they went through and how they got there is just interesting in and of itself.
Rob: I would agree. I mean, to be honest Chris Savage was kind of a long time aspiration of mine to get to MicroConf, so it was super cool to have him here this year. Our second session, was, it wasn’t a talk, it was Q&A with Jason Fried. I felt like the takeaway from there was know what you’re good at and make sure to double down on that. What’s interesting is already, we have some ratings and reviews and such coming in because we sent a survey out at the end of the conference. Typically, Q&A sessions are ranked in the middle, they’re not at the top, they’re at the bottom, sometimes they’re at the bottom depending, but Jason Fried is probably the highest rated Q&A session we’ve ever had.
I think that his authenticity, and kind of just his honesty really came out. He answered some pretty fascinating questions about Basecamp, about what it was like to get started about why he grew so fast. I mean at one point, I asked him why did it grow so fast and he said, “We don’t know.” That’s awesome, like, “Thank you for saying that, and not acting like it was that you were super smart, and that you knew what you were doing.” He’s just like, “Yeah.” At a certain point, he said, “We got a little lucky, we had some good timing, and we did some things right as well.” I was like, “That is fantastic assessment.”
Mike: I think that’s the position of a lot of successful people are in. One thing that had come up during the Q&A was that the fact that Basecamp, originally it was 37signals and then they launched Basecamp, and Highrise, and Ta-Da List and several other products, they looked at trying to sell Highrise, which was making obviously millions of dollars at the time. They could not find the buyer because of the fact that they didn’t want to let the team that was working on it and go with it. They just wanted to sell the code base, and the revenue stream, and customers, and all that other stuff to somebody else, and nobody was willing to pay for it. I made sure that I had him kind of clarify this like, “This code base was worth nothing without the team behind it.” He was like, “Yeah, it was.”
Rob: Code base plus revenue stream.
Mike: We get a lot of questions to the podcast about, “How much effort should I put in to protecting my code and making sure that people aren’t stealing it? If I hire a contractor, what do I do?” To have Jason Fried come out and say that the code and the revenue stream behind it were worthless without the team behind it. That’s just a big answer, I think to that question, that continues to come up.
Rob: I wouldn’t say it was worthless. He said they got offers, they were just super low without the team. He said, “We didn’t want to give it away.” If you end up doing $1 million a year and if you bought the team with it, you can get $5 million, and if you didn’t bring the team, you can get $1 million. I get the feeling it was that kind of situation where it’s not that it’s worthless, but it’s worth a lot, lot less.
Mike: He did turn down my offer.
Rob: You offered to buy it from the money in your pocket?
Mike: Yes, I did. I had like $100, maybe $200. I don’t know.
Rob: He graciously declined. That was cool.
Mike: Yes.
Rob: Later in MicroConf, we had a speaker who had to cancel last minute. He actually made it to Las Vegas and then had a personal issue come up and had to leave. Big thanks to Patrick McKenzie, also known as Patio11 on the internet, for filling in and talking about things that Silicon Valley Companies do well. He basically wrote a talk in 24 hours. He said, “We can throw stones at Silicon Valley; yes, it does a lot of things wrong, there’s no doubt but there are certain things that they’re pretty good at.
We won’t dig into all the points of his talk. I think the biggest thing that I took away or the one that impacted the most when he was talking was something that a boss said to him at some point at Stripe. The question was, “After a 45-year career, what do you want to be true?” I would rephrase that almost like, “What do you want to feel or have accomplished looking back on your entire working career?” I think this is a great question to think about, is legacy. This is something I have thought about, not in depth, and extensively.
When I think about legacy—it’s interesting—I think much more about this podcast, and MicroConf, and blogs, and books than I do about the actual companies I’ve started. I bet Jason Fried thinks about his legacy is probably Basecamp. Maybe it’s the books that they’ve written as well, but it’s just interesting to think that different people have different answers for this. I don’t think there’s a right or wrong, but figure it out for yourself and then every day, make a bit of progress towards that.
Mike: I definitely think that this is the type of question that should make it onto the list of questions that you’re going to ask yourself at a personal retreat. But one of the other aspects of that was that, “What does it mean after that 45 years?” I think Patrick had said—and you can correct me if I’m misremembering this—but I think he had looked at and said, “Well, what does that mean to me and how would I quantify it?” I think his basic assessment of how he was going to quantify it was how much impact he’s had on other people over the course that 45 years, and what it means kind of collectively to give himself sort of a numeric score so to speak. I thought that was an interesting way of looking at it as well. Everybody can do it in any way that they want, but I just thought it was an interesting way for him to quantify what that meant to him.
Rob: We had a talk from Hanne Vervaeck, she’s the COO of Thrive Themes. The takeaway I had from her was, “Don’t build what your customers ask for.” Really, it’s don’t only build or just build, you can get a mess. We’ve talked about that a little bit on the podcast in the past. Basically, she talked through handling feature requests; they get hundreds and hundreds of them each month. She talked about instead of implementing every feature customers ask for, do one-on-one customer calls on a call. Shut up and listen, ask questions, and she had a cool process for handling that. In our last couple of years at Drip as it kept ramping up, we were getting probably 100-150 a month when we got acquired, and it was at least double that by the time I left. We had to figure out a way to do this as well. I liked hearing her approach and her thoughts on this.
Mike: The cool thing about when she was discussing that was really, it was a nice way of saying that customers don’t always know what should be built. They have an idea of like, “This is how you should solve the problem.” But the reality is that you should dig into that, and find out what problem they’re actually trying to solve. As opposed to listening to them and implementing things that they say, “You should be doing this. I need a feature that does that.” If you start digging in and trying to figure out more of a jobs-to-be-done type of thing, then you’re going to be much better off if you just blindly implement it, which I think is intuitively obvious to most people, but at the same time, your customers don’t know all the other things that are going on. Quite frankly, you may not even agree with them. You may decide, “Well, yes. That sounds great and all, but it’s just not the right direction for the business, or for the company, or the product,” and you may decide to ignore them because of that. Customers absolutely do not have all the information. Sometimes you have to overrule them.
Rob: I wrapped up the first day with my talk that was titled, The City Bootstrapping in 2019. I looked at some trends that have changed over the past 14 years since I’ve started talking about all this stuff, and then a bunch of things that have stayed the same. I think the takeaway I pulled from there is kind of, there’s more competition these days, but there are also more funding options. I definitely still and whole-heartedly a bootstrapper at heart and believe that the bootstrapping and self-funding are totally viable ways to go. Given that there is more competition, some of the scraps I had with just enormous amounts of VC funding reported SaaS in general.
We, as a community like you and I, with the podcast and the conference were kind of early to SaaS. Now, the big money is coming in over the past eight or nine years. Something I’m talking about is like more funding options are available and that funding is no longer binary. You can look at someone, like a lot of the angel investments I’ve done, where they literally plan to raise a single round, they’re not going to raise institutional funding. They don’t have a board, they never plan to go public or have a unicorn exit. They technically raised money, but they’re still very capital efficient, and they’re using this money to reach escape velocity with their start up faster and maybe a little less painful than that two to three years that we often now see it taking for a truly bootstrapped SaaS to do that.
Mike: I think that there definitely has to be a discussion in our circles around what the terminology actually ends up being, because I think that that’s a source of confusion for a lot of people. If you spend all of your own money on it, or you do it on credit cards, is that self-funding? Well, I guess technically, but at the same time, if you build a product up and then sell it outright to somebody else, and you get a pile of money, and then you put it into your next product, is that self-funding, is that bootstrap? Well, I don’t know. What does that actually mean? I think there’s going to be some discussions over the next coming months or years about some subtle changes to how we view some of the terms like bootstrapping, and self-funding, and maybe bootstrapping becomes more of a state of mind than anything else.
Rob: I would agree. Frankly, I wonder if the terms are—how important they actually are. I think they’re helpful to give context to things when you start to talk and you said, “Look, I’m a bootstrapper. This how I think about things.” That’s helpful versus if I sit up there and said, “Look, I’ve raised VC funding,” then take my advice in that context. That’s why I think it’s helpful, but I do think it’s unhelpful, and that people sometimes get dogmatic about this stuff, and I do not think you should never raise funding. “VC is the worst ever.” Or, “Bootstrapping, it’s just terrible. Why would you even do that?” I’ve heard people say this. I don’t think that’s helpful to do the always never should game. It’s like, let’s keep open minds and realize that this is now a continuum. There is bootstrapping where I literally have $50 to start it, and it has to grow on its own revenue. That’s very hard.
Self-funding is the next thing to the right I will say. It’s the next notch over where it’s like, “Yeah, I have $200,000 to pump into this business,” or, “$100,000 of my own money.” It’s a little different, it’s a different situation in bootstrapping. I’ve done both. I know, it’s very different. And then perhaps the next up step over is taking a small amount of funding from TinySeed or any .vc, or funding source that maybe isn’t expecting you to get huge and you can still build a profitable business selling real product to real customers and then maybe the next notch over is venture capital. Maybe there’s even a notch in between. That’s the thing, it’s not binary anymore.
Mike: I feel like maybe some people get too hung up on the terminology because it feels like their identity is being attacked like, “I’m a bootstrapper and you’re not.” As you said, it’s not binary anymore; it used to be, but now it’s not. I think there’s maybe something about identity crisis going on, but I definitely think that there’s going to be talks and discussions about that behind closed doors. Maybe we’ll come out with something new, or maybe it’ll just kind of be a perpetual issue for the next 20 years, I don’t know.
Rob: Another talk, kind of a last one we’ll cover with Growth, Joanna Wiebe who’s been a many time MicroConf speaker. The takeaway I took from her is that words matter as she talked about copywriting. She ran through seven words that work well in copy. […] here because rattling them off isn’t going to help you. It’s probably somewhere you want to watch the talk when it gets there, or look at Christian Genco’s notes at microconfrecap.com just to see what she talked about and how she presented it.
Mike: Next up, we have Starter. I think that we both want to say a big thank you to Ben Orenstein for being the MC. I think he did a fantastic job. It’s interesting because his talk was actually the last of the conference. Usually, in the past two years when we’ve had an MC, the talks that the MC gave, they were the first talk, and then they were the MC for the rest of it. Whereas Ben, he did the entire conference as the MC and then he got up and spoke which, I mean, that’s just a testament to his ability to get up there in front of everybody.
Rob: Yeah and his talk was great. He always brings it; entertaining, witty, charming. It’s almost like Ben’s here in the room and I’m talking to him. Tall, what did I say? The man with the plan. He’s 6’5 with a tan. You know what I like about his talk is it was, he didn’t even try to pull too many actionable bits out of it, although there was advice and such. It was just a really well told story. I know the story, I’ve listened to every episode of their podcast and yet, I sat there and listened just kind of riveted by how he would talk about the learning from this, and how they did this experiment, and he just set it up so well. Honestly, that’s another one where it’s like, we couldn’t do a justice in five bullet points, that’s one where you need to watch the video when it comes out.
Mike: Definitely. I love the story, and the way that he told it, and how some things came together really well and some things were like, “We discovered this along the way and who knew?” Some of the lessons were, I wouldn’t say they were obvious, but they’re obvious in hindsight. It’s like, “Yeah, that was probably going to be an issue and nobody really thought about it.”
Rob: Just to be clear, we didn’t mention his podcast. It’s called, The Art of Product Podcast and his product is called to Tuple which is a pair of programming SaaS. Another talk we had, it was on the first day of Starter was from Abi Noda. The takeaway I got from him was, “Start quickly by building on someone else’s platform.” Now, he also talked about how there’s a risk in doing that. A platform risk where you’re dependent on them and they could potentially implement a feature and put you out of business. I like that he’s at 21K MRR. He’s only been doing it for—how long is it? Eight months, nine months? It’s not that long.
Mike: Yeah, I think it was a little over a year.
Rob: Okay. It’s pretty quick for a solo founder with no employees. I don’t even the he has contractors to be at 21K MRR. That’s life changing man. The other thing is he talked multiple times about how he’s doing things wrong. He’s like, “I’m not sure about my pricing. I don’t actually think it’s optimal,” but enough things are working that he’s at 21K MRR. Maybe if he optimized to keep—that could be 30 or 40, and that’s great, you can do that. But at this point, he’s bought his own freedom and that’s what I liked about that story. He didn’t get up there and say, “I did everything right and look what all I did.” He’s like, “I did some things wrong and it still worked.”
I think the fact that he built on GitHub, he has a GitHub add-on that notifies you when there’s a pool request that need reviews and notifies you via Slack. He’s in the GitHub marketplace and that was kind of his big marketing approach. It was funny because when I when I talk about stair stepping and how there’s step one, two, and three, he combined step one and three. Step one is that one time downloadable product with a single traffic source, and then step three is recurring revenue. He has recurring revenue, but it’s a single traffic source in essence. I know he has some other traffic but most of it is focused in GitHub marketplace.
Mike: I did find it interesting that the way he opened his talk was the fact that he got fired, that was the day before Christmas or something like that. It was kind of a life-changing event for him and he’s like, “Okay, well now what do I do?” It took him a little while before he figured out, “Well, I kind of wanted to do this and launch my own thing,” and then he did it. There were a bunch of mistakes that he made along the way and things changed for him as he made tweaks to the business and as he basically, just improved things. I think that’s something that a lot of people forget is that, just launching is not the end of the story, that’s not even the destination or the goal, that’s the beginning of it; that’s where you start to learn things and where the rubber hits the road and you’re able to start adjusting what it is that you do. You hear from customers and tweak the business.
Rob: Another good talk was from Lianna Patch, a returning MicroConf speaker. The take away I have from her talk was, “Don’t make stupid copywriting mistakes.” She actually talked and covered a lot of topics, but the stupid copywriting mistake section was cool. She talked about having me-centric copy. Instead of having you and your, it has a lot of I’m, and we, and me. She talked about writing like a robot. Sentences that were too complicated, trying to do too much, and then clichés and nonsense phrases, and had a bunch listed there.
Again, microconfrecap.com if you want to see the specifics of that, but Lianna is in the trenches. She runs Punchline Copy and is on a day-to-day, week-to-week basis is writing a lot more copy than you and I frankly. She really is in the weeds on how this stuff should be done. She actually wrote the copy for bluetick.com, didn’t she?
Mike: Yes, she did. She wrote a couple of emails in the email sequence as well. I gave her access to all the notes and stuff that I had taken from all the customer interviews and customer development that I’ve done. She took that and she translated into the copy for the website. She also went through and tweaked all the onboarding emails and the educational emails that I put out there. Basically, overhauled the entire thing. Honestly, it’s doing its job. It’s just doing it really well.
Rob: That’s cool. I realized I just said bluetick.com but you’re bluetick.io. Sorry about that. Your website looks great. I just went to it. It looks really good. I’ve not seen it redesigned. How long ago did that happen?
Mike: That was a while ago. We talked about that on the podcast, that was probably close to a year ago.
Rob: Did we? I don’t remember it.
Mike: I mean there’s been little tweaks and stuff, it depends on what you’ve seen. I don’t know.
Rob: Yeah. The design it’s far superior to my memory of what Bluetick was. My memory must be dated at this point.
Mike: I’ve had it redone I think just before the last MicroConf.
Rob: Mike, do you hear the music in the background? We are on the 21st floor of a hotel in Las Vegas.
Mike: It’s interesting, I almost feel like there should be security coming over and kicking you out because you’re wearing flip flops and you look too old to be here.
Rob: Yeah, exactly. Wait a minute, I’m not doing either of those things. I did not look too old. Alright, I do a little bit.
Mike: Don’t you remember when that happened at the Hard Rock?
Rob: Yeah. Weren’t they filming some type of like an MTV something around the pool? I think what it was—now, they didn’t say it out loud that we were too old, and this was a few years ago, but we were in beach gear. I was wearing jeans and a t-shirt with flip flops. They wanted you to be in a full on no shirt, swim trunks, totally ripped abs, the whole deal. I was walking, “Sorry, sir. We’re filming.” “Really, what are you filming?”
Mike: I think you should correct that, it’s not us, it was you.
Rob: It was me. No, I was including you man.
Mike: I wasn’t there.
Rob: Alright, forget it. We didn’t notice. We didn’t go back to the Hard Rock the next year.
Mike: That’s true. Although they didn’t demolish it in later years.
Rob: A little known fact, the hotel that the first MicroConf was at was demolished shortly thereafter because it was so old.
Mike: Our next talk was from Omar Zenhom and he’s from WebinarNinja. I thought this was actually a fascinating talk, mostly because there was one takeaway that I think just kind of tramped all others that you could possibly take it away from that which was, “You should build an audience before building a product. If you don’t have an audience, you just simply do not have a product, and nothing you can do is going to change that.”
Rob: Yeah and I don’t agree with him on that. I think that’s how he did it and I appreciate his perspective of how he built the business using an audience, but I have seen too many founders who have built businesses without an audience. Do I agree that it makes it easier? Yes. Do I agree that maybe it’s a thing you should do? Maybe. But if you’re not that type of person, don’t do that. I have known founders and many founders who have amazingly successful businesses and did not start with an audience.
Mike: Maybe I should qualify that a little bit better. I agree with you that you don’t need the an audience before you start, you don’t have to build the audience before you build the product. But I do think that there is a certain amount of momentum that you kind of need to maintain over time and doing that almost requires an audience. That’s not for every product, but I think for any product of some scale and complexity where it takes time to educate people, and they’re not going to be at the right point in order to purchase your product, it may be three months or eight months out, or maybe even two years.
You need to be able to keep them around and the way you keep them around is through some sort of content marketing, or education, and you’re going to be able to catch them at that moment. If you don’t, it’s going to be hard to scale your business to a much higher level than if you’ve got a product and you’re only catching them at the time where they are experiencing that pain point enough to go look for a solution.
Rob: Yeah, maybe. I think of Salesforce, maybe Salesforce is a bad example, but think of just outbound cold email and companies that have grown doing that. They don’t have audience. I mean, I have talked to TinySeed applicants, they have zero audience. Actually, they have almost no traffic to their website, and yet they’re doing several thousand in MRR and growing, because they’re just using other tactics; using traditional sales tactics. The internet marketer space, or in the SMB space, so to speak, it could be a potential thing. WebinarNinja is definitely going after SMBs. It’s going after some aspirational entrepreneurs. It’s going after a crowd where building an audience is super important. It’s a great thing to leverage, but if you’re not in that space, I guess I would not wholeheartedly agree with that assessment.
Mike: Sure. I guess maybe I said that more because that’s the type of space that I operate in now and that I would want to work with. There’s obviously certain ones where I wouldn’t want to, and that I don’t think it would work there.
Rob: Yeah, totally. The other thing I liked that Omar said there, where had one slide where he said, “Take things that are unique about you and make them your advantage.” We talked about his name, how no one else has Omar Zenhom, and that was a unique thing. He could rank at Google really easily for that. No one else was from Egypt. He just talked a lot about himself, about how he used that as a superpower. I thought that was cool because I think it’s something a lot of us, me included, try to fit in and try to not be unique for some reason because we feel like fitting in is important, but I actually like the sentiment of making your unique thoughts, skills, and abilities your true advantage.
Mike: The last talk we’ll cover in this episode is Asia Matos who runs demandmaven.io. I really liked the fact that because of the split between Starter and Growth edition, she spoke at Starter edition. One of the great things about splitting the conference in two is that speakers can hone their talk to the audience. She really honed it down to basically telling them, “Look, there’s lots of different pieces of your sales funnel, but if you want to get to your first 100 customers, you really need to focus on that bottom of the funnel and try and make sure that you are talking to them directly about your product, and exactly what it can do.” Because the middle of the funnel, and at the top of the funnel, those are much broader areas to tackle and they’re harder to do if you’re not able to convert people at the bottom.
If you can’t convert them at the bottom, adding more people into your sales funnel isn’t going to change that and it’s not going to help. It will get you more customers, assuming you can add enough at scale, but if the bottom of your funnel is so leaky that it doesn’t really move the needle for you, then there’s no point in trying to do that. Really focus on the bottom, optimize that, and that’s really going to help you move forward.
Rob: Yeah. This is really good advice and it’s not talked about enough. I’m glad that this was the point of her talk really, is that people think they just need to send more people onto their website or into a trial, but if churning people out, or if people are not going trial to paid, or if people are not going visitor to trial, you have to start at that bottom and work up. Of course, you need another traffic that you can do some type of testing for the numbers to make sense. Certainly, scaling up and starting at the top of funnel just doesn’t make sense. She was a dense talk in a good way. It was a lot of information. She actually compressed a longer talk down to fit in our speaking slot. I think she did a good job of covering how to get your first 100 customers. 17th and 18th MicroConf are in the bag sir, how do you feel?
Mike: Tired.
Rob: Drunk.
Mike: Not yet.
Rob: I know. We’re like one shot. This is a good whiskey though.
Mike: Actually, I’m on my second or third. Probably second right now.
Rob: I’m in the other room. Mike and I always record across the country rather I guess at this point halfway across the country. It’s so weird when every five years, we happen to be in the same place, and we try to record, and there’s echo and all this stuff. We’re in the same hotel room, but it’s a suite, and we have a door closed between us. It’s just a unique experience.
Mike: For sure. I did realize something. Did you think about the fact that MicroConf Europe is going to be the 19th MicroConf, and then next year, Growth edition will be the 20th?
Rob: What a trip. How fitting.
Mike: Yeah.
Rob: I had not thought about that at all, that’s cool. Speaking of MicroConf Europe, it’s in Croatia again, at that amazing ridiculously cool hotel where every room as an ocean view of the Mediterranean. It is October 21st and 22nd of 2019. Tickets will go on sale. They may already be on sale to the early bird list as your listening with this. But go to microconfeurope.com, enter your email if you’re interested in potentially joining us and around 150 other software founders who are trying to get their stuff done.
Mike: Well, I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. 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 software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re going to share our experiences to help you avoid the same mistakes we’ve made. We’re in this week, man? You sound a little tired.
Mike: It’s mostly the voice, it’s just a little scratchy. I am a little tired, but it could be worse. I mean after seven days in Vegas, that will do it to you.
Rob: That’s the thing, right? Normally, we record this MicroConf recap episode the week after or at least a day or two after MicroConf and this year due to my travel schedule, I’m heading to London in a couple of days. We basically have been in Vegas for six and seven days respectively, and voices are shut, and all the things. Hopefully, it will go well. Aren’t we also both drinking rye whiskey right now?
Mike: Yes, it’s a WhistlePig rye, it’s called WhistlePig, but it’s a rye whiskey. It’s quite nice. They make it up in Vermont.
Rob: It’s very nice. This will be a fun episode. We have some takeaways that I pulled away from Starter and Growth, let’s see how many we can get through. What’s new with you in terms of the past week hanging out here at MicroConf?
Mike: One thing I noticed that was sort of a recurring theme was I saw people increasing their prices all over the place which was kind of interesting there. I was sitting outside while Starter edition was happening, and there’s some group of people around the table and one of them had been convinced to double his prices on the spot. They basically made him open up his laptop, change the pricing on his website, and then shut down his laptop. It was pretty cool.
Rob: There was someone else that did that. Someone 12xd their pricing. They were obviously priced quite a bit too low and they said that sales continued to come in after doing that. I heard a rumor, you may confirm or deny, that Bluetick’s pricing might be rising soon.
Mike: Yes, it will be going up in the very near future. Actually, probably by the time this podcast goes live, prices will be tripling.
Rob: That’s the way to do it.
Mike: We’ll see what happens. It’s an experiment like anything else, but that’s what you want to know is that price too high or is it not.
Rob: For me, obviously, I had a great week here. It’s super inspiring to see up and coming entrepreneurs, successful entrepreneurs, and have my laptop charger fail in the middle of the conference. Luis run the conference off our laptops and in this case, we did not, but it was a trip. I have a new MacBook and so I needed the USBC charger and not many people have one. The brick died, the cables all worked. I was like begging, stealing, and borrowing […] at the conference to keep my laptop charged.
Mike: I thought that was funny that of all the things that you had more than one of, the one thing you didn’t was the actual brick itself.
Rob: That’s the thing. I literally have extra this cable, extra that cable. I have two things of ChapStick, I have two or three phone, and iPad chargers. I carry multiples of everything, but I don’t bring an extra brick because it’s the heaviest piece, and I’ve never had one go out on me before just at the time when I needed it, it was kind of funny.
Mike: Actually, I love this, I just saw on Twitter that there is a photo proof of you sitting down on the job while I do all the work.
Rob: That’s fast. I’ll go look for that. You have this whole list of things to do at the end of the conference and I didn’t really know. They’re normally passing back and forth and I just kind of hang out. It was like Tom Sawyer in full effect. MicroConf is a conference you and I started in 2011. It’s for self-funded founders and now, even some not so self-funded founders with the kind of rise of folks like CartHook and LeadFuze who take small rounds of funding, but it’s bootstrappers at heart.
We split the conference three years ago. This week, we ran back-to-back conferences. Monday-Tuesday is MicroConf Growth. We had around, I believe 265 on total attendees including speaker sponsors attendees. At Starter which was the three days following Wednesday, Thursday, 180 people, […] at least this year and last year at the Tropicana in Las Vegas. I think a goal that we made while we were here is to do it somewhere other than Las Vegas next year.
Mike: That would be quite nice, I think.
Rob: We have tried to do that many times and every time, it winds up being so expensive to move out of here. That’s kind of the trap of Vegas, is it’s relatively easy to get to, and the hotel, and that the venue, and the rooms, like just everything is not that expensive, and it’s like less than a 10-minute drive from the airport, it’s all these things that make it, I don’t know, it’s seductive. Because if you look at San Diego, for example, it’s more expensive and it’s a 45-minute drive from the airport to a hotel. I think I’m at the point where I’m just kind of ready to pony up and realize it’s not going have all the pros at Vegas, but we will give up the con, which is it in Las Vegas.
Mike: It’s in Vegas, yes.
Rob: It’s like dry here. I don’t know how you feel. You can tell by our voices, they’re not usual perky Startups For The Rest Of Us, Rob and Mike today.
Mike: Yup.
Rob: We have nine takeaways, give or take. We might want to put eight or ten, but takeaways from MicroConf, we’re going to look at both. Growth and Starter, we obviously don’t have time to go through every talk. I believe we had 19 sessions, 19 speakers, our Q&A folks, not including the 12 attendee talks, so 31 talks. Of course, we couldn’t possibly cover those in a podcast episode. If you’re interested in seeing an awesome recap in writing, written by Christian Genco, it’s microconfrecap.com. You can go there and see his notes of all the sessions.
For now, let’s dive into our first talk of the entire conference. It was Chris Savage, co-founder of Wistia. The takeaway I took away from Chris was, know what you’re getting into when raising funding. It’s interesting because you could have watched his talk and thought about funding is bad, but I don’t think that’s the message. It was that they didn’t think it through when they raised their funding. The talk title was, How an Offer to Sell Inspired Us to Take On $17 Million In Debt. Wistia, they blogged about it as well, is that they raise funding because it just seemed like the right thing to do. They followed the typical venture path, they actually had pretty high expenses because they are video hosting, obviously, and they weren’t really aware bootstrapping what I understand, so they raise multiple rounds.
At certain point, they got an offer to sell Wistia, but they really thought it over, and agonized, and said, “If we sold it, we would probably start another Wistia. This is really the space we want to be in. We don’t necessarily want to exit this.” But once they realized that, they realized they had a responsibility to their investors of, “Look, if we never sell, how do they get a return?” Now, one thing he never thought about pulling dividends out, but I think they’re probably a C-Corp, and frankly, their investors probably didn’t want that. I guess that’s been a thing lately with alternative funding, the Indie.vc and TinySeed is that from the start or set up that if you wanted to just do dividends, and run it, and not sell it, works; if you decide to sell it works. That’s the optionality I don’t feel like Wistia had.
Mike: Yeah, I think you’re take on this is a little different than mine, where you had said that, you know what you’re getting into, when raising funding. I took it more as a revelation on their part that they realized after a while, after they take in the funding, and obviously, well after that because—I think they funded it in 2008 or 2009, well after that, things changed, and they decided that they wanted something different.
Because of that change, because of the way that they view things was different, the original path no longer suited them. They had to look for ways to change that. That’s how I interpreted it, but I can definitely see how there’s probably three or four different ways that his talk could be interpreted. I don’t think any of them are bad, it’s just that whatever lessons you take away from it, I think you’re going to be great. It was a fantastic talk, it was well put together. I do think that the story of what they went through and how they got there is just interesting in and of itself.
Rob: I would agree. I mean, to be honest Chris Savage was kind of a long time aspiration of mine to get to MicroConf, so it was super cool to have him here this year. Our second session, was, it wasn’t a talk, it was Q&A with Jason Fried. I felt like the takeaway from there was know what you’re good at and make sure to double down on that. What’s interesting is already, we have some ratings and reviews and such coming in because we sent a survey out at the end of the conference. Typically, Q&A sessions are ranked in the middle, they’re not at the top, they’re at the bottom, sometimes they’re at the bottom depending, but Jason Fried is probably the highest rated Q&A session we’ve ever had.
I think that his authenticity, and kind of just his honesty really came out. He answered some pretty fascinating questions about Basecamp, about what it was like to get started about why he grew so fast. I mean at one point, I asked him why did it grow so fast and he said, “We don’t know.” That’s awesome, like, “Thank you for saying that, and not acting like it was that you were super smart, and that you knew what you were doing.” He’s just like, “Yeah.” At a certain point, he said, “We got a little lucky, we had some good timing, and we did some things right as well.” I was like, “That is fantastic assessment.”
Mike: I think that’s the position of a lot of successful people are in. One thing that had come up during the Q&A was that the fact that Basecamp, originally it was 37signals and then they launched Basecamp, and Highrise, and Ta-Da List and several other products, they looked at trying to sell Highrise, which was making obviously millions of dollars at the time. They could not find the buyer because of the fact that they didn’t want to let the team that was working on it and go with it. They just wanted to sell the code base, and the revenue stream, and customers, and all that other stuff to somebody else, and nobody was willing to pay for it. I made sure that I had him kind of clarify this like, “This code base was worth nothing without the team behind it.” He was like, “Yeah, it was.”
Rob: Code base plus revenue stream.
Mike: We get a lot of questions to the podcast about, “How much effort should I put in to protecting my code and making sure that people aren’t stealing it? If I hire a contractor, what do I do?” To have Jason Fried come out and say that the code and the revenue stream behind it were worthless without the team behind it. That’s just a big answer, I think to that question, that continues to come up.
Rob: I wouldn’t say it was worthless. He said they got offers, they were just super low without the team. He said, “We didn’t want to give it away.” If you end up doing $1 million a year and if you bought the team with it, you can get $5 million, and if you didn’t bring the team, you can get $1 million. I get the feeling it was that kind of situation where it’s not that it’s worthless, but it’s worth a lot, lot less.
Mike: He did turn down my offer.
Rob: You offered to buy it from the money in your pocket?
Mike: Yes, I did. I had like $100, maybe $200. I don’t know.
Rob: He graciously declined. That was cool.
Mike: Yes.
Rob: Later in MicroConf, we had a speaker who had to cancel last minute. He actually made it to Las Vegas and then had a personal issue come up and had to leave. Big thanks to Patrick McKenzie, also known as Patio11 on the internet, for filling in and talking about things that Silicon Valley Companies do well. He basically wrote a talk in 24 hours. He said, “We can throw stones at Silicon Valley; yes, it does a lot of things wrong, there’s no doubt but there are certain things that they’re pretty good at.
We won’t dig into all the points of his talk. I think the biggest thing that I took away or the one that impacted the most when he was talking was something that a boss said to him at some point at Stripe. The question was, “After a 45-year career, what do you want to be true?” I would rephrase that almost like, “What do you want to feel or have accomplished looking back on your entire working career?” I think this is a great question to think about, is legacy. This is something I have thought about, not in depth, and extensively.
When I think about legacy—it’s interesting—I think much more about this podcast, and MicroConf, and blogs, and books than I do about the actual companies I’ve started. I bet Jason Fried thinks about his legacy is probably Basecamp. Maybe it’s the books that they’ve written as well, but it’s just interesting to think that different people have different answers for this. I don’t think there’s a right or wrong, but figure it out for yourself and then every day, make a bit of progress towards that.
Mike: I definitely think that this is the type of question that should make it onto the list of questions that you’re going to ask yourself at a personal retreat. But one of the other aspects of that was that, “What does it mean after that 45 years?” I think Patrick had said—and you can correct me if I’m misremembering this—but I think he had looked at and said, “Well, what does that mean to me and how would I quantify it?” I think his basic assessment of how he was going to quantify it was how much impact he’s had on other people over the course that 45 years, and what it means kind of collectively to give himself sort of a numeric score so to speak. I thought that was an interesting way of looking at it as well. Everybody can do it in any way that they want, but I just thought it was an interesting way for him to quantify what that meant to him.
Rob: We had a talk from Hanne Vervaeck, she’s the COO of Thrive Themes. The takeaway I had from her was, “Don’t build what your customers ask for.” Really, it’s don’t only build or just build, you can get a mess. We’ve talked about that a little bit on the podcast in the past. Basically, she talked through handling feature requests; they get hundreds and hundreds of them each month. She talked about instead of implementing every feature customers ask for, do one-on-one customer calls on a call. Shut up and listen, ask questions, and she had a cool process for handling that. In our last couple of years at Drip as it kept ramping up, we were getting probably 100-150 a month when we got acquired, and it was at least double that by the time I left. We had to figure out a way to do this as well. I liked hearing her approach and her thoughts on this.
Mike: The cool thing about when she was discussing that was really, it was a nice way of saying that customers don’t always know what should be built. They have an idea of like, “This is how you should solve the problem.” But the reality is that you should dig into that, and find out what problem they’re actually trying to solve. As opposed to listening to them and implementing things that they say, “You should be doing this. I need a feature that does that.” If you start digging in and trying to figure out more of a jobs-to-be-done type of thing, then you’re going to be much better off if you just blindly implement it, which I think is intuitively obvious to most people, but at the same time, your customers don’t know all the other things that are going on. Quite frankly, you may not even agree with them. You may decide, “Well, yes. That sounds great and all, but it’s just not the right direction for the business, or for the company, or the product,” and you may decide to ignore them because of that. Customers absolutely do not have all the information. Sometimes you have to overrule them.
Rob: I wrapped up the first day with my talk that was titled, The City Bootstrapping in 2019. I looked at some trends that have changed over the past 14 years since I’ve started talking about all this stuff, and then a bunch of things that have stayed the same. I think the takeaway I pulled from there is kind of, there’s more competition these days, but there are also more funding options. I definitely still and whole-heartedly a bootstrapper at heart and believe that the bootstrapping and self-funding are totally viable ways to go. Given that there is more competition, some of the scraps I had with just enormous amounts of VC funding reported SaaS in general.
We, as a community like you and I, with the podcast and the conference were kind of early to SaaS. Now, the big money is coming in over the past eight or nine years. Something I’m talking about is like more funding options are available and that funding is no longer binary. You can look at someone, like a lot of the angel investments I’ve done, where they literally plan to raise a single round, they’re not going to raise institutional funding. They don’t have a board, they never plan to go public or have a unicorn exit. They technically raised money, but they’re still very capital efficient, and they’re using this money to reach escape velocity with their start up faster and maybe a little less painful than that two to three years that we often now see it taking for a truly bootstrapped SaaS to do that.
Mike: I think that there definitely has to be a discussion in our circles around what the terminology actually ends up being, because I think that that’s a source of confusion for a lot of people. If you spend all of your own money on it, or you do it on credit cards, is that self-funding? Well, I guess technically, but at the same time, if you build a product up and then sell it outright to somebody else, and you get a pile of money, and then you put it into your next product, is that self-funding, is that bootstrap? Well, I don’t know. What does that actually mean? I think there’s going to be some discussions over the next coming months or years about some subtle changes to how we view some of the terms like bootstrapping, and self-funding, and maybe bootstrapping becomes more of a state of mind than anything else.
Rob: I would agree. Frankly, I wonder if the terms are—how important they actually are. I think they’re helpful to give context to things when you start to talk and you said, “Look, I’m a bootstrapper. This how I think about things.” That’s helpful versus if I sit up there and said, “Look, I’ve raised VC funding,” then take my advice in that context. That’s why I think it’s helpful, but I do think it’s unhelpful, and that people sometimes get dogmatic about this stuff, and I do not think you should never raise funding. “VC is the worst ever.” Or, “Bootstrapping, it’s just terrible. Why would you even do that?” I’ve heard people say this. I don’t think that’s helpful to do the always never should game. It’s like, let’s keep open minds and realize that this is now a continuum. There is bootstrapping where I literally have $50 to start it, and it has to grow on its own revenue. That’s very hard.
Self-funding is the next thing to the right I will say. It’s the next notch over where it’s like, “Yeah, I have $200,000 to pump into this business,” or, “$100,000 of my own money.” It’s a little different, it’s a different situation in bootstrapping. I’ve done both. I know, it’s very different. And then perhaps the next up step over is taking a small amount of funding from TinySeed or any .vc, or funding source that maybe isn’t expecting you to get huge and you can still build a profitable business selling real product to real customers and then maybe the next notch over is venture capital. Maybe there’s even a notch in between. That’s the thing, it’s not binary anymore.
Mike: I feel like maybe some people get too hung up on the terminology because it feels like their identity is being attacked like, “I’m a bootstrapper and you’re not.” As you said, it’s not binary anymore; it used to be, but now it’s not. I think there’s maybe something about identity crisis going on, but I definitely think that there’s going to be talks and discussions about that behind closed doors. Maybe we’ll come out with something new, or maybe it’ll just kind of be a perpetual issue for the next 20 years, I don’t know.
Rob: Another talk, kind of a last one we’ll cover with Growth, Joanna Wiebe who’s been a many time MicroConf speaker. The takeaway I took from her is that words matter as she talked about copywriting. She ran through seven words that work well in copy. […] here because rattling them off isn’t going to help you. It’s probably somewhere you want to watch the talk when it gets there, or look at Christian Genco’s notes at microconfrecap.com just to see what she talked about and how she presented it.
Mike: Next up, we have Starter. I think that we both want to say a big thank you to Ben Orenstein for being the MC. I think he did a fantastic job. It’s interesting because his talk was actually the last of the conference. Usually, in the past two years when we’ve had an MC, the talks that the MC gave, they were the first talk, and then they were the MC for the rest of it. Whereas Ben, he did the entire conference as the MC and then he got up and spoke which, I mean, that’s just a testament to his ability to get up there in front of everybody.
Rob: Yeah and his talk was great. He always brings it; entertaining, witty, charming. It’s almost like Ben’s here in the room and I’m talking to him. Tall, what did I say? The man with the plan. He’s 6’5 with a tan. You know what I like about his talk is it was, he didn’t even try to pull too many actionable bits out of it, although there was advice and such. It was just a really well told story. I know the story, I’ve listened to every episode of their podcast and yet, I sat there and listened just kind of riveted by how he would talk about the learning from this, and how they did this experiment, and he just set it up so well. Honestly, that’s another one where it’s like, we couldn’t do a justice in five bullet points, that’s one where you need to watch the video when it comes out.
Mike: Definitely. I love the story, and the way that he told it, and how some things came together really well and some things were like, “We discovered this along the way and who knew?” Some of the lessons were, I wouldn’t say they were obvious, but they’re obvious in hindsight. It’s like, “Yeah, that was probably going to be an issue and nobody really thought about it.”
Rob: Just to be clear, we didn’t mention his podcast. It’s called, The Art of Product Podcast and his product is called to Tuple which is a pair of programming SaaS. Another talk we had, it was on the first day of Starter was from Abi Noda. The takeaway I got from him was, “Start quickly by building on someone else’s platform.” Now, he also talked about how there’s a risk in doing that. A platform risk where you’re dependent on them and they could potentially implement a feature and put you out of business. I like that he’s at 21K MRR. He’s only been doing it for—how long is it? Eight months, nine months? It’s not that long.
Mike: Yeah, I think it was a little over a year.
Rob: Okay. It’s pretty quick for a solo founder with no employees. I don’t even the he has contractors to be at 21K MRR. That’s life changing man. The other thing is he talked multiple times about how he’s doing things wrong. He’s like, “I’m not sure about my pricing. I don’t actually think it’s optimal,” but enough things are working that he’s at 21K MRR. Maybe if he optimized to keep—that could be 30 or 40, and that’s great, you can do that. But at this point, he’s bought his own freedom and that’s what I liked about that story. He didn’t get up there and say, “I did everything right and look what all I did.” He’s like, “I did some things wrong and it still worked.”
I think the fact that he built on GitHub, he has a GitHub add-on that notifies you when there’s a pool request that need reviews and notifies you via Slack. He’s in the GitHub marketplace and that was kind of his big marketing approach. It was funny because when I when I talk about stair stepping and how there’s step one, two, and three, he combined step one and three. Step one is that one time downloadable product with a single traffic source, and then step three is recurring revenue. He has recurring revenue, but it’s a single traffic source in essence. I know he has some other traffic but most of it is focused in GitHub marketplace.
Mike: I did find it interesting that the way he opened his talk was the fact that he got fired, that was the day before Christmas or something like that. It was kind of a life-changing event for him and he’s like, “Okay, well now what do I do?” It took him a little while before he figured out, “Well, I kind of wanted to do this and launch my own thing,” and then he did it. There were a bunch of mistakes that he made along the way and things changed for him as he made tweaks to the business and as he basically, just improved things. I think that’s something that a lot of people forget is that, just launching is not the end of the story, that’s not even the destination or the goal, that’s the beginning of it; that’s where you start to learn things and where the rubber hits the road and you’re able to start adjusting what it is that you do. You hear from customers and tweak the business.
Rob: Another good talk was from Lianna Patch, a returning MicroConf speaker. The take away I have from her talk was, “Don’t make stupid copywriting mistakes.” She actually talked and covered a lot of topics, but the stupid copywriting mistake section was cool. She talked about having me-centric copy. Instead of having you and your, it has a lot of I’m, and we, and me. She talked about writing like a robot. Sentences that were too complicated, trying to do too much, and then clichés and nonsense phrases, and had a bunch listed there.
Again, microconfrecap.com if you want to see the specifics of that, but Lianna is in the trenches. She runs Punchline Copy and is on a day-to-day, week-to-week basis is writing a lot more copy than you and I frankly. She really is in the weeds on how this stuff should be done. She actually wrote the copy for bluetick.com, didn’t she?
Mike: Yes, she did. She wrote a couple of emails in the email sequence as well. I gave her access to all the notes and stuff that I had taken from all the customer interviews and customer development that I’ve done. She took that and she translated into the copy for the website. She also went through and tweaked all the onboarding emails and the educational emails that I put out there. Basically, overhauled the entire thing. Honestly, it’s doing its job. It’s just doing it really well.
Rob: That’s cool. I realized I just said bluetick.com but you’re bluetick.io. Sorry about that. Your website looks great. I just went to it. It looks really good. I’ve not seen it redesigned. How long ago did that happen?
Mike: That was a while ago. We talked about that on the podcast, that was probably close to a year ago.
Rob: Did we? I don’t remember it.
Mike: I mean there’s been little tweaks and stuff, it depends on what you’ve seen. I don’t know.
Rob: Yeah. The design it’s far superior to my memory of what Bluetick was. My memory must be dated at this point.
Mike: I’ve had it redone I think just before the last MicroConf.
Rob: Mike, do you hear the music in the background? We are on the 21st floor of a hotel in Las Vegas.
Mike: It’s interesting, I almost feel like there should be security coming over and kicking you out because you’re wearing flip flops and you look too old to be here.
Rob: Yeah, exactly. Wait a minute, I’m not doing either of those things. I did not look too old. Alright, I do a little bit.
Mike: Don’t you remember when that happened at the Hard Rock?
Rob: Yeah. Weren’t they filming some type of like an MTV something around the pool? I think what it was—now, they didn’t say it out loud that we were too old, and this was a few years ago, but we were in beach gear. I was wearing jeans and a t-shirt with flip flops. They wanted you to be in a full on no shirt, swim trunks, totally ripped abs, the whole deal. I was walking, “Sorry, sir. We’re filming.” “Really, what are you filming?”
Mike: I think you should correct that, it’s not us, it was you.
Rob: It was me. No, I was including you man.
Mike: I wasn’t there.
Rob: Alright, forget it. We didn’t notice. We didn’t go back to the Hard Rock the next year.
Mike: That’s true. Although they didn’t demolish it in later years.
Rob: A little known fact, the hotel that the first MicroConf was at was demolished shortly thereafter because it was so old.
Mike: Our next talk was from Omar Zenhom and he’s from WebinarNinja. I thought this was actually a fascinating talk, mostly because there was one takeaway that I think just kind of tramped all others that you could possibly take it away from that which was, “You should build an audience before building a product. If you don’t have an audience, you just simply do not have a product, and nothing you can do is going to change that.”
Rob: Yeah and I don’t agree with him on that. I think that’s how he did it and I appreciate his perspective of how he built the business using an audience, but I have seen too many founders who have built businesses without an audience. Do I agree that it makes it easier? Yes. Do I agree that maybe it’s a thing you should do? Maybe. But if you’re not that type of person, don’t do that. I have known founders and many founders who have amazingly successful businesses and did not start with an audience.
Mike: Maybe I should qualify that a little bit better. I agree with you that you don’t need the an audience before you start, you don’t have to build the audience before you build the product. But I do think that there is a certain amount of momentum that you kind of need to maintain over time and doing that almost requires an audience. That’s not for every product, but I think for any product of some scale and complexity where it takes time to educate people, and they’re not going to be at the right point in order to purchase your product, it may be three months or eight months out, or maybe even two years.
You need to be able to keep them around and the way you keep them around is through some sort of content marketing, or education, and you’re going to be able to catch them at that moment. If you don’t, it’s going to be hard to scale your business to a much higher level than if you’ve got a product and you’re only catching them at the time where they are experiencing that pain point enough to go look for a solution.
Rob: Yeah, maybe. I think of Salesforce, maybe Salesforce is a bad example, but think of just outbound cold email and companies that have grown doing that. They don’t have audience. I mean, I have talked to TinySeed applicants, they have zero audience. Actually, they have almost no traffic to their website, and yet they’re doing several thousand in MRR and growing, because they’re just using other tactics; using traditional sales tactics. The internet marketer space, or in the SMB space, so to speak, it could be a potential thing. WebinarNinja is definitely going after SMBs. It’s going after some aspirational entrepreneurs. It’s going after a crowd where building an audience is super important. It’s a great thing to leverage, but if you’re not in that space, I guess I would not wholeheartedly agree with that assessment.
Mike: Sure. I guess maybe I said that more because that’s the type of space that I operate in now and that I would want to work with. There’s obviously certain ones where I wouldn’t want to, and that I don’t think it would work there.
Rob: Yeah, totally. The other thing I liked that Omar said there, where had one slide where he said, “Take things that are unique about you and make them your advantage.” We talked about his name, how no one else has Omar Zenhom, and that was a unique thing. He could rank at Google really easily for that. No one else was from Egypt. He just talked a lot about himself, about how he used that as a superpower. I thought that was cool because I think it’s something a lot of us, me included, try to fit in and try to not be unique for some reason because we feel like fitting in is important, but I actually like the sentiment of making your unique thoughts, skills, and abilities your true advantage.
Mike: The last talk we’ll cover in this episode is Asia Matos who runs demandmaven.io. I really liked the fact that because of the split between Starter and Growth edition, she spoke at Starter edition. One of the great things about splitting the conference in two is that speakers can hone their talk to the audience. She really honed it down to basically telling them, “Look, there’s lots of different pieces of your sales funnel, but if you want to get to your first 100 customers, you really need to focus on that bottom of the funnel and try and make sure that you are talking to them directly about your product, and exactly what it can do.” Because the middle of the funnel, and at the top of the funnel, those are much broader areas to tackle and they’re harder to do if you’re not able to convert people at the bottom.
If you can’t convert them at the bottom, adding more people into your sales funnel isn’t going to change that and it’s not going to help. It will get you more customers, assuming you can add enough at scale, but if the bottom of your funnel is so leaky that it doesn’t really move the needle for you, then there’s no point in trying to do that. Really focus on the bottom, optimize that, and that’s really going to help you move forward.
Rob: Yeah. This is really good advice and it’s not talked about enough. I’m glad that this was the point of her talk really, is that people think they just need to send more people onto their website or into a trial, but if churning people out, or if people are not going trial to paid, or if people are not going visitor to trial, you have to start at that bottom and work up. Of course, you need another traffic that you can do some type of testing for the numbers to make sense. Certainly, scaling up and starting at the top of funnel just doesn’t make sense. She was a dense talk in a good way. It was a lot of information. She actually compressed a longer talk down to fit in our speaking slot. I think she did a good job of covering how to get your first 100 customers. 17th and 18th MicroConf are in the bag sir, how do you feel?
Mike: Tired.
Rob: Drunk.
Mike: Not yet.
Rob: I know. We’re like one shot. This is a good whiskey though.
Mike: Actually, I’m on my second or third. Probably second right now.
Rob: I’m in the other room. Mike and I always record across the country rather I guess at this point halfway across the country. It’s so weird when every five years, we happen to be in the same place, and we try to record, and there’s echo and all this stuff. We’re in the same hotel room, but it’s a suite, and we have a door closed between us. It’s just a unique experience.
Mike: For sure. I did realize something. Did you think about the fact that MicroConf Europe is going to be the 19th MicroConf, and then next year, Growth edition will be the 20th?
Rob: What a trip. How fitting.
Mike: Yeah.
Rob: I had not thought about that at all, that’s cool. Speaking of MicroConf Europe, it’s in Croatia again, at that amazing ridiculously cool hotel where every room as an ocean view of the Mediterranean. It is October 21st and 22nd of 2019. Tickets will go on sale. They may already be on sale to the early bird list as your listening with this. But go to microconfeurope.com, enter your email if you’re interested in potentially joining us and around 150 other software founders who are trying to get their stuff done.
Mike: Well, I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 438 | Casual Conversations with Rob & Mike
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike have a casual conversation about what’s going on with each other recently. Some of the topics they touch on include Dungeons & Dragons, personal computer setups, new ideas for MicroConf, and Bluetick/TinySeed updates.
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Mike: In this episode of Startups For The Rest Of Us, Rob and I are going to be having a casual conversation about what’s going on. This is Startups For The Rest Of Us episode 438.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s going on this week Rob?
Rob: I just felt like we haven’t done kind of a casual episode in a while where you and I talk about things that are going on. We often get stuck in this odd place where we might have a lot going on, but it’s not necessarily stuff you can talk about or feel comfortable broadcasting to tens of thousands of people. I feel like we’re in a good place, we’re obviously pre-recording this episode because it’s going to go live after MicroConf—I think the week after—and we’re recording it the week before just because so much is going on that whole week. Since we do Growth and Starter now, I mean the week is just torched for me. When do you fly out and when do you fly back?
Mike: I fly out on Friday. I get in at like 8:00 PM or so on Friday night and then I don’t leave until the following Friday. I think my flight is at 12:00 PM or 1:00 PM or something like that.
Rob: Yeah. It’s a full on week for you. I go Saturday to Friday. It’s only six days but still, A, six days, seven days in Vegas is too long. B, pretty much the whole time—I don’t know about you—but all I’m thinking about is, what am I forgetting? What am I missing this year? Oh yeah, we need that opening slideshow for the first 10 minutes of each conference. I need to update that. There’s all these little things and then stuff just really ramps up Sunday. Honest question, do you sleep very well at MicroConf typically?
Mike: I haven’t slept well in 4-5 years so it’s not a really fair question.
Rob: Yeah, you’re the wrong person to ask. I tend to sleep well. I don’t have many sleep problems in general aside from grinding my teeth which is irritating as heck for Sherry. At MicroConf I always struggle and I think it’s just how much I have going on in my mind. I wake up at 5:00 AM and I got to make sure to do that one thing or to tell that to that one person who needs to be at that one place at that time. There’s just a lot of details.
Xander has changed the game for us absolutely. But even then, I’m still thinking about stuff. Frequently what happens is I think of it, “Oh yeah, we need to do that one thing.” Then I wake up in the morning and I text you and Xander and Xander’s like, “Yeah, I already took care of that a week ago.” That’s actually the most often thing, but it still wakes me up in the middle of the night.
Mike: I think when I am in Vegas for MicroConf, I tend to actually sleep better I think when I’m there than when I’m at home, but that’s also I think partially a result of me remembering to bring a sleep mask because otherwise, the blinds of the hotel rooms are absolutely horrendous. You flip and shut but any hotel I’ve ever been in, they’re never very good so you have to have something else.
It feels like it gets so light so early and it just screws me because I tend to be up late and then the light comes and wakes me up in the morning. That’s the biggest problem I think I have. I agree with you in like having all those little things that are hanging out, they come up and you have to remember that, “We have to do this. I have to go back and tweak that from last year’s slides,” or whatever. That obviously comes up just constantly.
I carry around a pen and a notebook at all times just so I can make sure to write things down as they’re happening, or keep track of what has to go on with different sponsors, or different times of each conference. There’s just lots of little things to keep track of and trying to keep them in your brain is just not going to happen.
Rob: Yeah and that’s a good point too, because in my day-to-day workflow, I use email a ton. I use Trello. I just have a system that all goes out the window when I’m at MicroConf because I’m not checking email very much at all and I’m not looking at my Trello board. I have email to Trello basically. If you and I are talking in day-to-day or I’m at a dinner party and someone mentions a book I should read, or a something I should check out, a website, a person I should contact, whatever, I pop open Gmail, I email my own Trello board and it goes to the top of it. The next time I sit on my computer, I put it into the right queue. It’s an Amazon wish list, or an Audible wish list, or I fire off an email or whatever.
I don’t do that at MicroConf because I’ve just not checked my Trello board at all. That pen and paper approach you’re talking about, it’s either that or Simple Note because I have Simple Note on my phone. I just open up like a MicroConf-only to-do that I have to keep referring back to because I just find that my systems don’t work when we’re just running 110% for five days straight.
Mike: Yeah, I agree. That’s why I kind of switched over to the pen and paper. One of the things that tends to drop down on my list is the email and text notifications, though text notifications are different than Slack notifications. I totally don’t pay attention to it. You’re right though, being in a different environment like that where you’re not at your desktop, you don’t have all the tools available to you because you’ve just got so many other things going on, and you’re not really able to get into any sort of deep work because you don’t have your desktop, or laptop, or whatever. It’s just a very different operating environment.
Rob: Do you still use a desktop, Mike?
Mike: I do.
Rob: Are you going to bring that with you to MicroConf?
Mike: No, I’m not. I think the 30-inch monitor would probably be hard to get through.
Rob: For the love of god man, why do you use a desktop at home and not a laptop?
Mike: I have yet to find an actual laptop that I like and like enough to take with me, that’s part of it I think. I built my desktop from hand, because I’ve always kind of built my own computers even back when I was in college. I like the hardware that went with it but at the same time, because I built this 5-6 years ago, actually no, it’s more than that because I just recently reformatted everything, but I didn’t replace any of the hardware. I’m trying to remember, I think I found a software that was installed like 2010-2011. Most of the hardware is that old. I think it’s a hex core machine. It was a top of the line Core i7 at the time. I’ve got 64 gigs of RAM in it and SSD drives. The thing is it’s still a beastly machine all things considered.
Rob: Given that it’s 10 years old or 9 years old I guess, that’s a trip. I guess my question is and it’s going to die eventually. It’ll either fail or it’ll just be too slow to run stuff. When that happens, are you going to buy or build another desktop or you just kind of pony up for top of the line, because you’re in Windows right? It’s top of the line Dell, or HP, or whoever’s making Lenovo these days.
Mike: Yeah. For a while, I’ve been using a MacBook Pro and just ran VMware on top of it.
Rob: Dual booting or VMware. Are you going to just buy a high-end MacBook?
Mike: I don’t think so. I have not heard anybody have great things to say about the newer Macs. Everybody I see talking about them kind of hates them. They’re like, “I wish I could go back to the 2013 model.” Funny enough, I actually have a 2013 MacBook Pro. I use that when I travel, but I go back and forth on this. I think the biggest thing for me is, in order to be productive, I feel like I have to have more screen real estate available to me. I run three monitors at all times. One of them is a 30-inch and a pair of 20-inch monitors. That really works well for me. Going to a laptop kind of sucks. I looked at like the Surface Books…
Rob: You can do that because I run two monitors, two 24-inch or whatever off of my laptop. My laptop is one monitor and it’s retina so it’s amazing, and then I have the two 24s, so I essentially have three. How is that different than what you’re doing?
Mike: It’s not, except that on the one laptop that I was looking at was the Microsoft Surface Book and it doesn’t have the ability to do three monitors at 60 hertz because of the bandwidth limitations or something like that for 4K monitors. They’re so close, they really are.
Rob: That’s the limitation. I wonder if there isn’t a laptop out there—you don’t need to drive three monitors, you just need to drive two because the laptop itself if it’s high-res, you can use that in the center. I have an elevated thing. My laptop is up at eye level, and then I have a remote Bluetooth keyboard and mouse that I sit on my lap, basically on a panel, that’s the center monitor and then I have two on the other side. I just need to drive two. A, will that situation work for you and B, can you find a windows laptop that can drive two 4K monitors?
Mike: I haven’t tried doing that yet. Would it work for me or could I make it work for me? I probably could, but your comment about, “Oh, eventually my machine is not going to be able to do it.” My machine’s lasted long enough. Since that time, processors haven’t gone to six or seven gigahertz. I don’t think it’s an issue of that so much as just being able to have the laptop itself. I don’t have a justifiable reason to just go drop $3000-$4000 on a new laptop.
Rob: I agree and I don’t think you should do that now. I was just wondering when your desktop fails because it will. Something’s going to happen or it’s going to get too slow in the next five years. It’s not going to last 15 years. I was just wondering what you were going to do at that point, but maybe you’ll evaluate it when you get there.
I guess the thing of just working on a laptop all the time is then when you’re traveling, you’re not in this weird environment where you don’t have your stuff and it’s not the way it is. I have a 13-inch MacBook Pro and it is the new one with the touch bar. I don’t love the touch bar but I’ve gotten used to it. When I’m at home, I have extra screen real estate it’s amazing. When I’m on the road, I don’t but you can flip back and forth between the windows and I have the exact same shortcuts, icons everywhere, the same files, everything. It’s the same hard drive.
To me, traveling isn’t this big issue. I hate switching computers I guess is what I’m saying. I figure that’s why most people have moved to laptop so they can be mobile and go to a coffee shop or do something and it’s not this step down, aside from screen real estate, it’s not a step down in productivity. That’s all I was wondering for you.
Mike: That’s something I look at. My preference I think would be able to have a laptop that can do everything that I want and needed to do and that I just have a docking station. Just plug it in and everything’s the same. I can go on the road, or go to a coffee shop, or something like that, but I don’t work well or at least I haven’t historically worked very well in coffee shops or remote locations. It’s partly because I have back problems.
For me to sit at a coffee shop or in some weird chair that doesn’t do a good job of distributing my weight, I have kind of a hard time just sitting there and trying to be productive because I’m just sitting there in pain more than anything else. Maybe that’s part of why it doesn’t matter nearly as much to me as it probably would to somebody else. But I do want to at some point be able to switch and just say I just grab the thing and go, and that’s my entire environment, and nothing’s changed, I don’t have to worry about any of the stuff that you talked about where syncing things back and forth.
Most of the time for the current setup I have like, I have a MacBook Pro but then I have a windows VM that’s running on it. I reinstall all the software there. It’s a very similar environment. It’s not exactly the same, but anything that needs to be there, I just keep it in Dropbox, or Google docs, or something like that. It’s not that big a deal and Chrome keeps all my bookmarks in the same places. It’s not nearly as painful as it probably was 10-15 years ago.
Rob: That’s what I was going to say. With Dropbox and being able to sign in to Chrome and have your browser. You’re in your browser a lot of the time anywhere unless you’re writing code so it is nice. We were talking about MicroConf and we veered into that. I’m pretty stoked man. You’re running a little mini campaign fifth edition D&D on Saturday.
Mike: I am. I’m looking forward to that. I’ve got a bunch of stuff that’s already kind of laid out. I have just a couple of things I got to send you guys. I have to do that in the next day or so. It should be good. I almost wish I could talk a little bit more about it because I think it’s going to be interesting. I’ve actually run it twice so far. It’s not like everything is completely new. There are certain places where I know that there’s a few issues to iron out, but I think I’ve got them all straightened out. I took all of your characters and I gave them to other people and said, I want you to play these characters and I wanted to see how things kind of shook out. I’m hoping it’s well prepared.
Rob: That’s cool. If you’ve done it multiple times, to me it’s like a conference talk. The second, third, and fourth time I do a talk, it just gets better and better until to the point where I get bored of it, and it starts getting worse. I think you’re still on the upswing with this campaign.
Mike: Yeah. We’ll see. I mean it’s just a simple one shot. I expect it to take maybe three—like both times I ran it before, it’s taken four hours. I got to come and tighten that in somehow.
Rob: A little bit, yeah.
Mike: I have an idea of how to do that, I’m not sure you guys will like it though.
Rob: To kill it, do a TPK.
Mike: No. Well, I could do that. The very first room you walk into, “Hey, nobody dies. Let’s go get a beer.” I was thinking something along the lines of like a timer or something like that would be like, “Hey, this is kind of timed here, you’ve got to go a little bit quicker than you normally would.” I don’t know.
Rob: There’s a nuclear bomb waiting to go off and goes off of you if you don’t get this done. Is this campaign something you came up with or is it like a module?
Mike: It’s a module. Somebody ported it from fourth edition to fifth, and then I ported it from that platform because it was made for Fantasy Grounds which allows you to play D&D online. You get tokens and stuff to drag around and stuff, but the module itself because it was ported from fourth edition to fifth edition, it’s got errors in it. That’s why I wanted to play it a couple times in advance because the very first time I run it I was like, “This is a problem. That’s a problem. This is wrong like flat out.” They’re referring to things that just simply don’t exist and the authors never went back and fixed any of it. It’s like, “Well, what’s my interpretation of what it should be or how it’s supposed to be?”
Rob: It’s going to exciting and for folks who don’t know, it’s fifth edition Dungeons and Dragons that we’re talking about which is the current edition of that. You and I have never gamed together before, so this would be kind of cool. Frankly, I got out of D&D until 4-5 years ago when my oldest son got old enough to start playing, then I had the impetus to get into it again. Did you also take a bunch of time off from it and recently get back into it?
Mike: When I graduated from high school and went to college, I think I played once once or twice. I played once in college that I remember and I might have played over the summer the year after I went to college or something like that with some friends back home. But like you, I took a bunch of time off and I started again. When they first published fifth edition, I bought the books as they came out. When those were published I think back in 2014, this was about five years ago, that’s when I got back into it and started rereading stuff.
I basically skipped from the second edition all the way to the fifth and know very little about the third and fourth editions other than what I’ve read about what the differences are between those and the fifth edition. Just because some people I play with have played the version three and I didn’t know much about it. I was trying to educate them about what the differences were, but most of the people I play with now, they’ve either played second edition or they’re kind of new.
Rob: I did the same thing. I played basic back in the early 80s and then played [inaudible 00:15:39]. When the first edition AD&D came out, we played that. I don’t think I ever played second edition, never played third or fourth. When I got back into it, let’s say 4-5 years ago, I Googled, “Coming back into D&D. I’m going to teach my kid. Should we play first edition because that’s what I’m most familiar with or is fifth edition good?” There were some really cool threads talking about the pros and cons of it.
In the end, people are like, “Fifth edition is a better,” not better, that was not the word they used, but it’s a faster rule set. The game moves quicker. It’s easier to understand for someone who’s never played it and there’s tons of new stuff being put out for. You can do either one, but consider checking out fifth edition. It’s nice that the rules are available for free. There’s a PDF that Wizards of the Coast lets you down. I downloaded it and I was blown away by the simplicity and how they’ve gotten rid of all of descending armor class, and all these tables to hit, and saving throws and stuff and it’s just come down to difficulty checks with advantage and disadvantages. It’s just really elegant to me—elegant simplifications of things.
I know folks who are used to the old stuff, adapting something new is like changing programming languages from SEED to Ruby or something, seed.net where it’s like, “Oh my gosh, this is such a different paradigm.” Even if it might be more elegant or whatever, it doesn’t feel that way because it’s different. When I was 10, 12, or 14, I just had hours and hours to pour into it, invented our own stuff, and read every book, but I just don’t have that time now. It’s like, “Look, I have two hours a week maybe three hours to hammer something out. What’s fast and what’s fun to play?”
Mike: Now you can go online and there’s like random dungeon generators, and random character generators, and all the stuff, they’re fantastic tools that streamline things. I remember I used to spend an hour or two creating a character and now you can just go and use one of these tools, and you can have a character done in 10-15 minutes tops. That’s just fantastic.
Rob: Yeah.
Mike: I agree. I love the fifth edition rule set overall the other ones over the basic edition, the AD&D first edition, and second edition just because I think the biggest thing that I think it has going for it is that your character will get more powerful as they level up, as opposed to depending so much on items and things like that in order to make you more powerful. That’s the thing I think I disliked the most about some of the previous editions, because you could just make somebody completely overpowered at a super low level just by giving them a bunch of magic items. Whereas with this one, you’re competitive every step of the way with no magic item which is kind of awesome.
Rob: Right, it makes sense. I know we can talk about D&D. This could be a casual D&D conversation with just Rob and Mike, or tabletop gaming. Folks who don’t play D&D might have already tuned out. Those two listeners are gone. I have a question for you. Have you ever been to a conference where the opening 10 minutes, where the host gets on stage and talks about things, sets the stage so to speak, for what’s going to happen during the conference. What’s the best one of those you’ve ever seen? Have you seen any that have blown you away, I think. Obviously, the reason I’m asking you is, we have adapted ours over the years especially last year changed, the whole slide deck changed, the format changed, and stuff. I’m just trying to think about the best way to keep improving that.
Mike: I don’t know about best. I would say the most interesting one I ever saw—and I wasn’t there personally for this—I’m think this is a little bit of secondhand information. I was there the year after and I think that as a result of that previous year, things have changed in terms of policies of the company. It was at a Altiris conference back in, I want to say 2007-2009 timeframe, or something like that maybe it was even slightly before that, but the founder of the company came in through the back, and went through the aisles, and up on the stage riding a motorcycle.
Rob: Okay. Let’s talk to Xander, and on Monday, I want you to do that.
Mike: Sure. I do have my motorcycle. I could do that theoretically.
Rob: Fantastic.
Mike: I think we may need to update the insurance, and waivers, and various other things.
Rob: And all the things, yeah, and rent a motorcycle, and get the drop to let us drive it through the hall. Alright, so that’s not helpful. That was completely unhelpful.
Mike: That’s my job here I think, to be completely unhelpful.
Rob: Exactly. Doing it 438 episodes since 2010—being unhelpful.
Mike: Yeah. I don’t know what the most interesting thing is. I mean I’ve been to conferences where the founder of whatever the business is, will come out and then give a really good opening talk or presentation, and it talks about the future, but it’s not like a 5 or 10 minute intro. It’s usually the keynote speech or something like that.
Rob: It’s a keynote, right. It’s an actual talk. Obviously, at MicroConf, for folks who haven’t been, you and I get up and we have between 10-15 minutes right at the start of the conference where we welcome everybody, we talk about what MicroConf is, we go through a breakdown of attendees, and stages they’re at, and that kind of stuff. It sets the stage for where we’re headed. Because it would be weird if everyone shows up at 10:00 AM on Monday and you and I get up and we’re just like, “Ladies and gentlemen, Jason Cohen, Chris Savage,” or whoever our speaker is and they get up on stage, because it’s not a program, it’s just a disjointed speaker after speaker. There’s no context for all of it. That’s why we’ve always done the welcome of like, “Welcome.” I don’t know. I’m just trying to think of something that’s not a keynote per se. We could do whatever we want. We can’t do it this year because the schedule is already set but next year, you and I could…
Mike: Are you looking for something different like to change it up in terms of saying how can we do this differently, or just looking for ideas of what other things, or are you just looking for validation of, “Is this the best thing for us to do or not?”
Rob: I think we should do it. I don’t think that’s part of the conversation of us not getting up there. It could be super weird if we weren’t there to welcome the people. Someone has to be there. I think we should do something. I think what we did last year was better than what we have done in prior years. I just am looking, is there anything else we can add to that to make it even better. That’s what I’m thinking about.
I think the best one I’ve seen was at SaaStr. Jason Lemkin got up and talked for maybe 15 minutes. It wasn’t a keynote, it was kind of like the state of SaaStr. He talked about the conference, and he talked about their community, and he talked about their fund, and it really was just an overview. It’s like when you think about writing a 10-page paper. You start high level, and then you dig in deep, and then at the end you come back to high level to conclude, and that’s how I think we structure MicroConf.
We have that introduction that really is this high level context setting, and then at the end, we should wrap it up with context and stuff, and we even have to structure the talks that way. We don’t tend to put a super tactical talk as the first talk on Monday because the vibe is off if you do that. That’s it. I think I might try to think back to what SaaStr’s opening was like and see if there’s any elements of that that could apply to us. We are similar to that opening and that we do set context, but I think there’s just ways to do it better.
Mike: What we do is we set context for the attendees at the conference. An idea that comes to mind—and obviously, there’s zero time to do that for this year—this is actually something that I have had an idea of the within the past couple of years like, “Hey, it would be cool if somebody kind of headed this up.” Not that I really had the time to do it, but it’s something that either we could potentially put together because of the audience and community.
But as you said, kind of give the state of self-funded entrepreneurs, or the state of SaaS applications, or the state of software in general for extremely small software companies like ours. Give a 10-15 minute overview of, “Hey, this is some of the major changes that have kind of come out over the past year. This is how things are progressing. These are things that are going on in the industry that people should kind of either be on the lookout for or be careful of. These are some opportunities that you guys might want to think about.” As opposed to what we do right now which is welcome them to the conference which I do think we still need to do that. But I also think that it would be nice if there was this extra piece there that was kind of an opening that did set the stage for other stuff. I think what that would actually probably take is doing interviews with founders, or calls, or surveys, and things along those lines to help gather information from the community to be able to compile that and show it to them.
I did a talk in MicroConf Europe in 2016 that I basically did that. I asked people for information and say, “Hey, could you submit this?” I’m basically writing a talk about it. I included a bunch of that information, but it’s not something I could potentially do like every single year so I just didn’t keep it up. I think something along those lines could be helpful and useful for the audience.
Rob: Do you know what the name of my talk is on Monday afternoon? You have not looked have you?
Mike: You know, I don’t even know the names of all the speakers.
Rob: I know. Well, we do keep a firewall between speakers and sponsors. Literally, we were talking last week I guess and I said, “Yeah, I don’t know.” I know some of the sponsors because there’s a lot of them returning, but I tend to wait until a day or two before to look through all the sponsors. Because this is our editorial firewall. Advertising versus editorial, we don’t link those two up. I don’t want that to influence decisions.
Mike: Right.
Rob: But the name of my talk is, The State of Bootstrapping in 2019. It’s not exactly what you are talking about, but I am trying to give that overview and talk about trends, and what’s happened over the past 10 years. I mean, you saw my Europe talk from eight months ago, or six months ago. It’s an expansion of that.
Mike: That would be cool. I mean obviously, you don’t want to do a one hour talk at the very beginning like that.
Rob: Exactly.
Mike: I don’t know how you would condense your talk into 10-15 minutes. That’s the other thing I think I would struggle with is how to gather enough data that is meaningful and useful to the audience, and present it in a short enough timeframe that isn’t distracting, or it doesn’t create a whole host of other questions.
Rob: Right. We have all these questions and then it’s like, “Alright and now our first speaker.” And people are like, “No wait, I want to hear more. That was in the middle of it. I’m so confused.” What’s up with Bluetick?
Mike: Oh, let’s see here.
Rob: Oh, that? What’s Bluetick?
Mike: What’s that? Could you spell that? I need to Google it real quick while we’re on a call.
Rob: What’s the news on that? I’m sure people want to hear it. Have you been working on it? Are you too bogged down with MicroConf stuff?
Mike: I’ve been so bogged down with MicroConf stuff and all sorts of other things going on. I think we talked about it a little bit in the last episode or the one before that. Just the timing of MicroConf and lots of other things that are going on has been so incredibly bad that I have not had time to look at it. Last week I had to sit down for a day or two and look at renewing my health insurance, because I think most people renew their health insurance at the beginning of the year and mine’s up for renewal on April 1st. I and had to call them and I’m just like, “Look, this is really bad timing.” They’re like, “We need to have this paperwork in by the 1st. Otherwise, it’s going to renew at the current rates.” I’m like, “Dear god.” It’s the worst timing.
Rob: I don’t renew my health insurance. What does that even mean? You have to reapply and fill out paperwork? I’ve never done that.
Mike: They change the plans every year. I don’t know whether this happens for everybody. They change the insurance plans that are available and the rates for all of them change as well. Sometime they will move things around. It’ll change the prescription coverage, or they’ll change what is covered under a particular plan, or they’ll change copays or which hospitals they cover. It’s just like, “Dear god, this sucks.” I have to renew by April 1st or basically, I just don’t have coverage.
It will automatically renew but because of the timeframe, I have to look at it now and figure out whether what I’m going to be doing now is the right thing or not. I was like, “Well, what about an HSA account or something like that?” They said, “Well, in order for you to do an HSA account, we have to give you entirely new plans because these are not HSA certified.” I’m like, “Oh my god.” Then there’s like a health savings account which is not…
Rob: Wait, that’s not HSA. You’re FSA, flexible spending account.
Mike: I think that’s it. Yeah.
Rob: Yeah.
Mike: Yeah. All these terms that are very close to one another that I’m not familiar with because I’m not in that industry. I’m just like, “I’m so confused. Why do I have to learn this right now and have 10 minutes to do it?” Like I said, it’s just bad timing and lots of major things all in a very compressed timeframe and it sucks.
Rob: You’ve been doing health insurance, taxes, prepping for MicroConf, right?
Mike: Yeah.
Rob: And so Bluetick is just kind of ‘blue ticking’ along?
Mike: Yeah, basically. I mean aside from the things that I talked about the last couple weeks. The webcast I’m going to be doing. That’s scheduled in late April. I’ve been doing little things here and there trying to move things along. I’ve also been doing research on the backend framework that runs Bluetick. Maybe this is a good time to talk about that, or maybe we should talk about it in the future episodes. I talked to Andrew Culver briefly about it because he is the founder Bullet Train which is essentially a framework that you can use as a starting point for your app whatever it happens to be. He takes care of all of the fundamental things like sign in, password reset, Stripe integration, and all these things. Basically, you start plugging the logic of your application.
When I was first building Bluetick and started out, I couldn’t really find anything like that, but I did find an open source project where they said, “Hey, here’s the MIT license for this,” or whatever, “and you can use this stuff.” It looked like it was pretty decent it’s just it didn’t do everything that I needed to do, and then you’re seeing some of the same library. I based a lot of stuff in on it, imported some of the code, but then there’s obviously a divergence there. They did their own thing and I did mine.
I went back and looked at it and it’s much farther along than it was at the time, and more advanced in certain cases which would actually make it easier for me to use that and plug in more functionality, but the database tables don’t line up. I’d have to port things over and deal with that stuff. I’m just like, “Is it worth it?” I’ve done a little bit of exploration there, but by porting it over would give me all the core functions or the features of just like a SaaS application would be taken cared of for me, and I wouldn’t have to worry about them. I just don’t know if I have a good sense of how long it would take to do that or whether it’s worth it. It maybe something I just do it over time and not necessarily worry too much about it.
Rob: I think the question I asked is like, to me, your number one goal right now is more paying customers. It’s ensure problem-solution fit, ensure product-market fit, and more paying customers, and this doesn’t do that. I know that it makes longer term, it’s a good call. If you run this app for 10 years, 20 years, then yeah, it’s good to be on a framework assuming that they maintain it. But I think that’s pushing off the number one priority which is get more people in your funnel, close more deals, get more revenue because that’s really the point you’re at. Just my take.
Mike: I totally agree with that. That’s why I haven’t tried to bite the bullet and actually do it. There are certain issues that the app has in terms of team accounts and things like that. I’m just like, I don’t want to go down the path of some of those things right now until I have more customers and more revenue because it’s just not—I don’t want to say it’s not important—it’s not the top priority.
Rob: Yeah.
Mike: At some point, I’ll do it, but I have a hard time doing it now.
Rob: I would agree. There’s always a lot of distractions like that. I think we talked about last time where customers give you more things or even you have more great ideas and you can never implement. You, as part of being a founder and making the right choice, is picking the ones that are going to have the most impact for you. It’s like, “What are you trying to impact now?” To me, it’s your top line, or bottom line, or however you want to phrase that.
Mike: Yeah.
Rob: Cool. I guess in the interest of time, we’ll wrap up here in the next couple of minutes. There’s some new stuff at TinySeed but it’s in that weird phase where we have all these applicants and I’m interviewing a lot of them. I’m having fun doing it. It’s super busy and then like you, trying to get taxes done, prepping for MicroConf. My talk is not done and I fly out basically in 48 hours. I know. The dirty little secret of you do enough talks, and you find that you’re closer and closer to your deadline.
I remember Dharmesh Shah at BOS years ago; it was probably a decade ago now. We were talking and we’re both doing a talk that year I believe. I might’ve been doing like a lightning talking and he was doing a full one. Anyways, he said, “Yeah, I’ll start my talk at 11:00 tonight,” and he did it the next day. I was like, “What? I’ve been prepping for weeks.” I was obviously much earlier in my conference speaking than he was. He said, “Yeah.” He typically sits until three in the morning and just writes his talk all at once the night before and that that’s kind of his best way to work.
That’s not mine because I don’t like staying up that late, but I do find that the pressure of having to get it done often forces me to really focus and ship good material. I can burn dozens of hours over the course of weeks if I have all this time to write the talk. Now the practice of it I think is another thing. I think having more time to practice does improve the talks. Off to figure out some good times to do that.
Mike: That’s something I kind of struggle with too is, getting the talk done early enough to be able to also do a lot of practice. I don’t know about you, I have little hacks and stuff that I put in a bunch of my slides where if I’m going through it—and I have a couple bullet points—if there is a bullet point that has a period at the end of it, then I know that hitting the button again goes to the next slide and things like that. Most people wouldn’t catch those types of things, but there’s little things that I use as visual indicators for myself to know what’s coming next, or to pay attention to a certain thing, or make a certain point.
Rob: Yeah, that makes sense. I guess the last thing for me is with TinySeed. As with any startup in the early days—here’s the difference actually is, nowadays, if I were to start a new company that’s going to build a software product, I would go to Stripe Atlas and I would form an LLC or a C-Corp through their one click thing and it creates a bank account that does all these stuff. It’s a solved problem now. I know that you’re then going to need some other paperwork as you hire employees and stuff. There’s gusto and there’s benefits. There are ways that have simplified it.
It’s not there yet with starting an accelerator and essentially an investment fund. The nature starting those is not as refined. You go straight to law firm, and you’re forming multiple LLCs that reference one another, and there’s just a lot of complexity there. Luckily, Einar, my cofounder with TinySeed, has taken care of most of that. But there have just been a few points where I’ve been involved in conversations as we’re trying to get term sheets nailed down and stuff. I had one simple question about changing one word to make things clearer and it wound up being this 10 email back and forth that got more and more complicated.
I don’t know if I wasn’t explaining myself well, but it was one of those moments where I finally said, “I give up. It’s just going to have to be complicated on the dock because to change it from pre-money to post-money would require a huge paragraph, and all these exceptions, and this huge bulleted list in what is otherwise a 10-word sentence right now.” If we do pre-money, then it’s 10-word sentence. If we do post-money, I think based on what he was telling me, I couldn’t actually understand, it just [inaudible 00:36:04] out of control. That’s the kind of stuff that is so frustrating to me as someone who is trying to get things done.
I was trying to send things to people three days ago and then it winds up being this back and forth back. We were going to jump on the phone, I know it would have helped, it would’ve been the same conversation that happened via email. I think the perpetual frustration of being a founder is, you always have these things that are just outside of your control or maybe your expertise. They get complicated and they become time sucks beyond what they should I think. I’m learning when to just throw my head up and say, “I’m going to give up on this one. I’m not going to fight this anymore. I’m not going to waste anymore time.” I think as a younger entrepreneur, I wasted a lot of time fighting against things like this rather than eventually just saying, “Look, it doesn’t really matter. Just do it the way it is.”
Mike: You raged against a machine when you were younger?
Rob: Indeed I did, over and over.
Mike: I think that that type of problem happens in general when you start a business. There’s going to be certain things that are out of your control and it sucks because you want to move fast and you want to get them done. At the same time, I think that one of the issues that you’re running into is that, when it comes to legal terminology, there’s hundreds of years of history of legal things that have happened, and there is precedence that has been set. When you say one word versus another word, it can drastically change how that is interpreted in the eyes of the courts. It sucks to have to deal with that stuff.
I don’t want to say it’s exactly like programming because with writing code, you have to be very explicit about what you wanted to do, and then what the exceptions are. But with legal terminology, there’s always—I don’t want to say ambiguity—but there’s different ways to interpret the exact same words. It kind of sucks sometimes.
Rob: Yeah. It is what it is. I know that people out there are probably not in their head. It’s like taxes, legal stuff, there are others. I don’t know, plumbing code in your SaaS app. It’s things that don’t move your business forward.
Mike: You said plumbing code and I thought the actual plumbing pipes.
Rob: That too.
Mike: [inaudible 00:38:09].
Rob: It’s stuff that doesn’t move your business forward.
Mike: Right.
Rob: That’s all I have to say. We should probably wrap it up for the day huh?
Mike: Yeah, I think so.
Rob: Most of our episodes are not this casual. We answer a lot of listener questions as well as dive into detailed and interesting startup topics. If you have a question for us call our voicemail number at 888-801-9690 or you can email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s going on this week Rob?
Rob: I just felt like we haven’t done kind of a casual episode in a while where you and I talk about things that are going on. We often get stuck in this odd place where we might have a lot going on, but it’s not necessarily stuff you can talk about or feel comfortable broadcasting to tens of thousands of people. I feel like we’re in a good place, we’re obviously pre-recording this episode because it’s going to go live after MicroConf—I think the week after—and we’re recording it the week before just because so much is going on that whole week. Since we do Growth and Starter now, I mean the week is just torched for me. When do you fly out and when do you fly back?
Mike: I fly out on Friday. I get in at like 8:00 PM or so on Friday night and then I don’t leave until the following Friday. I think my flight is at 12:00 PM or 1:00 PM or something like that.
Rob: Yeah. It’s a full on week for you. I go Saturday to Friday. It’s only six days but still, A, six days, seven days in Vegas is too long. B, pretty much the whole time—I don’t know about you—but all I’m thinking about is, what am I forgetting? What am I missing this year? Oh yeah, we need that opening slideshow for the first 10 minutes of each conference. I need to update that. There’s all these little things and then stuff just really ramps up Sunday. Honest question, do you sleep very well at MicroConf typically?
Mike: I haven’t slept well in 4-5 years so it’s not a really fair question.
Rob: Yeah, you’re the wrong person to ask. I tend to sleep well. I don’t have many sleep problems in general aside from grinding my teeth which is irritating as heck for Sherry. At MicroConf I always struggle and I think it’s just how much I have going on in my mind. I wake up at 5:00 AM and I got to make sure to do that one thing or to tell that to that one person who needs to be at that one place at that time. There’s just a lot of details.
Xander has changed the game for us absolutely. But even then, I’m still thinking about stuff. Frequently what happens is I think of it, “Oh yeah, we need to do that one thing.” Then I wake up in the morning and I text you and Xander and Xander’s like, “Yeah, I already took care of that a week ago.” That’s actually the most often thing, but it still wakes me up in the middle of the night.
Mike: I think when I am in Vegas for MicroConf, I tend to actually sleep better I think when I’m there than when I’m at home, but that’s also I think partially a result of me remembering to bring a sleep mask because otherwise, the blinds of the hotel rooms are absolutely horrendous. You flip and shut but any hotel I’ve ever been in, they’re never very good so you have to have something else.
It feels like it gets so light so early and it just screws me because I tend to be up late and then the light comes and wakes me up in the morning. That’s the biggest problem I think I have. I agree with you in like having all those little things that are hanging out, they come up and you have to remember that, “We have to do this. I have to go back and tweak that from last year’s slides,” or whatever. That obviously comes up just constantly.
I carry around a pen and a notebook at all times just so I can make sure to write things down as they’re happening, or keep track of what has to go on with different sponsors, or different times of each conference. There’s just lots of little things to keep track of and trying to keep them in your brain is just not going to happen.
Rob: Yeah and that’s a good point too, because in my day-to-day workflow, I use email a ton. I use Trello. I just have a system that all goes out the window when I’m at MicroConf because I’m not checking email very much at all and I’m not looking at my Trello board. I have email to Trello basically. If you and I are talking in day-to-day or I’m at a dinner party and someone mentions a book I should read, or a something I should check out, a website, a person I should contact, whatever, I pop open Gmail, I email my own Trello board and it goes to the top of it. The next time I sit on my computer, I put it into the right queue. It’s an Amazon wish list, or an Audible wish list, or I fire off an email or whatever.
I don’t do that at MicroConf because I’ve just not checked my Trello board at all. That pen and paper approach you’re talking about, it’s either that or Simple Note because I have Simple Note on my phone. I just open up like a MicroConf-only to-do that I have to keep referring back to because I just find that my systems don’t work when we’re just running 110% for five days straight.
Mike: Yeah, I agree. That’s why I kind of switched over to the pen and paper. One of the things that tends to drop down on my list is the email and text notifications, though text notifications are different than Slack notifications. I totally don’t pay attention to it. You’re right though, being in a different environment like that where you’re not at your desktop, you don’t have all the tools available to you because you’ve just got so many other things going on, and you’re not really able to get into any sort of deep work because you don’t have your desktop, or laptop, or whatever. It’s just a very different operating environment.
Rob: Do you still use a desktop, Mike?
Mike: I do.
Rob: Are you going to bring that with you to MicroConf?
Mike: No, I’m not. I think the 30-inch monitor would probably be hard to get through.
Rob: For the love of god man, why do you use a desktop at home and not a laptop?
Mike: I have yet to find an actual laptop that I like and like enough to take with me, that’s part of it I think. I built my desktop from hand, because I’ve always kind of built my own computers even back when I was in college. I like the hardware that went with it but at the same time, because I built this 5-6 years ago, actually no, it’s more than that because I just recently reformatted everything, but I didn’t replace any of the hardware. I’m trying to remember, I think I found a software that was installed like 2010-2011. Most of the hardware is that old. I think it’s a hex core machine. It was a top of the line Core i7 at the time. I’ve got 64 gigs of RAM in it and SSD drives. The thing is it’s still a beastly machine all things considered.
Rob: Given that it’s 10 years old or 9 years old I guess, that’s a trip. I guess my question is and it’s going to die eventually. It’ll either fail or it’ll just be too slow to run stuff. When that happens, are you going to buy or build another desktop or you just kind of pony up for top of the line, because you’re in Windows right? It’s top of the line Dell, or HP, or whoever’s making Lenovo these days.
Mike: Yeah. For a while, I’ve been using a MacBook Pro and just ran VMware on top of it.
Rob: Dual booting or VMware. Are you going to just buy a high-end MacBook?
Mike: I don’t think so. I have not heard anybody have great things to say about the newer Macs. Everybody I see talking about them kind of hates them. They’re like, “I wish I could go back to the 2013 model.” Funny enough, I actually have a 2013 MacBook Pro. I use that when I travel, but I go back and forth on this. I think the biggest thing for me is, in order to be productive, I feel like I have to have more screen real estate available to me. I run three monitors at all times. One of them is a 30-inch and a pair of 20-inch monitors. That really works well for me. Going to a laptop kind of sucks. I looked at like the Surface Books…
Rob: You can do that because I run two monitors, two 24-inch or whatever off of my laptop. My laptop is one monitor and it’s retina so it’s amazing, and then I have the two 24s, so I essentially have three. How is that different than what you’re doing?
Mike: It’s not, except that on the one laptop that I was looking at was the Microsoft Surface Book and it doesn’t have the ability to do three monitors at 60 hertz because of the bandwidth limitations or something like that for 4K monitors. They’re so close, they really are.
Rob: That’s the limitation. I wonder if there isn’t a laptop out there—you don’t need to drive three monitors, you just need to drive two because the laptop itself if it’s high-res, you can use that in the center. I have an elevated thing. My laptop is up at eye level, and then I have a remote Bluetooth keyboard and mouse that I sit on my lap, basically on a panel, that’s the center monitor and then I have two on the other side. I just need to drive two. A, will that situation work for you and B, can you find a windows laptop that can drive two 4K monitors?
Mike: I haven’t tried doing that yet. Would it work for me or could I make it work for me? I probably could, but your comment about, “Oh, eventually my machine is not going to be able to do it.” My machine’s lasted long enough. Since that time, processors haven’t gone to six or seven gigahertz. I don’t think it’s an issue of that so much as just being able to have the laptop itself. I don’t have a justifiable reason to just go drop $3000-$4000 on a new laptop.
Rob: I agree and I don’t think you should do that now. I was just wondering when your desktop fails because it will. Something’s going to happen or it’s going to get too slow in the next five years. It’s not going to last 15 years. I was just wondering what you were going to do at that point, but maybe you’ll evaluate it when you get there.
I guess the thing of just working on a laptop all the time is then when you’re traveling, you’re not in this weird environment where you don’t have your stuff and it’s not the way it is. I have a 13-inch MacBook Pro and it is the new one with the touch bar. I don’t love the touch bar but I’ve gotten used to it. When I’m at home, I have extra screen real estate it’s amazing. When I’m on the road, I don’t but you can flip back and forth between the windows and I have the exact same shortcuts, icons everywhere, the same files, everything. It’s the same hard drive.
To me, traveling isn’t this big issue. I hate switching computers I guess is what I’m saying. I figure that’s why most people have moved to laptop so they can be mobile and go to a coffee shop or do something and it’s not this step down, aside from screen real estate, it’s not a step down in productivity. That’s all I was wondering for you.
Mike: That’s something I look at. My preference I think would be able to have a laptop that can do everything that I want and needed to do and that I just have a docking station. Just plug it in and everything’s the same. I can go on the road, or go to a coffee shop, or something like that, but I don’t work well or at least I haven’t historically worked very well in coffee shops or remote locations. It’s partly because I have back problems.
For me to sit at a coffee shop or in some weird chair that doesn’t do a good job of distributing my weight, I have kind of a hard time just sitting there and trying to be productive because I’m just sitting there in pain more than anything else. Maybe that’s part of why it doesn’t matter nearly as much to me as it probably would to somebody else. But I do want to at some point be able to switch and just say I just grab the thing and go, and that’s my entire environment, and nothing’s changed, I don’t have to worry about any of the stuff that you talked about where syncing things back and forth.
Most of the time for the current setup I have like, I have a MacBook Pro but then I have a windows VM that’s running on it. I reinstall all the software there. It’s a very similar environment. It’s not exactly the same, but anything that needs to be there, I just keep it in Dropbox, or Google docs, or something like that. It’s not that big a deal and Chrome keeps all my bookmarks in the same places. It’s not nearly as painful as it probably was 10-15 years ago.
Rob: That’s what I was going to say. With Dropbox and being able to sign in to Chrome and have your browser. You’re in your browser a lot of the time anywhere unless you’re writing code so it is nice. We were talking about MicroConf and we veered into that. I’m pretty stoked man. You’re running a little mini campaign fifth edition D&D on Saturday.
Mike: I am. I’m looking forward to that. I’ve got a bunch of stuff that’s already kind of laid out. I have just a couple of things I got to send you guys. I have to do that in the next day or so. It should be good. I almost wish I could talk a little bit more about it because I think it’s going to be interesting. I’ve actually run it twice so far. It’s not like everything is completely new. There are certain places where I know that there’s a few issues to iron out, but I think I’ve got them all straightened out. I took all of your characters and I gave them to other people and said, I want you to play these characters and I wanted to see how things kind of shook out. I’m hoping it’s well prepared.
Rob: That’s cool. If you’ve done it multiple times, to me it’s like a conference talk. The second, third, and fourth time I do a talk, it just gets better and better until to the point where I get bored of it, and it starts getting worse. I think you’re still on the upswing with this campaign.
Mike: Yeah. We’ll see. I mean it’s just a simple one shot. I expect it to take maybe three—like both times I ran it before, it’s taken four hours. I got to come and tighten that in somehow.
Rob: A little bit, yeah.
Mike: I have an idea of how to do that, I’m not sure you guys will like it though.
Rob: To kill it, do a TPK.
Mike: No. Well, I could do that. The very first room you walk into, “Hey, nobody dies. Let’s go get a beer.” I was thinking something along the lines of like a timer or something like that would be like, “Hey, this is kind of timed here, you’ve got to go a little bit quicker than you normally would.” I don’t know.
Rob: There’s a nuclear bomb waiting to go off and goes off of you if you don’t get this done. Is this campaign something you came up with or is it like a module?
Mike: It’s a module. Somebody ported it from fourth edition to fifth, and then I ported it from that platform because it was made for Fantasy Grounds which allows you to play D&D online. You get tokens and stuff to drag around and stuff, but the module itself because it was ported from fourth edition to fifth edition, it’s got errors in it. That’s why I wanted to play it a couple times in advance because the very first time I run it I was like, “This is a problem. That’s a problem. This is wrong like flat out.” They’re referring to things that just simply don’t exist and the authors never went back and fixed any of it. It’s like, “Well, what’s my interpretation of what it should be or how it’s supposed to be?”
Rob: It’s going to exciting and for folks who don’t know, it’s fifth edition Dungeons and Dragons that we’re talking about which is the current edition of that. You and I have never gamed together before, so this would be kind of cool. Frankly, I got out of D&D until 4-5 years ago when my oldest son got old enough to start playing, then I had the impetus to get into it again. Did you also take a bunch of time off from it and recently get back into it?
Mike: When I graduated from high school and went to college, I think I played once once or twice. I played once in college that I remember and I might have played over the summer the year after I went to college or something like that with some friends back home. But like you, I took a bunch of time off and I started again. When they first published fifth edition, I bought the books as they came out. When those were published I think back in 2014, this was about five years ago, that’s when I got back into it and started rereading stuff.
I basically skipped from the second edition all the way to the fifth and know very little about the third and fourth editions other than what I’ve read about what the differences are between those and the fifth edition. Just because some people I play with have played the version three and I didn’t know much about it. I was trying to educate them about what the differences were, but most of the people I play with now, they’ve either played second edition or they’re kind of new.
Rob: I did the same thing. I played basic back in the early 80s and then played [inaudible 00:15:39]. When the first edition AD&D came out, we played that. I don’t think I ever played second edition, never played third or fourth. When I got back into it, let’s say 4-5 years ago, I Googled, “Coming back into D&D. I’m going to teach my kid. Should we play first edition because that’s what I’m most familiar with or is fifth edition good?” There were some really cool threads talking about the pros and cons of it.
In the end, people are like, “Fifth edition is a better,” not better, that was not the word they used, but it’s a faster rule set. The game moves quicker. It’s easier to understand for someone who’s never played it and there’s tons of new stuff being put out for. You can do either one, but consider checking out fifth edition. It’s nice that the rules are available for free. There’s a PDF that Wizards of the Coast lets you down. I downloaded it and I was blown away by the simplicity and how they’ve gotten rid of all of descending armor class, and all these tables to hit, and saving throws and stuff and it’s just come down to difficulty checks with advantage and disadvantages. It’s just really elegant to me—elegant simplifications of things.
I know folks who are used to the old stuff, adapting something new is like changing programming languages from SEED to Ruby or something, seed.net where it’s like, “Oh my gosh, this is such a different paradigm.” Even if it might be more elegant or whatever, it doesn’t feel that way because it’s different. When I was 10, 12, or 14, I just had hours and hours to pour into it, invented our own stuff, and read every book, but I just don’t have that time now. It’s like, “Look, I have two hours a week maybe three hours to hammer something out. What’s fast and what’s fun to play?”
Mike: Now you can go online and there’s like random dungeon generators, and random character generators, and all the stuff, they’re fantastic tools that streamline things. I remember I used to spend an hour or two creating a character and now you can just go and use one of these tools, and you can have a character done in 10-15 minutes tops. That’s just fantastic.
Rob: Yeah.
Mike: I agree. I love the fifth edition rule set overall the other ones over the basic edition, the AD&D first edition, and second edition just because I think the biggest thing that I think it has going for it is that your character will get more powerful as they level up, as opposed to depending so much on items and things like that in order to make you more powerful. That’s the thing I think I disliked the most about some of the previous editions, because you could just make somebody completely overpowered at a super low level just by giving them a bunch of magic items. Whereas with this one, you’re competitive every step of the way with no magic item which is kind of awesome.
Rob: Right, it makes sense. I know we can talk about D&D. This could be a casual D&D conversation with just Rob and Mike, or tabletop gaming. Folks who don’t play D&D might have already tuned out. Those two listeners are gone. I have a question for you. Have you ever been to a conference where the opening 10 minutes, where the host gets on stage and talks about things, sets the stage so to speak, for what’s going to happen during the conference. What’s the best one of those you’ve ever seen? Have you seen any that have blown you away, I think. Obviously, the reason I’m asking you is, we have adapted ours over the years especially last year changed, the whole slide deck changed, the format changed, and stuff. I’m just trying to think about the best way to keep improving that.
Mike: I don’t know about best. I would say the most interesting one I ever saw—and I wasn’t there personally for this—I’m think this is a little bit of secondhand information. I was there the year after and I think that as a result of that previous year, things have changed in terms of policies of the company. It was at a Altiris conference back in, I want to say 2007-2009 timeframe, or something like that maybe it was even slightly before that, but the founder of the company came in through the back, and went through the aisles, and up on the stage riding a motorcycle.
Rob: Okay. Let’s talk to Xander, and on Monday, I want you to do that.
Mike: Sure. I do have my motorcycle. I could do that theoretically.
Rob: Fantastic.
Mike: I think we may need to update the insurance, and waivers, and various other things.
Rob: And all the things, yeah, and rent a motorcycle, and get the drop to let us drive it through the hall. Alright, so that’s not helpful. That was completely unhelpful.
Mike: That’s my job here I think, to be completely unhelpful.
Rob: Exactly. Doing it 438 episodes since 2010—being unhelpful.
Mike: Yeah. I don’t know what the most interesting thing is. I mean I’ve been to conferences where the founder of whatever the business is, will come out and then give a really good opening talk or presentation, and it talks about the future, but it’s not like a 5 or 10 minute intro. It’s usually the keynote speech or something like that.
Rob: It’s a keynote, right. It’s an actual talk. Obviously, at MicroConf, for folks who haven’t been, you and I get up and we have between 10-15 minutes right at the start of the conference where we welcome everybody, we talk about what MicroConf is, we go through a breakdown of attendees, and stages they’re at, and that kind of stuff. It sets the stage for where we’re headed. Because it would be weird if everyone shows up at 10:00 AM on Monday and you and I get up and we’re just like, “Ladies and gentlemen, Jason Cohen, Chris Savage,” or whoever our speaker is and they get up on stage, because it’s not a program, it’s just a disjointed speaker after speaker. There’s no context for all of it. That’s why we’ve always done the welcome of like, “Welcome.” I don’t know. I’m just trying to think of something that’s not a keynote per se. We could do whatever we want. We can’t do it this year because the schedule is already set but next year, you and I could…
Mike: Are you looking for something different like to change it up in terms of saying how can we do this differently, or just looking for ideas of what other things, or are you just looking for validation of, “Is this the best thing for us to do or not?”
Rob: I think we should do it. I don’t think that’s part of the conversation of us not getting up there. It could be super weird if we weren’t there to welcome the people. Someone has to be there. I think we should do something. I think what we did last year was better than what we have done in prior years. I just am looking, is there anything else we can add to that to make it even better. That’s what I’m thinking about.
I think the best one I’ve seen was at SaaStr. Jason Lemkin got up and talked for maybe 15 minutes. It wasn’t a keynote, it was kind of like the state of SaaStr. He talked about the conference, and he talked about their community, and he talked about their fund, and it really was just an overview. It’s like when you think about writing a 10-page paper. You start high level, and then you dig in deep, and then at the end you come back to high level to conclude, and that’s how I think we structure MicroConf.
We have that introduction that really is this high level context setting, and then at the end, we should wrap it up with context and stuff, and we even have to structure the talks that way. We don’t tend to put a super tactical talk as the first talk on Monday because the vibe is off if you do that. That’s it. I think I might try to think back to what SaaStr’s opening was like and see if there’s any elements of that that could apply to us. We are similar to that opening and that we do set context, but I think there’s just ways to do it better.
Mike: What we do is we set context for the attendees at the conference. An idea that comes to mind—and obviously, there’s zero time to do that for this year—this is actually something that I have had an idea of the within the past couple of years like, “Hey, it would be cool if somebody kind of headed this up.” Not that I really had the time to do it, but it’s something that either we could potentially put together because of the audience and community.
But as you said, kind of give the state of self-funded entrepreneurs, or the state of SaaS applications, or the state of software in general for extremely small software companies like ours. Give a 10-15 minute overview of, “Hey, this is some of the major changes that have kind of come out over the past year. This is how things are progressing. These are things that are going on in the industry that people should kind of either be on the lookout for or be careful of. These are some opportunities that you guys might want to think about.” As opposed to what we do right now which is welcome them to the conference which I do think we still need to do that. But I also think that it would be nice if there was this extra piece there that was kind of an opening that did set the stage for other stuff. I think what that would actually probably take is doing interviews with founders, or calls, or surveys, and things along those lines to help gather information from the community to be able to compile that and show it to them.
I did a talk in MicroConf Europe in 2016 that I basically did that. I asked people for information and say, “Hey, could you submit this?” I’m basically writing a talk about it. I included a bunch of that information, but it’s not something I could potentially do like every single year so I just didn’t keep it up. I think something along those lines could be helpful and useful for the audience.
Rob: Do you know what the name of my talk is on Monday afternoon? You have not looked have you?
Mike: You know, I don’t even know the names of all the speakers.
Rob: I know. Well, we do keep a firewall between speakers and sponsors. Literally, we were talking last week I guess and I said, “Yeah, I don’t know.” I know some of the sponsors because there’s a lot of them returning, but I tend to wait until a day or two before to look through all the sponsors. Because this is our editorial firewall. Advertising versus editorial, we don’t link those two up. I don’t want that to influence decisions.
Mike: Right.
Rob: But the name of my talk is, The State of Bootstrapping in 2019. It’s not exactly what you are talking about, but I am trying to give that overview and talk about trends, and what’s happened over the past 10 years. I mean, you saw my Europe talk from eight months ago, or six months ago. It’s an expansion of that.
Mike: That would be cool. I mean obviously, you don’t want to do a one hour talk at the very beginning like that.
Rob: Exactly.
Mike: I don’t know how you would condense your talk into 10-15 minutes. That’s the other thing I think I would struggle with is how to gather enough data that is meaningful and useful to the audience, and present it in a short enough timeframe that isn’t distracting, or it doesn’t create a whole host of other questions.
Rob: Right. We have all these questions and then it’s like, “Alright and now our first speaker.” And people are like, “No wait, I want to hear more. That was in the middle of it. I’m so confused.” What’s up with Bluetick?
Mike: Oh, let’s see here.
Rob: Oh, that? What’s Bluetick?
Mike: What’s that? Could you spell that? I need to Google it real quick while we’re on a call.
Rob: What’s the news on that? I’m sure people want to hear it. Have you been working on it? Are you too bogged down with MicroConf stuff?
Mike: I’ve been so bogged down with MicroConf stuff and all sorts of other things going on. I think we talked about it a little bit in the last episode or the one before that. Just the timing of MicroConf and lots of other things that are going on has been so incredibly bad that I have not had time to look at it. Last week I had to sit down for a day or two and look at renewing my health insurance, because I think most people renew their health insurance at the beginning of the year and mine’s up for renewal on April 1st. I and had to call them and I’m just like, “Look, this is really bad timing.” They’re like, “We need to have this paperwork in by the 1st. Otherwise, it’s going to renew at the current rates.” I’m like, “Dear god.” It’s the worst timing.
Rob: I don’t renew my health insurance. What does that even mean? You have to reapply and fill out paperwork? I’ve never done that.
Mike: They change the plans every year. I don’t know whether this happens for everybody. They change the insurance plans that are available and the rates for all of them change as well. Sometime they will move things around. It’ll change the prescription coverage, or they’ll change what is covered under a particular plan, or they’ll change copays or which hospitals they cover. It’s just like, “Dear god, this sucks.” I have to renew by April 1st or basically, I just don’t have coverage.
It will automatically renew but because of the timeframe, I have to look at it now and figure out whether what I’m going to be doing now is the right thing or not. I was like, “Well, what about an HSA account or something like that?” They said, “Well, in order for you to do an HSA account, we have to give you entirely new plans because these are not HSA certified.” I’m like, “Oh my god.” Then there’s like a health savings account which is not…
Rob: Wait, that’s not HSA. You’re FSA, flexible spending account.
Mike: I think that’s it. Yeah.
Rob: Yeah.
Mike: Yeah. All these terms that are very close to one another that I’m not familiar with because I’m not in that industry. I’m just like, “I’m so confused. Why do I have to learn this right now and have 10 minutes to do it?” Like I said, it’s just bad timing and lots of major things all in a very compressed timeframe and it sucks.
Rob: You’ve been doing health insurance, taxes, prepping for MicroConf, right?
Mike: Yeah.
Rob: And so Bluetick is just kind of ‘blue ticking’ along?
Mike: Yeah, basically. I mean aside from the things that I talked about the last couple weeks. The webcast I’m going to be doing. That’s scheduled in late April. I’ve been doing little things here and there trying to move things along. I’ve also been doing research on the backend framework that runs Bluetick. Maybe this is a good time to talk about that, or maybe we should talk about it in the future episodes. I talked to Andrew Culver briefly about it because he is the founder Bullet Train which is essentially a framework that you can use as a starting point for your app whatever it happens to be. He takes care of all of the fundamental things like sign in, password reset, Stripe integration, and all these things. Basically, you start plugging the logic of your application.
When I was first building Bluetick and started out, I couldn’t really find anything like that, but I did find an open source project where they said, “Hey, here’s the MIT license for this,” or whatever, “and you can use this stuff.” It looked like it was pretty decent it’s just it didn’t do everything that I needed to do, and then you’re seeing some of the same library. I based a lot of stuff in on it, imported some of the code, but then there’s obviously a divergence there. They did their own thing and I did mine.
I went back and looked at it and it’s much farther along than it was at the time, and more advanced in certain cases which would actually make it easier for me to use that and plug in more functionality, but the database tables don’t line up. I’d have to port things over and deal with that stuff. I’m just like, “Is it worth it?” I’ve done a little bit of exploration there, but by porting it over would give me all the core functions or the features of just like a SaaS application would be taken cared of for me, and I wouldn’t have to worry about them. I just don’t know if I have a good sense of how long it would take to do that or whether it’s worth it. It maybe something I just do it over time and not necessarily worry too much about it.
Rob: I think the question I asked is like, to me, your number one goal right now is more paying customers. It’s ensure problem-solution fit, ensure product-market fit, and more paying customers, and this doesn’t do that. I know that it makes longer term, it’s a good call. If you run this app for 10 years, 20 years, then yeah, it’s good to be on a framework assuming that they maintain it. But I think that’s pushing off the number one priority which is get more people in your funnel, close more deals, get more revenue because that’s really the point you’re at. Just my take.
Mike: I totally agree with that. That’s why I haven’t tried to bite the bullet and actually do it. There are certain issues that the app has in terms of team accounts and things like that. I’m just like, I don’t want to go down the path of some of those things right now until I have more customers and more revenue because it’s just not—I don’t want to say it’s not important—it’s not the top priority.
Rob: Yeah.
Mike: At some point, I’ll do it, but I have a hard time doing it now.
Rob: I would agree. There’s always a lot of distractions like that. I think we talked about last time where customers give you more things or even you have more great ideas and you can never implement. You, as part of being a founder and making the right choice, is picking the ones that are going to have the most impact for you. It’s like, “What are you trying to impact now?” To me, it’s your top line, or bottom line, or however you want to phrase that.
Mike: Yeah.
Rob: Cool. I guess in the interest of time, we’ll wrap up here in the next couple of minutes. There’s some new stuff at TinySeed but it’s in that weird phase where we have all these applicants and I’m interviewing a lot of them. I’m having fun doing it. It’s super busy and then like you, trying to get taxes done, prepping for MicroConf. My talk is not done and I fly out basically in 48 hours. I know. The dirty little secret of you do enough talks, and you find that you’re closer and closer to your deadline.
I remember Dharmesh Shah at BOS years ago; it was probably a decade ago now. We were talking and we’re both doing a talk that year I believe. I might’ve been doing like a lightning talking and he was doing a full one. Anyways, he said, “Yeah, I’ll start my talk at 11:00 tonight,” and he did it the next day. I was like, “What? I’ve been prepping for weeks.” I was obviously much earlier in my conference speaking than he was. He said, “Yeah.” He typically sits until three in the morning and just writes his talk all at once the night before and that that’s kind of his best way to work.
That’s not mine because I don’t like staying up that late, but I do find that the pressure of having to get it done often forces me to really focus and ship good material. I can burn dozens of hours over the course of weeks if I have all this time to write the talk. Now the practice of it I think is another thing. I think having more time to practice does improve the talks. Off to figure out some good times to do that.
Mike: That’s something I kind of struggle with too is, getting the talk done early enough to be able to also do a lot of practice. I don’t know about you, I have little hacks and stuff that I put in a bunch of my slides where if I’m going through it—and I have a couple bullet points—if there is a bullet point that has a period at the end of it, then I know that hitting the button again goes to the next slide and things like that. Most people wouldn’t catch those types of things, but there’s little things that I use as visual indicators for myself to know what’s coming next, or to pay attention to a certain thing, or make a certain point.
Rob: Yeah, that makes sense. I guess the last thing for me is with TinySeed. As with any startup in the early days—here’s the difference actually is, nowadays, if I were to start a new company that’s going to build a software product, I would go to Stripe Atlas and I would form an LLC or a C-Corp through their one click thing and it creates a bank account that does all these stuff. It’s a solved problem now. I know that you’re then going to need some other paperwork as you hire employees and stuff. There’s gusto and there’s benefits. There are ways that have simplified it.
It’s not there yet with starting an accelerator and essentially an investment fund. The nature starting those is not as refined. You go straight to law firm, and you’re forming multiple LLCs that reference one another, and there’s just a lot of complexity there. Luckily, Einar, my cofounder with TinySeed, has taken care of most of that. But there have just been a few points where I’ve been involved in conversations as we’re trying to get term sheets nailed down and stuff. I had one simple question about changing one word to make things clearer and it wound up being this 10 email back and forth that got more and more complicated.
I don’t know if I wasn’t explaining myself well, but it was one of those moments where I finally said, “I give up. It’s just going to have to be complicated on the dock because to change it from pre-money to post-money would require a huge paragraph, and all these exceptions, and this huge bulleted list in what is otherwise a 10-word sentence right now.” If we do pre-money, then it’s 10-word sentence. If we do post-money, I think based on what he was telling me, I couldn’t actually understand, it just [inaudible 00:36:04] out of control. That’s the kind of stuff that is so frustrating to me as someone who is trying to get things done.
I was trying to send things to people three days ago and then it winds up being this back and forth back. We were going to jump on the phone, I know it would have helped, it would’ve been the same conversation that happened via email. I think the perpetual frustration of being a founder is, you always have these things that are just outside of your control or maybe your expertise. They get complicated and they become time sucks beyond what they should I think. I’m learning when to just throw my head up and say, “I’m going to give up on this one. I’m not going to fight this anymore. I’m not going to waste anymore time.” I think as a younger entrepreneur, I wasted a lot of time fighting against things like this rather than eventually just saying, “Look, it doesn’t really matter. Just do it the way it is.”
Mike: You raged against a machine when you were younger?
Rob: Indeed I did, over and over.
Mike: I think that that type of problem happens in general when you start a business. There’s going to be certain things that are out of your control and it sucks because you want to move fast and you want to get them done. At the same time, I think that one of the issues that you’re running into is that, when it comes to legal terminology, there’s hundreds of years of history of legal things that have happened, and there is precedence that has been set. When you say one word versus another word, it can drastically change how that is interpreted in the eyes of the courts. It sucks to have to deal with that stuff.
I don’t want to say it’s exactly like programming because with writing code, you have to be very explicit about what you wanted to do, and then what the exceptions are. But with legal terminology, there’s always—I don’t want to say ambiguity—but there’s different ways to interpret the exact same words. It kind of sucks sometimes.
Rob: Yeah. It is what it is. I know that people out there are probably not in their head. It’s like taxes, legal stuff, there are others. I don’t know, plumbing code in your SaaS app. It’s things that don’t move your business forward.
Mike: You said plumbing code and I thought the actual plumbing pipes.
Rob: That too.
Mike: [inaudible 00:38:09].
Rob: It’s stuff that doesn’t move your business forward.
Mike: Right.
Rob: That’s all I have to say. We should probably wrap it up for the day huh?
Mike: Yeah, I think so.
Rob: Most of our episodes are not this casual. We answer a lot of listener questions as well as dive into detailed and interesting startup topics. If you have a question for us call our voicemail number at 888-801-9690 or you can email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups.
