Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike inspired by a listener question, talk about whether or not the Micropreneur dream is still alive. Some of the topics discussed include reasons to start a business, stages of micropreneurship, and legacy.
Items mentioned in this episode:
Transcript
Mike [00:00:00]: In this episode of “Startups for the Rest of Us,” Rob and I are going to answer the question “Is the micropreneur dream still alive?” This is “Startups for the Rest of Us,” episode 307.
[Theme music]
Mike [00:00:16]: 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 [00:00:25]: And I’m Rob.
Mike [00:00:26]: – and we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:00:30]: Doing pretty good. I think we’re getting ready to send some emails to the MicroConf mailing list here in the next few weeks, because we’ve settled on the dates for MicroConf Vegas next April. If you’re interested in joining us and a few hundred of your closest founder friends in Las Vegas for, either MicroConf or MicroConf Starter Edition, head over to microconf.com and add your email address to our list, and we’ll let you know as soon as tickets are available.
Mike [00:00:55]: Are you saying we’ve actually planned something a little bit in advance?
Rob [00:00:57]: [Laughs] Once every two or three years we do this, and I think we might be ahead of the game on this one – although as I’m saying that, I’m realizing there’s still time for us to slack and get behind the eightball like we usually are.
Mike [00:01:08]: Yeah, cool. I talked a little about it a little bit this past week, about some of the changes that I was testing out for Blue Tick, and hit a couple of snags here and there mostly due to various RFC issues where they’re not real clear about stuff, or they imply things that are just absolutely not true. So, I’ve had to work through some of those, but the testing’s gone really, really well so far. I have a internal launch date that I’m shooting for at the moment, but I need to do a little bit more planning on that before I can commit to that actual date. I have a date in mind. I just want to go through all the lists of things that really need to be done before I can publicly call it out and say, “This is going to be the date.”
Rob [00:01:42]: Is this update just an internal rewrite, or does it add new functionality to Blue Tick?
Mike [00:01:46]: It adds new functionality. It allows you to see all the different emails that have been sent and received regardless of whether they were sent through Blue Tick or not, so when you add in a contact you basically just put in the email address of somebody that you want to add to the system. What it does is it matches that email address up to all the emails that you have sent or received from that person historically, even before you signed up for Blue Tick, and then it will be able to show those to you directly inside of the app. It’s a nice way of being able to mind your mailbox and identify people that you’ve started conversations with, and then they didn’t get back to you, and then – for whatever reason – you forgot about them. The app will have the ability to show those things to you.
Rob [00:02:24]: Cool. Given this, do you have a public launch date? At this point, you’re basically in early access right now, right? You’re getting your folks who’ve pre-purchased from you into the app and honing that and everything. Do you feel like your launch date is within reach?
Mike [00:02:37]: That’s what I’m still trying to sort out. I’ve got a list of all the things that need to be done, and I’m trying to figure out a time estimate for each of those. I know in my mind, “This is the date that I want to hit,” and I’ve got the list of things that need to be done, but I don’t have all the time estimates for all those things matched up and added up so that I can say, “Is this actually reasonable to be able to hit that date or not?” That’s what I’m working on right now, and that’s what the next step is.
Rob [00:03:00]: Mike and I really want to congratulate Glenn Germaine of My Practice. Glenn is a several-time MicroConf attendee. He’s come to MicroConf in Vegas with his wife. They fly up from Australia. He’s also written into the podcast several times, and has just been a supporter, and we’ve really appreciated our dealings and interactions with Glenn. His company was acquired by Best Practice Software, and he actually tweeted it out. He said, “Shout out to all our MicroConf buddies, particularly Rob Walling, [Single?] founder, for the years of advice.” He linked over to the press release, and so we have just a big “congratulations.” It’s such a big step to get to that point. He really grew My Practice on his own, boot-strapped it, and grew it to several employees, if I recall. Didn’t he have ten, 15 employees? That’s a big deal, to be able to exit that. We wish you the best, Glenn, moving forward.
Mike [00:03:45]: Yeah, and Glenn’s been coming to MicroConf since 2012, so it’s definitely been a long-time listener.
Rob [00:03:51]: Yeah, very cool.
Mike [00:03:52]: Yeah, congratulations, Glenn.
Rob [00:03:53]: What are we talking about today?
Mike [00:03:54]: Well, today what we’re going to be talking about is, “Is the micropreneur dream still alive?” This is inspired by a listener email from Scott Underwood. I’ll paraphrase some of the things that he said, but some of the different pieces he went into were the fact that, Rob, you just recently announced the sale of Drip a few months ago to Lead Pages, and it ties into Glenn Germaine’s announcement that he’d sold My Practice and is presumably going to be joining them for a while. Another announcement that came out recently was Patrick McKenzie announced that he was selling Appointment Reminder and, in addition to selling Appointment Reminder, should move on to other things. One of the things he’s doing is moving on to join Stripe as a full-time employee.
[00:04:31] Scott wrote to us and said, “I sent Patrick a quick congratulations email just before he broke the news, but it felt like the day the music died. My heroes are giving up on the dream I’m chasing and going back to being employees. Life’s a journey, a transition, growing families, etc., so priorities change. The Startups for the Rest of Us troops might need a little rally that the dream is still alive and attainable for those of chasing it. Thanks again for all the advice and entertainment over the years. Looking forward to more.”
[00:04:50] A couple of things I wanted to call out in this email snippet that I read out was that, I agree, priorities definitely change over time. But I think if you look at the three stories that I mentioned earlier, with Rob and Glenn and Patrick, the fact of the matter is that all three of these stories – if you look at them very objectively – they are success stories. All three of these were built from the ground up. They were built from nothing and were sold to the betterment of the founder. I think that if you look around at the general, broader community of people who are boot-strapping companies and building them, you can trice that back to MicroConf. You can see that MicroConf tends to sell out very quickly, and it’s aimed directly at this particular audience.
[00:05:30] So, you have to ask a couple of questions. The first one is: Are they pursuing something that’s ultimately going to put them back in the same position that they were in, which is working for somebody else? The second one is: Are they all delusional? The answer to that is, probably not, and I’m hoping it’s [laughs] really not. Certainly for some small segment of them, yeah, there’re some delusions of grandeur, but the reality is that people start businesses for a wide variety of reasons.
Rob [00:05:53]: Yeah. First off, thanks to Scott for sending that. I think it’s an interesting sentiment. I certainly thought it before I sold DRIP. It definitely crossed my mind, “What will people think?” That wasn’t a driving factor in the decision either way, but I did wonder how that would feel, and it’s interesting that there has been quite a bit of transition recently, and I bet just beyond Glenn and Patrick and myself, I bet there’re other folks here. I know there’s a lot of folks selling their aps and moving on to other things.
I think the thing to think about is – I don’t want to speak for Patrick or Glenn – but for me specifically, the micropreneur dream was to not work for someone else in a capacity that I didn’t enjoy, and to be stuck with that until I retired. These are the things. I didn’t work till I was 65 for someone, just trying to cram money into a 401(k) and just eke by and do the 9 to 5 and work my way up the corporate ladder. If you get fired or you leave that company, maybe you can do a lateral move. Maybe you won’t have as much trust. It’s kind of the rat race, right? I didn’t want to do that, and I didn’t want to work till I was 65.
[00:06:52]: So, while you can say at this point in time, this snapshot, “Yes, Rob now works for someone else again.” – something I haven’t done for about eight or nine years, I think, since I’ve been an employee at another company. But I ask myself: a, am I forced to do this until I’m 65? The answer is no, and that’s based on the financial means that happen from the exits and other things that I’ve had. The other thing is I’m working very much in a capacity that I really, really enjoy. I’m given this creative freedom. I could go into the specifics of it later, but I’m basically a product person. I’m doing what I was doing on DRIP anyways, but with a lot less headache and little to no – or, a lot less, I’ll say – financial risk. When you’re running your own company, you’re waiting to get just swatted by your competition, or to run out of funding, or to run out of money, or whatever, and that’s gone.
[00:07:38] So, I’ll just preface that by saying the fact that currently at this point in time I work for another company, given how different it is – so ten years ago, the last job I had, compared to now, it’s just night and day. I was basically a programmer just slogging away in a corporate environment. What I’m doing today is night and day, and I owe that to my entrepreneurship, and to the micropreneur journey. So when it’s like; Is the dream still alive? It’s like : Yes, it changed my life completely. Night and day. If I had not done that I would be in a completely different situation, with a completely different outlook and, again, I’d be slogging away, putting a couple hundred bucks a month into a 401(k), counting the days until I could retire and be in control of my own time. So, that’s kind of my initial thoughts, and we’re going to now dig into all matters of thinking through what this looks like.
Mike [00:08:23]: A couple of points that you made there which fed off the initial point, which was people start their business for a wide range of reasons. Some of these reasons are negative, and that’s because they want to move away from something. Then there’s other reasons why someone would start a business which have a more positive slant to them. They want to move toward something. Just to illustrate a couple of those examples, somebody might hate their job, or they hate their boss. There’re definitely reasons to start your own reason that have that negative slant. It’s because you’re trying to move away from a current situation. Rob just talked about the fact that he didn’t like his job. He was sitting there slogging away as a programmer, didn’t enjoy it. Those are the types of things that somebody would say, “I don’t like this. I either want to find a new job.” and that’s what the vast majority of people do. The other option is to start your own business to create a job that gets you away from that.
Then there’s the flip side of that, those things that you’re trying to move towards. It’s not to say that there’s only one reason to start the business. A lot of times these things factor into each other, and there are multiple things at play. You might want more money, or you might want some sort of financial independence. You might want to travel. You might want more time available to work on your hobbies, or spend with your family. Those are the ones that I talked about that have a much more positive slant to them. You’re moving towards something. Those are goals that you’re trying to achieve.
Rob [00:09:37]: Everything you have in this list are things that – these were goals that I wanted to achieve by getting out of just the salary employment of being just a 9 to 5 developer. So, I think this is really poignant, and I bet these things resonate, I would bet, with the majority, if not all, of our audience. The thing is I achieved all of these. Within a few years of even DotNet invoice, and in the early days, pre HitTail – these are all these little $2,000, $3,000, $4,000 apps. I hated my job, so I quit it. I hated my – I didn’t hate my boss – but I didn’t enjoy working for other people, so I left that. I did have a little more money. I definitely had time to travel, and I definitely had more time with my family.
[00:10:14] Then things change, right? Two years later, I personally got a little restless and got a little bored and wanted to have more impact on the world and do more interesting things, and working the four-hour work week wasn’t as interesting after a couple years. But it was amazing for the couple years that I did it. So I think that’s something to keep in mind. I don’t think you’re going to find your end state and be like, “Now I’m here, and I’m a micropreneur, and I’m independent, and I’m done for life.” None of us have done that. You look at Patrick McKenzie’s journey. You look at Jason Cohen’s journey. You look at my journey. Just everybody continues to evolve, because we’re entrepreneurs, and we’re ambitious, and we’re curious, and we need to constantly be learning. That means you have to do new things, and often those new things have to be bigger and scarier challenges, and oftentimes that may not look like you think it’s going to look. It may not look like raising a round and starting a big company. Maybe it means exiting your company and working for someone else to see if you can have an impact.
Mike [00:11:06]: That just kind of illustrates that the reasons that people exit their businesses is just as varied as the reasons that people start them, and some of those reasons overlap. For example, if you want more money and you want more financial independence, one of the ways to get that is to sell your company, to essentially get rid of all the responsibilities and the things that go along with it and essentially give yourself a financial reward for that that allows you to go do other things. The reasons you start the business can overlap very much with the reasons that you exit it.
[00:11:37] Now, I think that the biggest question to ask out of all of this is, “What is the end game for you?” I don’t think that there’s any right or wrong answer here that’s generally applicable to everyone, but it ties back to the classic “Rich versus King” argument. There’s two different variations of this. One of them comes from an article – we’ll link both of these in the show notes – but one of them comes from Noam Wasserman, who is a – I forget whether he’s at Harvard or MIT, but he’s a professor there who teaches about entrepreneurship. He talked about the idea of “Rich versus King” being a founder’s dilemma where you are trying to decide whether or not you’re going to take external funding. Are you going to try and build a business and make it huge and be rich because of it, or do you just want to grow it to the point where you are king of that particular industry, but you don’t necessarily don’t have a ton of money, because you didn’t take all the money, and you didn’t take any of it off the table.
[00:12:29] There’s another one a year after that, in 2009, by Jason Cohen, who talks about this particular dilemma as it relates from the standpoint of selling a company. Do you want to build a company and just run it as a lifestyle business – and “lifestyle” in air quotes, because Oprah’s got a lifestyle business, and she has quite a lot of money [laughs]. There’s different ways to look at that, but the idea is that you want to own that without giving up any ownership. That is your identity. You see it as an extension of yourself. The flipside of that is taking funding, going big – which may or may not work out – but it’s a risk. All these are about tradeoffs, about whether or not you’re going to take that external funding, give up some control. Again, it’s the classic rich versus king argument for that.
Rob [00:13:09]: Yeah, and the thing to keep in mind is as you go through this journey – I mean, I already touched on it for myself – but this journey of entrepreneurship is just that. It’s a journey. It’s a path, and your perspective is going to change. Whether you get married, whether you have kids, whether you start to travel, you’re just going to – that’s all going to shift you. It’s going to shift your priorities and your focus and the thing that you really, really value the most. To be honest, your current situation is going to heavily serve to shape your motivations. So, if you think about how things are going to change over time, let’s throw out some stages of entrepreneurship where step 1 is like, “Well, I hate my job. What can I do?” You go, and you find MicroConf, or you find this podcast, or one that – Justin Jackson, or Patrick McKenzie, or just somebody, and you follow them, and you figure out, “Oh, this is actually possible.” Right? Then maybe you validate an idea, and step two is building an idea, and three is launching, and four might be some growth.
[00:14:03] The, after that – let’s say you’ve quit your job at that point – what is the endgame? What is step five? Is it to just die with the most money? Is it to just sock money away? Is it to have freedom? Put yourself in the shoes of someone who has come from exactly where you are, and you’re working a salary job, and in your mind just getting out of that salary job is it, and you feel like you’d be happy for the rest of your life. That’s not what happens. Over and over, we see that it’s really good to have that motivation – for it to be strong – but once you get out of that salary job, you’re going to be super-happy for, I’ll say, a year or two, maybe three, depending on your disposition. Then you’re going to get restless, and you’re going to start thinking about, “What else could I be doing? This person over here’s doing something interesting. Maybe I should launch another product.”
[00:14:45] Or, you could perhaps even feel instability in your revenue. When I had HitTail at a certain point and Google tried to kill it two or three times accidentally, I suddenly realized, “Boy, I could lose my whole micropreneur dream that I have going right now overnight if Google decided to just nuke all the key words,” or whatever. So, certain things come up that then start making you think about, “What is next?” “What is next?” I think being in a steady state of just making eight grand a month, just enough to live, and trying to do that for 20 or 30 years – I don’t think any of us are going to be happy with that, and I don’t know how particularly stable that is. So, you have to start thinking about that. What is next? Is it to go bigger, or is it to diversify your revenue? Is it just to enjoy a few years of super-relaxed time and then think about what’s next? There’s a lot of thought that goes into this.
[00:15:30]: And you don’t need to think about that until you get there, to be honest. If you still are in a salary job and you don’t like it, your number one goal should be to get out of that. It should be to make enough money to get out of that. Once you get there, enjoy it. Live it up, and then when you do get bored, just think back to this episode and come re-listen to it. It really does come back to the arrival fallacy, right? You’re going to think that you will have arrived once you’re free from the 9 to 5, but it’s a fallacy. That doesn’t mean you shouldn’t do it, because it’s awesome to enjoy it for the time that it’s going to keep you happy – and that will be, like I said, one, two, three years, depending on your personality. Then you’re going to look at the next thing, and that’s how we grow as humans. We evolve over time.
Mike [00:16:06]: Yeah, I think the point of all that is even after you have, quote-unquote “arrived,” your life is still going to continue after that, so you still have to find things that are going to be interesting. Relating back to what you’ve said about the different stages of the micropreneurship, and the fact that your current situation is going to shape what your motivations are, in the early stages your focus is much more on yourself and your own needs : What are the needs of you and your immediate family, so that you can pay the bills and keep a roof over your head? Then it extends past that, and as you grow the business you extend that. It extends out to your family, or friends, or your co-workers, or employees. It extends out to your customers, and eventually to different parts of the region that you live, or the country, or the world that you want to have an impact. Over time, that impact is going to grow. The question becomes: How far is your reach? How much of an impact are you making?
[00:16:59] The goal of entrepreneurship is really to make an impact in whatever way is most appropriate for you. That question you need to answer for yourself is what do you want to have an impact on? I think I saw on Twitter Michael Pryor, who is the CEO of Fog Creek, had tweeted over to Patrick McKenzie – after he announced that he was going to be going to Stripe – and he said, “This is the perfect place for you to maximize your effective output on the world.” I think that’s a very poignant quote because of the fact that Patrick McKenzie is in a position where he probably doesn’t necessarily have to work for anyone else. But what is ultimately going to make him happy? He could go back to consulting. It didn’t seem to me like he particularly cared for that, although he could make a very successful career out of that if he wanted to.
[00:17:42] But the reality is that he comes from the bootstrapping world. He likes dealing with entrepreneurs. Looking at that from an outsider, I look at that and say: I agree with Michael. I think that going to Stripe and working with them to help entrepreneurs around the world, and small businesses, to succeed, that fits Patrick – from what I can tell – to a T. I mean that’s a perfect fit for him. With Stripe’s backing he essentially has resources that he can bring to bear on a problem that he sees as a worldwide problem of helping people to succeed with their businesses. The ability to bring Stripe’s resources to that particular problem – that is a huge impact for him. I think that, looking at that, if that’s his goal is to make an impact, I can’t think of a better way for him to do it. This relates back to the question of: What is it that you want to have an impact on. What are your goals? How do you achieve them? Even once you’ve achieved them, what’s next?
Rob [00:18:34]: Yeah, and there’s actually a pretty interesting chapter in Chris Guillebeau’s book. It was his first one. It was like “World Domination,” I think. He basically talks through entrepreneurship and some other stuff, and then late in the book he talks about legacy. He said at certain point, you got to start thinking, “What’s my legacy?” I remember reading this when it came out, which was probably – I don’t know – maybe 2010. At the time, I wasn’t ready to think about that. I remember dismissing that chapter out of hand, just being like, “I don’t even know what he’s talking about. I’m never going to think about that.”
[00:19:05] Then, lo and behold, a couple of years later I started realizing, “Wait. There’s something more here for me. Running businesses making $2,000 a month for the rest of my life is probably not the best use of my abilities. It’s not going to have the maximum impact. It’s not going to help people. It’s not going to help me and my family in terms of financially and freedom and all this stuff.” There’s so much that goes into this decision, and so I think at a certain point, as I said, you will probably start to shift and to think about your legacy.
[00:19:32] You know, there’s one other thing I wanted to bring up. I was thinking about Joel Spolsky and Jeff Atwood. I remember both of them just blogging in the early days. Joel Spolsky – what – around 2001, I think, started; and Jeff around the time I did, which I think was 2005. I watched Jeff move from a salaried employee to then working with Joel on Stack Overflow to then leaving Stack Overflow. Then they raised funding, and then he left and went to start his own – is it Discuss? Is that what it’s called?
Mike [00:19:56]: I forget what the company is called, but the product is Discourse.
Rob [00:19:58]: Discourse, yeah. Then the same thing with Joel. Joel was all about bootstrapping a real software company, and he built Fog Creek with Michael Pryor, which was awesome. Then when they started Stack Overflow, I was just totally shocked. I just thought he would run Fog Creek forever. Then when they raised funding, I was like, “What? But Joel always said don’t do the funding thing.” But then if you listened to his rational, it really made sense. They just had started a different business. He wanted to do something bigger. There was all this stuff that went into that decision to do it.
[00:20:24] So I think that’s even another story. I remember seeing that and hearing him talk it through, and being like, “That actually makes sense.” “That makes a lot of sense.” It didn’t tell me, “Oh, man, I don’t want to start a Fog Creek now,” which before I had wanted to start, like a software company. It didn’t make me think that I didn’t want to go down that path. It just made me think, “Wow, he’s just entering another chapter of that journey, and maybe I’ll get there someday.”
Mike [00:20:46]: If you look at examples of not just Joel and Jeff, but lots of other people in the bootstrapped world, as people grow their businesses, as they do things like that – they launch companies, and they exit them – it feels to me like they do bigger things over time. Nobody sets out to do something smaller than the last time. They want more challenges. They want to do things that are interesting to them, so the next thing always seems to be bigger than the last. It’s because people want to be challenged. Nobody wants to do the same thing over and over and over again. So, I think that what you’re seeing is as people move through this journey they start doing things that, to you, are unexpected, and it’s because you’re not necessarily in that situation. You don’t see all the things, and you don’t see the challenges that they’re having as boring. You look at them and say, “That’s exciting. I’d love to experience that.” But they’ve been through it probably numerous time, and they say, “I don’t want to do that anymore. Let me do something that’s completely new.” That’s why it makes sense to them, and from an external standpoint it really doesn’t sometimes.
Rob [00:21:41]: So, this is some stuff to think about, and this specifically relates to Patrick and myself and Glenn. The cool part is I think, a) this legitimizes this entire path of starting small. If you want to just stay small forever there are examples of people doing variations of that, where they just stay as the micropreneur, the micro [ISP?], and that’s totally cool. If you get there and you decide you want to do that, fine. But if you get there and you decide you get bored, this is the path. Look at what Patrick’s done. Look at what I’ve done. Look at how other folks have stair-stepped their way up.
[00:22:11] So, I think this: a) legitimizes it, but b) I think it’s cool that we’re still able to comment. We still have so much in common, right? Even when I was growing DRIP and we’ve been acquired now, I can still comment, I feel like, pretty intelligently on the early days, and how to – thinking about ideas and how to validate and how to find a market. I actually feel like I have more knowledge of that now than at any time previous. Just because I’m further away from it doesn’t mean I still don’t have a finger on the pulse of what’s going on there. Maybe over time, maybe in a decade, I won’t anymore. but right now I think the stuff we say on this podcast is still valid for a wide range of people, all the way from just trying to seek their idea, to building into a seven-figure SaaS business. I think there’s no question about it.
[00:22:57] The other good thing is there’re always people that’re kind of coming up behind us. You know, people who are currently earlier in the journey. So, you look at maybe Justin Jackson, [Kai?] Davis, maybe a Jordan [Dahl 00:23:09] from the Bootstrap Web podcast, Ryan Battles – I mean there’re people out there who really are focused on the early-stage stuff, and I think that that’s the cool part. This stuff’s all in flux, and people are at different stages. So there still is a lot of good information being created at all stages of this bootstrap journey.
[00:23:29]: So, the question I think we want to leave you with is: How far is your reach now? How much of an impact do you make, and how much do you want to make? The idea that entrepreneurship is – the goal of it – is to have an impact on yourself, on your family, and then maybe on the world? I don’t want to sound too grandiose, like starting DonNetInvoice had an impact on the world, but it certainly had an impact on my own life which allowed me to then change things, and change our lives. So, the question you want to think about as we leave this episode, I think, is: What do you want to have an impact on long-term? What do you want to start having an impact on? Maybe that starts with yourself. Then maybe the next one is your family – meaning you have more time, or you can travel with them. Then beyond that, that idea of legacy. How do you want to impact those outside of your immediate sphere?
So, thanks again, Scott, for the question.
[00:24:09] If you have a question for us, Mike and I very well may discuss it on the show. 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 of each episode.
Thanks for listening, and we’ll see you next time.
Episode 306 | Mixing Subscription and One-time Pricing, Angel Investing, Options for Recurring Payments, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer some listener questions including mixing subscription and one time pricing, options for reoccurring payments, affiliate programs and more. Mike also gives some recent updates on his progress with BlueTick.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of Startups For The Rest Of Us, Mike and I discuss mixing subscription and one-time pricing, angel investing options for recurring payments, and more listener questions. This is Startups For the Rest Of Us, episode 306.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome in building, launching, and scaling software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike [00:33]: And I’m Mike.
Rob [00:34]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
Mike [00:38]: Well, I’ve had a couple of pre-order cancellations in the past week, which is a little bit disappointing. But one of them never got to the point of going through the on-boarding process. They never even connected their mailbox to the system – to Bluetick – and their concern was essentially privacy. They were really just trying to limit the number of applications that have access to their mailbox. So there is really no way for the software to work right now without that, and I can think of things down the road that might enable that, but it’s just not going to happen any time soon.
That was one of them. And then the other one, they had some other tools that they were looking to replace and then the vendors came back and implemented some of the things that they were lacking that I was building. So it’s unfortunate on both of those things, but the first one there’s really not much you can do about that, and then the second one, I mean, that kind of thing is just going to happen. Like I said, it’s a little disappointing, but I don’t think that it’s any reason to panic at this point.
Rob [01:29]: I think that other vendor building that extra feature is a bummer, but it’s not the end of the world because you just need to out-feature them, right? You need to stay ahead of them and innovate and stuff. Is that competitor a large competitor that you think could swallow up the market, where everyone’s going to be telling you – kind of like when MailChimp launched automation and everyone was saying, “Oh no, and MailChimp launched automation. Is that better than Drip?” and then we just had to keep addressing it. Is that what it’s going to be? Or is this competitor kind of an also ran or a lesser known player?
Mike [01:56]: No, they’re a big competitor, and they’re funded. And – how do I put it? The things that they implemented still don’t completely overlap with what I’m doing. The reason that the person was switching was they had a short list of things that they had that they needed that the vendor just simply didn’t have. And then when the vendor went in and added them, they’re like, “Oh, I’m sorry. The vendor just added a bunch of these things. And they were the reasons why I was going to switch away, because you had them and they don’t. But I have all my systems set up through them.” So it would have been painful for them to switch, and there’s a lot of other things that they probably use with that vendor that the customer would have had to wait for me to implement. So it would have been kind of painful, and because it was so integrated in those processes, it would have been difficult for them to switch. So it’s probably best that this happens now kind of and left the door open to possibly switch over at some point in the future.
Rob [02:44]: I think you’re going to hear this again. So I think you’ll either need to figure out a way to counter that objection, or build out enough functionality that someone would consider leaving whole-hog from that vendor over to you, or from that competitor over to you. Because otherwise, I have concerns that if they become the de facto for this type of sending, and everybody knows that, it’s really hard for you to get a foot-hold in the space.
Mike [03:07]: The thing is, they don’t even do like the email sending. So that’s the thing, is like it was just this customer wanted certain features that the vendor didn’t have, and the sending of the emails would be really nice and helpful, and that’s not what they have and it’s not what they implemented, but they implemented enough that it’s like, “Okay, well, yeah, I’ll stick around for a while longer.”
Rob [03:26]: Right. But then the other one I’m actually more concerned about the fact that he didn’t want to connect it due to security issues? I think other people are going to balk at that as well. What kind of education could you put in place – I’m brainstorming here. How can you educate people? How can you overcome that objection in the future, because if one out of – what do you have 10 or 15 pre-orders? And if one person out of that many cancelled, I have to imagine that that’s going to come up again.
Mike [03:51]: I had pretty in-depth conversation with them about it, and it feels to me like it’s much more of an edge case than, I’ll say, a mainstream thought about limiting the number of applications that have access. So one of the things right now that I don’t have implemented is any sort of OAuth mechanism to access the mailbox. It’s all directly done through one-time passwords if you’re using Gmail, or just the regular passwords if you’re using other mail servers. So that’s something that I could use to allow me access without having to provide the credentials into my system, and then they can revoke it at any time on the other side. You can do that with one-time passwords as well, but there’s only so much that you can speak to those types of points. I mean, if somebody is just not fundamentally not comfortable with your products interacting with their mail server, there’s really only so much you can do. And I think that there’s enough people that are okay with it that that’s not going to be a big deal.
Rob [04:44]: Yeah. I think you’ll know more as you have tens and/or hundreds of conversations. Then you’ll start to see a pattern. We had concerns in the early days from early customers about deliverability, because they just – it was an unknown. And that was a big thing we had to educate them on, because they kept saying, “I’m on MailChimp. How do I know your deliverability is as good?” And at that time, we were actually sending through, essentially MailChimp servers, right? Because we were using Mandrel, and so we always brought that to the table and basically said, “Look, our deliverability is as good as them. We actually ran parallel tests and we saw the same results. It was within a tenth of a percent deliverability either way.” And so we took the time to really focus on that one, because it was – we don’t get that almost at all anymore, because we’re just now, you’re accepted as a major player, but in the early days, that was for some reason this big concern of everybody’s, and it’s funny because that’s never been a concern of mine. I know you need to worry about it, but I figure if someone’s sent an email, they probably know what they’re doing.
But all that to say, I think that in the early days since you’re not a brand name, and since people don’t know who you are, that you are going to hear these types of things, and the more you can have prepared to really address it directly, and to be like, “You can revoke this at any time. These are the only things we look at…” and blah, blah, blah – whatever you can do to basically minimize it. You’re never going to talk everybody out of that concern, but if ten people raise it over the next six months and you can maybe talk five of them out of it – and it’s really education. It’s not even talking them out of it, it’s just educating them to the point where their fears are allayed, I think you’ll be in good shape.
Mike [06:09]: Yeah. I mean for the, I’d say the first batch or two that I’ve added in, I don’t know if that’s going to be too much of an issue. Most of the people I’m talking to know what my background is, and I can explain to them, “Okay, this is how everything’s encrypted. All your user names and passwords are encrypted. You can’t even get the user names and passwords of mail servers out of the system. There’s not a way to do it. You basically have to crack open the system, hack into the entire server, pull out the database, and then decrypt the information inside of the database for each of the records.” And at that point, there’s much easier ways of getting information.
But I also understand that access to your entire mailbox could be a huge issue for some people. So, as you said, there’s only so far you can take that conversation and try to convince somebody that, “Hey, this is going to safe – or at least reasonably safe – and you’re not going to have to worry about it.” But my bigger concern is down the road, when there’s people who are signing up that I’m not directly talking to, that I’m not having those conversations with. And I can’t answer those questions, because they’re not asking them. They’re on a website.
Rob [07:11]: And that’s where having that as a question right next to the credit card form, or right below it in the FAQ on the pricing page, or just something where it’s pretty prominent, I think is going to be a win. That’s where these early days of hustling and talking to people builds up not just your customer base, but it’s education of what the standard objections are. If you start noting these down somewhere in a Google doc and you’re able to say, “This was the objection, this is the reason why that’s not a big deal,” and I saved reams of those things. I probably had 20 or 30 by the time that we launched Drip. I had objections, I had FAQs, and answers I provided via email. So I just had it all as text, and then we basically pulled from that to build the marketing site, and not only the marketing but the FAQ piece of it. That’s such a big win. That’s something you’re pulling out of right now. The learning right now is worth way more than the revenue.
Mike [08:02]: Oh, definitely. I have probably 50 or 60 pages of notes and in various Google docs with like – every time I have a conversation with somebody I take notes on it. So I keep all those notes in those Google docs, and I date them all so that I can just go back through and eyeball it and see who I talked to, and when I talked to them, and it’s all in one spot. Actually it’s in several different spots, but I think it’s in five different documents based on when I talked to them. So I keep each conversation in a single document that maps to where in the sales funnel they were at the time I had the conversation.
Rob [08:31]: Very cool. From my end, when to log in to my calendar app, it’s on my iPhone, which is called Sunrise. Have you ever used it?
Mike [08:39]: No, but I’ve heard of it. Didn’t Microsoft acquire it?
Rob [08:41]: They did, and in typical funded startup with no business model, Microsoft acquired them and shut the app down. And there’s been a bunch of notifications and so this is not a surprise, but it’s such a bummer because it is by far, in my opinion, the best calendaring app on the iPhone.
Mike [08:57]: Minor correction there, was.
Rob [08:58]: Was the best. Thank you very much. So I’ve switched. I’m using Tiny Calendar right now which is fine. And the Google calendar client for IOS, it’s decent, right? It’s not terrible but – and I’ve also tried to use the Outlook IOS app because they basically bought Sunrise and then tried to integrate some of that into Outlook, but it’s not the same. It’s nowhere near as polished and the UX just isn’t as good. So thanks to Derrick Reimer for initially introducing me to Sunrise, and now I think we’re all looking for a replacement of that.
And that’s a bummer. I don’t like it – it kind of irritates me when a startup starts with no business model and you’re just counting the days until they get acquired. I mean, right? In most cases that’s what’s going to happen. They’re either going to go out of business because they ran out of funding, or they’re going to get bought right before they ran out of funding, and the app’s going to shut down anyways. So it’s a little bit irritating.
Mike [09:45]: Definitely disappointing. So other Bluetick news here is we’re testing a pretty massive update to a lot of the backend infrastructure where we’re introducing an event messaging system, so that as different things happen in different parts of the application, that it will be able to send messages back and forth. And it allows us to react to different things that happen. So if somebody opens an email you can trigger a message that will perform a bunch of different actions. You can chain those things together. And there’s a huge amount of work that’s gone into this, but it’s kind of nearing the completion phase, but it allows the entire system to be a lot more scalable. And because those messages can be just pulled off a queue and processed, and if anything fails along the way then it’ll reprocess it. Obviously, there’s a lot of care that you have to have in certain cases where, if you don’t want obviously an email that could be sent more than one time, then you have to be very careful about concurrency aspects of that stuff, or whenever certain things are being shut down or started up. But like I said, it’s a huge update that we’ve been testing for probably close to two months now.
Rob [10:46]: Oh, man. Wow, that’s a long time, man.
Mike [10:50]: Yeah. Some of the stuff is just things that we’ve never worked on before, and then there’s error messages that we have to try and figure out exactly what they mean. I read one to you earlier. For the listeners, the error message I’m getting is, “The condition specified using HTTP conditional headers is not met.” which doesn’t mean a whole heck of a lot. So there’s a little bit of research involvement in some of this stuff.
Rob [11:09]: “Stack overflow. Help me!”
Mike [11:13]: Yeah, no kidding. No kidding.
Rob [11:14]: Cool. So well let’s dive into questions. I think we were talking about doing a more in-depth updates episode in the next few weeks, so we can dive further into this kind of stuff. But we have a bunch of questions today. I don’t think we’ll get through all of them. And actually, if you listen to this and you have either a topic suggestion for Mike and I to discuss, or a question that you have about anything startups, SaaS related, even tech related, tabletop gaming related – no I’m just kidding about the last one – but send it in to questions@startupsfortherestofus.com, because we are at this point running a little bit low on questions, so I bet we’ll be able to answer your questions sooner rather than later. And at this point we do have some guests lined up over the next few months. We don’t need topic suggestions with a guest included, because we don’t like to do a ton of interview stuff, because we’re not really an interview show, but definitely questions or topics are welcome.
So our first question is from Brian Matheson and he says, “Hey guys, many thanks for all your work on the podcast. I’m a big fan and I’ve learned a lot over the years. I’m a freelance videographer and I’m working on launching a new project that doesn’t require me to do stuff on a project by project basis. I want to collect recurring payments and communicate with businesses in this new project. At the moment, my plan is to use Stripe and link that up to my CRM. I’ve been researching payment systems, but Stripe looks like it offers the best long-term rates and compatibility with payment methods as well as CRM and other software. I’ve never dealt with recurring payments before and my question is, should I go with Stripe or are there alternatives you’d recommend? Also, are there any pitfalls I should be aware of, or advise you could give regarding setting up and managing recurring payments? Thanks for your help. Brian.”
Mike [12:53]: So one piece that you actually left out in that was he had said, “My intention is to begin with annual licenses, though I may offer monthly plans in the future, and potentially even three or five year deals for some material.” I think that based on that piece of information, I don’t know as I’d worry too much about the recurring payment side of things, because if you’re charging people on an annual basis my guess is that the price points for those are likely going to be high enough that you’re going to have to have conversations with people just to get them sold on it. And then you’re going to have to invoice them. So I would look for something that allows you to send invoices and then make sure that they get paid. There’s a lot of different pieces of software out there that do that kind of thing. FreshBooks is one, for example. There’s probably a bunch of others. I’m probably most familiar with FreshBooks. But there’s a variety of different ways to do that.
The other thing that you could do is you could wire up your website to take the payments through Stripe and then have just like a special page – or a set of pages – to one side that are private or hidden from the public world, and you just send links to those pages to get people to pay you online. I don’t know if I’d worry about the recurring aspects of it, just because I think that people are probably going to be a little bit leery of giving you a credit card for that they know is going to get paid on an annual basis. Now, that’s not to say that you can’t do that in the future, but I think that getting started when you’re spending all this time trying to focus on that piece is probably the wrong place to be focusing your time.
Rob [14:12]: I would agree. If you’re going to have a high price point, you’re either going to invoice. If they are willing to prepay with their credit card, that’s great, so you don’t have to do Net30 or whatever. In that case, I would really consider just setting up a WordPress install on WP Engine and then buying Phil Derksen’s plug-in called WP Simple Pay. In fact, I think they just rolled out subscription support, so it’s pretty simple to get that kind of thing set up and not have to worry about another layer. There are services like Recurly and Chargify that are SaaS apps, and they provide you with subscription billing infrastructure. But for what you’re doing, it just doesn’t sound like you need to scale that much. And they charge an extra chunk on top of your Stripe fee, whereas something like WP Simple Pay – and I’d imagine there may be a non-WordPress approach that’s similar to that that you could buy that would make it simple for you to just get that up and running if you do think people are actually going to want to sign up on your website. But as Mike said, if you’re going to be having conversations with them anyways, and it’s going to be either in person to start with or phone, then as far as I know, you don’t even need the website piece of it. I think you could set up a subscription right through just the Stripe web admin area. As long as you get their information from them, you can just start billing them right there, and things should work. That’s probably the simplest way. And I agree, Stripe compared to a traditional merchant account, or PayPal web Payments Pro, hands-down, I would go with Stripe, as long as it’s available in your country, and it sounds like it is.
Mike [15:36]: The other thing to keep in mind is that because you’re doing an annual payment for this stuff, you’re essentially just kicking that problem down the road by 12 months. You don’t have to fix that problem now which is, it sounds like you’re trying to fix the problem of scaling those payment systems, and you’re just not going to have the volume right now to have to really worry too much about it.
Rob [15:55]: So thanks for your question, Brian. Our next question is about pricing. It’s about mixing SaaS – or subscription – and one-time pricing. This is from Basel at Techsol Software and he says, “Hey, we just launched our product Clock. It’s a cloud time and attendance-based solution. So it’s at clockit.io. As part of generating some immediate cash flow we’ve been speaking with companies who are willing to buy for a one-time cost. Usually, it’s our expected lifetime value, plus an annual maintenance contract of 20%. Is it common for SaaS apps to do this? What, in your experience, are the pros and cons?”
So one piece about this I’m a little confused about is, he says, “Usually we’re trying to charge the lifetime value up front, and then have an add-in annual maintenance contract,” Typically, you figure out what the monthly subscription fee would be, you multiply that by 12, and you either charge that, or maybe charge 15% discount on that amount or something. But I’m not sure how he’s calculating “lifetime value”. Because let’s say your lifetime value for a time-based solution, it might be – for a time clock solution – it might be three years or four years of a lifetime. So if you charge ten bucks, is he then multiplying that by 48 and charging all of that up front with annual maintenance at 20%? I’m a little confused by that specific piece. I think exact numbers would be helpful here, but maybe we can answer it even with that kind of confusion in mind.
Mike [17:18]: Yeah. I think the issue here is that there’s a little bit of confusion, or crosstalk, between the idea of the delivery of the product versus how something is being built. And I understand how this is very confusing, because people tend to talk about them as being the same thing for a SaaS product, where you are delivering it over the web and you are billing for it on a recurring basis – whether it’s monthly or annually, it doesn’t really make a difference. But I think in this case what you’re really talking about is that SaaS is the delivery model, where you’re delivering it over the web, and it has whatever those ongoing costs are, but then your pricing model is actually much more geared towards a one-time fee. So it feels odd to me that somebody would do this, because there’s going to be those inherent costs moving forward for being able to deliver the service. And if you’re just charging them that one-time fee, as if it was a one-time downloadable piece of software, then it seems to me like you’re probably going to run into problems down the road at some point, in terms of the profitability of each of those customers. Now if they stop using it after 12 months or 15 months and you’ve charged them for what would have effectively been 24 months, then you come out ahead. But there’s going to be those customers that sign up and you expect them to stick around for 12 months, and then they end up sticking around for 5 years. I know somebody who runs a SaaS app that does time tracking, and a lot of their customers have been customers for five, six, seven, eight years, and they don’t leave because it’s just a pain in the neck to change. They’ve already got it integrated in all their systems.
Rob [18:46]: I’m not sure I have much to add to this. I think that trying to charge a lifetime value up front sounds a little weird to me. It’s more of an enterprise approach to things, and I think that one of the benefits of SaaS is that your revenue is fairly even. Even if you have some annual and some monthly plans, it is just a more stable revenue stream. So it’s easier. It’s more predictable, it’s easier to build a business on that. If you do this, it’s nice to get all the cash up front, but then realize you’re going to have to be perpetually selling and getting only that 20% renewal is going to be kind of painful. Imagine if you sold pretty hard for a year and you got revenue up to – whatever – half a million, or a million that year. The next year you only have 20% of that that’s recurring. And so that is an unusual approach. You’re not going to get SaaS multiples doing that, because you’re essentially taking so much cash up front that you don’t have a ton of long-term value. And so it all depends on your goals and all that, but I would personally consider having a more even keeled thing and just charging the same amount every year. That’s the model that I’m typically seeing working.
Mike [19:51]: Especially on a SaaS model where you’re continuing to deliver it. And I think that that’s the piece that is the difficult part here is because essentially you’re telling them, “Hey, you’re going to have to pay full price for this first year, but then every year after that, you get an 80% discount.” That’s difficult for you as a vendor to make work.
Rob [20:07]: So thanks for the question. Hope that helps.
Next question is from Bob and he says, “Should I seek investment advisors or both?” He says, “I have a product where the lifetime value is between $500 and $1000. I currently spend nothing on anything but my own expenses, minimal hosting costs, and as a result the product has been ramen profitable for years. Due to various reasons, this has now become my primary source of income. The product market fit is nearly perfect. In recent months, surveys have said they would not change a single thing about the app and more than 80% of users would be somewhat, or extremely disappointed, if they could no longer use the product. I have to do so much work to move it beyond ramen profitability, but I don’t really know what to do. I’ve read and read and read, but I’m paralyzed with the potential monetary black holes that I cannot afford because of the aforementioned ramen profitability. So my options as I see them are: number one, try and get another source of income going. Option two, take on an investor. Option three; take on an advisor who could guide me on next steps. Option number four, take on an advisor who is also an investor, and option five is find some low-hanging fruit.” What do you think?
Mike [21:08]: I think what I’m not clear about is what things have been tried at this point? So it sounds to me like the product is stable and it’s making enough money to support you, but probably not much more than that. And I think that that puts you in that difficult position, where your app is not growing enough – the app has stable income – but the growth curve is simply not there. And in order to push on that and make that growth curve higher, then you need to spend money in order to do it. And running all those different experiments to do different things to try and push the app forward, it’s resource intensive, in terms of cash and time and everything else, and that’s just a difficult position to be in. And I think it would depend a little bit on how many of these different things you’ve tried, and how many that you’re looking at that you think would be likely to succeed. And you have to do a risk analysis to figure out whether those are things that you want o try or if you’re just going to go in another direction and potentially offer a completely different product, or find an overlapping market where you can sell a product that solves a different problem to the same audience, which is probably the better direction to go. But I don’t know specifically what the product does, so it’s hard to judge whether or not that makes a lot of sense.
In terms of taking on investors, or advisors who are also investors, that seems to me to be pretty risky. It’s hard enough to get something to a profitable point where you’re making enough money that it supports you, and basically putting yourself in a position where you owe somebody else something seems like it’s probably the wrong approach. I might look around to see if there are mastermind groups that you can get in. Talk to other business owners. I would go that route first. Unless you stumble across something where you really are almost sure that by getting an investor you know what channels need to be pushed, and what gas pedals need to be pushed, in order to make the products much more profitable than it is, but you need the money in order to do that. I don’t think it’s a wise idea to get the money in order to run those experiments. You need to know what’s going to work first, and then spend the money on it, versus trying to use that money to basically guess at it and run the experiments. That’s the classic problem that most people who start out and they’re looking for funding are running into, is that they try to get funding to fund their business so that they can run experiments. And investors don’t want that. They want a business where they know that they can put money into it and they’re going to get more money out of it. They want all that experimentation done and out of the way up front, so that they can just push on the gas pedal.
Rob [23:38]: Yeah. I feel like we’re lacking some information to properly advice on this. Like, I’m wondering, you have product market fit, but do you have 10 customers? Do you have 100? Do you have 500? What’s the pricing model like? There’s things that I would need to think through before I could even consider giving advice, but to me it’s like finding the next lever, right? And I think the reading and reading and reading isn’t super helpful at this point. Obviously, it’s paralyzing. But it’s like, what is the problem that is keeping you from making more money? Is it a pricing issue? What do your competitors charge? Do you think you could increase pricing 50% tomorrow, and – not on existing people but on new people? And do you think that that would have an impact on your bottom line and not hurt sign ups? Or just run the test and just do it. Just increase it 50% and see what happens. That’s one test you can run.
Another one is, it’s a question to ask, is how many uniques do you get per month, because if you get 1,000, then you have a traffic problem then, right? But if you are only converting a tiny percent of people to a trial that hit your website, then you have a conversion problem. And if only few people are getting on-boarded and you’re bleeding them out after the trial, then you know you have essentially an on-boarding problem. And so that’s what it is. Identify the next thing that just looks all – that looks messy. And you know in that episode with Ruben Gomez, it’s what, 50 episodes ago, we laid out specific numbers and percentages that I like to see, and I know that if we don’t hit those that we have a problem in that area. I also outline these in at least one Microconf talk – and unfortunately, I forget which – but that’s where I would look if I was trying to improve this. The question of whether to take an investor or do it yourself is: Do you have the energy to attack it? The paralysis, you’re going to have to get over that, and you’re going to need to either talk to somebody, you’re going to need to get into a mastermind, like Mike said. Some exterior voice is going to help you push past that.
Mike [25:19]: I think the paralysis much more – other than the fact that certain experiments just take a lot more money – or he’s perceiving it to take a lot more money than he has available.
Rob [25:27]: But all this stuff you can do without money. I mean, with almost no money.
Mike [25:30]: I agree.
Rob [25:31]: That’s the issue. It’s like when I was bootstrapping back in the day, I had almost no money to spend on this. These days I do things differently and I can move faster. And if you raise funding you can certainly move faster. But if you want to do it yourself, you can do this yourself. And you can do it with not a ton of money. It’s just going to take longer. That’s my take on it. And so I think trying to find an advisor, if you have zero network and you’re trying to find an advisor, it’s like, “Good luck.” I think that’s going to be very, very hard. Just because everybody is busy. In fact, the people who know how to do this stuff are busy with their own projects. Finding an investor with zero network, it’s certainly possible, but there’s a lot more that has to be done. It’s not just something that – those are the harder roads to go unless you already have ins, you already know somebody who can vouch for you, you already have some type of online reputation, you have something to show for it. If you don’t, then I would personally turn your head towards your app, think about what are the quickest wins and what are the ways to do that without spending barely any money, because there are those wins out there. Right? There’s the SEO and there’s the content marketing which means you create it – whether that’s a video or text or audio. There’s social media stuff, there are a really cheap clicks. So it will take a little bit of money, but there are really cheap clicks on some sites these days. There are a lot of cheap/free – except for your time – marketing approaches, and those are the ones that, if you have a traffic problem – again it’s identifying if it’s a traffic problem then do one of those things. The conversion stuff. If you already have enough traffic and you’re just not converting, then it’s looking at what other people have done, like how does DRIP do their on-boarding and why do they convert so many people into their trials? It’s thinking through how to optimize this stuff. So I think with more specific information, we could probably make a better recommendation, but that is the thought process I would use to go through this.
So our next question is actually two questions, both about affiliate programs. So the first one is from Eton, and he says, “Hey guys, big fan of the show. I would love to hear about affiliate programs. In particular, how that plays into DRIP’s growth as a marketing channel, experience working with Ambassador, et cetera.” And then there’s another question from Robert Brandl from chattooltester.com and he says, “How do you set a program up? How do you find good affiliates? How much do you pay them? Your own experience, et cetera.”So it’s just kind of a little quick mini-episode maybe here on affiliate stuff.
Mike [27:38]: I have very little to offer on this, because I’ve just never really gotten into like the whole affiliate marketing thing. So why don’t you go forward?
Rob [27:45]: Yeah, cool. I have some thoughts on this. So in terms of affiliate marketing as a marketing channel, I think that I have used it on a couple of products, and certainly have had affiliate programs for most of them. I’ve seen really mediocre results in most cases. You have to be extremely deliberate about it, and I think if you have a really strong network, and you have a network of people who have audiences, or you’re willing to build that network, I think affiliate marketing can be exceptional. If you look at Leadpages, all their growth in their early days was from affiliates that Clay Collins knew, because he was an information marketer and everybody respected him, and he knew all these people from speaking at conferences and they had already done JVs for info. So then when he launched this software, there was a bunch of people lined up that he knew that had these massive audiences – 10,000, 100,000-person email lists. If you have that – very, very few people do – but if you have that, affiliate marketing is going to be awesome for you.
If you are literally going to sign up for Ambassador or sign up for referralsaasquatch.com or whatever else affiliate programs you have – and if you’re going to do it, I would definitely recommend finding a SaaS app to do it – that’s the best way to set it up. Just setting it up and then pinging your customers periodically, kind of promoting it, sending them emails, it’ll work. You can build a decent channel there, but it’s not the number one thing I’d be doing. If you really are time-constrained, and you’re bootstrapped, and you’re focused on getting new customers, without the network, you do have an uphill battle.
Now how to find good affiliates? I think that’s all about the network. I think cold approaching people can work, but you have to have something to bring to the table. And you have to have a better product and you have to have a really nice affiliate commission. So think about it. If you’re a SaaS app, the range I’ve seen is recurring subscription affiliate commissions, and I’ve seen it range between about 15 and about 30%. I think these days like an email marketing as an example, AWeber pays 30%, and I think MailChimp might pay 25%, and Drip pays 30% as well. And I think Leadpages pays 30%. So that kind of gives you an idea of where marketing SaaS apps fit, but other industries and such may have different norms, so you really just want to take a peek at some affiliate programs and see where you wind up.
Those are really my general thoughts on it. I think that affiliate marketing can, and has been, a really good channel for some SaaS apps; some people launching software. But it really does mean I think you need to have your own audience, and then have good network and a solid network of other people who are willing to promote it up front. Otherwise, I would prioritize affiliate marketing and blow a lot of the other marketing approaches that we talk about here on the show. So thanks for your questions guys. Hope that’s helpful.
Mike [30:10]: So as Rob said at the beginning of this show, we are looking for questions, so 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 on iTunes by searching for Startups and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 305 | Strategies for Taking Pre-orders for a New Product
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to take pre-orders for a new product. These are strategies that can be used to help gain interest and validate a product. They also discuss some motivations and benefits to taking pre-orders.
Items mentioned in this episode:
Transcripts
Transcripts
Mike [00:00:00]: In this episode of “Startups for the Rest of Us,” Rob and I are going to be talking about strategies for taking pre-orders for new product. This is “Startups for the Rest of Us,” episode 305.
Mike [00:00:16]: 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 [00:00:25]: And I’m Rob.
Mike [00:00:26]: – And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:00:30]: Well, it’s nice to be in a big city where a lot of musical acts are coming through, and this week we are seeing not one, but two, bands, or acts, at this club called First Avenue, which is this icon of Minneapolis. It was featured prominently in that movie “Purple Rain,” and I think Prince owned it at one point, so it’s this club that’s been a club since the ‘70’s, and it’s just a very popular club. Anyway, we saw Lauren Hill, former lead singer of the Fugees, a couple nights ago. Then we’re seeing Explosions in the Sky tomorrow, so aside from the same stuff that I’ve been saying for the past four or five episodes, of we’re almost done unpacking, it feels like transition is coming to an end, we’re hiring several people at Drip, and things are moving forward and going pretty well in general, that’s the other thing that’s new.
Mike [00:01:13]: You know, when you first mentioned you were going out and seeing a couple of musical acts, my first thought was you’re going to get to hear the entire soundtrack for “Frozen,” or something like that.
Rob [00:01:21]: Yeah, right.
Mike [00:01:22]: Laughs.
Rob [00:01:22]: I mean that’s a lot of what we did – well, not a lot of what we did, but I think that tends to be the default. You get the musical stuff coming through that is kid-appropriate. It’s easy to bring them, and it’s been fun to do some grownup things, too, which the big city really allows that pretty easily.
Mike [00:01:37]: Cool.
Rob [00:01:38]: How about you? What’s going on?
Mike [00:01:38]: Well, I’m finally back to normal in terms of my back issues. I don’t think I really talked about it on the podcast, but I was kind of out of commission for about a week, week and a half with a pretty severe spinal problem. So, back on my feet now. I can actually stand and walk around without too much trouble, and kind of getting back to things and plowing through the work that has been stacking up a little bit. The other thing I do have is a listener sent us an email about an episode we did back in 303, which was our favorite tabletop games, and he runs a company called Playtable.xyz. So, if you go over to that website, they have – essentially, it’s a tabletop game device that you can put down, and you can play tabletop games on it. The focus is on being able to minimize the setup and tear-down time for some of the more complicated games and to be able to streamline the rules so that you don’t have to go look things up, and it gives a little bit of visual flair to the tabletop games. I checked it out. They’ve got a video up and got a mailing list that you can sign up for. It looks pretty cool.
Rob [00:02:33]: Yeah, I checked it out as well. I’m intrigued by it. I’d like to see how many games they get on it and how expensive they are and that kind of stuff, but certainly it’s an interesting work-around instead of having to read all the paper rules all the time. That’s something I like. You know, we talked about Pandemic a couple episodes ago, and there is a Pandemic for the iPad, and it’s really cool –
Mike [00:02:51]: There is.
Rob [00:02:51]: – Because you don’t have to remember all the stuff. You just move around, and it really helps guide you. I think it’s – once you know the rules of Pandemic, it’s easy enough to play, but those first couple of games are pretty painful just trying to remember everything –
Mike [00:03:01]: Yeah.
Rob [00:03:02]: – And that’s what the iPad kind of – it’s scaffolding that helps you get their faster, basically.
Mike [00:03:07]: Yeah. Some of those games, it’s not even just all the rules. It’s all the little markers and stuff that you have to put on the board for all these different things. Then there’re special-case situations that an app will just take care of that stuff for you. I think there’s a bunch of apps for some of the games that we had talked about. I’m pretty sure there’s one for Catan. There is one for Pandemic. There’s also one for Small World, which I think was only $6 or $7, but if you buy the board game itself, it’s 40 or 50 or something like that.
Rob [00:03:32]: Oh, jeez. Okay.
Mike [00:03:33]: Yeah, so there’s a huge price difference between them, but it’s on an iPad so it’s not nearly as expansive; but you do get the abilities to play against computer opponents. So, if you like to game, you can do that.
Rob [00:03:44]: Yeah, that’s nice. Cool. So, what are we talking about today?
Mike [00:03:47]: Today, what we’re going to be talking about is how to take pre-orders for a new product. These are essentially strategies that you can use to go out and, if you have an idea that you’re trying to validate, or you’re trying to get people interested in it and trying to figure out what it is that you actually need to build, then you probably want to get to a point where you’re going to be taking pre-orders for that product. That product can be a piece of software, it can be a book, it can be a service, it can be a course. Depending on how long it takes and what your time investment is going to be, you want to be reasonably sure that people are going to pay for it afterwards. You don’t want to spend six months or 12 months building something and then try to find people to buy it. I think we talked about it before. James Kennedy at MicroConf Europe had said that sales is really about finding out what people want, going out and getting it, and then delivering it to them; and you have to do it in that order. And if you try to build something and then go find someone to sell it to, you’re in a much more difficult situation, because now you’ve already put that time investment in, and it may not have been the right time investment. So, taking pre-orders is a step along that process to identify whether or not you’re on the right track. So, let’s talk about some of the motivations for taking pre-orders. I think the first motivation is risk mitigation. Are you going to be able to find people who are willing to pay for this? Can you convince those people that it’s going to solve their problem? There are a few caveats here, because if you’re talking to people individually and one-on-one, it’s much easier to sell somebody on the idea than it is if they were to come to your website; but that’s also the intent behind this. You want to have those conversations so you’re talking to them directly and you get the feedback about what sorts of hurdles you’re going to run into, or what questions they have, so that you can use those questions to put on the website that talks about those objection points that they might have.
Rob [00:05:36]: Yeah, and I think risk mitigation is a really nice benefit of asking for pre-orders. I think there’re obviously a lot of different ways to mitigate risk in terms of having a product idea that you don’t know if anyone is going to buy, but this is perhaps one of the best. Building an email list is another one. Talking to people and getting a verbal commitment is another one, but until someone actually makes purchase you don’t know for sure if they, in fact, will do it, right? We’ve heard people different doing it different ways, where you get a check that you’re not going to cash, or where you get the credit card and actually charge it and tell them you’ll refund it if stuff doesn’t work out. But I think this is an intriguing way to do this, and I think that it requires probably a lot of chutzpah to ask for money up front, especially if it’s someone you don’t know. I think if you tend to know people and they trust you’re going to deliver, makes it a little easier; but I do think that doing this is an interesting idea. We’ve talked about this in the past. I have always tended to build the email list rather than actually as for pre-orders up front – than actually take money. There’s a bunch of logic to that, that maybe we can cover in this episode, of why I’ve done that; but at the same time, I do think that, single-handedly, risk mitigation may be the single biggest reason that you may want to lean towards actually taking pre-orders.
Mike [00:06:48]: Let’s expand on that a little bit right now instead of trying to talk about it or come back to it later –
Rob [00:06:52]: Sure.
Mike [00:06:52]: – Because building the email list, I think in many ways, serves as a proxy for asking for money –
Rob [00:06:58]: Exactly.
Mike [00:06:58]: – And that you can use that as – there’s people that have signed up for my mailing list; and, sure, I’ve got 1,000 people there, but not all of them are going to buy, but some percentage is going to buy.
Rob [00:07:07]: There you go.
Mike [00:07:07]: The question is what percentage is that? You don’t really know, and taking the pre-orders and actually taking somebody’s money for it is not even just a proxy for that email list. It is actual money that you’ve got in your hands that all you have to do is you have to deliver what it is that they wanted.
Rob [00:07:22]: Right. And, yeah, all those points are valid. The reason I like building an email list is because I can get – let’s take Drip, for example. I built the list up to about 3400 people, and then I was able to nurture them along the process: give them screenshots; give them screen casts; ask for feedback via a survey; eventually do a slow launch, a email three to five hundred people at a time. It was a very well-orchestrated and well-crafted thing, and we had a really good conversion rate on that. If instead of building the list I just had a form that was like, “Here’s this amazing thing, and at the bottom of this page pre-order Drip for” – whatever – “three months for 99 bucks,” or whatever price it would’ve been, I would have gotten – I don’t know – a hundredth. Maybe I would’ve gotten 50 people or 100 people to pay me. Now, I would’ve had that money up front and would’ve had it for sure, but I wouldn’t have had the access to all 3,400 people, right? I actually think in the long run I converted a lot more people to paying, but I had to accept a little more risk up front by not taking the money up front. That make sense?
Mike [00:08:20]: Right. It does, but I don’t think that you would use that exact, same process for taking pre-orders. Taking a pre-order is not something where you just put up a website and just hope that people buy it sight unseen without any real walk through of it. I think that with a pre-order, your strategy is really finding people who really desperately have that problem and then crafting a solution that specifically solves that and, at the same time, having those individual conversations with other people who hopefully overlap, to help give you a better sense of what you should actually be building rather than building stuff, sending it out, doing surveys and not having as much of a hands-on approach with the people that you’re talking to. I think the strategy that I’ve seen work and I’ve used so far, with BlueTick, for example, is that if those initial people that you’re taking pre-orders from – if you know them or they know you, you can have those one-on-one conversations and establish that rapport with them such that you’re able to get the answers to the questions that you really need answered.
Rob [00:09:19]: Got it. Yeah, so you’re talking about doing medium-, high-touch sales to get a handful of pre-orders, in essence, to validate a product. I think there’s a difference – I think we’re talking about two, different things and I think those two different things are you’re talking, by hand, going through 10 or 15 people and getting those pre-orders to say, “All right, it’s valid. Let’s start building it.” I’m talking more about later on down the line, having that big list where you actually want to launch and you want to launch to thousands of MRR right off the bat. But I think our two approaches that we’re talking about are actually most powerful when they’re combined, and let me –
Mike [00:09:48]: Yeah.
Rob [00:09:49]: – Talk through that real quick. I do think that validating – the way I validated Drip was I emailed a bunch of people – by “a bunch,” it was 17 – and I got verbal commitments via email, “Yes, if you deliver that, I would try it out for three months.” That’s all it was. I didn’t actually take pre-orders. Now, why didn’t I take pre-orders? Well, two things. One, I knew that it could easily be six months from that time until we finished the product, because Derek was part-time on it. There was just a bunch of stuff, and I didn’t know how long it would take. It didn’t feel cool to me to take people’s money and to just sit on it for that long. Number two, all the people I was emailing with had some relationship with me, and so I trusted that if they actually said that they would try it out, that they would try it out. In the end, almost all – there were 11 people that said yes, and almost all of them – I think nine or ten – took me up on it and did deliver. Now, your mileage may vary there. If you’re at a conference and you’re meeting brand new people and you don’t know them, it’s like how much is their verbal commitment worth? You don’t know. I do think there’re some things to think about there. I don’t think there’s a right or wrong answer here. I really do think that you have to ask yourself what situation you’re in. Now, I have seen people multiple times when they go to take pre-orders, they do it on a landing page, where they send you to a site that looks like a landing page or a SaaS marketing site type thing, and they say, “The products aren’t ready. Enter your credit card here. We’ll charge you 49 bucks, and you’ll get the first X months free.” That’s the approach I mentioned, and that’s, I think, what we’re both saying is: “You probably don’t want to do that.” I actually think that’s a really bad approach, and the reason is because of what I said earlier. If you can build a list of a couple thousand people and then get pre-orders from there, you’re going to be way better off, right? It’s to combine the two approaches and nurture that list until you’re getting close to when the products will be ready. Then you’ve shown the screenshots. You’ve shown them screen casts. You’ve got them interested in the product. Then before the product is ready, but you’re like, “I think it’ll be done in the next month,” or the next few weeks, then you come in and say, “I’m going to give you this awesome deal. Buy your first year or your first six months for X, Y, Z.” They’ve already seen the screenshots. They know it’s pretty close anyways. Then that’s when you’re going to make that big, initial push, and I think you can get quite a bit of revenue. You’re no longer validating the idea. I guess you’re validating all the way to product-market fit, if we were to just take it literally; but you do at least know that there’s some desire for it. At this point, you really are trying to maximize some early revenue and get momentum going.
Mike [00:12:01]: Yeah, and I think the two approaches, as you said, are very complementary, and they overlap quite a bit. I don’t think that you either do one or the other, but you are probably not going to be in a position where you can gather 1,000 or 2,000 emails without having a pretty solid idea of what it is that you’re offering and what problem that you’re solving. That’s really where some of these strategies for taking the pre-orders really helps, because you can have those individual conversations. You can use that to craft what it is that you’re going to building, the marketing messages around it, the specific pain points that you’re trying to solve, and then use that information to go out and help build your mailing list at the same time. Then you’re building, and you’ve validated, “Hey, I’ve got enough people here that have placed a pre-order for it.” In parallel, you’re also trying to build that mailing list, using that information. I think you can build a mailing list without it. You can kind of – I don’t want to say “guess,” but it is, I’ll say taking educated guesses about what it is that people really want or need and having a few conversations here and there to help make sure that you’re on the right track.
Rob [00:13:00]: Yeah. I think another benefit to doing this kind of hybrid approach you’re talking about, where you do get validation up front from a small number of people and maybe take pre-orders, maybe you don’t based on what you want to do, and then building that mailing list, launching to it and potentially also taking a second round, essentially, of pre-orders right before you’re ready to launch. There’s another benefit to that in that you can then start trying out paid media when you’re building that list, right? You can try Facebook ads and AdWords and whatever else. You can also try content marketing. You try SEO. You can do a bunch of stuff that is that more broad, wider funnel marketing rather than just all the one-on-one stuff that would be required if you really have to talk to everyone who’s going to buy from you.
Mike [00:13:39]: I think one of the other motivations for accepting the pre-orders is that it allows you to fill in some of the knowledge gaps in terms of who exactly is your target customer, what do they do, what’s their role. This comes back to having those individual conversations with people, and it allows those one-on-one conversations, let you find out what you think is important that the customer actually doesn’t care about. It’s very easy to think that something needs to be done when the customers actually don’t care about it. It might be cool. It might be interesting to see, but it’s not something that is really a big deal. Then the reverse of that can also be true. You might think that, “This small feature over here is a nice-to-have,” and then customers see it, and they realize how powerful it is, and suddenly that’s the thing that they really are looking for; and you didn’t necessarily realize right away that that was so important to them. They may not have either, but in seeing it, it can change their mind, and it can make them see things in a different light.
Rob [00:14:34]: Other knowledge gaps it can fill in are what is important to buyers that you don’t know about, how much are people willing to pay versus what you think they’re willing to pay or what you think your app is worth. There are a lot of questions early on when you’re building an app, and I think that getting someone to put money down – this is essentially another form of risk mitigation, and it’s a form of learning early on, even before you have a product.
Mike [00:14:55]: Yeah, and we’ll talk specifically about what people are willing to pay versus what you think it is a little bit further in this episode. Yeah, those are all very important parts. Again, those two motivations for taking the pre-orders are just the risk mitigation and then helping to fill in the knowledge gaps. Let’s talk very, very briefly about how to actually take somebody’s money when you’re doing pre-orders. There’s three different ways that I know of. The first one, that I’ve done, is using WordPress and WP Simple Pay Pro and Stripe. It’s very easy, obviously, to set up a WordPress site. There’s a plugin made by Phil Dirkson. It’s called WP Simple Pay Pro, that you can buy. I think it’s $40 or $50, or something like that. It’s not very expensive. Then you wire it up to a Stripe account, and you can take pre-orders. You can even refund people’s money through Stripe months later, whether it’s six months, or seven months later. It appears to not be a big deal through Stripe. Now, of course, their credit card still has to be active; but you can do that and because Stripe hooks into your bank account when depositing the money, they’re able to turn around and take that money back out of your account, assuming that no more money is coming into the Stripe account. The other two mechanisms that I’ve seen are Gumroad and SendOwl. Both of these are mechanisms for typically delivering digital assets over the Internet. Both GumRoad and SendOwl allow you to set up a pre-order mechanism that allows you to distribute things once you’ve taken a pre-order. One thing I don’t know about either of these is whether or not you can go back and charge them in the future, like on a subscription basis, so it may not be the best option if you’re selling a SaaS application. But if you’re selling an info product, or a training product, or a book of any kind, those are pretty reasonable options, because then once you’ve finished it, you can upload it and then get it distributed to people very, very quickly.
Rob [00:16:36]: The other option here is there’s an iOS app – I’m assuming there’re android apps as well, but I’m just looking in iTunes right now. There’s an iOS app called Payment for Stripe, and you can hook this into your Stripe account. You could potentially, if you’re at a conference or anywhere, you could be talking to folks in person and pretty easily take pre-orders. I think that’s a nice way to do this if you don’t want to do it over the web and you want to do something more in-person.
Mike [00:16:57]: When you’re doing one-on-one demos with people, what is it that you really need to show them? For something like a course or a training product, you probably want to give them a course outline. If it’s a book, you probably want to give them a table of contents and outline all the different topics that you’re going to cover. If it’s software, you mostly want to have screen mock-ups of some kind. What I would do is I would walk through all the important parts of the application that are going to solve their problem. You don’t need to put in every screen, show things like profile screens and administration screens. You most likely don’t need those. You really want to focus on the screens that are going to solve their problem. I would wire up as much as you possibly can in a way that makes it obvious where they’re supposed to go and what they’re going to do and how they’re going to solve the problem that that software is designed to solve. There’s a lot of different tools and wire framing products out there that you can use. Balsamic is one that I’ve used pretty extensively. I’ve also seen people using Vision App, and there’s probably half a dozen others as well. You can put these together, and you can spend as much or as little time on these things as you want. It’s like any software product. You’re going to get out of it what you put into it, but at some point you have to draw the line and say, “Yes, this is good enough.” I think that’s a very important piece to remember – is that you don’t have to make everything look pretty. The final design does not have to be there. You’re really trying to focus on the problem that you’re solving and showing to the person that you’re going to give that demo to that this product is going to solve that problem.
Rob [00:18:23]: Yeah, that’s a key thing to remember. When I did pre-orders for Drip, I actually didn’t show any screenshots. I do think it’s helpful – if you are a designer, you can do decent mock-ups – to show some, but I think that if you get too far into the weeds, people frankly don’t necessarily have the time to dig into it. I think building a landing page and a marketing page for it with just a bunch of copy and maybe a fake screenshot – not even as something you’re going to distribute, but just as something that you can email to folks as you’re emailing or as you’re talking through – or, even just a short slide deck, like five slides of what you think things might look like. But I think you should focus, as you said, more on – you’ve got to figure out that value proposition, and that value proposition could almost be communicated in one sentence or a sentence plus a few bullets. If that’s what resonates, then what you’re actually going to build can come later. You’re just trying to figure out – is there a problem here that needs to be solved? and what is the general way that I’m going to solve that? I think the earlier in the process that you can figure out and that you can get confirmation that it really resonates with people, where they’re not puzzled, like, “Yeah, I guess that’s it,” but where they’re like, “Oh, my gosh, yes. This is such a big pain point,” that’s really what you’re trying to get to.
Mike [00:19:26]: The other thing to keep in mind when you’re going through that is that your value proposition that you communicate people is likely going to change probably dramatically between the first two or three or even five people. You’re going to iterate on that value proposition and your sales pitch after each person that you talk to, because you’re going to get feedback. There’re going to be certain things that resonate with them, and the future conversations that you have, you’re going to want to take those and extract things that you’ve learned from earlier conversations and present it to them and see if that works with them. You’re sort of split-testing the information that you’re learning with the other people that you’re giving the demo to. I don’t know as I would just say, “Give a demo to five or ten people.” You want to give it too as many as you can. I would probably shoot for at least 15 or 20, if you can do that; but realistically, you also want to run your idea past probably more than that. Probably, 30 or 40 people is probably a good, ballpark number of people to run the idea past. Then in terms of the demos, you probably want to give at least a dozen of them so that you can start honing in on the specific pieces that the majority of the people feel are important to them. Then you can concentrate on understanding what features need to be built first and what is the most important to people, and categorizing them according to what things need to be built first, and what things can be pushed, what things are not important and just can go into a future version.
Rob [00:20:45]: Is this similar to the process that you’ve been following for BlueTick?
Mike [00:20:48]: It is, actually. Most of it is. For example, I didn’t take orders through GumRoad or SendOwl. I took them using WordPress and the WP Simple Pay Pro. One thing that we haven’t talked about yet – I did say that we’d come back to it – was talking to people about actually taking the sale and taking their money for it. What I did for this piece was – what I wasn’t sure of was how much people were willing to pay for it. I had in my mind that I wanted to charge people $50 per mailbox for it, but I wasn’t sure whether or not that would be appropriate. What would people feel like the product was going to be worth to their business based on the problems that it solved? So, when I explained to them – I said, “Hey, here’s what my process is. I may or may not actually go through with this, but if I take your money and I decide not to go through with it, then I’ll refund it.” I laid out my refund policy. I laid out exactly what my timetable was, and I told them, “I’ll take your money now. I’m probably not going to be able to deliver for at least four to six months, and even after that point, it may still not work for you for another three or four months after that. So, it could be upwards of eight or nine months before I have something that I’m able to deliver to you. With that said, if eight months down the road you say, ‘This isn’t working for me,’ or, ‘I’ve gone on a different direction,’ I’m more than happy to give you a refund, and I’ll eat whatever transaction costs. If I have to send it to you through PayPal, I’m more than happy to do that. What I’m really interested in now is does this actually solve a problem for you that you’re willing to pay for.” Going back to the naming a price, this is a piece that I wasn’t real sure about, so I was very careful and cautious about presenting it to people in such a way that I wanted them to name what they felt it was going to be worth to their business. So, when I did that, I said, “You’re going to put your credit card number in,” and the website that I connected it to, I literally had a text box there, and they had to type in the amount. So, I would send them a URL through Skype, and they could plug in that number, and I would ask them to prepay for a certain number of months. It defaulted to 3, but they could select anywhere between 1 and 6. I’ve had a recent conversation with somebody, and they thought that, by and large, everyone would just choose one month. But the reality is what I found was out of the dozen people that I took pre-orders from initially, there was one person who prepaid for one month, there were two people who prepaid for two months, and then nine people who prepaid for three months. So, it was very interesting to see that most of them prepared for either the default, or at least a little bit. I think that that was because they had this understanding that, “I’m not going to get a ton of value out of this up front. It’s more of a longer-term investment,” which is really what I was looking for, because that validates and qualifies the people who are signing up for pre-orders, they’re looking at it as a longer-term investment. They’re looking at it as something that they’re going to be using for a while as opposed to somebody who’s a tire kicker who’s on your mailing list and does not have the level of investment or intended investment that you desire as the person who’s creating the product. I will say for sure that the first couple of conversations that you have with people – and this is especially true on the first conversation where you’re asking for that pre-sale – is when you ask them and say, “This is what it looks like. Would it solve your problem?” If they say yes, say, “Great. Well, here’s a webpage I’m going to give you. Here’s what the refund policy is, timeline, et cetera, when you will be charged for it the next time.” What I did for people was I took the payment that they had, and I said, “I will apply that as a credit to your account, but only after you have told me that it’s going to provide value to you.” I think that there’s a few different ways you can structure when they’re going to start paying for the application that you’re delivering, or the product that you’re delivering. But if it’s a SaaS application, you have three options. You can either have them start being charged when they’re first onboarded, a specified time after onboarding. Let’s say you onboard them on the first of January. You can say, “You get it for X number of months,” whatever you’ve prepaid for, “and then I will start charging you immediately,” or maybe you give them a 90-day grace period because you know that when you first get them onboarded there’s probably going to be issues. So, maybe you give them a little bit of an extended runway there. What I did, which I think may have been a mistake, was to say, “I’m not going to charge you until it provides value.” In retrospect, I think that that was a mistake because it gives people an unlimited time window which they can push it lower on their priority list. So, one of the challenges I’ve run into is people just aren’t really making time for using the app, and I think that if you were to say, “After I’ve onboarded you, I won’t charge you for 60 days, but once that point hits then the clock will start.” If you set that expectation up front, then you can always extend it. You can always say, “Look, we delivered this. We’re not quite ready yet. We know that there are some issues or things that we need to implement for it to really provide value, so we’re going to push this timetable out.” If you’re trying to dial things back in, if you’re trying to reel them in, you’re almost taking things away from it, and it’s not really fair to do that.
Rob [00:25:34]: Yeah, that makes sense. That’s a good way to think about it. I’ve talked about this, but with Drip I basically let people have unlimited trial because I was working so closely with them. This was for the first, let’s say, maybe 20 customers, when I was essentially doing early access, and we were just onboarding and trying to get features done. The hard part that I had is certain people would say, “Once I have X and Y, then I’m willing to pay,” and sometimes X and Y took us a month to build. I didn’t want anyone’s trial to be expiring during that time, so that’s why I was telling people, “Once it provides value, then let’s call it and start charging.” But I think you make a good point. There’s always not a real impetus for them to dig in and do a time investment there, so I think this is another place where kind of have to use your judgment.
Mike [00:26:17]: The other piece that factors into that is – let’s say that you signed up – call it ten people for easy math there, and three of them come back to you with stuff that’s going to take a month to build. Well, in order to deliver all three of those things, it’s going to take three months to probably deliver it, so it kind of pushes your entire timetable back for all kinds of things, and some of them you may not have realized up front that those things really needed to be built in order to provide value to everybody. So, if you dial back those expectations a little bit and say, “Look, you’ve prepaid for three months. I’m going to give you a month and a half, or two months up front just to get comfortable with it. Then I will start applying the credit.” Again, it just goes back to being able to extend things out if you need to, or if problems come up and you need to push things out and say, “Look, I know we were going to charge you now, but we’re not going to. We’re going to push this out because we’re not ready yet. We can’t deliver on this yet, and it’s not fair to you.”
Rob [00:27:10]: Yeah, I think that’s a good way to handle it.
Mike [00:27:12]: The other thing that I did, as I mentioned before, about naming the price and letting the customer pick their price is that it gives you a solid sense of what people are actually willing to pay versus what you think that they’re willing to pay. I think that this is super-important, because if you are too far off in what you think that the product is worth – let’s say that you think that people are going to pay $100 a month for it, and they come back to you and they say, “Yeah, I might pay 35 or 40 for it, but 100 is just way too much,” you might step back and say, “Do I really want to go forward and build this product when my lifetime value is going to be less than half of what I thought it was going to be?” And assuming that somebody paying $50 a month would stick around the same amount of time as somebody paying $100 a month, your lifetime value is going to be half for those people, so the issue is can you justify building the product at that price point and selling it at that price point. Are you going to be able to acquire customers at that price point? If you are talking to somebody and you name a price, their mind is instantly anchored to that price as opposed to what they think it’s going to provide to them in value, so there may be a disconnect between people who don’t know who you are or what the story is behind it and just hit your website versus those people that you’re talking to individually, and you can kind of convince them that, “Hey, this is a justifiable price for reasons X, Y and Z.” You can’t have that conversation with somebody who just hits your website.
Rob [00:28:30]: Yeah. Since pricing is such a hard thing to nail down, and there is so much guesswork and risk in it, I really liked the conversations that I had early on validating Drip. I think it is really important, and I also think something you need to think about is, if you’re just getting started, it can be okay to have a lower-priced product that you’re going to learn on. I think of how I stair-stepped up, and I went from one-time sales and then to subscriptions with HitTail, and it was – what – nine dollar starting point. It was like $9.95 and 20 bucks and 40 bucks and 80 bucks. Then at a certain point, I saw how bad the churn was, and there were limitations of how much I could grow it. Then beyond that, it was like, “Let’s get aspirational,” right? The original pricing of Drip was 99 bucks a month. That was going to be the minimum, and I kept saying, “What do we have to build to make this product worth 99 bucks a month?” That can be an interesting question if you’re far enough along that it makes sense to do, but I also don’t – I think you can toy with lowering price points. Just know you’re going to have more churn and stuff like that.
Mike [00:29:25]: I think the last step in this process is once you have decided whether or not you’re going to move forward or abandon the product that you’re looking at launching, I think you need to let everybody know. You need to let them know whether it’s a mass email or individual emails. If you’ve decided to move on and go do something else because it doesn’t look like you’re either going to be able to deliver, or that the product is going to be radically different than what you had envisioned and it’s not something that you want to pursue, then you’re going to want to go back and refund everybody’s money and maybe look at either a related product, or try something completely different. But regardless of what that is, you need to let people know early enough in the pre-order process, especially when you have them on the phone or you’re talking to them and you’re giving them that demo. Set their expectations, and you can tell them, “I’m doing this with X number of people,” or you can just ballpark it. Let them know, “I expect to know within 30 days,” for example, “whether or not I’m going to move forward with this. At that point, if I don’t have enough people, or haven’t gotten enough momentum with this, I’ll refund your money.” So, just make sure that you let them know what you’re going to be doing at that point. If you’ve made a commitment to them that you’re going to let them know by a certain date, follow through with that. Once you’ve done that, make sure to keep in touch every four to six weeks to let them know how things are going, what new developments are going on. If you can, include screenshots and keep them posted on how different pieces of the application are going, if you’re ahead or behind in any areas. The more information that you can tell them about how close you are to the original timeline that you expected, the better off you’re going to be and the more invested that they’re going to be in the application when they finally get onboarded. You’re going to help generate that excitement with them.
Rob [00:31:00]: I think this part can’t be underscored enough. When you have someone’s money, they tend to want to see some results from it. You can either make it kind of a crappy experience for them where you’re not communicating with them very well, and that would tend to be a lot of our defaults. As a developer, your head’s down, and you want to build stuff. Or an entrepreneur, if you have other developers, you’re going to tend to not communicate enough. But I think there’s a really nice approach here to be able to get people excited about this, and then they get thinking, and then they get talking about it. Then they tell other people. What we saw with Drip was there were people in early access who started talking in their Mastermind groups and in their little, private slack channels and their private forums, and I started getting direct emails from people saying, “Hey, So-and-so’s talking about this,” you know. We had early-access folks like Brennan Dunn and Jeff [?] and Ruben from BidSketch, and they’d say, “Ruben mentioned this. This sounds like something I need. Can I get in on it?” So, I then had people asking to get in early access before we launched. It was crazy – right? That’s a type of thing that you want to be able to build. It’s not as hard as it sounds. I don’t think this is lightning-in-a-bottle, Cinderella story stuff. This is just following this playbook and building something that people really are interested and need, and that it really does solve a pain point for them.
Mike [00:32:08]: Yeah, that’s actually a really good point, because if somebody comes to you and specifically asks to be on that early access program, there’s nothing saying that you can’t put them into it. Let’s say you’ve got the initial 12 people signed up, and you’re working through the pre-order process with them. Maybe you’ve delivered an alpha version to them. There’s nothing saying that you can’t take more pre-orders and put them through that process and start onboarding those people. I’ve actually done that to some extent, but it’s also got to be somebody who I feel is going to be a good fit for it and is going to start using it right away as opposed to somebody who is more of a tire kicker, I’ll say.
Rob [00:32:40]: Totally. I feel the same way. I also added people late. I did confirm with them. I was like, “If you’re really ready to dive in, let’s do this. There’s not a lot of time.” So, I added a little bit of time pressure, and I also started implying by that point – since I’d had enough experience with folks getting started up on Drip, I did tell them, “Hey, I’m going to give you as much time as you need for trial, but it’s going to tend to be between 20 and 30 days when you’re really going to hit the ground running.” So, I kind of set an expectation of, “You can’t just surf on this thing for 90 days and expect to see results.”
Mike [00:33:06]: Yeah, and as they’re going through that onboarding process, it helps you pave over some of the rough points of the app, whether there’s documentation issues, or pieces that are not entirely clear because the [UY?] or the [UX?] is not well designed. Or, you just haven’t quite figured out how to present information in a way that makes it easy for the user to understand. There’s lots of those types of issues that, as you’re going through the early-access pieces of it, you’re going to be aware of those. You can point people specifically to different things, or you can create videos that you send somebody so that you maybe don’t – get to a point where you don’t have to onboard each person individually. That’s really the position you want to be leading up to the point where you leverage your mailing list and start doing a much more public launch.
Rob [00:33:49]: That wraps us up for the day. If you have a question for us, 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 in iTunes by searching for “startups” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.
Episode 304 | From Bootstrapped to Funded and Back to Bootstrapped with Simon Payne
Show Notes
In this episode of Startups For The Rest Of Us, Rob talks to Simon Payne, a co-founder of Leadpages, about his journey from being a bootstrapped developer, to raising funding, and eventually moving on from Leadpages and developing his own product.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of ‘Startups for the Rest of Us’ I talk about moving from bootstrapped to funded and back to bootstrapped with special guest Simon Payne. This is ‘Startups for the Rest of Us’ episode 304.
[music]
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, and today with Simon Payne we’re going to share our experiences to help you avoid the same mistakes we’ve made. Every once and awhile, Mike and I like to mix things up and have a guest on the show. And today I welcome Simon Payne, who many of you will know as one of the co-founders of Leadpages. He was, in essence, the developer who helped to Clay and Tracy build Leadpages from day one. And Simon lives in Prague. I’ve met him in person and we’ve hung out several times over a few years. And so there was a good conversation that we had about basically starting off as a developer and transitioning from this bootstrapped company to Leadpages raising their $37 million in funding. And then just recently in the past few months, Simon has moved on and has decided to launch his own product called Convert Player. You’ll hear us talk about that in the interview. Hope you enjoy it. And we’ll be back next week with more of our normally scheduled programming. Thanks so much for joining me on the podcast today, Simon.
Simon [01:25]: I’m happy to be here.
Rob [01:26]: You and I first met in person – was it in Prague when we did MicroConf there the first year? I think you came to MicroConf in Europe it was like four years ago, is that right?
Simon [01:35]: Yes, I went to both of them in Prague.
Rob [01:38]: It was cool. And then we connected again, I think in DCBKK.
Simon [01:41]: Yes, it was in Bangkok.
Rob [01:42]: Cool. So you and I have known each other for several years, and you’ve been a big part of the dynamite circle, which I’ve had some affiliation with. But the reason that I wanted to have you on the show today is to talk about your experience basically working with Clay Collins and Tracy to get Leadpages off the ground in the early days, and finding out what it felt like to go through that journey as the first developer. And then to see the company raise funding and, obviously, get very large – there are 160, 170 people today. And you did that all while you were working remotely from Prague. And then recently, you have decided to move on, from what I understand – we’ll dig into it – it was a mutual decision and very amicable. And I know you’re still in touch with Clay. And then you’re working on your own new software product called Convert Player. And if folks want to check that out, go to convertplayer.com and you’ll find out more about what Simon is working on.
So, let’s start by talking about – this has been covered elsewhere, kind of the advent of Leadpages and how you and Clay met, so I don’t think we’re going to spend a ton of time on it. What year was it when you and Clay connected and started working on it? It wasn’t even Leadpages at that point, right? I think Clay was selling info products, and you were kind of like the web guy?
Simon [02:47]: Yes, I was helping him transition from information products into software. So we did the first few software projects together. First ones were just [Wordpress?] plugin.
Rob [02:56]: What were those?
Simon [02:58]: The first one we did was Welcome Gate. It was a simple WordPress plugin. It was for free. It helped you to make welcoming gate when you arrived on some website that will cover the whole page and give you an offer the first time you visit the site.
Rob [03:12]: Right. And this was like – no one was doing it at that time. You had to hand code it, and people didn’t really use that tactic, is that right?
Simon [03:19]: Yes, it was a completely new tactic. People liked it, but they didn’t know how to do it, so we made it easy for everybody to do it.
Rob [03:24]: And what year was that?
Simon [03:25]: It was 2012.
Rob [03:26]: And then after that you did – was it LeadPlayer was the next one?
Simon [03:29]: Yes, it was LeadPlayer. It was like a month later.
Rob [03:32]: Got it. Wow, a month later. You cranked it out fast. So it was like a WordPress plugin for video? Could you embed videos and then you could ask for emails during the video playing?
Simon [03:42]: Yes. Exactly.
Rob [03:43]: Got it. And then was Leadpages on the horizon shortly after that?
Simon [03:47]: It was very shortly after that. Yes.
Rob [03:48]: Leadpages launched was it January of 2013?
Simon [03:52]: Yes.
Rob [03:53]: And from what I recall, it got big really fast. Right? Revenue spiked way up. Was that mostly based on Clay’s audience and just his marketing chops?
Simon [04:01]: I was watching it from the [?] perspective and I was just completely stunned by the growth, because I just had to keep up with everything. So yes, it was all stuff that was Clay bringing through his content marketing, his audience, and his great marketing skills.
Rob [04:15]: How did you scale that so quickly? What were you hosted on?
Simon [04:18]: I already had good experience with Google App Engine so I was pretty confident with using that. Without App Engine, you would never be able to scale so fast. So it was super easy.
Rob [04:30]: Yeah, for sure. You’re a contractor, you’re living in Prague, you’re working with Clay and Tracy, you’re writing all the code. And things start going hockey stick. You guys were – I don’t remember what the numbers were, but I remember you guys hitting a 100,000 MRR in like no time. It was crazy. Did you hire more engineers right away, or were you solo working on the product for a while?
Simon [04:53]: It was growing so fast we couldn’t properly hire fast enough. So, I think the first year and a half it was just two, three, four, five developers coming pretty slow. But those first hires, they’re developers that are still in the company today. We were very careful about hiring somebody who’d be like a technical leader later, and could manage other people. [?] with Tracy about hiring somebody really smart and I think that was one of the secrets that helped us along.
Rob [05:22]: Right. Was Tracy a big part of the – because it sounds like you had some really good early hires – do you think she was a big part of that?
Simon [05:28]: Yes. Tracy was awesome. She had like 25 years or more experience in HR and hiring all the right people. She hired me. And it was really interesting how we head-hunted some of the developers. We kind of like stole them from other agencies and ODesk.
Rob [05:45]: An interesting part of the story, very similar to how Derek was a contractor for me, and then he became W-2, and then he eventually – kind of retroactively – became a co-founder of Drip. A similar thing happened with you and Clay and Tracy. You want to talk a little bit about that?
Simon [06:00]: Yeah. I originally joined Tracy and Clay to learn more about marketing. But then I realized I can just refocus on myself and my software skills. And I didn’t even think that I would be a co-founder. I just worked so hard and passionately on the business that they invited me to kind of join the center circle of the three of us.
Rob [06:20]: When did that happen?
Simon [06:23]: I think it was like one or two months at the beginning. They told me, “Simon, you are telling us every day what should we be doing. You’re already a co-founder because you behave like one, so we don’t even need to make more changes.” I was so excited about somebody being able to sell my software because, as a developer, I wasn’t very good at that propagation and promoting my stuff. So, for me it was a very interesting experience.
Rob [06:46]: Well, yeah. You know, I was in a conversation with someone the other day – it was actually another podcast, Bootstrapped Web – and we were talking about co-founders. And as we talked I realized there’s kind of this framework that just came out of it which was: if you’re going to have a co-founder you’re going to worry about kind of the interpersonal relationship. Like can you work together well? Are your working styles similar? And that was the first part. The second part was goals. Are the goals similar? Do you both want an IPO, or do you both want to build a nice profitable lifestyle business. And the third was are your skill sets complimentary? Because what we find is if two developers get together and they both know how to write code really well, they’re going to stomp all over each other, and then they don’t have anybody to market the stuff. So, it sounds like you guys had a really unique situation where you were basically the technical co-founder, Clay, obviously, ran marketing, and then Tracy, it sounds like she did most of the business and the hiring. And that sounds like a pretty potent combination.
Simon [07:34]: Yeah. And I think most people just saw me and Clay, but they overlooked Tracy, and that was the key thing because she gave us the undisturbed focus on each of our doings. It was very important for us.
Rob [07:47]: It’s really interesting because I knew of you and Clay, and I had no idea you had a third co-founder until, I think, you and I sat down to lunch a couple of years ago and you said that. And I was like, “Well what does she do?” Because you have marketing and engineering down, but now I understand it. And having met Tracy now – for those who don’t know I work at Leadpages now. Drip was acquired by Leadpages about two months ago. And so, I’ve obviously been working closely with Clay and then Tracy came into town – because she works remotely – and I was able to meet her. And I started seeing that’s her super-power. It’s like working with people, reading people, talking to people. And so I can see how that was really an advantage for you guys as you grew. So, Clay was marketing info products for a while before – I think since 2009, right? Then he was getting into software in 2012, and I’d imagine that was a bit of a transition, right? In terms of moving from marketing info products to software. Could you talk a bit about that?
Simon [08:38]: Yeah, definitely. I was kind of guiding his hand through software, but the learning curve was pretty fast for him. We did quickly make the duration to learn fast. So first we did WordPress plugin. I think it coded over a weekend. And over next week he just started marketing it. The next project was a little bit more. It was a bait plugin. We did that in a month. And then Leadpages was, I think five, six months later. So, we started from small, free stuff, we moved to bait plugins, and then we moved to selling SaaS and subscriptions. We just went through all these phases so that we learn how to do each stage and that will help us to see how people react to software. How to sell them to get them to communicate about it because it was all new for Clay. But it was interesting how quickly he picked up everything.
Rob [09:27]: Sure, it sounds like you guys – you’ve heard of my stair-step approach of basically going from WordPress plugins or one-time sales up to SaaS – it sounds like you guys did that really fast.
Simon [09:35]: Yes.
Rob [09:35]: Normally it takes years. And that’s cool. And you said Clay picked it up really quick, which that seems like that is his super power, right, is marketing? So that makes sense. And so, you said even over the first year or 18 months, you hired as fast as you could but since you were picky and wanting to hire the best, the team wasn’t huge. You recently left Leadpages, maybe a month or two ago. How big was the team by that time, the engineering team?
Simon [10:01]: Engineering, I don’t know. I think it was like 60 or 50 people, including QA and other technical people.
Rob [10:07]: Was there a difference from when you guys were self-funded to when you raised funding? Did that change anything for you and the engineering team? Or was it kind of the same path the whole time?
Simon [10:18]: It felt literally – and I talked about it with Tracy – that I was working for maybe four or five different companies. There were different stages of the company’s life when everything changed, like from one day to the next everything was different. And we didn’t see that coming. So, I remember some people were saying, “We are the early people.” They were like remembering when the company was like under 50. And I was laughing because I was there when it was like just three. So it changed dramatically every few months. The first period was the longest. I think like a year and a half, we were like three developers maybe. And I think it’s kind of interesting because people think that many of this fast growth you need a lot of people. But if you do it kind of smart, and we used App Engine and we trie to do it kind of like a lean way, we realized we don’t need to implement everything and have all this staff. And it actually was enough in the beginning.
Rob [11:15]: And what was the next phase?
Simon [11:16]: The next phase was kind of growing the US team, because in the beginning we were completely all remote. And basically, even when we were five or six people, we each took one big chunk of projects on their own. One guy just went and made analytics, one guy made split testing, a new [builder?]. And we each worked individually. The biggest challenge was to build a team that can work together in US and be integrated with some management. And that started completely, from scratch and it was really painful and slow.
Rob [11:47]: Yes. That transition can be. Did you have funding by that time?
Simon [11:50]: I think so, yes. I think it was about the time when we needed funding. So it was even more motivation for us to get more structured. I call the early days like a [“Hero”?] development, when you just have one guy and you basically have one phone call, tell him what to do, and he goes and figures out everything. But the next stage shifts to stuff like QA and processes and you have to write requirements, and starting documentation and tests. And that’s – if you haven’t done it for a year and a half – then it’s hard to start with all of that. So we have to bring new talent and people that can do all of that. And it took us some time to do that.
Rob [12:22]: That’s always tough. It’s a tough transition. It also slows you down because it adds more process.
Simon [12:27]: Yes, definitely.
Rob [12:28]: And so, you and I talked before the interview about there was kind of a transition point for you. You were a co-founder and working for Leadpages, and there was a point where you were going to move to Minneapolis, because I’m assuming that it just made a lot of sense given that most of the team was here that you would come here and be involved. But tell us the story of that and how that turned into, in essence, kind of a transitional point for you mentally.
Simon [12:51]: I wasn’t sure. I was kind of trying to test it so I was coming just for a few months. I was highly considering actually moving there. But then I had some problems with the visa because we were growing so fast we didn’t have time to properly prepare for all the legal situations. And I was kind of delayed more in Prague. And eventually realized I kind of value my life in Prague and my environment more. And I felt more stable and more productive here then I would be maybe there. So eventually I kind of transitioned into staying permanently remote in Prague.
Rob [13:25]: So that was maybe two, two and a half years ago and you kept working for Leadpages. And why was that? What was the driving force that kept you at Leadpages working away as the team got bigger? I know things change. Sometimes that can be tough on an early engineer. But there had to be something that kept you there toiling away on the product.
Simon [13:44]: I still very much enjoyed working with Tracy and Clay and I still like the company. I wanted it to succeed. And I felt like I can help the company a lot doing it from inside. So, that’s why I stayed so long during these four years.
Rob [13:59]: Yeah, four years you were there. Cool. And then, recently like I said, a couple of months ago you decided to transition out and you’ve built a new product called Convert Player. It’s at convertplayer.com. And your headline there is ‘Turn your video viewers into email subscribers.’ I have an inkling that you are building this one on your own, and probably want to bootstrap it and make it into a lifestyle business. Is that right?
Simon [14:20]: I don’t like this term ‘lifestyle business.’ I just like building business. But yes, I’m going to bootstrap it on my own and I’m going to be doing everything. I’m already coding it myself, writing all the copy. I’m going to be doing some video marketing and email marketing all by myself. I think it actually might work.
Rob [14:39]: I think so. And you’re in kind of an early access right now? You have some folks using it already? Things are going alright?
Simon [14:45]: Yes. Things are going pretty well. I’m actually excited about how well it’s going. I like that.
Rob [14:51]: Good. Where do you want to take it from here? What does the next maybe six months look like for you with Convert Player?
Simon [14:58]: I have an idea that I want to implement and share and communicate and give away to people, because I feel like this is a piece of marketing tool that is kind of missing on the market. And I basically will be developing a new feature every week and then documenting it on video and showing it to other people to tell them how to do it because I’ve got some experience in that. So I think I’m going to be just doing this simple process like weekly videos and new features for the next half year.
Rob [15:28]: So content marketing basically demonstrating all the new stuff you’re doing and educating folks on how to use it.
Simon [15:33]: Yes.
Rob [15:33]: Yes. Do you want to tell folks – I gave the headline of what Convert Player does – but do you want to tell folks what it actually does?
Simon [15:39]: It helps you to get more email subscribers from the videos, which you can do on YouTube, but if you embed the videos on your site like WordPress or other site, you can actually achieve that by placing a special opt-in box anytime during the video.
Rob [15:55]: Got it. And is this WordPress plugin? Or is it SaaS?
Simon [15:58]: It’s actually SaaS. I was considering WordPress plugin and actually Clay gave me the idea that I should turn it into a SaaS. And I eventually did that.
Rob [16:08]: Yes, that’s cool. It looks like you support YouTube and Vimeo videos and, rumor has it that you’re integrated with Drip. Is that right?
Simon [16:13]: Yes. It is going to be one of my first integrations.
Rob [16:15]: Yes, that was cool. You emailed me and it was kind of fun to hear. Well, to hear A) you were working on a new project. Just because I’ve been watching what you’re up to with Leadpages for so long. Then it was nice that Drip was one of your first integrations.
Simon [16:27]: I’m actually using Drip for my own marketing and I’m using it, I have to tell you, I fell in love with that product. It’s really cool.
Rob [16:35]: Awesome. Yes, that’s good. Glad we could help. A few months ago, when you finally made the decision to leave Leadpages and go on your own and do Convert Player, that had to have been a pretty long thought process. And I’m wondering kind of what was the impetus for that? What eventually made you decide that it was time for something new?
Simon [16:54]: I was thinking a lot about how I could contribute to the company, and how can I help and contribute to the growth. And especially in the beginning, in the first years, I felt like really helpful and really valuable. And then the more the company grew it changed the different sizes and the environments, I slowly got the feeling like the skills I used to grow it from the ground are not as useful. But they are still useful for other things. So eventually I realized I’m going to use them to build a new product from scratch. Because I feel there are some people that generally good at taking a company that’s already launched and taking it to a higher level. And there are some people who are generally good at taking stuff from the ground, which I feel like that’s kind of like my domain. So, in that sense, I might have stayed even a little longer than necessary. But I felt I was still very productive.
Rob [17:44]: Yes. I totally get it. I feel the same way. I am a starter. I mean, obviously, right. I’ve started 20 things. But it just comes to a certain point where – and I don’t know if it’s – I guess it’s level of complexity, or it’s number of employees, or just at a certain point where your contributions aren’t as valuable as they were when they were only two or three people. So, that makes a lot of sense.
Simon [18:06]: Yes. And that start can be long. It could be a few years.
Rob [18:10]: Oh, yes. For sure. Well, and you know what I liked about it is I was basically coming into work for Leadpages as you were moving on, but the relationships are intact. It was a very amiable parting of ways and Clay still speaks very highly of you. And you talk about how Clay gave you the suggestion to go to SaaS. So, it’s obvious you guys are still talking and I know you’re still in touch with Tracy. That’s cool that it’s not some type of burning of bridges or bad blood or anything.
Simon [18:35]: Yes, that’s really important for me. And I want Leadpages to succeed, and I want to be really close to it as a partner business ideally. So, Leadpages incentive would be one of the integrations for Convert Player itself. And I just want to be around Clay and Tracy because they gave me so much and it was a very interesting and awesome ride.
Rob [18:58]: Yes, very cool. Alright, sir, thanks again for coming on the show today and talking about your journey over the past few years. I’ve already mentioned convertplayer.com if folks want to check that out. How else could someone get in touch with you if they wanted to follow what you’re up to?
Simon [19:12]: Well, I guess they can easily just follow me on Twitter and send me a message as well.
Rob [19:16]: Sounds good. What’s your Twitter handle?
Simon [19:19]: Mine is @SimonPrague.
Rob [19:20]: @SimonPrague. Sounds good. Thanks again for coming on the show, Simon.
Simon [19:25]: Cool. Thanks for having me.
Rob [19:26]: 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 comments. 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 303 | Our Favorite Tabletop Games
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about their favorite table top games. Deviating from the typical topics, they change things up and reveal some games they enjoy as a personal hobby. They put the games into 3 different categories by age range and difficulty and share some stories on how their families and kids enjoy them.
Items mentioned in this episode:
Transcript
Mike [00:00:00]: In this episode of “Startups for the Rest of Us,” Rob and I are going to be talking about our favorite tabletop games. This is “Startups for the Rest of Us,” episode 303.
[Theme music]
Mike [00:00:15]: 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 [00:00:24]: And I’m Rob.
Mike [00:00:25]: – 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 [00:00:29]: Well, we are mostly unpacked now in Minneapolis. There’s only just a few boxes left, and now we’ve gotten to the point where we’re hanging curtains, hanging photographs, really putting finishing touches on things. It’s amazing the amount of stuff that, even once we got here, we’re just like, “Oh, yeah. We didn’t really need that,” so we we’re giving stuff away to Goodwill, and then the amount of stuff that we actually need, right? We’re buying all thee curtains and all these paintings and art and stuff for this wall and that. Our living room stuff didn’t quite fit perfectly in the space, so we had to get another chair and stuff. It’s very time-consuming. At this point, I’m not super concerned about the money, like I used to be in our very first apartment, where everything had to be used and everything was Ikea and Craig’s List, but it’s just the time to do that and to find stuff that you like.
Mike [00:01:15]: You know, there’s a time shortcut you could take here. Just go to Target and buy a bunch of picture frames and just unpackage them and hang them on the wall. Just leave the stock photos in there. You’d be good.
Rob [00:01:23]: Boom! That’d be a great idea.
Mike [00:01:25]: [Laughs].
Rob [00:01:25]: Be like, “These are all our children that are away at college.”
Mike [00:01:28]: When you rent it out as an Airbnb, it won’t matter.
Rob [00:01:29]: Yeah, exactly, because everyone will feel like it’s theirs. The other thing I’ve been up to is a lot of hiring, like at work. I always forget how time-consuming it is to find really good people, and to find people that are the right fit for what you need, and we’ve tended to be extremely picky, in general. We’ve hired pretty slow, and we basically have four open positions right now. It’s almost my entire job right now. It’s like 30-plus hours a week of reviewing resumes and meeting with people and talking and then getting that going. That’s with – Lead Pages has a full-time recruiter, and several full-time HR people, so I’m not even negotiating anything in terms of actual salary, or researching salaries, or doing any of that. It’s purely just finding the right people. I’m hoping that we get over a hump here pretty soon and I can back off of that and get back to some more product-focused stuff.
Mike [00:02:1]: Cool.
Rob [00:02:17]: How about you? What’s going on?
Mike [00:02:18]: I think last week, I was – I don’t want to say “down in the dumps,” but I was just a little disappointed about the apparent lack of progress on the technical front and all the different challenges we’ve been running into. I feel like we’re starting to turn a corner. I just onboarded a more advanced senior developer onto the team, and basically replaced the rest of the team with him. So that is going pretty well so far. He did a full review of the API, and started overhauling a bunch of things, and I’m still working on other things in the meantime; but I think things are going in the right direction now. It’s been a slow process, but I think things are starting to turn a corner.
I’ve had a couple of conversations with some customers about some things that are in our feature pipeline that they’ve been looking for, that are, I’ll say, preventing them from fully transitioning over and using the product, because they want to use it to replaces some other things that they’re using. Until those things are in place, they really can’t make that transition, and it looks so far like – I’m mitigating as much of the risk as I can by having those conversations, but so far it seems like we’re really on the right track in terms of what it is that we want to deliver. So, I’ll have the conversation with them and say, “Here’s the broad-strokes idea of the feature. What is it that you’re looking for?” then let them talk, and see if it mentally maps back to what it is that we were planning on building, or we’re in the middle building. It’s nice that there’s 90, 95 percent overlap in what they envision versus what we’ve road-mapped out and are building.
Rob [00:03:40]: That’s really cool. It always is painful to run into roadblocks like this, and it’s nice to feel like you’re back on track. Do you feel like you’re just turning the corner now – like you’re just coming out of it and that’s going to be sustained – or do you still have in the back of your mind, “Are we still stuck in this?” and, “Are we really actually making progress?”
Mike [00:03:56]: No, I feel like we’re starting to come out of it, because a lot of the testing, I’ll say historically for certain things, has taken much longer. The reason it has taken longer is because we have to run a bunch of data through a process that will take hours or days to run, and as part of going through that process, it’ll run into a problem that we didn’t anticipate. Then we have to rewrite a bunch of stuff and then run the entire thing again to see if that worked instead. It’s almost like we’re translating data from one place to another. If fails along the way, we’ve got to redo a bunch of stuff. But in reworking it, we also are able to find places where we can cut down on the amount of time that it takes to process and do all of the work. I’ll give you an example. One thing took four days the first time – or it was on track to take four days. Then after it ran into a problem, I reworked a bunch of the code, got it down to take, I think, ten hours or something like that. Then it ran into a different problem, and then I reworked that and was able to get it down to about three hours. So, the initial iteration times to just see if a particular prototype of how to do something is extraordinarily painful, but over time as you go through some of the different challenges, it gets to be less painful because the iteration time is quicker. It still takes time to build all that stuff.
Rob [00:05:10]: Oh, for sure.
Mike [00:05:11]: I feel like we’re starting to turn that corner, and it’s getting easier and progressively faster to go through each of those iterations. That’s good to see.
Rob [00:05:18]: So, what are we talking about today?
Mike [00:05:20]: Well, today we’re going to be talking about some of our favorite tabletop games. This is a bit of a deviation from the shows that we typically do, where we focus in on a particular aspect of how to do something, or certain things that you might need to be careful of when approaching a particular problem. Every once in a while, we like to do, I’ll say, an “off-the-beaten-path” episode, where we talk about something different, whether it’s something that we specifically do either in our personal lives or just something that interests us. Today, I wanted to talk about one of the things that – in my house, we have a family game night. Once a month, roughly, we get together with other families, and we’ll bring all of our kids together. There’s – I don’t know – like ten, 12 kids or something like that, and we’ll be playing different games with them. Sometimes it’s just smaller groups. Sometimes it’s just the kids. Sometimes the kids will be playing one game, and sometimes the adults will be playing different games.
[00:06:07] I wanted to talk about some of the different games that we’ve played, and some of the different things we’ve tried, because some things we’ve tried introducing our kids to, and the kids are interested, but it’s just way too advanced for them, or it’s just not a good fit. Then there’s other ones where we don’t think it’s going to be – we’re really not sure, and it turns out that it’s a great game and everybody has a fantastic time.
Rob [00:06:26]: Super cool. Yeah, I’m such a board game fanatic. I should say “tabletop games” right, because I like RPGs, and I like more – I think “board game” connotes – to me, it’s like Monopoly and Chutes and Ladders and stuff, but “tabletop” is just more sophisticated, more strategic, something that just gets your brain firing. Just learning the rules is always such a task, and then learning the strategy of those rules and how to beat others at it is – I think it brings out – I think a lot of founders, this should ignite something, because it’s about complex systems and competition, and it’s really similar to launching a startup, so I think we could do almost an entire episode on Rob’s favorite tabletop games that he’s gotten on Kickstarter, because I have dozens and dozens of them. I’m that into this stuff.
Go ahead. Say it. “Ne-e-erd!”
Mike [00:07:11]: Nerd! [Laughs] Of course, on that note, I’ll mention that we’ll link up a website called boardgamegeek.com in the show notes that you can go take a look. You can probably find every single one of these games on that website, and there’s usually an in-depth review, and there’s reviews of each of the different games and the age-appropriateness and the number of recommended players and things like that.
Rob [00:07:33]: I want to throw one other – oh, you’re going to just hate me if you like tabletop games and you like Kickstarter. There’s a podcast called “Game Punting.” It comes out once a week, maybe once every other week. All they do is review their favorite six or seven crowd-funded tabletop games. It’ll be Indiegogo and Kickstarter, and it is just – it’s terrible for me, because I listen to that, and I’m just clicking through. I’m backing games, all crazy stuff. Sorry if you like tabletop games and crowdfunding, because you’re going to spend a lot of money.
Mike [00:08:02]: I guess we’ll break this down into four, broad categories. The first one is games that I will say are aimed at younger kids, and by “younger kids” I mean seven and up. These are the types of games that you can get a kid into and they will understand it, and it will actually be fun to play the game with them versus those things where you try to introduce them to it, and it’s just way too advanced for them.
Rob [00:08:23]: And these are not just games for kids. It’s just games that kids can start playing, because on this list we’re going to talk about Dungeons and Dragons, Magic: The Gathering. You can play that up until you’re our age, and it’s still super interesting. So we’re not going to be talking about necessarily kid games, but things that they can start playing at seven or eight years old.
Mike [00:08:40]: Yeah, that’s a really good distinction, because a lot of these games, I still find them highly entertaining, and it’s a lot of fun to play them, whether you’re playing with the kids or without them. These are just the types of games that you can introduce smaller kids to that you’re still going to enjoy playing regardless of whether it is aimed at that younger crowd or not. It doesn’t necessarily matter.
The first one is called “Sushi Go!”, and it’s a card game where you deal the cards out to everybody, and you are trying to score points from one round to the next. It’s very easy for kids to get into it. The idea is that you’re trying to collect and match up these different types of sushi, and for each match that you get, or each set that you get, you will score a certain number of points. The points are anywhere up to, I think, three points for each set that you get, so it’s either one, two or three points. You go through several rounds. Then at the end of the rounds, you add up the number of points that you get. Usually, the games in this are pretty close in terms of points. It’s really hard to get so far ahead of somebody else that you have no chance of winning, so that’s one of the benefits of Sushi Go!, especially when you’re trying to play with kids. The other thing is that there a lot of complexities to it. There are certain things that are worth a lot more points than others, and it can be difficult to get those matches, so if you’re trying to get something that’s worth four points, it can be very difficult to get that, but if you do get it, it can be very helpful if you are able to put those things together. You are trying to match what you get versus what other people may have in their hands, so you’re essentially playing head-to-head by taking things away from them when you play down sets.
Rob [00:10:11]: Oh, man. That would be so brutal. My six-year-old would scream bloody murder if someone took something from him.
Mike [00:10:17]: The thing is you don’t know. You just know that there is a card in there, and it may be face down, it may be in the deck, or it may be in somebody else’s hand. But let’s say that I’m trying to get a California roll, or something like that, and you’ve got one in your hand. I’ve got three in my hand, but I want a fourth one. Well, I don’t know where that fourth one is, but if you’re hanging on to it, I won’t get it, but I won’t necessarily know until the end.
Rob [00:10:39]: It looks like Sushi Go! Is right around $9 on Amazon.com here in the States.
The Second game we want to talk about is “Magic: The Gathering”, and this is a card game that’s been out since the early ‘90s. I actually played it in college. I don’t think it was out when I was in high school. Super fun game, and you can get starter decks for – I don’t know – 10 or 15 bucks, and each player needs a deck. So, my ten-year-old and I play – and, to be honest, we didn’t actually by starter decks. We went on eBay. For, like, 20 bucks – I think on Amazon as well – you can get a big, old box of hundreds and hundreds of “commons,” they’re called – commons and some uncommons and two rares or something. They’re not actually worth that much, but you can totally play the game if you don’t want to get into the collecting of it, because Magic is both a collectors’ game – where the cards go up in value and stuff – but if you really just want to play it as a game, which is probably would I’d recommend if you’re going to be playing it with younger kids, you can, again, spend 20 bucks and get plenty for tons of different decks. The concept is almost like a simplified version of Dungeons and Dragons, in a way. It’s just two wizards battling. It’s pretty sophisticated now. It’s actually gotten more complicated with more game mechanics over the years; but, in essence, you have some cards you play that are like your resources. Then you can tap those resources to summon creatures, and then you attack each other. You, as the spell caster, have 20 points when you start, and you’re just trying to get the other guy below 20. You can attack each other as creatures or each other. Yeah, it’s a pretty fun game, and we’ve played it a lot. We’ve gone to camps my ten-year-old went to where there were Magic tournaments, and it was so cool. He had brought his deck. What is it? A 20-year-old thing now, so a lot of folks play it, and it’s really age-appropriate from probably age seven or eight and up. Even when my oldest was seven, he picked it up pretty quickly.
Mike [00:12:17]: Yeah, I think the game came out in ’94 or ’93, maybe even ’92, something along those lines. So, it’s a pretty old game at this point, but every year they come out with new expansion packs, and they come up with new stuff. But I think you’re right. If you’re just trying to get into it, or you are trying to bring kids into it, it’s very well worth it to go on eBay and just buy, like, thousands of cards because they’re very, very cheap there. You won’t get the greatest cards in the world, but you can get a lot of them, and it’s significantly cheaper to do that than it is to buy all your cards new. There’s really no additional value to buying a new card these days. I think that the company behind it, Wizards of the Coast, realized very early on, or at least maybe five or ten years into it, that some of the previous cards that they came out with, they just weren’t going to make anymore; and some of them are worth thousands of dollars at this point. They’re not going to make them anymore, but nobody plays with those either, and they’ve banned certain cards from tournaments and things like that. I actually have a deck that was built ten, 15 years ago. It is completely not tournament-legal. There’s no way that it’s tournament-legal at this point.
Rob [00:13:15]: One, last thing about Magic: The Gathering, and we’ll move on. This is one of those games, one of the few games on this list, that you can play over and over for years. Since every time you choose what your deck is, you can just play with new cards. You can play different – there’s five, different colors you can be. Depending on which color you are, it’s just a totally different game, so much like Dungeons and Dragons or something with infinite possibilities – there’s no board. Certain games have boards. I find that you play them five, ten times, and then you’re kind of done with them. You’ve played it out, and it’s not fun anymore. Magic is one of those that you can play for a really long time.
Mike [00:13:46]: The next one on this list is called “Storming the Castle.” I got my kids into this when they were about seven years old, and they love it. It’s based on the movie “The Princess Bride.” So the idea is that you pick one of the characters from “The Princess Bride,” and you send them on a mission to try and storm the castle. Whoever gets there first is the person who wins, and there’s all the different places from the movie inside the game on these different cards, and you can put them in front of other players. You can overcome different challenges on your own path, but the idea is you’re just trying to storm the castle as fast as you can and get there before anyone else is able to get through all of their challenges.
Rob [00:14:22]: It looks like it’s available for about 17 bucks on Amazon. There’s a whole series of “Princess Bride” games. That’s hilarious. I’ve never even heard of these. I like that movie, but I’ve never heard of any of these games.
The next game is called “Boss Monster,” and this is also for about ages 7 and up. What I like about this game – I’ve only played it a few times, but the art is super cool. It’s eight-bit. It almost looks like Super Mario Brothers graphics on these cards. It’s just a card game, and it’s like a dungeon-building game. Not a dungeon-building, but – what do you call it? You put the dungeons down, and then you fight through them in rounds.
Mike [00:14:53]: I forget what the specific name is for it, but it’s kind of a resource-building game where you put the different cards down, and those are your resources, and you’re trying to attract or, in some cases, repel certain types of heroes from your dungeon; because there’re certain ones where you’re just not going to be able to compete to get them to your dungeon, so you just say, “I’m going to give up on that type of hero,” whether it’s a fighter or a wizard. There’s other ones you’re trying to attract based on what it is that you have in your dungeon. The goal is to get enough of the heroes to come into your dungeon that you can kill and get the points for them, before enough of the heroes come in and get through your dungeon and kill you. So, you can either get hurt, or you can kill the hero and get the points for it. You can either win the game or lose the game, or you can cause somebody else to win or lose the game based on whether or not you push a hero to their dungeon or you take the hero away from their dungeon.
Rob [00:15:41]: Yeah, it’s “Boss Monster: The Dungeon Building Card Game.” I think that about wraps it up. It was $20 on Amazon.
Mike [00:15:50]: The next one is a fun one. It’s called “Car Wars: The Card Game.” There is a Car Wars pen-and-paper game. It’s not really a role-playing game, but the idea in that game is that you build your vehicle of some kind, and then you can get put into an arena, and you can shoot other cars until one of you blows up, or one of you tries to get away. In the card game, Car Wars: The Card Game, you have a card that represents your car, and then you draw a bunch of cards, so does everybody else, and then you play one card per turn against the other players. You are essentially trying to be the last person in the arena with a functional vehicle, and there’s lots of different things that you can play. You can either play armor. There’s weapons that you can play. There’re special abilities that you can get and certain types of defensive measures, stuff like that.
I find that this is a lot of fun with my kids, and my wife plays with us as well. It’s interesting to see that, because you can attack anyone, it’s very easy to either be ganged up on or to have somebody else gang up on you. The kid will occasionally gang up on somebody, and there’s really not much you can do if that happens, but it’s not to say that you can’t get certain types of cars that will help you overcome two people coming against you.
Rob [00:16:55]: It looks like Car Wars: The Card Game is about 14 bucks on Amazon, and there’s also Card Wars: The Board Game. I haven’t played either of those, but I have heard about them. Car Wars: The Board Game is actually – what – 20, 30 years old. It’s kind of a classic.
Mike [00:17:07]: Car Wars was made by Steve Jackson Games, and it has been around for a very long time. Steve Jackson Games is also behind Gurps, which is the generic, universal roleplaying system, I believe.
Rob [00:17:17]: Our next game is called Dungeon. I actually recommend this. If you’re thinking about getting your child into Dungeons and Dragons, or you’ve never played Dungeons and Dragons and you want to get a more entry-level version of that, Dungeon is – when I bought it on Amazon brand new, it was $15, super cheap. Comes with a board, so it’s like D&D lite. Comes with a board, and it comes with some generic character classes, and then you just wander around the board. When you go into a room, you flip a monster, and then you try to fight it. It’s very simplified rules, but it just gets you some of the combat mechanics so that you understand the movement in combat stuff. This is one of those you play five or ten times, and then, yeah, you’ve kind of played it out. There’s just only so many things you can do, but it’s super cool, especially for younger kids because they just get it. It’s in the paradigm of the little pog moving around with the roll of the dice and being able to fight things, but you don’t need all the heavy weight of six, polyhedral dice like in D&D and all the heavy rules set.
Mike [00:18:14]: That’s a really good way to describe it. It’s “Dungeons and Dragons lite,” because there is that board game, and it’s very self-contained. But the downside, I think, of it is, as you said, you play it five or ten times, and then it gets boring. You start to realize there’s one character class in the entire game that has an advantage over all of the others, and there’s no point in choosing any other one. Since there’s only four character classes and only two people can chose any one, if you have more than three players, two of them are going to get that one character class, and the third player has to choose something else, and it can be really challenging to win, or even come close, if you have to use anything other than that one class. I think it’s the cleric, but I’m not sure of that.
The next one on this list is called “Small World,” and this one’s got great graphics. It’s a very colorful game. It’s a little bit like Risk, but without all of the annoyances of Risk, and I think they put that in some of their marketing materials as well. The idea is that you have a race that you choose, and then that race will get some special abilities that go with it. This has a lot of replay value, because those things get mixed up every time, so there’s 15 different races, I think and 12 or 15 different types of abilities, and depending on how those get mashed up in the game, you can have, for example, flying giants. Or, you can have underworld elves, or something along those lines. The idea is that you get a handful of these tokens, and you put them on the board, and it costs you a certain number of tokens to take over a space. That number is modified by the abilities and the race, so you might be able to take over seven or eight different spaces, or you might only be able to take over two or three. It depends on what other people have played on the board. The goal of the game is to try and score as many points as you can at the end of the turn that you take. What I like about it: 1) is the infinite replay value of it, and 2) that it’s so simplistic that it’s easy to understand and get the appeal of it without having to go through all of the intricacies of Risk and all the advanced strategy of Risk. In general, Risk is a very simplified game, but it makes it a challenge to play just because it takes so long to play Risk. With Small World, you just don’t have that option. You have very limited opportunities to do things during your turn.
Rob [00:20:20]: That’s the cool way to explain it. I’ve never played this game, and for as much as we are into tabletop games, it’s really surprising because there are, like, 20 different versions of it, and there’s all these expansions, so I knew it was a popular franchise. I’ve just never bought it, and that description actually makes me much more interested it.
Mike [00:20:37]: I would highly recommend this game. My kids love it. My wife will play with us as well, and it’s a lot of fun.
It kind of leads us into our next one, which the kids also really like. It’s called “Settlers of Catan.” It’s a very similar game in terms of the complexity, but obviously Settlers of Catan is much different in that you are trying to get your team or – you’re trying to get to ten points, and so you have to build cities. You can build roads. You can’t directly affect or attack somebody else, but you can indirectly block them or, prevent them from doing things. In Small World, you can directly attack somebody and completely take over a particular spot, but if you do that – you might only get eight tokens on a given turn, and it might take five or six to take over one spot. With Settlers of Catan, it’s very much a resource-driven game where you’re trying to gain resources and deploy them in a way that allows you to build things down the road. It’s a little bit more strategic in that sense. I like the replay value of Small World over Settlers of Catan. Settlers of Catan is the same from one game to the next, but I also think that that’s partially because we don’t move the board around in Settlers of Catan. I think with Settlers of Catan, the board will change, and where the resources are and the point values and stuff. With Small World, the board is different, depending on how many players you have, but the board is always the same. The two-player board is always the same. The three-player board is always the same. With Settlers of Catan, everything could be different. We don’t play it that way just because it could result in a four-hour game, but those are the main differences between them.
Rob [00:22:04]: Our next game is the classic, the originator, Dungeons and Dragons. I played in grade school and then a tiny, tiny bit in high school. Then I just didn’t play again for decades. When my son got to be about eight or nine and we were playing some Magic: The Gathering and I knew he was ready for it – I did research, and I was figuring I played first edition. I played basic D&D first –
Mike [00:22:27]: Oh, you’re old. You’re old. [Laughs].
Rob [00:22:28]: Yeah, no. I am that old. I was young. I was seven or eight when my brother got it. Anyways, there’s been five editions, and there’s all this religiosity around which edition you want to play and stuff, but I’ve researched, researched, and I finally figured out that if you’re going to start today, I would just highly you start with fifth edition. It’s got a streamlined rules set. Again, there’s a beginning D&D thing for 13 bucks on Amazon, and it comes with the dice, and it comes with one module, and it comes with a guide, the rules to it. D&D, if you’ve never played, it will blow your mind. It is a free-form game where you need a dungeon master, so it’s someone who’s running the game. They’re not playing against the players, but they’re basically crafting the story. It’s really nice to have multiple kids or multiple players playing their characters. You can really get into it and have people roll their own characters and create their own. We just use the ones out of the box at this point just purely due to time, because you can sink hours and hours into this. We got some miniatures, and we printed out some layouts. Man, we used to play without miniatures, where it was purely just describing what was around you, and that was fun, but combat’s a lot more fun if you have miniatures to figure stuff out.
There’s too much to be said about this game, to be honest. But if you’ve never played it and you’re into tabletop games, it is a classic. Fifth edition is a very solid game. I recommend that you check it out.
Mike [00:23:45]: Yeah, I would definitely recommend the fifth edition as well. I, like you, started back when it was still – it wasn’t even advanced Dungeons and Dragons. It was just the basic rules set back then. They had all the different boxes for it. I like the fifth edition rules much better than a lot of the advanced Dungeons and Dragons rules. I stopped around the second edition or so. There was 3, 3½ and then 4; and I didn’t really pay too much attention to those. Then as my kids got older, I got back into it. I really like that they’ve clarified a lot of things, and they allow you to create a character in such a way that it really builds a story around the character, and it’s character-focused, as opposed to previous editions, where it seemed more about the abilities that you got and the treasure and stuff like that. It was much more geared towards hack and slash, which I think younger kids are much more attracted to that side of the game, and that’s one of the downsides of this game as well, especially if they’re six or seven, or maybe even eight years old. They’re not so good at the roleplay, and they’re much more hands-on when it comes to the action sequences or there’s combat going on. They really like that aspect of it. The roleplaying, they’re just not as in tune with how to do that. So there are some challenges that you have to overcome; but, again, depending on the group that you’re in, you can still definitely make that happen and make it work.
[00:24:56] The next game is called “Code Master.” Code Master is a game that is aimed directly at smaller kids. If you’re a software developer of any kind, you’re probably not going to be interested in this one, but it is a nice intro to how computers work for kids. It’s very logic-driven. You get a series of commands on each of the boards, and there’s 40 or 50 different boards. Let’s say that one of them gives you three commands, and you can go from a red space to a green space, and then you can go down a slide, and then you can move from a purple space to a red one, and you have to move this little pog from one side of the board to the other using just those instructions. You can’t duplicate things. There’s usually almost only one way to make that happen given the board that you’re on and the instructions that they give you, so it’s very self-contained and very constrained; but it also teaches kids how to work out a problem that has a single solution. Some of them, as you go through further and further into the game, some things can be reused. You can enter a space more than once, and it can get more complicated, but it starts out, and it’s very, very easy. It’s a nice intro into teaching kids how to mentally map out what the path is to get to a given destination.
Rob [00:26:06]: Yeah, and if you’re looking for games along these lines, Robot Turtles is another one I’d recommend. It’s some very basic programming skills.
Our next category is collaborative games. Again, these are all ages. You can start probably around seven or eight years old. These games are so fun, because you’re all working together against an AI. It’s like an AI mechanism that sometime is flipping cards. Sometimes it’s rolling dice. It sometimes is picking randomly out of a pile. So, Castle Panic is one that’s really cool. It’s aimed at a little bit younger kids, but you’re basically just defending a castle, and all these monsters are running at it. Forbidden Island, as well as Forbidden Desert, are neat games. They’re a little more complicated. I’d say it’s – probably want to be a little older to play that, but they have neat, little – what are they? Little, plastic game pieces that make this field, and the are in metal boxes, so it makes it feel like a real premium game. These ones are a little more expensive.
Then I really like both Pandemic and Flashpoint. I think they were designed by the same guy, and they have similar game mechanics, but in Pandemic this virus, or multiple viruses, are taking over the world. The viruses are the AI, and you just have to – you’re trying to knock them off. Then in Flashpoint, it’s actually a home that’s on fire. The fire spreads with each round, and you’re a fireman going in and trying to take it out. Cool part about these, again, is you’re all working together. It works well with younger kids, because you can help them, and you’re not helping them play against you. Also, you either all win together or all lose together. These are probably – aside from maybe D&D and Magic: The Gathering, these are probably my favorite games.
Mike [00:27:33]: Yeah, we play Castle Panic, and Forbidden Island. That is the nice piece of those games, is that it is collaborative, and you win or lose as a team. If you don’t help each other out, then you’re all going to collectively lose. It’s nice to see the collaboration and the strategy behind helping each other out: “Well, if I do this, or I give you that, then you’ll be able to do this and that,” and being able to work through the problems in advance. Again, a lot of them are just driven by the cards, or the AI, as you put it; and sometimes there’s nothing you can do. You can play the best game in the world, especially with something like Pandemic, and you can still just lose, and there’s nothing that you did wrong.
[00:28:09] The next category of games – I will say that these are probably more for mid- to late teenaged kids, so if you have kids that are 12 or up, or 15 or up, then these two games are probably more appropriate for them. The first one is called “X-Wing Miniatures,” and the next one is called “Wrath of Ashardalon.” The X-Wing Miniatures game – my kids looked at that and said, “Hey, I really want that, and I want to play it.” We got it. In less than 24 hours, they broke one of the pieces; and within three or four days, half of them were broken. The reason I would say that this is aimed more at older kids 12 and up is because they’re just not careful enough to not break those things, and they are very, very brittle. It’s not just kids, to be perfectly honest. There’s plenty of adults complaining online, “Hey, these are easily broken. How do I get replacements?” and they didn’t really sell replacements for those pieces.
Rob [00:28:57]: Yeah, we had the same experience. It’s a fun game, but I think almost all of our pieces have been broken and glued back together at this point.
Mike [00:29:04]: Wrath of Ashardalon is almost like a Dungeons and Dragons lite game, similar to Dungeon in some respects, but it has a lot more replay value than Dungeon, but it’s also a lot more complicated. There’s a lot of nice figurines that comes with it, and it’s kind of expensive. There’s probably four or five different variations of the same type of game. There’s one that’s set in the Ravenloft realm, and there’s probably two or three others that I can think of; but they’re all, I would say, probably 14 to 16+ games. You really can’t have smaller kids playing those games, because they just don’t understand all the rules, and there’s just so many rules. It’s actually kind of painful to play, so unless you’re really into sitting down and playing a board game like that for three or four hours when you feel like you’re going to be flipping through the rules a lot, probably not a great game for the younger kids.
Rob [00:29:52]: That about wraps us up for today. 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 by searching for “startups” and visit startupsfortherestofus.com for a full transcript of each episode.
Thanks for listening, and we’ll see you next time.
Episode 302 | 8 Key Takeaways from MicroConf Europe 2016
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike discuss 8 key takeaways from MicroConf Europe 2016. A couple weeks after the conference they highlight some of their favorite points from the speaker’s talks. Also detailed notes from the entire conference are available at microconfeuroperecap.com
Items mentioned in this episode:
- Self-Funded Product Survey
- MicroConf Europe
- MicroConf.com
- BlueTick.io
- CartHook
- Teamwork.com
- Qualaroo
- Balsamiq
- Leadfuze
- Drip
Transcript
Rob [00:01]: In this episode of Startups for the Rest of Us, Mike and I discuss eight key take-aways from Micro Conf Europe 2016. This is Start-Ups for the Rest of Us, episode 302. [music] Welcome to Start-Ups 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 [00:28]: And I’m Mike.
Rob [00:29]: And we’re going to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike [00:33]: Well, kind of in a little bit of a slump lately. I’ve been trying to plod through some of the development issues for [Bluetick?] and try and get the product to a point where customers are actually getting value out of it that they need, and there’s just technical problems. Some of them are just really hard to get through and are taking forever, just way longer than I would have anticipated initially, and it’s just a long slow slog. So it’s a little disappointing. But, I mean, I’ve had conversations with the people that have been using it and everything is on the right track, it’s going the right direction, it’s just a lot slower than I would like it to be.
Rob [01:04]: Is this because of technical debt? Or is it early scaling issues?
Mike [01:08]: It’s a little bit of both. Some of it is scaling issues, because certain things are a just a little bit slow on the back end because of the number of messages that I’m storing and what I’m doing with them. And then some design decisions, for example, one of which is I’m not going to bother storing some of this information because we don’t need it. It turned out that we did, and it’s a lot more complicated to shoe-horn it in later than it would have been to grab it all upfront. Those are the kinds of things that we’re running into, and just scaling up that amount of data is a lot harder than it seemed to be initially.
Rob [01:39]: Yup. And do you have – do you think you have a couple of weeks? Because you don’t want to get new customers on when you’re doing this, right? You’re kind of holding off?
Mike [01:46]: Right, yeah.
Rob [01:47]: How long do you think that’s going to be?
Mike [01:48]: Well, the things that I’m working on now I’m kind of in the final phases of testing it, so I’m hoping that I’ll be able to do some of that migration, and getting some of that data into the system, within the next week or so. Beyond that, it’s a matter of going back to people and saying, “Okay, this is where it is.” Because there’s all this work that needs to be done upfront to gather everything, and then there’s additional work that needs to be done to display everything. So I’m hoping that in the next week or two I’ll have something that is, I’ll say, much further along, and can display information that they need. But it’s kind of hard to say, to be honest.
Rob [02:19]: Yeah, it’s a long slog, man. I’m sorry to hear that it’s going slower than you want it to, especially when it’s technical issues, those are the things that kill me. It’s like we have one advantage as software people, and it’s that we know how to build products. But when you run into these things, it always feels like, “Man, this is just killing me!”, because you want to get the sales going, and you know you should be focused on marketing and onboarding and getting new people in, and sometimes these things, you just have to take care of them. You know? You can’t have the technical debt sneaking it, especially if the app isn’t working properly, or you can tell it’s not going to scale past 50 people or something.
Mike [02:50]: Yeah, and part of the issue is that I’m also running into bizarre edge cases that, if you think about it and say – I’ll give you a prime example, what characters are valid characters in an email address? You probably think to yourself, “Well, alphanumeric, and then dots and then the at-sign, of course.” But then beyond that, there’s all these additional characters that you would not even consider could possibly be part of an email address and they can be. For example, like slashes, plus signs, equal signs. There’s all this other crap that can go in there, and according to the RFC’s, those are all completely valid characters, and it just sucks to end up running into those things when you just didn’t anticipate them.
Rob [03:29]: Yup. Early on we had to do a little research too, and I think – the nice part of using Ruby is that I think there’s a gem that does the validation and it’s a very complex – I’m not sure if it’s a [Reg-x?] or a complex series of statements. But that’s the kind of thing, in that particular case, be on the lookout for rather than – we’ve tried not to write our own because we’re not experts at it. We probably would be now, but we weren’t three and a half years ago when we were building DRIP.
Mike [03:52]: Yeah. This isn’t for specifically validating that it’s a valid email address, I’m already using modules for that. It’s more a matter of – to give you a prime example, if a slash appears on an email address I can’t use it in Microsoft shared platform as a partition key, so I basically have to apply some sort of transform to it, and then use that as the look-up key, as opposed to actually using the email address, which is what I originally planned on doing. Of course, when you run into that after processing several hundred thousand messages, then it becomes a problem.
Rob [04:21]: For sure. So on my end it’s been kind of nice. A couple more of the DRIP team members have joined me here in Minneapolis. So for a couple weeks there I was kind of – you know, you’re just kind of flying solo, didn’t know anybody, like the first day at a big company, and you don’t know anybody. But it was really cool, Derek and Anna have since joined me and I feel like things are continuing to fall into place. We’re hiring now three new people for the engineering team, and it continues to be fun. It continues to be a good journey where I am learning, and my team is learning, and things are going well. We’re going fast, like our trial count, I probably can’t even say how much it went up, but hundreds and hundreds of percents, many x’s up from where it was the week before closing. It’s been a fun ride, and it’s been interesting to watch the app scale, and to watch which things start to creak and kind of teeter, and then we have to jump in and say, “Alright, we need to increase these boxes. We need to increase RAM on this box. Or “We need to rewrite this one piece.” And so we’ve been doing that. But fingers crossed, knock on wood, we haven’t seen any major scaling issues to date, so that’s been really nice.
Mike [05:26]: Awesome. So what are we talking about today?
Rob [05:27]: Well today we’re talking about eight key take-aways from Micro Conf Europe 2016. We ran Micro Conf Europe just a couple weeks ago in Barcelona. We had about 110 attendees, so it was a little smaller this year than last year. Before we dive into these, I want to refer focus to MicroConfEuropeRecap.com if you’re interested in detailed notes on each of the talks. We had nine talks, and then we had some other attendee talks, and a panel and some other stuff. Kristoff [Egalhart?], once again volunteered to take notes for us, and they’re at MicroConfEuropeRecap.com and they’re detailed and very good. So what you and I did is sat down and said, “What were kind of the key take-aways?” These are not all of the take-aways, for sure. There were people taking pages and pages of notes. These are just some things that kind of struck out to you and I as we talked through the two days of speakers. So our first take-away is to be prepared to rewrite your MVP, and this one is from Jordan Gaule who did a talk called “Two Years in the Sass Trenches”, where he walked through his experience starting Cart Hook, where he walked through his experience of the last two years of launching and growing Cart Hook, and finding a co-founder, and partnership catastrophes with external companies, and perseverance and what it’s taken to get there. A big lesson that he said was, “If you build an MVP be prepared to rewrite it.”
Mike [06:48]: I thought that was a very telling, and probably an eye-opening piece of advice, just because when you’re building something you try and build it with the future in mind so that things aren’t going to fall over and break as soon as you add one, or ten, or twenty customers on to it. You can’t always predict what’s going to happen at that point. I think Gabriel [Weinberg?] of [Duck Duck Go?] had mentioned this in the past as well – if you 10X what you’re doing the problems that you’re going to run into are just exponentially more than what you had previously anticipated in whatever previous rewrite you had done, or reengineering, and you’re always going to run into those scaling issues at some point along the way that you have to rewrite a bunch of stuff. Which kind of sucks, but it’s, in a way, a good problem to have if you’re getting to that point.
Rob [07:30]: Yeah. Whenever I hear people say “MVP,” I wonder in my head, “Do you mean a crappy version that has a lot of technical debt?” Because if that’s what they mean, that scares me a little bit. When I think of the MVP of DRIP that we launched, it was the code – the underlying code was good, and the architecture was solid, and it had test coverage. It was a solidly engineered software product, but it didn’t have a ton of features. That’s what I think of minimally viable in that instance. And obviously, an MVP doesn’t even necessarily need to be software, even if you’re going to start a software company. We’ve talked about that – how you can do human automation, and there’s all kinds of ways to work around having to not build software, basically. But if, in fact, you are building a software product for something, I don’t think I could move forward with it as something that has a bunch of technical debt, because it’s going to come back to bite you at some point. Because if you do you’re MVP, you get 10, 20, 30 customers, what do you do now? Do you take six months to rewrite it? You’re just standing still? That’s no fun. Think twice about what you’re doing, and how you’re doing this. Our second take-away is to brute force sales in the early days. This also comes from Jordan, who, in essence, had a virtual assistant that was going out and looking for possible clients of Cart Hook, and then doing cold email sequences, and just talking on the phone. I mean, it’s really just brute force. It’s just perseverance. It’s coming in every day, doing the slog, doing the grind, and I think he said that got him to – it was around 5K in MRR. That’s like super admirable, just clawing your way. He didn’t really have an audience, he didn’t really have a list he could go to, and he just showed up every day and did the stuff a lot of other people aren’t willing to do.
Mike [09:01]: Yeah, and a lot of those types of things are going out and writing cold emails, or scraping lists together from different websites that you think would be a good target. That’s actually one of the strategies that I’ve seen recommended to people to get your first hundred customers, is go out and create a list of who you think your best, or flagship, customers would be for your top 25 or top 50 customers, and people you would want to do business with. Then iterate through them, and talk to those people, and see if you can get them on- boarded as customers. If you can, then it will help you build the roadmap for the future in terms of how to get in front of more of those types of people. But just showing up and doing the work is, I’ll say, highly underrated.
Rob [09:42]: Our third take-away is, if you’re not getting initial traction during customer development you may just have things completely wrong. The advice to talk to more customers may not be correct. This is a take-away we pulled out of your talk, which is called “Drawing the Line Between Success and Failure” where you did the survey, or the mini-research study, where you asked boot-strappers specifically about products that they had either failed to launch, or launched, and then had either failed or succeeded at the after-launch. You looked at the data and you analyzed it and you showed your findings.
Mike [10:11]: I think one of the hard things about the data that I had was there’s not enough data to begin with, especially in the boot-strapping and self-funded space. But some of the things that I really wanted to zero in on were edge cases where you could see clearly defined lines between the maximum amount of time that successful companies spent doing customer development, and then the average time, for example – or the minimum time – that companies that were not successful did. You could see very clearly that the maximum amount of time was I think about 10 or 12 hours of customer development for the successful ones, and then there were some people who did upwards of 50 or 100 or even 200 hours of customer development. The reality is that, in looking through that data, and kind of picking through all of the things that I found, what I came to realize was that there’s people who can get themselves into a situation where they’re not sure what they should do. They think that they don’t have a clear picture or clear understanding, but they want an idea to work so they’ll keep talking to people in an effort to try and make it work. That is essentially deluding yourself into thinking that strategy is going to work, because just talking to more people will get you more people to say “Yes”, but it also kind of shows you how difficult it’s going to be, in the long run, to get more people on board. If you can’t convince people who are in your network, who are very likely the people who you’re talking to first, if you can’t convince them that your idea is something that is going to provide business value, what chance do you have from an anonymous webpage where people who have no idea who you are are coming to it and are trying to evaluate it?
Rob [11:42]: Right. I think in the long term you want to increase the number of survey respondents. I think you had about 55 or 60 at the time you presented it there, but it would be nice if some more people would submit their stuff so you can increase the accuracy of this statistics you’re running. Perhaps we could link that up in the show notes, and if you’re interested in providing your data, it can be anonymous or not, it’s up to you, then Mike can maybe revise that in a future talk, or blog post. Our fourth take-away was to find out what people want. Go get it, give it to them, and do it in that order. This was from James Kennedy’s talk “Zero to 20K MRR in 20 ‘Easy’ Steps; The Story of Rubber Stamp.IO.” The title was a little bit facetious because the Easy was in quotes. It was 20 really hard steps. It took a long time to get 20K MRR, which made for a great story. One of the pivotal moments of it was when he read – do you remember what the guy’s name was?
Mike [12:32]: I don’t remember the specific book.
Rob [12:34]: But he read a book, and the instructions were to find out what people want, go get it, and give it to them. He was trying to do that but he was failing. In the end he realized that you have to do it in that specific order.
Mike [12:46]: It might have been the book called “Instant Cash Flow” by Bradley Sugars.
Rob [12:49]: Yes, that’s the book. And actually it’s in Kristoff’s notes, as I think you were secretly looking out while I was fumbling around for the name. One of the other things I liked about James’ talk is he had a lot of really actionable stuff. I mean, he’s attended several Micro Confs, so he knows the level of talk you want to bring, and he talked about some really cool marketing approaches that other people haven’t tried. There was SoftwareAdvice.com, there was [Captera?]. There was – I’m trying to think of what else there was – he had several things that really were kind of off the beaten path that he has used and optimized in order to grow his business.
Mike [13:23]: The other thing I like about his talk is that really laid out, in a manner that was very systematic, about what his approach was to identifying those different channels. I had specifically asked him about that at Micro Conf: What was it that make him decide to go after [Captera?] and those other things? He said he went out and had read the book called “Traction” by Gabrielle [Weinberg?] and Justin [Merez?], and in it it lays out the bullseye approach. We’ve had Gabrielle on the show before talking specifically about that book, and about that approach. They just went through it, and they were very systematic about it: “What’s working? What isn’t? What do we think has the best chances?” And that’s how they identified that those different channels were going to work for them. Because if you look at the channels that they are using, that are being successful for them, they aren’t things you’d think of off the top of your head. I was really interested to hear about how he stumbled across those, and he’s like, “We just systematically went through that and used the information that we had to identify which one was going to work.” and when they didn’t have enough data they went out and got the data.
Rob [14:22]: I also like that he referenced Jason [Cohen’s?] talk from Micro Conf – I think it was 2012 maybe, 2012 or 2013 – and he’s been attending Micro Confs and basically he didn’t have a business, and started a small one, and learned from Micro Conf and grew it, and later shut that one down and started another one. Really, he’s just learned so much from the community, and from the talks, that it was cool to see him reference that and call it out, and now he’s a main stage MicroConf speaker, talking about his road of getting to 20K MRR. That’s the fun stuff. If you’re listening to this and you have not watched Jason [Coen’s?] talk, I think it’s called “Building the Idea Boot-strap Business,” or something like that, it’s linked to from the Micro Conf website, or you can find it on Vimeo. In my opinion, it is the best boot-strapped talk ever in the history of boot-strapped talks. He just rocks it out of the park. I remember as he was giving it, I was thinking, “My head is exploding. This is completely rocking my world.” And then every year since then I try to re-watch it just to remind myself, and to relearn, and to pick up new things. It’s just really written and executed – I don’t know if anyone’s going to ever outdo that talk because it was just so phenomenal. Our fifth take-away is to constantly ask yourself: Why are you doing this? Reevaluate your core values as they might not be etched in stone, and they might change. This comes from my talk, which I titled “Eleven Years to Overnight Success from Beach Towels to Successful Exit.” The idea here is I really talked through the decision process of deciding to sell DRIP, and how that all went down. There’s a lot of thought processes to it, but one of the key threads that kept coming up for me as I looked back and I thought, “What did happen here throughout this career?” I went all the way back – I mean, I started launching products in 2000, but I didn’t really have my first dollar revenue until 2005, so I kind of included, that’s really the last eleven years. I looked back and I thought, “What are the things that were my core values? Why was I doing this at all? Why didn’t I stay a salaried employee?” And so I talked through that I wanted freedom, that I wanted to have purpose, and that I wanted strong relationships. Freedom, purpose, and relationships were three three things that I had originally heard, it’s psychological concept from years back. I heard it on a podcast years ago, and I’ve really just taken it to heart. It’s been something I’ve come back to. Throughout this journey, as I’ve wandered off that path, as I’ve given up some of my freedom, given up some of my purpose, hurt my relationships because I work too much or over-committed, I’ve always had to come back to that center line of making a change. That really was the story. In the end, by the way, I added a fourth one which had never been on my radar, which is stability. Having a lot of products, or having a product that can easily be taken away from you when you’re paying your mortgage from it and your entire income come from that, I’ve had a few scares over the years where Hit Tail almost got creamed by Google, and other things like that. I realized that having that stability was an important thing which, of course, factored into that decision.
Mike [17:04]: I think that what really stood out for me from your talk was the fact that you kept going back to those core values, but at the end of the day you also realized that those core values can change over time. The values that you have when you’re 25, for example, and not married and no kids, those will change over time as you hit 35 and 45 and get older, your priorities change. The things that you want and need in life are going to be different than what they were earlier in life. I think that it was interesting to see that verbalized, because it wasn’t something I had necessarily really given a lot of consideration to before.
Rob [17:38]: Our sixth take-away requires a little explanation. Okay, if you’ve seen the movie Glengarry Glen Ross, Alec Baldwin is like a sales manager, and he uses this expression or this phrase, “ABC – Always Be Closing.” So our sixth take-away is ABFU – Always Be Following Up. This, of course, comes from [Stelli Efdi?]. He did his talk called “Building and Optimizing Your First Sales Process.” If you’ve heard [Stelli?] talk, he’s a very engaging speaker. He gets really riled up on stage in a positive way that just keeps you captivated. He went first on the second day. He’s the perfect post-lunch, or “first in the day” slot because everybody’s trying to wake up and he gets them going. There were a lot of messages, but one of his messages was “always be following up”, and we have abbreviated that. Maybe [Stelli?] can take that and use it, I like it. ABFU.
Mike [18:27]: One of the things I liked about [Stelli’s?] talk was that he gave a bunch of sales metrics that people should be using to help establish whether or not they’re doing the right activities, or they’ve got the right quality metrics for their sales that they’re looking at. For example, if you’re trying to reach out to people and put them into your sales funnel, you should ideally be reaching at least a 15% reach rate, and ideally you would get to 30, but for every 100 calls you make you would reach at least 15 people, ideally you get to 30. So you need to adjust things that you’re doing around that in order to make sure you’re meeting the right metrics. It’s not just enough to call 100 people. You need to also be reaching them as well. Then he also talked about some of the different conversion metrics, and hiring people, making sure you’re hiring the right types of people, making sure that the sales are also founder-driven. You need to do sales yourself in the very beginning stages of the company to make sure that you’re selling to the right people and identifying the right prospects that you should be talking to. It’s very difficult to bring in a sales rep from outside the company and then just plop them down in a chair and say, “Okay start selling.”, because you haven’t figured out a process. You haven’t figured out who is it you should be talking to. That sort of thing really can’t be outsourced. It’s very difficult to just plop somebody in and expect them to be the entrepreneur, because I think a lot of developers, our natural inclination is to kind of step back from that and say, “I need to hire a sales rep to so this sales thing for me.” when the reality is that the developer is going to the best person for that job because they understand all the different pieces that are in it. They may be very uncomfortable, but they understand all the things that go into it. I’ve actually been in conversations where people will tell me flat out, “Hey, I actually trust a lot of what you’re telling me because you’re coming at it from an engineering standpoint. You’re not coming at me as a sales rep.” So when you’re talking at the technical levels about the specific challenges that you’re solving, don’t sell yourself short. You can easily overcome your own uncomfortability about that, and come across to somebody as much more trustworthy just by virtue of the fact that you’re a little bit more technical, and a little less sales-y.
Rob [20:29]: Our seventh take-away is to be deliberate about your direction once you’ve had early success with a product. This came from Jenna [Bestow?] who talked about the power of product focus. She basically talked about how early success makes things complicated, because once you have 10 or 20K in MRR you really have a lot of options. You can go in a lot of directions. If you try and follow all of those threads, it can be a pretty dangerous time for your business, because you can kind of wander off the reservation and not be focused on the product. She showed from first-hand experience how it had them kind of just wandering around and it hurt growth in the end.
Mike [21:05]: I think one of the most interesting things about her talk was that she had graphs that showed what some of the different cohorts looked like, and you could see, over time, as they focused in on the user-acquisition process, and trying to get people from trial to paid, you could very clearly see in the graphs exactly where changes were happening, and how they were moving people to make those decisions earlier in the process. Whereas previous to that they weren’t focused on that. They weren’t concentrating on it, because they were trying all these different things. They didn’t necessarily have set goals and specific things that they were trying to accomplish. They just had money coming in the door, and they were trying a bunch of different things, but they didn’t really have a plan. But once they stepped back and said, “Okay, let’s make a plan. Let’s do these things and be very deliberate about them.” you could see very clearly how well it impacted the business.
Rob [21:55]: Our eighth and final take-away from Micro Conf Europe 2016 is to focus on retention instead of acquisition. This came from Drew [Sinaki?] and his talk “Double Your Business.” It had a long subtitle, but it was just about doubling your business. What he walked through was there are only three ways to increase revenue. It’s to increase your average revenue per user, to decrease churn, or to increase the number of customers that you have. He said if you do all three of them they’re multiplicative. So if you do one of them you get a 30% rise. If you do all three of them, they multiply times each other. It becomes exponentially – it’s like a 2.2 times growth, getting a .3 increase from each of them, I think that’s what the numbers are. You know what I liked is he pointed out how most people focus on the third one. They focus on “We need to see more customers, more customers, more customers.” But if you’re not increasing average revenue per user, and decreasing churn along the way, you’re leaving a ton of money on the table. Then he walked through specific ways that he has done that, both he talked about doing it on an e-commerce site, talked about doing it on Sass apps, because he does some marketing consulting for Teamwork.com, and overall it was a good talk.
Mike [22:57]: What I liked about his talk was that he showed how those three things were applicable to different types of businesses. One of the examples that kind of sticks out in my mind was when someone is going through an e-commerce business, they offered an up-sell. It wasn’t very much, but at the same time there was a certain percentage of people who purchased that up-sell. I forget what it was. It was like an extra t-shirt for $10 or $15, but they got a significant and measurable increase in the number of sales, which impacts the bottom line, and all it took was them to add in that extra page, and that extra offer for the person who was making the purchase. It was just fascinating to see how all those little things ended up adding so much to the bottom line for the business.
Rob [23:39]: And so I think to start wrapping us up, if you attended it was great to see you. Thanks for coming. If you’re interested in attending either of our Micro Confs, in Las Vegas or in Europe, come to MicroConf.com and enter your email address. We also want to thank our sponsors. Frankly, Micro Conf really runs on the energy from the attendees and the help from our sponsors. This year we had five sponsors at MicroConfEuropeTeamwork.com. [Qualaroo?, Balsamic, Lead Fuse, and, of course, DRIP. We’ve been getting some questions via email about our Micro Conf in Vegas this next year. We mentioned it briefly in episode 300 to kind of give you a teaser, we didn’t give you too much detail. In essence, we are having the Micro Conf in Las Vegas on Monday and Tuesday for the past five, six years. We’re having that again this year on April 10th and 11th, of course with an evening event the Sunday before that, the 9th. Then we’re having a separate conference called Micro Conf Starter Edition, and this is for folks who are in more of an early stage. Maybe if you are looking for an idea, you have an idea, you’re not yet launched. Even if you’re launched and just trying to find product market fit, Micro Conf Starter Edition is going to totally geared at idea-validation, early traction, getting the first 10 or the first 100 customers. Because some of the feedback we’ve gotten over the years is that some of the Micro Conf attendees and speakers have progressed to a point where we’ve started thinking about maybe larger problems, and we have new challenges. So you think about me, when we started Micro Conf in 2011, I hadn’t even acquired Hit Tail. I still had a bunch of little businesses doing a few grand a month, and then bought Hit Tail, grew that, started DRIP, 10 employees, that whole thing, I’m just at a different place. There are a lot of folks who are in my shoes, who have gone from zero to businesses that are doing 50K, 100K a month, and when you’re running a bigger business, you just have different interests. So hearing from [Des Trainer?] from Intercom, or hearing from Patrick [Holisem?], the founder of Stripe, it makes more sense at that point. But if you’re in an early stage then you actually want to hear different content. It’s more helpful to hear about idea validation, and maybe to hear about folks who are in the early stages, or to have someone come on and just talk about business ideas rather than you’ve already launched and here’s what you’re doing and what to do with your millions of dollars in revenue and that kind of stuff. That’s the idea here, is it’s two separate conferences aimed at the different stages of what boot-strap startup founders are facing.
Mike [25:49]: I think if you think about Micro Conf in a larger sense that makes sense, because over time the attendees themselves are going to evolve with their businesses. Not everybody is going to want to grow their business to multiple employees, – you know, tens or hundreds or whatever. But there are going to be people who still have those challenges, and maybe they’ve never heard of Micro Conf before, or they’ve never had a chance to go because they’ve never felt like they were in a position to really take advantage of it. So this is kind of our attempt to make sure we are still catering to the needs of the audience and making sure we’re able to deliver what they want and need out of the conference. But at the same time we’re trying to address the fact that over time people are going to have those different phases of their business, and it maybe makes more sense to have these two different conferences that people can go to based on the stage, or the evolution, of their existing business.
Rob [26:37] : Right, and I think we’ve gotten the question, “Why wouldn’t I just attend both of them?” And I think my answer is, “If you want to, that’s fine.” I actually think that depending on your stage you’re going to get a lot more out of one of these conferences than the other. But if you wanted to attend both I don’t see why you shouldn’t. This is also an opportunity for us to allow more people to attend a Micro Conf. Once we launch to the public we sell out in five minutes, and we have wanted to grow the conference to 450 people or whatever. But if we do these two conferences back-to-back, we get people, based on their stage, from the most amount of value that really helps them where they’re at. It also allows us – if we do 200, 225 per conference – then we can’t have 450 people getting help and valued learning out of Micro Conf without having just this massive conference of people wandering around and feeling like – let’s say you have 450 people of all stages, then when you walk around you’re going to talk to a bunch of people who are still validating ideas, and that feels – if you’re already doing seven figures – it feels kind of weird. What do we have to talk about? Whereas if we segment this, and we have the standard Micro Conf and then Micro Conf Starter Edition, you’re just going to run into more people who are doing exactly what you are. That’s always been the point and purpose of Micro Conf. If this sounds interesting, either Micro Conf or Micro Conf Starter Edition, come to MicroConf.com and enter your email address and you’ll be the first to hear about it when we sell tickets.
Mike [27:53]: Well I think that about wraps us up for the day. If you have a question for us, you can call it in to our voicemail number at 1-888-801-9690, or you email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out Of 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 and we’ll see you next time.
Episode 301 | Six Decision Making Tips for Entrepreneurs
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about decision making for entrepreneurs. They walk you through some decision making techniques and look at how they can help you make decisions faster and more efficiently.
Items mentioned in this episode:
Transcript
Mike [00:01]: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about decision-making for entrepreneurs. This is Startups for the Rest of Us, episode 301. [music] Welcome to Startups for the Rest of Us, the podcast that helps developers and designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you have built your first product, or you’re just thinking about it. I’m Mike.
Rob [00:25]: And I’m Rob.
Mike [00:26]: And we’re share our experiences to help you avoid the same mistakes we have made. What’s going on this week Rob?
Rob [00:29]: Just recovering from MicroConf Europe. I had a really good time last year. I guess we should a Take-Away’s episode from Europe 2016, shouldn’t we?
Mike [00:38]: Oh, we probably should. It might have been a good idea for the live podcast episode, but that would have been difficult to do I guess.
Rob [00:42]: Because the conference wasn’t done.
Mike [00:44]: Right.
Rob [00:45]: But we’ll try to do next week’s with our Take-Away’s. It was a really, really good conference. I had a lot of fun. Sometimes when we throw the event there’s a lot of struggles, and some things don’t turn out the way you want, but it ran really smooth. I thought that the talks were very good this year, and overall I had a really good time. It was good to be back in Barcelona again.
Mike [01:04]: It’s really funny that the episode that went out last week – I listened to it, and at the very beginning it made it into the cut where I interrupted you and said, “You didn’t say episode 300,” and you said, “I was getting to there,” and then you completely skipped over saying it was episode 300.
Rob [01:18]: No, I did say it was 300 –
Mike [01:19]: No you did not! I went back and listened to it, and even my wife listened to it and she was like, “He didn’t say it, did he?”
Rob [01:24]: No. I’m going to pull that snippet and email it to you, or post it on the blog or something.
Mike [01:29]: I don’t think it was there.
Rob [01:31]: That episode was fun. Hopefully as a listener, you’ve already listened to that. It was our first live episode ever, so there was definitely a different energy level, and sound quality, and ambiance, and that kind of stuff. But it was fun to be able to share that kind of recording experience with a group of people, because normally it’s basically you and I basically sitting on opposite ends of the country in our respective closets with the shades drawn.
Mike [01:52]: Yeah, that was a lot of fun. It’s definitely interesting to be up on stage like that and to talk to people directly, either during an episode or even immediately afterwards, and being able to answer questions and talk a little bit about it, and just hear how long people have been listening, what kind of take-away’s they’ve have. We sent out an email to the email list for the podcast – which if you’re not on that email list, you can go to Startupsfortherestofus.com and there’s an email list you can sign up for. We don’t send out too many emails, but we do use it to kind of communicate with the audience to some extent.
Rob [02:20]: ”What are some unfair advantages for faster SaaS growth? This is Startups for the Rest of Us, episode 300.” Oh, snap!
Mike [02:29]: I must have missed that.
Rob [02:31]: So now that we know I’m right, what’s going on with you?
Mike [02:25]: Well, I guess I’m just getting older and I can’t remember things as well. I was sure I had listened to that. I didn’t hear that.
Rob [02:41]: Getting older. Was it fun for you to have 110 of your closest founder-friends singing you Happy Birthday on the Micro Conf Europe stage last week?
Mike [02:49]: I’m not sure I’ll forgive you for that, ever.
Rob [02:52]: Yeah, now I know your birthday is right around early August here, so –
Mike [02:56]: I still am kind of speechless about that. I can’t believe you did that to me.
Rob [02:59]: You turned 40.
Mike [03:01]: Yes, I did.
Rob [03:02]: How does that feel?
Mike [03:03]: Well, I am still always going to be younger than you, so it feels great.
Rob [03:06]: That’s true.
Mike [03:08]: No, I didn’t really do much. I just worked and then late evening I sat down, had a glass of whiskey, and read a book. That’s about it.
Rob [03:14]: Nice. Low-key. Good way to recover from travels last week.
Mike [03:19]: It’s a good way to get old.
Rob [03:20]: Yeah, dig it. Cool. So what are we talking about this week?
Mike [03:23]: Well, today we’re going to talking about decision-making for entrepreneurs. The idea here is that with this episode we’re going to walk through some decision-making techniques, and looking specifically at how we can make better decisions faster. because the progress that we make in a daily basis is generally constrained by our ability to make good decisions and make those decisions quickly so we can actually get back to work. When you are struggling to make decisions, or you’re not making decisions quick enough, then the progress that you’re making and the output tends to slow down a lot. I’ve noticed this in my own situations where if I’m struggling with a decision, or it’s taking me much longer than it probably should to make that decision, then progress on pretty much everything stops, because I’m either wrestling with it, or trying to do different things to get more information and trying to figure out what I should be doing. Instead of actually doing anything I’m just trying to make a decision. It kind of leads to procrastination, but there’s a lot of implications of that because obviously it detracts from morale and makes you think about things a lot more and increases stress and all these other things that go along with it. Because you’re stressed out that you’re not making a decision, or moving things forward, and it’s constantly on your mind. So the idea for this episode is to talk about how to go through the decision-making process faster.
Rob [04:38]: Yeah, and decision-making, as you said, is such a key part of what you do day-to-day as a founder, and I think that one of the biggest parts of how to keep things moving forward is making decisions with not enough information. That is like a majority of my day, making the best decision you can given that you don’t have all the info that you would otherwise want to make a perfect decision.
Mike [05:01]: Number one on our list of decision-making for entrepreneurs is being cognizant that you are not making a decision. I think one of the tell-tale signs of this is that you’re procrastinating and there’s a lack of progress. Those are really symptoms of not being able to make a decision. They are not the root problem itself. The root problem is that you are struggling to make this decision. I think one of the ways to be more cognizant of this is you have to pay attention to the progress that you’re making. Because it’s very difficult to be in that situation and then say, “I’m in the middle of trying to make a decision and I’m having a hard time with it.” But there are symptoms that you can be aware of, and if you are tracking those types of things on a regular basis, then it will kind of remind you that you are maybe struggling with this decision. So if you’re tracking your daily tasks that you are attempting, or that you have actually achieved – whether it’s through a journal or a task list, any of those types of things – if you find that you’re not making progress on them then try to figure out if it’s because you’re having a problem making decisions. Is that the problem that you have, or is that you’re working on the wrong thing and you’re not making any progress, and it ultimately doesn’t matter? Not every day is going to yield any sort of progress, but if there’s too many days in a row without a substantial amount of progress, then it could be because you’re struggling to make decisions. When you are struggling to make those decisions, that’s where these symptoms start to come out.
Rob [06:21]: I notice when I’m procrastinating and not able to make decisions it tends to be because there’s either something at the top of my to-do list that I really don’t want to think about, don’t want to do, don’t want to make a decision, or there’s something somewhere in my inbox where I keep skipping around. I think having the discipline to always force yourself to work top to bottom through your to-do list, or bottom to top through your email inbox, and basically power through it and make fast decisions and make the best decisions that you can – I think that’s a discipline that we all should work on. I don’t maintain it full-time, but I notice that on the days that I do I notice that there’s a lot of willpower, and it typically requires me to get some music playing and get some caffeine in my system, and then I can break through. I mean, I will have stuff on top of my to-do list for weeks and then I realize that I’m going around it and doing things of a lower priority because I just don’t want to do that one, but when I start hammering through it, the things you put off for weeks – because you don’t want to do it, or you think they’re going to take a long time – you often hammer them out in like, an hour, typically is what winds up happening. There’s this huge freeing weight lifting from your shoulders. You have to kind of be aware of this. You have to make yourself aware that you are not focusing, and that you are not making decisions because of that. Then fight it head on. Pick a moment where you’re at maximum strength. You’re awake, you’re motivated, you’re in a good mood, and just get psyched up and hammer through something that you’ve been holding off on. Once you do that, it’s amazing how much momentum you gain from that, and the positive energy that comes out of tackling something like that that’s been holding you back for days, hours, or weeks.
Mike [07:52]: The second tip for decision-making is to frame the decisions that you do need to make. Part of that comes with outlining the issues around the decision. But it also ties into separating your emotional ties from that decision so you can be more objective about it. Think about why it is that you need to make this decision. What are the results of that decision? What is the outcome? And is this decision even important? Do you have to make this decision? Because sometimes you don’t. There’s certainly decisions you may come across that you feel you may need to make a decision. So ,for example, an email comes in and you feel like you need to reply to it right away. Usually that’s not the case. A lot of times you can either delay those things, or, if it’s a support request, you can hand it off to somebody else. It depends on the specifics of that. But a lot of times you can take a look at those decisions and either push them off a little bit – which there’s a fine line between actively deciding to deal with something later, versus performing avoidance techniques to not do it. I think these are two very different things. But take a look at whether or not you even need to make this decision. Is it relevant to you?
Rob [08:55]: Something to keep in mind – as you are making a decision – this is a little bit of a tangent, but there’s this acronym that I think is used in psychology, or in coaching, or something, but it’s an acronym that’s HALT. That’s H-A-L-T. It’s don’t make decisions when you’re Hungry, Angry, Lonely, or Tired. And then actually Jacob Thurman did an attendy talk a couple years ago at [MicroConf] and he added an “S” for Sick because he had a stomach ailment, and he was having a really tough time making decisions and he didn’t want to make a bad one. So be really cognizant of your state of mind as you’re doing this. This is, again, a self-awareness thing, and it’s going to be aware that you are angry or hungry or lonely. It’s easy to be sad or depressed or to be having a rough day and make decisions that are just not ideal, especially if you’re making permanent or semi-permanent decisions you really don’t want to do that. That’s something to kind of keep in mind.
Mike [09:46]: The third step is to ask yourself if you have enough information to make this decision. Most of the time we don’t have all the information relevant to a particular problem in order to make a decision, so the vast majority of the decisions that we are making are based on incomplete information. There is a threshold that you are going to cross where you will have enough information to make that decision, and when you’re in the middle of trying to make a decision, if you’re struggling with it, ask yourself if you do have enough information to make that decision. If you don’t, how do you get it? How long is it going to take to get that information? What is the cost, in time, to acquire that information? If you were to make that decision and move in a particular direction, is that going to be faster than taking four to six weeks to identify the information that you need to do something that would have only taken two weeks to begin with? You have to balance out and you have to look at that and figure out whether it’s warranted to just make the decision and move forward knowing that you may have to do work again and, or make a different decision, versus spending the next four to six weeks trying to figure out the additional information that you need. Sometimes there’s an opportunity cost there that a lot of times it’s just easier to just make the decision and move forward even if it is the wrong decision, because you will learn things along the way.
Rob [11:02]: I said this a couple episodes ago about how there are certain decisions that are easy to undo, so make those quickly. Make the best when you can and move on. Then there are certain decisions that are really hard to undo, and those are the ones that you are going to need to agonize over and get as much information as possible, and being deliberate about information-gathering. Thinking like, “What test could I run?” Sometimes it’s a decision of like, “”Should we change our pricing?” Or, “Should we change our home page to a totally different version?” Often times you can just run a split test, or you can talk to customers. There are ways that you can gather some more information, and it might take some work to do, but it will help keep you from shooting into the dark and basically not knowing if what you’re doing is going to improve the situation.
Mike [11:46]: The fourth tip is actually the opposite, which is you have too much information, or you have conflicting information. I think this is a common source of angst among people, myself included, where you don’t want to make the wrong decision, and not wanting to make the wrong decision can lead to procrastination. I think in these situations you have to do something of a cost-benefit analysis to figure out how much longer it would take to get decisive information, or whether even that situation exists. Is it possible to get decisive information? If you look at something like AB-testing, it can take a long time for something to be statistically significant if the differences are minute, or you’re not able to throw a lot of traffic at a particular thing for example. Sometimes adding more information is simply not going to help. You’re going to have to make a decision one way or the other. And as you said, sometimes you just have to make that decision and you’ll go down the wrong path and that’s okay. You have to be comfortable with that ,and accept that there are going to be decisions that you are going to make, you’re going to be wrong, and that’s okay. The fifth tip is that decisions tend to have a way of proving themselves right or wrong rather quickly. If you’ve made a decision and you’re not sure if it’s the right one, several weeks afterwards or several months afterwards, take a look at how much longer it’s going to be before you think that you’re going to be a position where you believe you’ve made the right or wrong decision. What are the conditions that need to come up that are going to allow you to verify one way or the other? When you get into those in between stages where you have made a decision and you’re looking back historically to figure that out, sometimes that’s difficult. Sometimes there’s kind of a meandering of the environment, or what it is that you’re working on, and you’re just not sure. When you’re doing that it’s difficult to be confident about the direction that you’re going and you have to just take a step back and say, “Is this the right approach? Am I doing the right thing?” Because sometimes it’s not. Looking at the reward for being right, or the penalty for being wrong, is warranted in those cases.
Rob [13:37]: You know, this is something that I’ve struggled with a long time, and actually used to struggle with a lot more when I was younger and kind of as an earlier start-up founder, I would make decisions and then I would second-guess them for days or weeks or months if it was warranted. That is not how you want to make decisions. You are carrying around this cognitive load and this baggage, and it really distracts you from moving forward and getting the work done that you’re trying to get done. So I think, over time, maybe it’s purely just kind of desensitizing yourself to it, and learning that the more decisions you make the less each individual one matters. Or maybe it’s just a learned skill. Maybe it’s something – I genuinely don’t know. I think at a certain point in order to move forward I had to start making the call and living with the outcomes. I didn’t have the time or the energy to sweat it anymore. I don’t necessarily have any fantastic guidance, tips, or tactics. I’m sure someone out there does who has studied this, but I do know that I’ve gotten way, way better and I feel better about so many more of the decisions that I make now than I used to when I would kind of second-guess everything that I was thinking about.
Mike [14:40]: I think what you just said there is probably a fantastic quotable quote, which is the part about the more decisions you make the less impact each individual decision has, because you’re able to achieve more and accomplish more, so the addition of all of those things overcomes any individual wrong decisions that you might make along the way. If you make a massive incorrect path decision, then that also a collection of lots of other decisions as well, but the individual decisions along the way, in and of themselves, don’t necessarily matter as much. The last tip we have here, which is something that Rob talked about a little bit earlier, which is decisions tend to be reversible. There’s a lot of decisions you’re going to make where you can make tiny course corrections, or you may decide, “Hey this is a strategy that is not working and we’re going to go in a different direction now.” So you make either minor course alterations, or a massive course alteration, based on the environment, but these things are not set in stone. You don’t have to continue going down a path you have already gone down for the sole purpose of going down that path, or because you don’t want to be wrong. You’re going to be wrong on occasion, so if you have to change your course, or change the decision that you’ve made, that’s okay too.
Rob [15:50]: I think that’s something big that I learned – is undoing decisions. In most cases, while sometimes you’ll lose face, or you look a little foolish to someone going back, but you can undo almost every decision. There are some exceptions, but I think that getting over the fear of looking dumb, or of having someone think that person didn’t know what they wanted – it tends to be social fears, I think, that keep us from undoing decisions. Almost all decisions you make can be undone. The question is always just at what cost, right? Sometimes undoing decisions will cost you $20, or sometimes it could be hundreds of dollars or thousands, and you just have to value it – is it worth paying that in order to be able to undo it? In another respect, sometimes it’s just your reputation, it’s just a little ding, or a large ding, against your reputation, and you have decide, “Is it better to move forward the way I’ve decided? Or is it better to take that short-term hit to my reputation and to be able to undo it?” I think it’s an interesting way to think about it. To not think about it in black-and-white, like, “I made the decision and therefore I’m moving forward.” Because if the information changes, and even if there’s going to be some type of cost to you – whether that’s money or reputation – if it’s the right choice then it’s the right choice. Go back and undo it. What you often find out is that the ramifications are often a lot less severe than you think they will be in your mind. That question of, “What’s the worst that can happen if I undo this decision?” Ask yourself that and dig into it and really think, “What is likely to happen here?” Maybe get a sanity check, because I think you can trap yourself in a box, especially us as engineers, we can trap ourselves in this box of thinking everything is black and white, and once you make the decision it’s done. I have learned over the years — this is something which I did not understand at all when I was younger – I’ve learned over the years that so much is able to be undone.
So to recap, the six tips for decision-making for entrepreneurs are – number one, be cognizant of when you’re making a decision. Number two, frame the decisions you need to make. Number three, do you have enough info? Number four, do you have too much information or conflicting information? Number five, decisions have a way of proving themselves right or wrong quickly. Number six, decisions are reversible. 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 Out of Control” by MOot, used under Creative Comments. Subscribe to us in iTunes by searching for “Startups” and visit Startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 300 | The 4 Unfair Advantages for Faster SaaS Growth
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk live at MicroConf Europe about the four unfair advantages to faster SaaS growth. They also expand the topic to things that seem like unfair advantages but aren’t and how to improve your chances of getting an unfair advantage. At the end of the talk they do a short Q&A with some audience members.
Items mentioned in this episode:
- MicroConf
- Slides from Presentation
- Drip
- Baremetrics
- Stripe
- Bidsketch
- Appsumo
- Clarity.fm
- WPengine
- SumoME
- Kissmetrics
- LeadFuze
- Buffer
- Woo Themes
- Basecamp
- Qualaroo
- Balsamiq
- CartHook
- MeetEdgar
- Crazy Egg
Transcript
Rob [00:00]: In this episode of ‘Startups for the Rest of Us,’ Mike and I are going to discuss the four –
Mike [00:04]: Stop. You didn’t say it was episode 300.
Rob [00:06]: Then I say this is episode –
Mike [00:10]: All right.
Rob [00:10]: This is going to be good.
Mike [00:11]: We do stop like this on occasion.
Rob [00:13]: Oh, I love it.
Mike [00:13]: I’m not kidding.
Rob [00:14]: In this episode of ‘Startups for the Rest of Us,’ Mike and I discuss the four unfair advantages for faster SaaS growth. This is ‘Startups for the Rest of Us’ episode 300.
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 [00:44]: And I’m Mike.
Rob [00:47]: 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?
Mike [00:51]: Well, we are live with an episode. We’ve never done a live episode before. And we’re recording at the 10th MicroConf in Europe, in sunny Barcelona.
Rob [01:00]: Indeed. And we have some audience participation going on. We’re going to have a Q and A at the end. But I have to admit it feels very different to record here in front of 110 people, instead of sitting home alone in my office with the mic muted.
Mike [01:12]: Yes, very different. Not necessarily intimidating, but it’s just all eyes are one you, and you’re like all of our general screw-ups are going to visible to everyone.
Rob [01:21]: Right. So we do have an interesting announcement. A little top secret preview, both for the audience here and the folks that are going to hear it next week. MicroConf in Vegas this year is going to be two conferences back to back. So we’re doing MicroConf as usual – MicroConf that we’ve done for the past several years – April 10th and 11th at the Tropicana. And then we’re doing something called MicroConf Starter Edition. And that’s going to be on the 12th and the 13th. And there will be more info to come on that later. But if you’re interested in potentially coming to Vegas for either of those two day conferences that we’ll be running back to back – and they’ll have an evening reception that overlaps – come to MicroConf.com and enter your email.
Mike [02:02]: Awesome. So, anything else new this week?
Rob [02:05]: Hanging out in Barcelona.
Mike [02:05]: Awesome.
Rob [02:06]: Pretty cool.
Mike [02:06]: What are we talking about this week?
Rob [02:08]: We’re talking about the four unfair advantages for faster SaaS growth. And this is specifically the self-funded edition. This is based on a MicroConf talk I did in Las Vegas just about four or five months ago. We actually have some slides the folks here in the audience will see, and maybe we’ll publish these in the show notes or something, if Josh contacts us.
Mike [02:24]: Yes, that would be cool.
Rob [02:25]: That would be nice. The whole premise of this is that as I was putting together this talk, I was trying to think of – I’ve had a lot of software products over the years, and some that are not software products, and DRIP, of all of them, grew way faster than the others. I had a SaaS app called HitTail before this, Wedding Toolbox, DotNetInvoice, CMSthemer, Beach Towels. I wrote a book, ‘Conference.’ Just other stuff. And I started thinking, “Why is it that DRIP got such traction so quickly?” Once we had product market fit there was a lot of growth. How did this happen? What was the anomaly?
And so, I started thinking through the differences of how I had changed, how my skills had changed, and I was trying to attribute it to just, well, I got smarter, I had a little more money, I had a little more skills. Then I took a look at some other fast growing SaaS apps. I looked at things like Baremetrics, Balsamiq, Bidsketch, Woo Themes, Clarity, Basecamp – some of these aren’t SaaS apps, per se. Woo Themes is a subscription WordPress theme service – WP Engine and others. And was trying to pick out what was the advantage that these had over other apps that maybe launched around the same time, even in similar spaces or overlapping spaces, but didn’t have kind of this meteoric growth. A lot of these apps were growing 10, 20, 30% a month in the early months, and once they stopped reporting – because eventually most people do stop telling all the numbers once the table stakes get high. I’m trying to figure out what it was.
So I looked at these. I looked at a whole other list. This is from, I think, our Founder Café homepage, just looked through apps and did research. I talked to some founders. So, this is mostly anecdotal, but it’s based on my experience, my conversations with hundreds of SaaS founders and even other software product types. So, I dug in and I picked out four things I know are unfair advantages. And I think one of them is a requirement for fast, early growth. I couldn’t find an app that was growing quickly that didn’t have at least one of these things in place. When I say “quickly” I don’t mean it was growing three, four, five percent a month. I’m talking the ones that – remember when Baremetrics came out and Josh was publishing his early revenue? And we were like, “What in the world? This is really fast.” It’s that kind of growth. And it may not sustain forever, but at least in the early days how he got there. I’m sorry. We’re going to also talk about things that seem like unfair advantages but aren’t. And then we’re going to talk about how to improve your chances of getting an unfair advantage.
Mike [04:45]: Why don’t we talk a little bit about what an unfair advantage is. An unfair advantage is really a competitive advantage that you have over other people, and whether that’s other people or other businesses. And there’s a bunch of different ways to define this. Probably one of the better ones comes from Jason Cohen. He says that the only real competitive advantage is that which cannot be copied and cannot be bought. This encompasses a bunch of different things. And I think the really important piece here is that there’s a differentiation between those two sides of it. It cannot be copied and it cannot be bought. So, cannot be copied. There’s a lot of different reasons why something might not be able to be copied. You may have some insight or knowledge, for example, on a very specific type of business. Or you may have a background that relates to how a particular process is done, or a new roadmap for how version 2.0 or 3.0 of something is coming out, and you’re involved in the creation of that. Those are the types of things where you have that insider knowledge that nobody else has, and they could learn it but it’s going to take them a long time. The second side of that is it cannot be bought. If you get funding, you still are not going to be able to replicate that. Those two factors in place, I think Jason has got it brilliantly on at that point. The combination of those two factors, that’s what makes it a competitive advantage.
Rob [06:04]: So let’s dive into the first one. Unfair advantage number one is if you are early. So, it’s to be early. This is probably the most common as I looked through. As I ran through Baremetrics and – what was it? Woo Themes? – they were an early one. I think I actually talk about them in a second. I shouldn’t start naming the companies. But being early is a very common way. If you’re early into a niche, it’s a way to get fast early growth, because there’s just no other options for you at the time. The issue with being early is that it’s temporary, because typically – unless you’re in a very small niche – there’s going to be fast followers. So, if you’re the first one to launch into, let’s say Woo Themes as they created their first subscription premium themes, there were dozens of them by the next year. It doesn’t necessarily go away, because you can still keep that brand recognition, but you are going to bring competition. Especially if you talk a lot about your success, which we’ve seen some people do, and bring competitors into the space.
Mike [07:01]: And it seems like there’s places where just being involved in a particular space, or on a particular platform, just by virtue of being there you can almost make yourself early anyway. In some cases you just completely luck out. You happen to be in the right place at the right time, and there’s not necessarily an element of skill or your relationships involved. But if you are – let’s say that you’re working with Woo Themes and you already know the people – you know the founders personally – and they come to you and they say, “We’re building a platform, and we want to be able to build a mechanism for people to build plug-ins on our platform.” By virtue of having those relationships you are able to leverage yourself into being early there. There is a large element of luck involved. You can’t necessarily depend on being early all the time, or even most of the time. It’s something that is just going to happen, and you don’t really have a lot of control over it.
Rob [07:51]: Being early is basically feasible in very small markets, because at this point those tend to be the markets that are underserved in this day and age. In 2016, there are SaaS apps in all the major markets. So it’s going to be feasible in small markets, or in emerging markets. What I mean by that is markets that don’t really exist yet. So again, you think of Woo Themes premium – WordPress was around, but it was really kind of an emerging market when Woo Themes came out. And Stripe had been around a little while, but how many SaaS apps had built on it when Josh launched Baremetrics. Stripe Analytics was an emerging market when he hit that. The other thing is being early requires swift execution. So if you get out early and you build something and you get to market, if you’re still working your fulltime job and you only have five, ten hours a week to work on it, and you do get any type of pickup, you’re going to get trucked. You’re going to get caught and you’re going to get overtaken quickly. So, once you get out ahead, you really don’t want to lose this be early advantage. We look at our two criteria. What do you think, Mike? Can being early be copied or bought?
Mike [08:49]: Not easily. If you are able to quickly execute on something that you see it coming out, and you have the money to be able to do it, then yes. But by virtue of the type of company that would have that type of money, they don’t move quickly. You have that advantage of being small, being able to out-maneuver them and implement something fast that they’re not going to be able to get there in front of you. Now they may get there a little after you, and that poses a bit of a different challenge just because they come in after you and they do have more money than you, they do have more resources, but, hopefully, you can leverage yourself into a position of “dominance.” And if you are early, it’s probably in a small market anyway. And chances are good they won’t come after you.
Rob [09:24]: Very good. Some examples of folks who were early. I’ve already mentioned Baremetrics. It’s SaaS analytics for Stripe, Joshua’s first to market as far as I know. Balsamiq. So Peldi’s startup was a really early mockup tool, basically. If not the first one that I had heard about that was kind of made for the modern age, and wasn’t the old kind of Visio style. Bidsketch, a friend of MicroConf, Rubin Gamez, was really the first proposal software made for the web, and he got early traction with that. Woo Themes, as I said. And then Basecamp. They were the first web-based project management tool that I remember. I’m not sure if they were the number one, but they certainly were the first early entrant.
So as we’re going to walk through these four unfair advantages, I kind of want, instead of everyone just listening, I want you to think to yourself, “Where do I stand on a scale of one to ten?” But I was trying to think what does that mean? What does one to ten mean? And so, I think maybe one to Basecamp. Or one to Baremetrics. Where do you think your app, or the app idea that you have, stands on this rating scale? And this may not be super relevant to you. We have three other advantages, and maybe they’ll be more relevant. But if you are thinking of launching something, it’s good to know. If you think about DRIP, it was probably a one or a two. It wasn’t early. We have hundreds of competitors so that wasn’t necessarily our unfair advantage. So it’s okay if you don’t have some of these.
Mike [10:38]: I think there’s some challenge in trying to figure out where you are in that spectrum, because you look at something like Basecamp now and they have 30 or 60 employees or something like that. And they have millions of dollars that are coming in, and hundreds of thousands, or millions, of subscribers. And knowing whether or not your market – or the thing that you’re going after – and whether or not it’s going to ever get to that point, it makes it difficult to try and relate yourself to where they are. One to Basecamp, I think there may be a better way to put that. I’m not sure.
Rob [11:05]: There probably is. Maybe when we do this next time you can write the outline. No, I was only kidding – BOOM! I only do that when it’s live. I don’t –
Mike [11:13]: I’ll write your talk next time.
Rob [11:13]: All right. Unfair advantage number two is who you know. This is your network. These are the people, not just who you know, but who would be willing to endorse you, who would be willing to promote you to their audience, who would be willing to advise you, or make intros. It’s deeper than just, “Oh yeah, I know that guy who sat next to me at MicroConf.” It’s like, is this person willing; do they know you, like and trust you enough that they’re willing to put a little bit of their reputation on the line in front of their audience, or in front of someone else who has an audience that they’ll make an intro to?
Mike [11:47]: Yeah. You’re basically asking them to spend their social capital on your behalf. So you have to have at least some level of trust, or knowledge, there. And it’s not really just about the type of product that you have, or how good it is, because if you’re just launching a product it’s probably not very good, and you have to have that relationship with them that they know that you’re going to be able to come through, or you’re willing to do what it takes and put forth the effort. As opposed to, “Hey, I’d like an introduction to [Beth Flynn?].” Or somebody else like that. And there’s a lot of social capital there, and if that product tanks, or that relationship goes south for whatever reason, then it’s really their reputation on the line. It’s not yours. So that makes it challenging.
Rob [12:25]: Another caveat, or note about this, is that who you know, you kind of need to know people that your competitors can’t access as well, because there’s potentially a loss of value there. I think if someone was an affiliate for you and a competitor, it could work, but it certainly has a lot less value if your networks overlap heavily. It would be really nice if your network was very different, and the two circles didn’t overlap much. So what do you think, Mike, who you know? Copied, bought?
Mike [12:51]: Definitely not. Well, it depends on your friends, and who you know, and whether they can be bought or not [laughter]. I think that there’s definitely difficulty in copying, or buying, either one of those things. With certain types of markets you can kind of buy your way into relationships. For example, a reseller market, you can spend money taking people out to dinner and convincing them to promote your products, especially if you have the type of margins that are there in order to, essentially, compensate them for that time, or that’s their business. It could very well be that they’re getting paid to promote products and they don’t necessarily care. But I think that, in general, you probably don’t want those types of people to help you promote your product anyway.
Rob [13:27]: And some examples of businesses that were grown based on the person’s network, based on who they knew, AppSumo is one. Most people don’t remember but Noah Kagan was pretty much an unknown in our circles in 2012, 2011, whenever AppSumo launched. And, in fact –
Mike [13:45]: He spoke at the first MicroConf.
Rob [13:47]: That’s right.
Mike [13:47]: He was not known until after MicroConf. We can make that claim.
Rob [13:50]: Yes, I guess so.
Mike [13:51]: I don’t think so.
Rob [13:51]: The two aren’t correlated, but they happen to line up. So, when he launched AppSumo it was a “deal a day” site, where he would get these big bundles of software and he’d discount them, and the first deal they every did 20 or 25% of the deal sales went to Micropreneur Academy members. Somebody posted it in our forums, and it was just the perfect lineup because we all consumed software and stuff, and it was kind of a founder bundle, or startup bundle. And he just picked up the phone and started calling me. And I’m like, “Who is this guy?” A) I don’t like talking on the phone and b) who are you. I get a lot of phone calls. And we talked and I had no idea. And he’s like, “I was employee number seven at Facebook.” And I’m like, “This is crazy.” But he built a lot of that business based on relationships. And he either built them – like he did when he picked up the phone and called me – because later on we did a deal together. He put HitTail on AppSumo. He was able to build these bundles because of his extensive network of people. Then he was able to get affiliates and just do all types of crazy stuff. And it was based on his network.
Clarity.FM from Dan Martell. Dan Martell is also a MicroConf speaker. That dude just knows everyone, and if he doesn’t know you, he will soon. He just utilized that network really well. Clarity.FM is advice for founders and entrepreneurs. It’s actually a network of successful founders who you can call on the phone and just book like ten minutes of their time for X dollars, and it was a marketplace, right? Few of us in this room, if any, could start a marketplace like that, because you need so many high-end founders. And he just picked up the phone, wrote emails, and was able to populate this business. And he later sold it. He sold it a couple of years ago to Startups.co.
WP Engine is another one. Jason Cohen talked early on about how his network didn’t allow him to grow WP Engine, but it allowed him to hire really good people because of his blog, and it allowed him to raise funding like that because he was well known. So those two things contributed heavily towards his growth. And then a shout-out to [Carthoop?]. It’s an honorable mention, because he’s still working on it and growing it. But Jordan, as I view it, he knows a lot of people, especially in his space. So he’s in the e-commerce space. He just has a way of — I see it, and I remember Dan Martell meeting everybody, and suddenly Dan Martell knows way more people than I do in my own circle. And Jordan’s the kind of guy who’s doing that. So these are some good examples.
Mike [15:59]: I kind of joked about it earlier, but every single person behind those companies has been a MicroConf speaker at one point.
Rob [16:05]: I didn’t do that intentionally –
Mike [16:07]: I know.
Rob [16:07]: – but it is – when I’m going to write this and outline it it’s kind of like I’m going through and I went to all these startup lists and all these – I did go through all the MicroConf speakers and I just put this huge list of SaaS apps and startups together. And I was thinking which one do we know grew fast? Which ones didn’t we? And then breaking down the criteria. So there is definitely some bias here. It did come out of me.
Mike [16:26]: Yeah. There’s definitely bias there, but I also think that there’s a correlation with those types of people, because they travel in the same circles. And when you tend to get into a particular – and social network is kind of a nuance term, I think at this point – but when you get into a social network of people – and I would say that MicroConf people are a social network of people. There are various other ones out there. There’s startup groups in different cities. They’re all their own social network. So you have those social – maybe social circles is a better way to phrase it – but when you get into a social circle, you can very quickly and easily be introduced to other people, and over time those relationships develop. And, as you are kind of alluding, over time those relationships develop into something where you are able to just tap into those relationships and talk to people and just get-to-know-you basis, and you’re able to use those people to grow your business. And “used” is probably a strong term, but leverage that relationship.
Rob [17:18]: So, on our one to ten scale, where do you stand between one and maybe a Jason Cohen, in terms of your network?
Mike [17:25]: Jason Cohen knows everybody.
Rob [17:27]: He does. It’s crazy. All right. Unfair advantage number three is, who knows you. So this is your audience. This could be an existing customer base, where there’s people who may have perhaps bought an info product from you. Maybe it’s folks who have subscribed to your one-time sale WordPress plug-in and then you’re going to launch a SaaS app. It’s people who know, like and trust you.
Mike [17:46]: And it could just be people you’ve worked with before. Most people discount, or undervalue, LinkedIn to some extent, because a lot of people will use it as a mechanism for just kind of increasing their network connections in efforts to be able to leverage that into success, or download the list of emails, and they’ll just start introducing themselves to other people. But when you connect with somebody, a lot of times people will start with the people that they’ve worked with in the past, people they actually shared a job experience. Then, from there, you start finding, “Oh, there’s these small groups of people that I worked with maybe at a startup ten or 15 years ago that went on to do other things, and I didn’t realize that these two people now work at the same company, and I worked with them – one at this company and one at this other company – and now they work together. You can also leverage those relationships to ask them about other people; your second or third connections in LinkedIn. And I’m not saying that LinkedIn is the panacea for all of your networking issues, because it’s certainly not. But you can use that to gain some visibility, and it works in the reverse as well. Those people will see you on the other end. So you see it from your perspective, but you are on the other end of that as well.
Rob [18:51]: All right. What do you think, Mike, who knows you, your audience? Can that be copied, can it be bought?
Mike [18:54]: It goes back a little bit to who you know, and whether or not those relationships are reciprocal. Because just because you know somebody doesn’t mean that they know you as well. There’s that element of trust that you can leverage, and whether or not you have a voice that they’re paying attention to in any way, shape or form. So, it definitely can’t be copied or bought. It can be re-implemented, but it’s going to be at a slower growth rate. You’re probably much better off being in a position where other people know you than you know of them on a peripheral basis. For example, I know Jason Cohen, but it’s not like I’m on his inner circle or anything. And he knows who I am, but the relationship is not, I would say, directly equivalent in both ways.
Rob [19:35]: All right. So, examples of businesses that have been built on the who knows you, but built on an existing audience. SumoMe. So going back to Noah Kagan, he had already had AppSumo, he had a very large email list. 750,000. I think they’ve kind of made it public. And then when they went to build SumoMe, they basically had the big email list that they could get started really quick, and they got to six figures in the installs – hundreds of thousands, or over a hundred thousand pretty quickly based on that list. They took their existing audience and they very intelligently turned it into a software success.
Edgar, meetedgar.com. This is Laura Roeder. She had an audience of folks who had bought training and information products from her on social media and Twitter marketing. It may have been Facebook, too, but definitely Twitter marketing. Then she started a SaaS app for essentially doing just that. It had a system to it, and was able to pretty quickly get to – I think she got to $100,000 a month of MRR within, was it six months or ten months? It was very fast. Anomalous growth.
KISSmetrics. Hiten Shah, Neil Patel. They started Crazy Egg. They had an audience of marketers who said, “These guys build good products.” When they came out with KISSmetrics, they already had that list of customers, and they had a small marketing audience, but they really had a lot of customers who trusted them.
LeadFuze. Justin McGill started this as a productized service. It was doing cold email outreach. He actually had what they call BDR’s – business development reps – he had a staff of them who were doing email outreach. They were actually doing some for DRIP. They would go get customers. Then he built LeadFuze, the software product, behind it using that revenue. Then he sunsetted that productized service, and now LeadFuze is a SaaS app – and he’s public about this so I can say it – but they hit 30,000, 31,000 in MRR in a short time. Again, it’s like six months or something. So it’s pretty good growth.
Then DRIP. I would say that one of the big reasons that I got early traction, and that Drip was able to grow the way it did, was a little bit because of my network. But I think a bigger part of that is because of who knows me. It’s because when I said, “I’m launching something and I think it’s good.”, people would listen. They would at least give me the time of day. Whether they were going to switch that day from MailChimp, I at least got the benefit of the doubt.
Mike [21:41]: I think there’s an important distinction to make here when you use the phrase “Who knows you?” It is not necessarily who is in your audience that knows you. At least not the number of people because, for example, ‘Startups for the Rest of Us’ has 11,000 listeners or weekly downloads or something like that. All it takes is one person in that audience who they may know 200,000 people, or 300,000 people, and they may have a channel that you can leverage. So, even though your particular audience, the people listening directly to you, may be lower than you’d like, it doesn’t necessarily mean go out build an audience. You could very well have just five friends, and one of those people, all it takes is their relationships. And if they know who you are and they know what you’re building, “Oh, let me introduce you to so and so. They can help you.” That’s where that social capital comes in. That’s where those social circles are really helpful. So, it is not necessarily equal in both ways. But that’s an important distinction about “Who knows you?” is not just about the number of people that know you. That number gives you a bigger surface area, but it also gives you those people that may have their own relationships that can work in reverse for you.
Rob [22:45]: The influencers. So, in terms of “who knows you,” where do you stand from one to ten with ten maybe being someone like Noah Kagan, who has, obviously, a very large audience. And our fourth and final unfair advantages for self-funded SaaS founders is growth expertise. This one’s a little tricky. Growth expertise is knowing the tactics, knowing the strategy, and having experience doing these things. It’s not just reading about them, but it’s having this in-depth knowledge of it. And it’s people who we think of as the best growth people. That’s what I mean by expertise. I don’t mean someone who has toyed around with stuff, or someone who has done some marketing. And there are people, who without an audience – this was the tricky one where I said, “I have apps here that have grown with no audience and very little network as far as I can tell. And they weren’t early so how did that happen?” And every one of them there was a founder, or there was a marketer there, who just knew his stuff, his or her stuff. They just nailed it. And that’s what I’ve encapsulated with this one.
And copied or bought is a tough one on this. Copying, very hard. It could take years to get that expertise. Bought, could be bought perhaps with equity, but the best growth people we know they don’t just work. You can’t just pay someone $200,000, $300,000. These growth people, they’re not going to do it. So bought, very, very hard. You would need to give away a chunk of equity.
Mike [23:55]: I think that’s the key piece there. You can pay for expertise, but there becomes a certain level of expertise that is, I’ll say, early enough in a particular technique of some kind that is really difficult to buy them. You can go out and you can find people that are doing consulting for $20,000, $30,000, $50,000 a week for certain things, and you can’t buy them. There’s stories from unnamed individuals who’ve probably been a little bit public about – without naming names – and they’ve said, “I was offered $1 million dollars for annual salary and I turned it down.” And it wasn’t to say that they couldn’t be bought, because they were obviously doing the consulting work, but they didn’t want to be tied to that, and there was no equity involved. So when you get into those situations, to find somebody that is that good that early, without offering them equity, I think it would be really challenging to be able to buy them.
Rob [24:42]: Some examples of these companies are companies like Sean Ellis’ Qualaroo, who’s here in the house.
Mike [24:48]: Actually, it’s not Sean Ellis –
Rob [24:49]: Sean Ellis. Yes, I know he sold it, but he grew it and then sold it. But Qualaroo’s a sponsor of MicroConf this year. That’s not why this is here. I put this here back in April. We have Buffer from Joel and Leo. They were a little bit early into that market, but they weren’t the first. There were plenty doing what Buffer was doing. But is it Leo? Leo’s the growth guy, is that right? I forget if Joel’s the – Anyway, one of them is the programmer and one of them is more the growth guy. And that dude just hustled, and they didn’t know anybody. He cold emailed me, and he knew Hiten, and then he cold emailed me and said, “I’d love to do a guest post or two on your blog.” And I was like, “Well, you know…” And he showed me examples of his writing. I get a lot – if you have a successful blog then you get tons of offers for this. I typically turn them down but I said, “Well, give me a sample.” And his writing was really good. Over the course of a couple weeks, he did two guest posts. I found out later he was doing one guest post a day on all the big blogs. If you go back and you look at that time when Buffer was getting started, you look at everybody, like Jason Cohen, my blog, on Startups, [?] blog – just pretty much every blog you can imagine that has any type of influence, any type of link-back authority, and Buffer has a guest post on that. He was just hustling. He had growth expertise and he had hustle.
Crazy Egg is another one where they didn’t have an audience at that point but Hiten and Neil, let’s just say, they’re at the top of their game, and some of the best in the world at this.
Mike [26:04]: Going back to your Buffer example. When you do that type of thing and you’ve reached out to Hiten Shah or Rob Walling and you get at least some visibility. You said yourself, “I had no idea who this guy was.” And you asked for a sample of his writing, and then started looking back and seeing where else it was that he was being published, you can leverage those relationships, because really what you’re doing in a way is – back to your stair step approach – you’re leveling up the people that you’re talking to. You’re talking to people who have fairly large social circles, and you leverage that relationship into a larger relationship that they may have with somebody else who is bigger. Then you go bigger, and you keep going bigger. And you go, “By the way, I did a blog post over here for Neil Patel. And I did one for Rob Walling. And I did one for Hiten Shah.” And then it’s like how do you turn something like that down? You can leverage those types of relationships, but you can’t just go for the big fish. You’ve got to work your way up to it.
Rob [26:51]: In terms of growth expertise, I’d ask you to think about, “Where do you stand on a scale from one to ten, where ten maybe someone like a Sean Ellis or a Neil Patel?” Whoever you think in your mind is maybe the best of the best. So, a couple other things that I’d say are not unfair advantages, and that a lot of these are just table stakes for competitive spaces. If you’re going to go into a space with 100 competitors all of these are table stakes. If you go into a niche that’s maybe smaller and doesn’t have a tone of competitors, these will get you an advantage, but it’s not an unfair high growth advantage having just these things. I have five or six things here. One is great design and UX. I love great design and UX, most people in here probably do. But this alone isn’t going to cut it. This is table stakes if you’re going to be in a competitive space.
Mike [27:32]: And the reason is because that can be copied. You can very easily copy that.
Rob [27:36]: Copy or buy it.
Mike [27:37]: And that goes back to Jason’s quote, “You can copy it or buy it.” You can go buy the same theme that they did. Or you can buy the same designer that they used. There’s way to copy a design. It’s not a big deal.
Rob [27:46]: Technical or design skills. While, again, I think these are super valuable, most of us in here do. These are things that can be bought for a couple hundred thousand dollars. You could hire a really good technical or design person, or a great design or UX person, unlike that growth thing. Money. Money’s not an unfair advantage. Maybe unless you’re the only one in an entire space that has money, but money is cheap these days. It may not be forever, but it’s pretty easy to get a round of funding. As we’ve heard a lot of people just having some success, and then people are throwing hundreds of thousands of dollars at you. This is the climate we currently live in. Five years ago it wasn’t that way, right after 2008, 2009 – which I guess is not seven years ago – and in five years it may not be that way. But right now money is pretty easy to get.
An uncopiable idea. When I was researching unfair advantages, this came up in a few of kind of the big MBA like Stanford Business Review, Harvard Journal of such and such MBA stuff, and an uncopiable idea is something like a Google where you have that killer algorithm and it’s completely uncopiable. And the reason that I don’t think this applies to us is because this is for self-funded SaaS, and I could not think or find a single self-funded SaaS app that ever had an uncopiable idea. So that’s why it’s on this list. Domain expertise. Let’s say you’re selling to lawyers. I think that’s a good thing, that if you were a lawyer, your brother’s a lawyer, your co-founders a lawyer, that is really good. Not uncopiable though. And then passion, interest, time, focus. Again, these are table stakes. These are things that I used to think, “If I have that, I have an advantage over people.” These days I don’t think you do.
Mike [29:13]: I think everything that you just listed there, all of its stuff that you could either copy or buy. And they are helpful, but they’re not the only things that are going to get you to a higher level.
Rob [29:21]: So if you look at the four unfair advantages we’ve listed – we’ve listed be early, who you know, who knows you, and growth expertise. The latter three – who you know, who knows you, and growth expertise – those come with you. Those are skills, or assets, that you can bring with you from product to product, year over year. Being early – I’m not trying to downplay that – I wish I could be early actually. I think that’s the thing is I’ve never been early to anything in my life. I’m not the creative type. And I think that there are certain people who are just going to be thinking that way and are going to be at the right place, at the right time. But for me, I like to develop repeatable models that can be used over and over. That’s what we do at MicroConf is try to teach things that, not just say, “Well, go be early.” because that’s not helpful. Because you don’t know how to do that. We like to teach things that are fairly repeatable, testable, validatable. And so these latter three are things that you can take with you over time.
Mike [30:10]: You’re not even early to the podcast half the time.
Rob [30:12]: I know. I have to keep you waiting. And so, to wrap us up – there’s just a couple of more minutes here – it’s interesting, as I looked at my stair-step approach, where I talk about building one-time apps and then stepping up to one-time sale apps, like WordPress plug-ins and such. Then stepping up to step two which is selling enough of those until you can buy your own time. And then eventually stepping up into recurring revenue. This fits pretty well with this whole unfair advantage thing, because if you do this right – you’re going to launch a WordPress plug-in for e-signature or for lawyers or for something. For sales people. For ecommerce. Then you’re probably going to launch maybe a few more WordPress plug-ins in that space. And by the time you get to step three, and you’re trying to do recurring revenue, which is really hard as we kind of all hear over and over, you may have that. You’re likely to have maybe some growth expertise in that. Maybe you have a network of people in that space, which is who knows you. Maybe you have an audience in that space, which is who you know. So the ideal is that if you travel a path that you would build these skills and build these unfair advantages up over time as you go through your journey.
Mike [31:13]: That was actually an interesting thing that I looked at. Even on your stair step approach, early on you look at the things that you did. It was the WordPress plug-in, all the single products, the one-time sales, things like that. And you didn’t even really have any unfair advantages at the time. You were basically in learning mode. You’ve got the learn, build, grow stages for, basically, how DRIP went. But early on it was just you were learning, and you were in learning mode the entire time. And eventually you got to a point where you learned and then people knew who you were. And then after that it was kind of going a step beyond that. So you built up these unfair advantages over time. And I think that that’s an interesting point, is that just because you don’t have them now doesn’t mean that you can’t have them in the future. Being able to build them over time, there’s a trajectory that you can get, and as you build that trajectory – as you build more products or launch more things or do different things in different markets – you learn to toggle the levers in ways that will accelerate the growth in ways that were previously never possible.
Earlier in Steli’s talk, somebody had asked him could he have started with Close.IO and he said, “No, I don’t think that I could have, because there were a lot of things that we needed to go through and we needed to learn.” And I think that that’s very true for most of the paths that many of us are on as self-funded bootstrappers. You really need to go through those missteps and learn those different things along the way. As you get further advanced you learn the techniques and the patterns that come up where you can turn that knob just a little bit tighter and get a growth acceleration that you never thought possible, or that you weren’t comfortable with.
That’s one thing with, for example, building an email list or sending out emails. People are very hesitant in their early days. You’ve got 25 subscribers. “Oh, I’m really not sure about hitting the button on that email that I’m going to send.” It’s 25 people, it doesn’t matter. There’s people, as they proceed past that, you get to 2,500 and 25,000 and you’re just like, “Okay, whatever, I’m just going to hit the button.” And it doesn’t matter at that point because you’re comfortable, you’re confident that you’ve gone through those missteps, and it doesn’t make a difference anymore because you’ve learned what to do and realized that some of the mistakes that you make, they don’t matter nearly as much as you think that they do.
Rob [33:12]: I like that you used the phrase “self-funded bootstrappers.”
Mike [33:15]: Sorry.
Rob [33:16]: So the question we want to leave you with today is, “Which of your advantages do you want to increase?” And now I think we have time for just a couple questions from the audience.
Mike [33:24]: I made up that term, by the way. “Self-funded bootstrappers.”
Rob [33:27]: Self-funded bootstrappers. Hiten would love and hate it, right?
Mike [33:28]: You want to hear another term I –
Speaker 3 [33:30]: He would hate it.
Mike [33:32]: I’ve got another one I made up. Plagiarism.
Rob [33:33]: Plagiarism. Nice.
Andreas [33:35]: I’m Andreas. I’m the founder of [Hunter Recruitment?]. And I was thinking about the unfair advantage, and I was thinking about the problem because we are building a platform with a validation machine. But really maybe our unfair advantage is the people that we know, the tech people that we know. We are [residents?] right now in [Google Campus?] in Madrid, and probably the disadvantage is the people that sit down near to us. We really want the other startups outside the campus know these people could be. I don’t know if you agree with that.
Mike [34:17]: I would say it does map back to that, because it is partly about who you know and who knows you. And I don’t want to directly say it’s because of geography at that point, because you sit close to them. But in a way it is. You are sitting very close to them. How many other people are sitting close to them that are doing what you do? That are trying to connect tech people with businesses that are trying to hire them? So there is that element of geography, but when you translate it to the internet it’s not exactly one to one mapping.
Andreas [34:39]: A relationship.
Mike [34:42]: Right. But that relationship is there because you sit around the corner from them. And you’re probably going to give somebody who sits around the corner in another cubicle the time of day, whereas if somebody just cold calls you over the internet and says, “I’m James Kennedy from Rubberstamp.IO in South Africa. I’d like – “. You’re not going to pay attention, unless you wanted that and you’re basically right there.
Rob [34:59]: Any more questions? May be time for one more.
Speaker 4 [35:04]: What do you think about software patents, because I think there are some companies who use them and abuse them as an unfair advantage?
Rob [35:13]: Software patents?
Mike [35:14]: Software patents, yes. I think both Rob and I have lots of things to say about –
Rob [35:16]: Travesty.
Mike [35:17]: – patents.
Rob [35:17]: Yes, I have a lot of opinions on that. Go listen to the ‘This American Life’ and the ‘Planet Money’ episodes on it. It’s absolutely catastrophic. That’s my opinion. Software patents in the U.S. were not allowed until 1998, and since then it has become an absolute epidemic.
Speaker 5 [35:31]: Okay, thank you. A quick question. How do you recognize when you’re early then when you are wrong?
Rob [35:36]: That’s good. This is our last question. How do you recognize when you’re early or when you’re wrong? Okay, so this advantage is to be early and hit it at the right time rather than – you’re talking about being too early. Being too early to a market is where there’s no one there that needs it yet. And then in a year you see someone launched the exact same thing and it takes off. So like Foursquare had been done like six times. Facebook had been done three or four times, almost exactly the same way, but there was something about the flux of technology and such. You know when you’re right, because you’re right, and the curve looks like this. And you know when you’re wrong – I guess what I’m saying is, you said early versus wrong, and I’m saying too early is equivalent to wrong. But this early advantage is actually when it works. It’s the perfect time. You’re just early ahead of other competitors, but you hit the market at the right time. That’s what I meant by it.
Mike [36:31]: I would say you don’t know until way after the fact. If you are early there’s varying degrees of early. There’s “way too early”, which is – as Rob said – is effectively wrong. But there’s also near the tail end of it, when you’re basically ready to give up, there will be an uptick in growth and that’s going to start giving you hope. And you maybe stick around a little bit. That’s the point where you would recognize, “Hey, I was just early,” versus you were way to early and you get to that point and you just give up. And it’s a matter of how much time do you spend in the “zombie product” land where you’re not really making enough money to be able to support it and be able to grow it the way you need. And I think that boils down to trajectory at that point. How fast are you growing whether it’s users or installs or money? Those are the three things that you can, at least initially, measure a business on.
If you have a question for us, call our voicemail at 1-888-801-9690 or come to MicroConf. You can also email us at questions@startupsfortherestofus.com. Our theme music is an excerpt for ‘We’re Outta Control’ by MoOt, used under creative comments. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode.
Thanks for listening and we’ll see you next time.
Episode 299.5 | Ten Lessons Every Startup Founder Should Learn from Bill Walsh
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about a book by former head coach of the San Francisco 49ers Bill Walsh, about his standards of performance. Rob and Mike pull out 10 different points from the book that are most relevant to a startup founder and elaborate on them.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of ‘Startups for the Rest of Us,’ Mike and I talk about ten lessons every startup founder should learn from Bill Walsh. This is ‘Startups for the Rest of Us’, episode 299.5.
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 are just thinking about it. I’m Rob.
Mike [00:30]: And I’m Mike.
Rob [00:30]: 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?
Mike [00:34]: 299.5. Are we going down in the numbers here?
Rob [00:38]: Yeah, we’re going to start doing every half episode. Every episode will be half an episode. No, you want to tell them why we’re doing that? How you thought of gaming the system here?
Mike [00:46]: Yes. So we’re coming up on episode 300, and we were trying to think of something good to do for the 300th episode. And a lot of the ideas that we came up with were going to take – I wouldn’t say a fair amount of time – but enough time that I didn’t think that it was really possible for us to pull some of them off. So, I kind of had the idea that way back – I guess probably two, three, four years ago – we would do these half episodes on occasion for special occasions, whether it was right after MicroConf, or leading up to certain things. And next week is MicroConf Europe, so I thought that it would be appropriate to say, “Let’s slot in this episode here, and then next week what we’ll do is we’ll record a live episode at MicroConf Europe, and that will be the 300th episode.”
Rob [01:27]: And it’s our first live episode ever.
Mike [01:30]: Yes. And the people at MicroConf Europe have no idea this is coming. We’ll kind of announce it on the spot. But they’ll get to hear it, essentially, in advance of everybody else.
Rob [01:38]: And it’s an experiment. We will see if it’s good or bad. We tend to have quite a bit of editing, so it’ll be fun to try to hammer this out live on stage with an audience. And so this is episode 299-and-a-half but it is a complete episode. It’s not a half-length episode. Is that correct?
Mike [01:53]: Yes.
Rob [01:53]: Cool. So other than that, what’s going on with you?
Mike [01:55]: Well, the survey that I talked about last week that I had mentioned on the show about trying to aggregate data from different startups that have launched, and how far they got, how much customer development people did, how much revenue those endeavors made. I’m up to 55 responses so far. So, it’s interesting to see the range of the data that’s coming in. Everywhere from people who made absolutely nothing from it, to people who’ve made a couple hundred thousand dollars within a few months of launch. It’s nice to be able to see that kind of information. And the other thing I’d say that’s striking – or that’s really interesting – is the number of people that were comfortable to just say, “Yes, you can share anything you want. You can highlight it. Share my name and product name, etcetera. I don’t care.” I’ve gotten over 40% of the people who’ve submitted have said that level of sharing was okay. But the flip side of it is there’s another 40+% have said, “Yes, I want to be completely anonymous in sharing this.
Rob [02:48]: Very cool. Congratulations already. I haven’t filled out my responses yet, but I plan to do that while I’m sitting in an airport, because tomorrow I’m wheels up to Barcelona. I’ve got about 12 hours of flying ahead of me as you do as well. I think we’re flying on the same day.
Mike [03:01]: Yes.
Rob [03:01]: So, I’m looking forward to that. And I guess the other thing on my radar is since Leadpages acquired us – now it’s almost a month ago – trials have kicked up substantially, as you would expect. Their marketing engine is a well-honed machine, and so we get to scale support and demos and all other kinds of stuff. So that’s the fun that I’m dealing with now. And actually, when I say fun, I’m not being facetious. Like it actually is pretty enjoyable. It’s nice to have the resources that these guys do because they do have an entire support staff. And so, they’re basically training – I don’t have to go out and hire people from scratch. They’re able to train in-house people and kind of lend them to us for now. So, it’s kind of a fun process to talk about how they do things, how we do things and comparing them, and taking the best of the two, and saying, “Boy! There’s some things that I like the way we do it better, and then other things it’s like, ‘You have a much better system for that. Why don’t we use that?’ So that’s been kind of neat to collaborate on with just a bigger, I’ll say, more experienced team in terms of supporting large volumes of customers. So that’s been what I’ve been up to for the last week.
Mike [03:59]: It’s interesting that you put it that way, because being able to take the best of two different ways of addressing the same types of problems — because a lot of times when you’re running your own business you’re kind of operating in a bubble, because you don’t necessarily have experience from other companies to bring in. I mean, you’ve obviously worked in different areas on your own, or worked in previous companies before you launched something yourself, but you aren’t necessarily bringing a lot of additional experience, or different ways of handling the same types of problems, into the same company, because your hiring is going to be limited. You have to grow at least kind of slow because you are bootstrapped. And when you start combining teams like that, or even just bringing one new person onto the team, if they’ve done something differently at a previous company it brings in this wealth of knowledge and experience, and it’s nice to have two successful teams that have come together and collaborate at that level to be able to figure out, ‘What is the best way to do this?”
Rob [04:52]. Yes. And the interesting thing is, obviously I’ve bootstrapped for 15 years now, and it’s a certain way of thinking about things, and “How do we automate this?” Or, “How do we dial that down?” And, “It’s going to take two months to hire someone.” And, “We don’t have budget right now.”, and all that stuff. But Leadpages has been in business for what three, three and a half years now? And they think in terms of having lots of resources, because they raised a big chunk of funding. And so, it’s two different ways of looking at the same problem. And it’s cool to see that sometimes the bootstrapped way of looking at it, I think, is superior, and often times the resource-heavy, or the kind of resource-rich, way of looking at it can be better as well.
Today, we’re talking about ten lessons every startup founder should learn from Bill Walsh. And I’m very excited about this topic, actually. This is one that I’ve read in the past, I don’t know, six to 12 months let’s say. Really blew me away. It’s not even a new book. I think it’s at least ten years old, but it was recommended to me by my older brother. And the book is called ‘The Score Takes Care of Itself: My Philosophy of Leadership.’ And Bill Walsh was the head coach of the San Francisco 49ers, and he’s one of the greatest football coaches of all time. It’s pretty much inarguable that he is one of the greatest. There’s Vince Lombardi, there’s Bill Walsh, there’s a handful of others. But he absolutely was at the top of his game.
I really liked this book. The 49ers basically hired Bill Walsh in the aftermath of a 2 and 14 season in 1978. For those that aren’t familiar with the San Francisco 49ers, that is an American football team in San Francisco. And in 1978, they won two games and they lost 14, which is an abysmal record. And the team had posted losing records in five of the previous six seasons. So, it was a terrible situation, and he actually talks about this in the book. There was no discipline, there were people getting in fights, and there was all types of madness going on. Walsh came on in 1979 and he won the first Super Bowl with the 49ers. It was two years later, in essence. It was 1981. And then he won in ’84 and ’88. And he won ten of his 14 post-season games along the way, six division titles, three NFC championships. Just amazing record. And he was named NFL coach of the year a couple of years and he was elected to the pro football Hall of Fame.
So, really an astounding record. To be honest, I like football a lot, but I haven’t watched it in years but I have always respected people who perform at the top of their game. Even if you’ve never watched an American football game, or you don’t care about it or whatever. You don’t need to like sports to, a, like this book, and, b, enjoy and learn from what we’re going to talk about today.
Mike [07:24]: So let’s dive right in.
Rob [07:25]: Cool. So this – to be honest, boiling it down to just ten takeaways – was a challenge for me, because he has this thing called “standards of performance”. And he had this for everyone in the organization. So all the players had it. They had a certain standard of performance. All the staff had it. He said he has his own list of 16 standards of performance. And, in addition, I had another 10 or 15 kind of notes, quotes, thoughts, from him. So I easily could have put 30 points in this podcast episode worthy of discussion. But, obviously, that would be very long and it’s too much information. So, I basically boiled it down to what I consider kind of the best ten that are most relevant to a startup founder. So let’s kick it off with the first one.
The first learning that I want to talk about today is that everything starts with work ethic. And he talks about Joe Montana and Jerry Rice, also Hall of Famers, also arguably one of the best quarterbacks and one of the best receivers ever to play the game. He talks about the two of them doing drills on the field that high school players wouldn’t do because they were too boring. And so he would watch these guys who were at the top of their game do very basic arm drills, or very basic catching a ball and throwing a ball – I mean, just stuff that no one else would do, but they worked so intently at it to keep themselves at the top of their game. And they knew that just because they were the best doesn’t mean that you can relax. And the way they got to be the best was through that work ethic.
And there’s this other quote I really like relating to this. This is one of his standards of performance. He says, “Exhibit a ferocious and intelligently applied work ethic focused on continual improvement.” And I think every startup founder can learn from, and would be way better off then they currently are, if they would think about everything starting with work ethic and to focus on continual improvement. And the successful founders who I know are killing it and are doing it year after year, startup after startup, are the ones who are focused on these two things.
Mike [09:19]: I think there’s a natural tendency to try and jump forward in terms of your abilities, or the things that you’re trying to tackle, or the challenges you’re trying to overcome, just in an effort to get better. Nobody wants to go out and try to learn how to downhill ski, for example, and sit there on the bunny slopes forever. You really want to get out there and go out to the diamonds or the double black diamonds. And you have to start at the beginning. Otherwise, you’re probably going to fall and kill yourself.
But the fact of the matter is just practicing a lot of those fundamentals can really help you hone in on your skills so that you can do them, essentially, automatically and not have to think about it, or even worry about, ‘Am I going to be successful at this?’ And in this case, obviously like with Jerry Rice is, “Am I going to catch this ball?” It probably never even crossed his mind. It was more of an, “Okay, I know that this is coming in. I’m going to catch it. Then what do I do?” But it’s only a result of him having practiced catching for so long, and so many times. So it becomes just so repetitive, and so second nature, that he doesn’t even have to consider the ramifications of failing in those particular cases.
Rob [10:22]: Yeah. And I want to clarify, too, when I say work ethic here I don’t mean you need to work 80-hour weeks. What I view work ethic as is being incredibly focused, and when you’re working, getting it done. Sitting down, hammering through, not avoiding and not kind of having a mix of conversations at the watercooler, or being on Twitter and Reddit. I mean that you are a focused individual, and that you’re relentlessly executing when you’re sitting in front of that computer. And when you step away, you’re not. That’s the time when you rest your brain. I’ve seen a lot of folks who say, “Hey, I work 60 or 70 hours.” But when I’m actually around and working with them it’s like, “Oh, no, you’re in front of a computer for 60 or 70 hours. But you’re not actually sit there and focused.” Some folks fool themselves, I guess, is what I’m saying. So don’t feel like when I say work ethic it’s like, “Oh man, he’s telling me to work ridiculous hours.” That’s not the case.
Mike [11:09]: It’s interesting that you bring it up and put it in that light, just because if you think about a 40 hour a week job that most people will go to, you’re paid to be there for 40 hours, but the reality is that most people don’t actually work 40 hours when they’re there. And if you were to sit down and just focus and intently try to be productive, then your level of productivity just soars. It skyrockets way above and beyond what a normal person, or a typical worker, will be able to achieve, because you’re focused on that productivity and you’re trying to do better there. But if you’re getting paid to just show up, or if you are just showing up, then you’re not going to be nearly as productive.
Rob [11:47]: The second lesson is to blame yourself for poor team performance. And you can imagine how this plays out as a professional coach. You are going to get blamed if the team doesn’t perform well. But this reminded me of a story. A friend of mine was in grad school and she had a supervisor, and there was a whole process where the friend had to put together this survey or a document that was going to get sent out. And there were three or four people that reviewed it and they were supposed to review it and they all signed off including the supervisor. And then a document went out and it had a typo in it that was a big deal. It impacted the effectiveness of the survey, basically, or wasn’t just a non-issue. It actually caused them a bunch of work down the line. And the supervisor came down on the person who had written it, and basically was like, “You’re sloppy, and you don’t have attention to detail and this is your fault.” And when she told me the story it blew my mind because I never think that way. And I think that if you have someone who you think is sloppy and isn’t working out, then they shouldn’t be working for you. There’s a mismatch there. Either your expectations are too high, or they’re not very good. Get rid of them, because if you have a team that you like working with and the people are solid and there’s a big mistake and a server goes down, or someone’s money gets lost, or emails are sent at the wrong time, any of these things that are basically catastrophic happen, you don’t blame the team. You blame yourself, or you blame the process. And if the process is broken then it’s your fault, because you’re the leader and you’re the one putting it in place. This is something that I try to embody, and I feel very strongly about this. We can all learn from the mistakes, but it’s never time to blame someone for mistakes. If your team makes mistakes or has poor performance, it should always reflect back to the person or people in charge.
Mike [13:24]: I think sometimes this puts people in an awkward position where they’re trying to figure out whether or not they should continue down a particular path with a contractor or an employee, or if they should just kind of throw in the towel and move on to somebody else. Because you have to have a certain amount of empathy as a human being to run a company. But at the same time there are times when you have to put the needs of the business and the customers above the individual needs of the contractors or employees that you’re working with. And as you’ve said, if it’s not a good match then perhaps it’s time to part ways. But I wouldn’t say that that’s necessarily always the easiest decision to make either. So you do have to keep in mind, though, that you are leading the team, and if you are not making the decisions that need to be made then that reflects poorly on the team itself, and people notice that kind of thing. And that’s something else that may make some of these decisions a little bit easier, because if you’re not doing what you need to do and, I’ll say culling the team of people who are not contributing on the level that they need to, then people are going to notice and they’re going to become demoralized. And then the entire team’s performance suffers. It’s not just going to be one individual person.
Rob [14:30]: As you were talking I was reflecting. One reason why I like this book so much is because I think it says things that I already believed but that I maybe haven’t put into words. I’ve never written this list of ten, but as soon as I started reading through them I was like, “Oh my gosh, yes. Yes, this is so true. That’s exactly how I want to be. Or how, if I’m working for someone, I want them to kind of embody all of these things.” And it’s really interesting.
So the third lesson is not to win by fluke. He says, “Don’t win by fluke. Always examine what caused your victory and how can you repeat it and improve upon it.” And the reason this struck me is because you hear these fluke startup stories of someone launching – whatever it is – Flappy Birds or back in the day it was Hot or Not. Remember that? Or Plenty of Fish or whatever. I’m not sure Plenty of Fish was a fluke but you get the idea. There are these stories that are told – or the Facebook apps that suddenly were making the guy a million bucks a month. And while that would be great if we could all do that, we just can’t all do that. It really is a story that is kind of portrayed by people wanting to sell magazines. And that if you are in this for the long haul – you’re not just trying to make a bucket of money, and it’s kind of like a gold rush in a sense – if you’re not trying to do that and you actually want a sustainable lifestyle, and you want a much better chance of being able to live off the proceeds from your startup or your app, then don’t look for flukes.
Now, you can look for arbitrage, and you can look for angles, but if you have a victory, if you have an early success, I think you should look at that and say, “How can I repeat it? How can I improve upon it?” And I see this through my own career with a bunch of a failures and then DotNetInvoice makes a few thousand bucks a month, and I looked at that and said, “Boy, what worked here and how was that different than all the previous ones? And now, how can I either improve upon this or repeat this over and over?” Rather than just constantly going for moon shots, which I think is perhaps the curse of the startup space; to always think, “Boy, I’m really just going to have to catch a fluke here, and then I’m going to make $10 or $20 million.” Whereas, as we’ve talked about, we’re about startups for the rest of us, the people who want to turn this into a sustainable thing. And it’s much more of a calculated repeatable process.
Mike [16:35]: Yeah. This is kind of the anti-lottery strategy. You’re not hoping against hope that something’s going to happen and fall your way. You’re not making bets that are unreasonable to pay off in the end. It’s really about taking a hard look at what is working and what’s not, and doubling down on the things that are working, and either changing or getting rid of the things that aren’t. Because as you said, if you can find a strategy that works and is repeatable then that’s what you should do more of. And anything that’s not working, get rid of it.
Rob [17:05]: The fourth lesson is to make friends not enemies. And Bill Walsh specifically says, “Enemies suck up too much time and emotional focus. One enemy can do more damage than the good of 100 friends.” And this is something that I’ve long struggled with because I don’t get into the Twitter fights, or the comment fights, or the Reddit fights. And I see people doing it and I always feel like, “Boy, a, that takes an emotional toll and, b, don’t you have better things to be doing then sitting here saying how you’re right and the other person’s wrong?” But I feel like I’m kind of in the minority, and it’s always hard to back down from a fight if someone says something – because basically it’s someone picking a fight with you. And what he’s literally saying is back down. Even if someone is up in your face back down. It’s a hard thing to do, but what I’ve found is that it saves so much time, and so many emotional and mental cycles, that it is now my defacto way. Especially online where people can get out of hand pretty easily. I heard someone talk about this. It was Scott Hanselman, actually. It was on his podcast, and I think he was talking with Richard and they were going back and forth. And Richard was like, “Yeah. All these guys were saying all this stuff and you just didn’t say anything.” And he was like, “I basically have better things to do with my time. And there’s absolutely no use in responding to them.” And I was like, “Oh my gosh, that’s totally how I feel!” I really like this one. And it is hard to do. When someone says something that you know is incorrect, and it’s attacking you, and it insults you, it is very hard not to pipe back. And what I find is that typically you will pipe back once, and it doesn’t make a difference, because they either come up with some new thing, or they tell you, “Now that thing that you said is wrong.” And it becomes this thing where you’re now checking Twitter instead of working, and you’re all riled up to no end. You won’t change their mind, it will not improve you, it won’t sell more of your app, it won’t grow your business. None of that does anyone any good. So, it’s a really interesting thing, I think, for startup founders to learn. And I love that he puts it this way, “Basically, make friends not enemies. And that one enemy can do more damage than the good of 100 friends.” And he means no only for your reputation, but he really means also the emotional toll that it takes on you. Bill Walsh has his own story of actually doing this once and making an enemy and then having to turn it around. It was with Howard Cosell who was an announcer here in the States. And it’s a really good story of that. If you listen to the book you can get more detail.
Mike [19:24[: I’ve had conversations with people about similar situations at MicroConf before, where they’ll have a story about, “Oh, I got into an argument with somebody on Twitter, of all places.” It’s not like any argument ever gets solved on Twitter. But that’s where I would say that they’re probably the most visible, and where a lot of them – you know, you’ll see these things publically get started. And then there’s people who will just walk away and they’re just like, “Yeah, I’m just not even going to bother to respond.” It’s interesting to see the people that have that ability to just simply walk away and not bother to get involved are also the people that have a tendency to just get things done. They speak with their actions as opposed to their words, and, as you said, if you get into an argument with somebody it’s very difficult to convince them, especially if they don’t know who you are and they don’t have an understanding of the things that you’ve done, or your history, or anything like that. People just simply don’t listen, and it’s distracting to get into those arguments and feel like you need to respond. It’s difficult to deal with that on a regular basis anyway, but especially on a public forum like Twitter or various other places. If you get involved in those it can just be distracting to you, and your entire day of productivity can be completely shot if you start paying attention to that.
Rob [20:37]: The fifth lesson is to, “Take pride in your effort as an entity. Separate yourself from the result of that effort.” And he basically says, “Deal appropriately with victory and defeat. Don’t get crazy with victory, nor dysfunctional with loss.” He talks about winning Super Bowls and how certain people suddenly think that they won a Super Bowl because of them, or that their whole reputation and their whole self-worth relies on winning Super Bowls. Or you get crushed at the last minute right before the Super Bowl or at the Super Bowl and suddenly you just basically go into this massive depression. And you can imagine, especially as a football coach, it’s a big deal where your job depends on that. But as a startup founder you’re going to see similar ups and downs, where you’re going to have a month where you kill it, and you’re going to have months where you’re just going to get punched in the face over and over. And this is going to impact you. It will. But realize that you are separate from your successes and failures, and you are separate from the effort that you’ve expended. So do everything you can to make this happen so you have no regrets, so you essentially leave everything on the field. But then step away and realize that, “I’ve put the effort in, and I really hope it succeeds, but I am not the embodiment of that effort, and I am not the success or failure.” This is easier said than done. I’m going to admit it. But I like reading this one, because it reminds me again of what’s important to us and how we can make this a sustainable, sane lifestyle.
Mike [21:56]: I think especially with startup founders it’s very difficult sometimes to separate the success of your product, or projects – books that you’re writing or software that you’re building – it’s very difficult to separate the success of those things from the success of you as an individual. So, if you pour your heart and soul into something and it doesn’t work out, it doesn’t mean that you’re a failure. It just means that that particular endeavor wasn’t going to work out. But if you put everything that you had into it then you should at least be proud of the effort that you put into it. And it’s very difficult to alter your viewpoint to be able to see it that way. Especially if you have it in your head that, “Hey, I’m going to do this and it’s going to be successful.” And kind of planning things out before you’ve even gotten there. You’re planning out, “I’m going to celebrate in this way.” Or, “I’m going to take this victory lap over here.” But you’re planning those things out in anticipation of this goal that you may or may not reach. When the reality is you should be focused on the efforts that you’re putting in, not the results of those efforts. And, as you said, it’s very difficult to separate yourself from those things.
Rob [22:58]: Lesson number six is to demonstrate respect for each person in your organization and the work he or she does. I think this one’s pretty simple. I think that, hopefully, this comes naturally to you. I have worked with people, I have worked for people, who don’t demonstrate respect for the people in the organization, or they don’t demonstrate respect for certain jobs, as an example. Or they don’t demonstrate respect for the work; like a certain job isn’t as important as others. And I think this is an important reminder of that even if you have someone who’s writing the code for your core app, and then you have someone over here who’s doing whatever. I don’t know, what could it be? Support. Someone might make that out to be less important. Or marketing or, I don’t know. I know as developers often times – especially when you’re getting started – you think marketing is a lot less important. And it’s like, no. Each of these pieces, if you don’t do them, they can and will spell the end of your app, again, over the long term. It may not hit you in the first couple of months, but if you do a poor job with support, you do a poor job of marketing, you do a poor job of building, you’re going to fail. So respect the people who are doing them and respect the work that they’re doing.
Mike [23:57]: Yeah. I think it’s important, in this case, if you’re mathematically inclined, it’s important to keep in mind that for each piece that integrates into your app – whether it is the software development itself, or the support, or the marketing channels, customer development. All those things, they tend to create multiplicative outcomes. So if you do half as well at support as you probably should then your final results are essentially going to be half as good as they probably could otherwise. And the reverse is true as well. But keeping in mind that those things multiply themselves together to get you to the end of it, it really brings you back to the standpoint, or this viewpoint, that all of those things are important. And if you do terrible at one of them it’s going to tank the rest of it. And, as you said, maybe not now, maybe not two months from now, but eventually down the road it is going to reflect poorly.
Rob [24:48]: Lesson number seven is to be deeply committed to learning and teaching. And this ties into what Bill Walsh talked about earlier which is that work ethic focused on continual improvement. Because a lot of continual improvement may be doing drills and honing a muscle, but it’s also about learning. And I think that if you’ve had any success as a startup founder, or if you’re drawn to this, you probably have a deep desire to learn. So that’s probably not going to be the issue. The hard part tends to be taking the time and making the investment in someone to teach others. And typically that’s going to be teaching folks on your team and actually investing in making them better, and not just teaching them exactly what they need to do in order to do this particular job, but actually elevating them and letting them go out and make a little bit of a name for themselves. And let them achieve goals and making them better off having worked for you. So, I’m not saying this one is an absolute requirement in order for you to have success. But I think, again, making this a long term play, that being deeply committed to learning and teaching is not only healthy, but it will have positive dividends for you in years to come.
Mike [25:46]: I almost feel like I have a different take on this one, where I don’t necessarily think that you have to be deeply committed to learning and teaching so much as you have to be committed to enabling the people on your team to learn and, potentially, to teach other people on the team. Because if you’re the one who takes on all the responsibility for teaching people, then you kind of put yourself in this position where you have to know everything. And I don’t think that that’s the case in most startups. You can’t possibly know everything. So you’re better off putting people in a position where they can learn from other sources, or you’re enabling them to either mentor other people on the team or to learn from other people on the team. And I think if you approach it from that standpoint, as opposed to the view of, “Hey, I need to be able to learn this stuff so that I can teach my team.” I don’t think you need to do it that way. I think as long as you’re enabling everybody to do both of those things, because I think both of those really tie into the type of team that most people are going to want at their startup.
Rob [26:40]: The eight lesson is to demonstrate and prize loyalty. This involves being loyal to your team and not letting them get beat up. If you have a support person and someone’s being really rude in support, you very well may need to step in. And you very well may need to fire a customer, which is hard to do. And you very well may need to have a confrontation. But to me, having loyalty to your team and not letting them get abused… I’ve heard of some acquisitions where something goes wrong and, I don’t know, the healthcare isn’t as good in the new company or something, or it’s more expensive, and a startup founder can step in and just make it right. To me, that’s expressing that you are willing to sacrifice some of your own comfort, or maybe some of your own money, or something of yours in order to show loyalty to people who have shown it to you. And this is, I think, a very strong value of my own. I get along best with people who show that in response, in essence – a reciprocal loyalty. But I like that Bill Walsh called this out because it was obviously something that was very important to him.
Mike [27:39]: I sometimes have a hard time differentiating this type of thing. When somebody says that they prize loyalty, for example, because I tend to look at different situations. And you kind of pointed to a situation where you may have to step in and fire a customer. Well, if they were mistreated by the employee, then it makes more sense for you to side on the customer’s side than on the employee’s side. So, I think it really depends a little bit on the situation. I take this with a lot more context than just flat out, I’ll say, blind loyalty.
Rob [28:10]: Oh, yeah, totally. I meant if you’re in the wrong, or your employee screwed something up, then I wouldn’t fire the customer. But I would back the employee and be like, “Look, we make mistakes. Let’s not do this again. How do we avoid this?” And then make it right with the customer. At that point, it’s a loyalty thing like, “Man, I’m sorry. We screwed up and here’s how we’re going to fix it.” That’s how I’d view it. I was simply implying you had like a toxic, out-of-control customer, which unfortunately you are going to see at some point during your career.
Mike [28:36]: Yes. Understood.
Rob [28:37]: So lesson number nine is know what constitutes greatness for every role, and if you don’t know, find out. I like this one. I think this ties in with teaching because it’s kind of knowing what someone needs to learn. But also, you often hear like, “How does a non-technical person hire a programmer?” Or, “How does someone who’s never done marketing hire a marketer?” And my answer tends to be some derivative of, “You need to find out. You need to educate yourself.” You can’t just hire someone when you have no knowledge of what makes a good marketer or makes a good developer. You can get a referral from a developer who refers another developer. That’s the best. But other than that, learn enough about coding so that you can at least talk to someone about it in an intelligent way. And it takes more than that to know what constitutes greatness for everything, but I like the gestalt of this, of like, if you’re running a team than it is your responsibility to know what everyone should be doing, and what skills they will need in order to be the best performer at that role.
Mike [29:37]: I think the biggest challenge for trying to figure out what constitutes greatness for each role is that it takes time to do that. And most of the time it takes significantly longer than we want it to because we’re unfamiliar with what it should look like, or how certain things should be done. And because of that unfamiliarity, or that inexperience, we want to look for shortcuts. We want to look for a ten-point bullet list of ‘These are the things that I should be looking for.’ Or, ‘These are the things that I need to do.’ But even when you get that – even if somebody were to hand that to you on a silver platter – you’re still going to look at it and take it with a grain of salt, and you’re probably going to procrastinate because you’re just unfamiliar with all the different bullet points. Maybe it’s four through seven, you’re like ‘I’m not so sure how to do this.’ Or, ‘I’m unfamiliar with this.’ Or, ‘I’m uncomfortable.’ And it’s still going to take you significantly longer. So, you’re looking for those silver bullets, and it’s hard because you have to buckle down and just do the work to learn that stuff. So, I think that that’s one of the biggest particular one, is trying to justify to yourself spending all of the time in order to become enough of an expert that you can make that judgement call without spending so much time that it derails you from all the other things that you’re doing.
Rob [30:46]: And the tenth and final lesson is to control what you can control, then let the score take care of itself. This heads back to the stuff we talked about earlier about not getting so wrapped up into the results. But he takes it a step further and basically says, “There are certain things you can control. That involves choosing your team. It involves training your team and being loyal to them. It involves making yourself a constant learner and having a work ethic. There are things you can control and there’s a bunch that you can’t.” And as a founder, you’re going to run into things and sometimes it’s hard to tell the difference between the two. Sometimes if you lose MRR, or you have a terrible month, or an employee quits, or you have lay somebody off, or you have an amazing month where you double MRR. Any of these things can happen, and some of them are direct links to what you can control, and many of them are not. They’re more indirect ties to what you’ve been doing over the long term. And so, it can be very helpful that if your stressed out, or if you’re flipping out about something, sit down and make a list. ‘What can I control here? What can I not control?’ And then focus on the things that you can control and let that score take care of itself.
Mike [31:53]: I think as a startup founder it’s difficult to deal with things that you can’t control, because by nature they’re out of your control. And in some cases it feels like luck, or it feels like you have no influence. But I think in most cases, you have influence, it’s just not direct control. For example, you can’t force somebody to sign up for your mailing list. But you can influence them. You can provide trust factors. You can do all these things that will help guide them in that direction. But at the end of the day you can’t force them to do it. So, it’s trying to figure out different ways that you can influence things or toggle the different knobs. That’s going to be helpful but, as you said, understand that at the end of the day, you are not going to be in complete control. You’re going to have some semblance of control, and some semblance of ability to influence the results, but you can’t force them.
Rob [32:41]: And so to recap our ten lessons that every startup founder should learn from Bill Walsh are: Number 1: everything starts with work ethic. Number two: blame yourself for poor team performance. Number three: don’t win by fluke. Make friends not enemies. Take pride in your effort as an entity. Separate yourself from the result of that effort. Demonstrate respect for each person in the organization. Be deeply committed to learning and teaching. Demonstrate and prize loyalty. Know what constitutes greatness for every role. And control what you can control then let the score take care of itself.
Mike [33:09]: We’ll link this book up in the show notes so you can go check it out. 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 comments. Subscribe to us in iTunes by searching for startups. And visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 299 | 7 Entrepreneurial Blind Spots
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about 7 entrepreneurial blind spots. They outline some areas that people can overlook but can potentially cause issues down the road. This topic was inspired by a case study Mike is putting together on self-funded launch statistics to help people make better decisions for their business.
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Transcript
Mike [00:00]: In this episode of ‘Start Ups for the Rest of Us,’ Rob and I are going to be talking about seven entrepreneurial blind spots. This is “Startups for the Rest of Us,” episode 299.
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: [00:25]: And I’m Rob.
Mike: [00:27]: And we’re here to share our experiences to help you avoid making the same mistakes we’ve made. What’s the word this week Rob?
Rob: [00:30]: Well I’m in Minneapolis, sir. I’m only one-hour time difference off from you now.
Mike: [00:34]: Very cool So now I don’t have to schedule things much later in the day.
Rob: [00:37]: That’s right. So it’s been fun. I just got here a couple days ago and you had mentioned that you’ve been to Minneapolis but this is really just my second time. I’ve been here for two days a couple months ago. And it’s a pretty sweet city. Obviously, you know the big thing everyone thinks of is the cold and it’ll definitely be getting cold here soon but, there’s a lot of really interesting things going on here. Really good culture; there’s good museums, great bands come through, and the food scene is really top notch. So far I’m a fan.
Mike: [01:05]: Well now that you’re there I can tell you about the time that I went there in the middle of January, and it was so cold that the LCD on my car literally took several minutes to light up.
Rob: [01:15]: Yes.
Mike: [01:17]: Because it just wouldn’t light up because it was –
Rob: [01:18]: That is going to be so much fun. It’s going to be awesome. You know I did a Connecticut winter and a Boston winter.
Mike: [01:23]: Oh, it’s so much worse.
Rob: [01:24]: That’s what I’m hearing. I heard that it’s colder here but less snow. Is that accurate?
Mike: [01:27]: It is. Yes, because when I was there it was god awful cold but, I mean there was very little snow. It didn’t snow much at all but it was just bitter cold, and when the wind comes through it’s just ridiculous.
Rob: [01:40]: I will be looking at what I can do to work out of the Fresno office for a few weeks there in January because it will be like 70 something there. How about you, what’s been going on?
Mike: [01:50]: Well, I’ve been going through the data migration that I talked about a little bit last week, where I had to move a ton of stuff onto new data storage system. And I kicked that off yesterday, right now it’s about 53 percent done it’s been running for, I don’t know, almost a full day at this point. So needless to say, babysitting something like this kind of sucks. It’s very distracting because if something goes wrong the whole thing stops, and then you have to go in, figure out what went wrong and restart everything and fix it. It’s just kind of a pain. But for the most, part I’ve only had to restart it once and everything else seems to be going pretty well. So hopefully this will be done by tomorrow and I can move on to other things.
Rob: [02:25:] I hate background jobs like this it totally keeps me from being able to focus on work. I keep checking it every 15 minutes, just to check on it, and that’s still like the worst way to be productive. Especially if you have something like you’re trying to write, or you’re trying to do something that requires some type of calm mind, that’s the worst.
Mike: [02:45]: It’s kind of interfering – I’ve got this other thing I’m doing right now where I’m trying to gather data for a study. And I sent out an email to my mailing list essentially to ask people to volunteer information for their self-funded products that they’ve launched, or that they’ve tried to launch. And the goal of this case study is to try and aggregate as much information as I can about different types of products that people have attempted; what stage they got to, whether they launched or not, how much customer development they did in advance, how much money they spent, how much time they spent, and whether or not they deem that as a successful product launch and are they still working on it today; what happened to it in the end.
And the goal of this is to be able to publish data around that so that people can make determinations about oh, I’m working on this particular type of product – let’s say it’s a SaaS app or maybe a WordPress plugin or something like that, and they’ve spent X thousand dollars, and four months of time on it. Is that normal for that type of product or is it in edge cases, is it an extreme. Or have they not done nearly as much as what other people have done? Because most people are kind of operating in this vacuum where they don’t know that type of information. So you get four months, six months in and you don’t know how to compare yourself relative to other products that have launched along those lines. And it’s hard to make decisions about whether or not you should keep going and push harder or whether you should walk away.
Rob: [04:08]: Remember the four to six month rule I used to throw out all the time. I was like four to six months of spare time is what you need to do to launch. Now that may not apply to what is being launched but I think that for morale, for most people that’s about the extent of what I’d recommend for a first timer, launching a product. Like if you go longer than that, you’ve picked something to hard, you’re not working hard enough on it, or you’re just going to kind of lose morale, you know, and lose motivation after that. I find it’s really hard to keep going six months of hacking away in your basement.
Mike [04:38]: I tend to agree with you but at the same time that’s a general feeling that is not backed up by fact or data.
Rob [04:45]: Right, it’s anecdotal. It’s like –
Mike [04:48]: Exactly.
Rob [04:50]: [crosstalk] a dozen people, but it doesn’t have a very high in for those who have done statistics.
Mike [04:53]: So I’ll link that case study in the show notes, in case anyone listening to this wants to contribute data to it. And I actually put in the case study at the bottom, you have the option to say hey, please make everything that I tell you completely anonymous. Or if you’re more along the lines of share everything, I may take some of the things that you send in and make a full in depth piece of the case study about that, just kind of a highlight of that. But I leave it up to the people who are kind of contributing the data to make that decision or determination based on how comfortable they feel about it.
Rob [05:22]: Very cool, so as you said we will link that up in the show notes. So the good news for me is there’s just been a lot going on the last few weeks with Drip. I mean now that the Leadpages acquisition has been finalized and announced, and we’re moving forward with actually taking advantage essentially of the vast resources that they have, we’re able to move quickly on things that have, frankly, been on my list for a long time. Some things that we’re going to be implementing in the next month or two have been like in my notebook for a year or two because they just required resources that we didn’t easily have access to, or it required to much money. You know it’s either too much support, too much money, or too much engineering time, or something. And now we just have the ability to take advantage of that very quickly because there’s just such a big team here, able to support us.
Like one example of that is, we launched a one dollar a month plan that supports up to 100 contacts. I don’t know if you remember if you heard Dharmesh talk about cheapium plan; like not going freemium but cheapium where you’re basically charging cost. And that’s the idea here i to get as close to free as possible but still keeping it reasonable. And there’s spam concerns and stuff. If you make a free plan you kind of have to have a whole team doing anti-spam stuff.
So anyways, this one dollar a month plan for full marketing automation, it’s unheard of. The tools that are comparable to us are one 199 bucks a month and up. And that’s where they start. There is one competitor who used to have like a nine-dollar plan but they pretty much, for all intents, discontinued it. So even they now are $49 a month and up. So even though this plan is loaded to a 100 subscribers it’s still a really interesting offering in the market. We think that not only can early stage people use but even people just looking to kick the tires. It kind of means you can just have a trial forever. Like if you just want to kind of try some stuff out on a simple thing, or see about the new workflow feature, or whatever, it’s like paying a buck a month to have access to it is kind of trivial. So when this goes live we will have announced it the prior week and I’m interested to see – it’s in a couple days and I’m interested to see the response to that. But, really excited about that.
And that’s one thing, again, that you can’t do as a bootstrapper because you can’t handle the support load because instantly just get way more trials and the revenues not there immediately to be able to support all those users. So that’s pretty cool. The other thing we did, which is just awesome – again this was something I’ve always wanted to do but needed the money is we were able to double our affiliate commission. We used to pay 15% recurring and we pay 30% recurring now. And right away we notified our affiliates and we just kind of got all these positive reflections. We’re like, man, if this is the stuff you can do when you have essentially Leadpages or more money or more resources, then keep doing this, keep going in this direction.
It’s exciting to be able to do that stuff because whether you come up with good ideas – sometimes you come up with a lot of good ideas and a lot of them are impractical because of lack of funds; or lack of design talent; or lack of developer resources or whatever. And just seeing things really open up. And that was the intent. Like we talked about last week and the episode where we dove in. That was really the intent. And to see two of them just come up right away and for us to be able to push those, it feels really good.
Mike [08:21]: That’s awesome. I really like the idea of having that $1 a month price point for somebody to kind of get their feet wet with Drip just because, as Dharmesh had said, it’s the cheapium it’s not freemium. But it kind of forces them to actually pull out their credit card, too. It’s one step up from a free trial or from that free plan. I think MailChimp used to have, and they probably still do; they have that 2,000 subscriber limit on a free plan but they will put their branding and marketing on there. And then for $10 a month you can pay for their 500 subscriber option. But the one dollar a month plan, that’s interesting. I like the idea of it.
Rob: [08:55]: Very cool. So what are we talking about today?
Mike [08:58]: Today we’re talking about seven entrepreneurial blind spots. And the idea for this show actually came about because of the case study I’m putting together. And it made me think about what sorts of other blind spots people either are running into that are obvious to them after the fact and they look back and they say, “oh yeah, I should have known that,” or they talk themselves out of seeing it as a potential issue because they just weren’t thinking about it or weren’t taking a step back to kind of evaluate their situation. So I wanted to outline a couple different places where people might run into an area where they could run into potential issues down the road if they are not thinking about those things.
Rob [09:34]: And numero uno is?
Mike [09:37]: And numero uno is, being an entrepreneur is more about the journey, not the goals. And this one actually came to mind partially because of you selling Drip to Leadpages. And one of the things that kind of comes to mind is that most people say I’m going to build a business and I’m going to sell it and I’m going to make tons of money and then I’m going to walk away. There’s actually a couple of different things in addition to that.
Most people don’t think about the fact that they probably have to stick around for a little while. But if your whole goal is to sell the company, when you get to that point, what then? What meaning is there in your life? What is going to make you happy beyond that? Because if that was your whole goal, if you finally achieve that goal, then what? What is your life really about at that point? So I think it’s more about understanding that if you’re not enjoying what you’re doing then maybe you’re doing the wrong things. And that your business goals are probably pretty important but they don’t necessarily define who you are as a person either. It’s really about getting to a particular place, and enjoying a particular journey as opposed to the whole focus is getting to that goal.
Rob [10:35]: There was a study done once on – it was med students who were going through medical school. And they found the people who hated medical school but were just doing it for that goal – I’m going to become a doctor, I’m going to become a doctor. Like once I get out everything will be good. That those people were extremely unhappy once they became doctors. There was some correlation there. Whether they just didn’t belong there, it wasn’t something they enjoyed and they were really being forced to do it by their parents or by societal scripts, or whether they were just naturally never going to enjoy the journey and maybe once they became doctors they were like I’m just going to retire. I’ve just got to make enough money to retire. But there’s a correlation there.
At the same time this one is really hard for me to embody. I am not a journey person. I’m very much goal-oriented and I would say, of the entrepreneurs I know, the vast majority, 80-90%, are goal-oriented. And so that’s why this is such a big blind spot. I have to remind myself constantly to take a deep breath and look around and say, these are the good ole days. You’re going to look back on this time right now in a few years and you’re going to be like, “man. that was awesome.” And truth be told I look back to the very early days of Drip with Derek hacking away on code. And he and I used to sit out behind my house by this koi pond and hammer away like that. I remember it just seemed so romantic and so fun, but it was tough work. I mean it was like we had no revenue and you don’t know if this thing is going to succeed. And then Derek and I in the office together, once we finally got an office, man I bet those days were cool. But it’s like they were fun and I remember then but, man, it was a lot of hard work. And there was a lot of stress of like is this thing ever going to take off. And then each step of the way, once the team got to about four or five, I remember starting to tell people this in like team meetings where like this is a really good time, drink this in, because being at this size, it’s a unique step. No company can stay this way forever. Drip’s not in this competitive space, not going to be able to stay like this. So we’re either going to get big, or we’re going to get acquired. We kind of talked or raise funding or something.
And there were different options there but, I think that is the one piece of advice that I would give based on this. About enjoying the journey; is just take time once a week to look around and think, boy we have it pretty good here. Like you’re not slogging away in a cubical for someone else, depressed at your day job, working a nine to five. To me that is the alternative to what we’re doing. And even though what we’re doing is and can be stressful, we are in control of it. In fact, even better advice; I was talking to Ruben Gamez from Bidsketch – this is seven-eight months ago, and I was like kind of burning out on stuff and slogging through email. There’s stuff that piles up. There was HR stuff I was handling; I mean just kind of everything. And he said why are you hating this, you’re the founder. You’re in control of this, make it change. Change this and make it fun, because that’s why we started our own companies; is so that we don’t have to feel this way. And it’s like sometimes it just takes someone to tell you that. To kind of snap you out of it and be like what do I have to do to snap out of this? And that’s actually when I hired Dawn, the assistant who then took a bunch of that stuff off of my plate.
Mike [13:39]: The second entrepreneurial blind spot is that estimates for anything that you’ve never done are going to be wildly inaccurate. And I think in my experience – and this is more anecdotal than anything else – but anything that you try to put an estimate on that you’ve never done before is probably going to take something like five times longer than you think it will and it will probably cost twice as much. And that’s true whether it is development costs, you’re outsourcing things, or trying to build a marketing campaign and you’re trying to determine what’s going to be your cost per acquisition for advertising campaigns; something along those lines. And anything that’s outside of your direct control is probably going to take at least two times longer than you think it is. Even if you’re trying to be a little bit cautious about what those estimates are you’re still probably going to be wildly inaccurate because you don’t necessarily have a good understand of what to expect when you’re trying to put those estimates together.
Rob [14:27]: So when I estimate and I was writing code, I got to be pretty good at it because I used to do it for fixed price projects. And so I got to where I would overestimate just enough that I was pretty accurate as long as something crazy didn’t come up. But that one took years of having bad estimates and having stuff not working. And so, for most people who don’t have to develop that skill, it’s just never going to happen and that’s okay. But, you then have to realize it, that you’re just kind of always going to underestimate. The problem is a lot of us just look at a high level thing and we say the feature is to add a page that does X. And into an existing app, if you just throw an estimate out – you can say “oh, it’s going to be a few days, it’ll be done in the next few days.” But until you sit there and even if you take five minutes or ten minutes on a piece of paper and you actually think through what are the database calls or is there anything beyond just some basic crud that I already have ORM for? Or maybe I’ll have to write custom sequel because that one table is big and I need to work around an index. Or maybe that UI’s going to be a little tricky. As soon as you start sketching it out it’ll start popping up of like man, that’s going to take a lot longer than I thought.
Because I remember in the old days someone throwing out I can build – a typical Web app, Web pages, it’ll take me like two to three hours. But then when I actually watch – because I was kind of being a product manager – it was a tech lead at the time. So I was coding and also looking at other people’s productivity. It did only take the person two to three hours to hack things together. But then it was almost double that in the discussion of what the page should do; going back and forth with the end user, in essence. There was kind of project management time; it was like circling back because there was a bug, so then you’d need another 30 minutes. Then there was CSS browsering incompatibility issues.
So just on and on and on. And it would literally be two to three times what just that initial two to three estimate was accurate in a sense, but it wasn’t the whole cost of building that page. The real cost was more like a full day’s work; six to nine hours. That’s where I think if you’re really going to bare bones estimate things, I think at two to three times multiple tends to be what I think about. Unless you find that you developed a skill and are pretty in tune with how long it’s going to take you to code it. It’s a lot harder to estimate for someone else. And I’d try not to do that unless I know them really well. Like Derek and I will estimate stuff together and I will throw out how long do you think it’ll take; two days or whatever? And we’ve worked together long enough that I know how he works. But if you don’t know someone, like a contractor, you’re going to be off by ridiculous valuations.
Mike [16:47]: I was just going to point that out; that all the examples and stuff that you were just talking about were all for your own estimates. But when you’re doing an estimate for somebody else, they’re skills are different than yours so your estimates or assumptions about what they do and don’t know, whether it comes to technology itself or familiarity with the code base, are going to be just off. It’s really hard to be accurate when trying to do an estimate for somebody else.
Rob [17:12]: In fact, I try to avoid estimating for other people. And if I were to have someone doing a project and they were developing or working on it, I would sit with them and help figure out what all the components were, and then I would ask them to estimate. And then, probably sanity check it again; like “what do I think I could build this in?” And walk it through to get an idea. Because, again, most developers estimate too low and that’s a problem. If they’re too high, you can talk about bringing them down. But typically they’re going to be too low. And I would almost encourage people to increase it at that point so we could get a more realistic view of when stuff will be delivered. Because that can create stress, right? That makes a journey not fun when you think something’s going to take a week and it takes two or three weeks and you’ve committed to someone or you’ve even committed mentally to yourself and then you just feel behind the whole time.
Mike [17:53]: That’s actually part of the data migration that I’m going through. I thought that it would take me a week, possibly two at the most. And here I am, almost four weeks later and it’s just kind of getting to the point where we’re pushing it out. So it sucks to be in that position but there’s only so much you can do.
This actually leads us a little bit into number three, which is you can only be productive on one or two things at a time within a given time period. By a given time period I mean over the course of several days or several weeks, not really within an hour or two. Because you really can’t multitask very well within that hour or two. But if you’re trying to do an estimate and you say this is going to take four weeks, that’s not the only thing that you’re going to be working on during that time. So that context switching back and forth between, let’s say, coding activities and marketing activities, there’s a cost associated with that. And it’s very difficult to be completely done with a particular task and then move onto the next because there’s always things that come back. There’s always bug fixes or things that need to be tweaked. Whether it’s a marketing campaign and just text on a page, or whether it’s actual code and a customer decides that “I need this to work a little bit differently, can you go in and fix this?” Well, if you’ve already moved on to working on your marketing campaigns, then you’re getting dragged back into the coding. And the reverse can happen as well.
So it’s really hard to just completely be done with one specific thing and move on. Those lines in the sand are very difficult to draw. So if you have two sets of things that you’re working on, one of them is maybe four weeks of coding and another one is four weeks of marketing tasks, chances are good it’s probably going to take you closer to ten or 12 weeks in order to finish both of those. Even though individually, the estimates are only about four weeks each.
Rob [19:26]: I think this is a type of multitasking. There’s kind of micro-multitasking, which is where you’re just sitting there and you’re checking Twitter and you’re checking your email and you’re bouncing around and you’re trying to write a blog post and you’re doing 20 things at once. Then there’s this macro-multitasking, which is what you’re talking about where you have too many high-level projects going on at once. And it is just chaos. There’s a couple things that I’ve started to do. You have to be a little bit in control to be able to do this. If you’re an employee and people are just throwing stuff at you all the time and you can’t control it, then it makes it harder. But I’ve tried to be extremely deliberate about picking what is – like you said, one or two – the highest priority things, and really digging into those. And then wrapping them up until they’re finished.
And it depends on the length of these projects. I mean if you’re trying to write code and do marketing it is hard because those are both ongoing things. There’s always more code to write, there’s always more marketing to do. But if you break it up into projects where like maybe for one-week marketing is just split test on the home page, and then it’s testing out some Twitter ads to a landing page, then those are kind of smaller projects and they may take a while to reach fruition or for you to be able to determine if they’re successful or not.
But as a founder it is tempting to start the split test, start running ads and then be like “wow, well I have some free time this afternoon so let me start two more projects like that.” But then once they do start bringing results in, it’s too many things to monitor. So it’s almost like don’t start that next thing that’s going to take a while. If you do have two hours that afternoon that’s free, don’t start another project. Instead flip back and either hammer out a blog post if you think you can. Like do something that you can start and finish in that amount of time. Something like a blog post I could see just taking an hour to sit down in front of a notebook and think about all the really good ideas. Almost take just a quick mini check-in. Not quite a retreat, but just a mini check-in of what are some things that we should be doing, what are our priorities, and do a high-level check-in like that. Or, hammer through email or just something that, again, you can start and finish in that time frame.
Mike [21:21]: The fourth entrepreneurial blind spot is being able to maintain your objectivity. And this revolves around being able to be objective about the ideas that you have or being able to question your assumptions. It’s very easy to fall in love with a particular idea that you have and assume that you’re correct rather than intentionally undertaking fact-finding missions. I think a popular name for this is confirmation bias. But I think it also involves some psychological components because everyone wants to be right. It’s not so much that you are looking specifically for confirmation of what your assumptions are, but you want to be right.
I think that those two things intertwine very closely, but I don’t think that they’re exactly the same thing. But the key point here is that you know that you’re no longer objective about something when you start to become defensive about the points that you’re making. So if you’re explaining how a product works or you’re working with a customer and they give you a bit of feedback, if you go on the defensive at any point during that conversation then you know that you’re no longer objective about it. And you really need to start taking into consideration the fact that they’re giving you feedback and you’re trying to be defensive about it. “Oh no, you should be doing this. This is how you would do it.”
There’s times where that’s an appropriate response, and then there’s also times where you need to take a look at what they’re telling you and realize that they may very well be representative of a large number of other people, and you’re so close to it that you can’t see that. You are seeing all these other possibilities, but because they’re seeing it for the first time they don’t understand it and you need to look for ways to help them understand it as opposed to trying to change that person’s mind.
Rob [22:52]: When we talk about how founders need to embrace failure or they need to learn to make mistakes, this is one of those hard ones. Because admitting that your idea doesn’t work or being open to it not working is a scary thing to do. And it’s really similar to feeling like you’ve failed. Especially if you’ve spent six months trying to come up with ideas and then you finally latch onto one and it seems like a great idea and then you get a ways in and kind of just bursts. It’s tough to admit that. So I agree. I think this is a blind spot many of us have, including myself. I found myself latching on too long to certain ideas.
Mike [23:28]: The fifth blind spot is around delegation and failing to understand that delegation is not the same as abdicating your responsibility for something. If you are delegating a task to somebody you’re still responsible for making sure that those tasks get done. You’ve simply become the manager for those tasks as opposed to the implementer. And you can go and delegate important tasks to other people. There’s a lot of people, myself included sometimes, that feel that if something is really important then you need to be the one to do it. And that’s not always true. There’s lots of things that you can delegate that are still important things.
One example of that is the bookkeeping. I mean that stuff has to be accurate. And you want to know how your business is doing and how much money’s coming in and what your ROI on the different customers is, and then different marketing initiatives you have. But you don’t necessarily need to be the ones doing those. And if you’re training somebody to delegate those tasks to, especially for small tasks, a lot of people will push that off because it doesn’t seem like there is enough ROI there to hand somebody a task when you’re going to spend almost as much time training them to do that particular task as it would for you to just do yourself. And people will quickly fall into this trap of doing everything themselves because it’s going to take too long to delegate that to somebody else.
And the reality is that you want to hire people for their decision-making ability, not necessarily for their skills. You want to be able to explain to them this is a high level of what I’m looking to have done, go do this and then use an iterative approach to have that come back to you. And you guide the output as opposed to dictating it or explaining every little nuance to it.
Rob [24:57]: It’s a learned skill. You’re not going to be very good at it when you start. I was terrible. And you got to dive in because you just aren’t going to be able to accomplish everything that you need to on your own. Even when I was solo and I had no employees and I had these tiny little apps doing a thousand, two, three, four thousand a month, I had VAs responding to emails; I had folks doing design; I had many contractors that worked with me. And again, when I first started I was terrible at. You get better at two things, one you get better at hiring so you get better people, and two, you get better at delegating. So it just becomes a virtuous cycle.
Mike [25:34]: The sixth blind spot, which I think afflicts a lot of people, is that you’re going to base the majority of your decisions on incomplete data. And there’s lots of different ways that this can manifest itself. It can either be in coding estimates or trying to figure out what you should do for a marketing campaign. And sometimes this leads to procrastination because you’re not really sure what you should do. There’s this desire to be right or to avoid being wrong. And very often that leads to making no decision at all because you want to make the best decision but you don’t have enough information to make that decision. So rather than making any decision you do nothing.
And this is very similar, I think, to the analysis-paralysis, where people have too many decisions to make and they don’t know what to do so they don’t do anything. But I think that fear of a particular outcome can also lead you away from finding the truth about a particular situation, and you’re not necessarily going to realize it. Or it’s sitting there in the back of your mind and it’s weighing on you and maybe it’s a source of stress and you just simply don’t do anything about it. I think a prime example of this is delaying talking to your customers because you’re embarrassed about a question that you’re going to ask them before you’ve even asked the question. And I think that’s probably a major factor here is that you don’t necessarily know what they’re going to say. You may have an idea of it, but you absolutely have to find out what those people have to say. They may surprise you. It may very well be good dues. But if you don’t ask those questions then what you’re doing is you’re really just making a lot of assumptions here.
And those decisions are going to be difficult to make if you don’t go out and find the data. And if you don’t have enough data you have to go ahead and make a decision anyway because these decisions are subject to change. And a lot of that change is outside of your control. There’s things that will happen that maybe you make a decision today, something radical goes on tomorrow and maybe Google indexes a bunch of things and your entire search engine strategy goes out the window. You’re going to have to change how you do things. And that whole thing is outside of your control, so waiting a few extra days, weeks or months is not going to make a difference. Google is going to move forward with whatever they’re going to do and you have to do the best you can with the information that you have.
Rob [27:32]: I really like this one. This was something my dad told me probably 20 years ago. He was a project manager for a large electrical contractor and I was kind of coming up on that path. And he told me very early on the majority of his job is making decisions with incomplete data. And so I think that if you’re listening to this and you haven’t had the experience of having to make a lot of decisions with incomplete data, or when you do you agonize over them and it takes you days, hours, weeks to make them, really think about how you can get faster at it. And the way that I improved upon this, this skill, because I was terrible at it at first and I would get paralyzed over things like – honestly we’d go to order pizza and I would sit there for like ten minutes trying to figure out which pizza I’d wanted.
And so there’s a few types of decisions, right? There’s really important decisions that are hard or impossible to change later. Those are the ones that you do need to agonize over and you need to get as much data as you can. Whether that means further testing, further conversations with customers, you really need to go all out to get that. The other decisions, the ones that are either like not that important like ordering pizza or setting what color the font should be in something, or the decisions that are easy to change later. So that might be important, but you can always change them if things go sideways. Both of those you should make very quickly.
And the skill is in learning to identify which of those three categories it fits into. And then recognizing that as you’re making the decisions. Again, I think it’s kind of a habit or a muscle that you develop to where by default think “boy, can I change this decision later?” And if I can, even if it’s important I just got to make the best one I can given the information I have. And that’s kind of been my mantra because I, personally, as more of a Type A person and someone who is – as I classically said, I’m kind of risk adverse and don’t like to fail and don’t like to make wrong decisions, this was something I really had to break myself out of a habit of because you move too slow if you agonize over every decision.
Mike [29:21]: And the seventh entrepreneurial blind spot is that making a mistake doesn’t mean that something isn’t ever going to work. It means that it didn’t work for you in that particular situation. And what I’ve seen is that if you look around at the entrepreneurial landscape there’s a lot of advice out there. And general advice is not always applicable to every situation. There’s always edge cases, there’s always exceptions. And I say always, I probably should say almost always exceptions and almost always edge cases. Because there are certain situations where that advice is simply not applicable. And it could be that the situation that you’re in, or the business that you have, it’s just simply not going to work for your particular situation.
That said, assuming that a piece of advice is going to work for you in your situation without testing it is often a mistake. You have to iterate through it, you have to make sure that it is applicable to what you’re doing and how your business is operating. And it’s common to take a look at something that you’ve tried and if it didn’t work out just assume that it’s never going to work for you in the future. And I’m not saying that you should or shouldn’t go back and do that again, but at the very least it should be something that you consider rather than summarily dismiss as we tried that and it didn’t work. Go back and take a look at the things; what is it that you did? Is there any new information you have? Because going back to what we said before, you’re making a lot of decisions based on incomplete data. And if you’ve done something, now you have more data and you can take a look back at that and say, “do I know more about this situation then I did before, and are there things that I can change or that I can tweak, and make another try at this and do better with it?”
Rob [30:51]: I always take general advice as a rule of thumb that then if at all possible to test and verify I do, like if we have the resources or if it’s something that’s easy to test and verify, I do. Sometimes you don’t. I mean you have to make so many decisions. Let’s say you’re just launching your app, you’re worried about pricing; you’re worried about positioning; you’re worried about copy; you’re worried about getting the code out and tested. There’s so much to do. You can’t test everything all at once. You just have to, at a certain point, email your list and see what works and kind of manually fix it. But for that, like when we launched Drip and when I’ve launched any product, I use the rules of thumb that I’ve developed over time.
And it doesn’t mean that it’s going to work for your case because you haven’t tested it yet. But it’s better than nothing. It’s better than a wild guess to at least start with some common knowledge. But then thinking as I have the resources, how much of this can I test? And if you’re going to test this stuff is to look at the high-level stuff first. You start with big changes in headlines or body copy, or big changes in pricing. There’s a lot you can do, especially if you even have a decent amount of traffic. And I think it’s really important to remember that that’s why all the podcasts and the conference talks and the blog post and everything, everything you read worked in one case, or maybe two cases. And even if it was a study, and let’s say it had 100 different SaaS apps were looked at, it’s still probably going to be more of like an average or a watered down version. And it still may not be the best practice for you. That’s the experienced marketers, the experienced founders that you’ll hear from that will tend to say this has been my experience but test in your own instance.
So to recap, today we talked about seven entrepreneurial blind spots. The first one was being an entrepreneur is about the journey, not the goals. The second is estimates for anything you’ve never done will be wildly inaccurate. And I would say even for things you have done, can be wildly inaccurate. The third is that you can only be productive on one to two things at a time. Fourth is maintaining your objectivity. Fifth is delegation is not the same as abdicating responsibility. The sixth is you’ll probably make the majority of your decisions based on incomplete data. The seventh is that mistakes don’t mean something doesn’t work. It means it didn’t work for you in that instance.
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