[00:00] Mike: This is Startups for the Rest of Us: Episode 137.
[00:10] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs to be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:19] Rob: And I’m Rob.
[00:20] Mike: 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?
[00:24] Rob: Well, I’m at inbox zero for perhaps the first time in my life. Yeah. Yeah, after getting back from MicroConf there were just this mountain of e-mail, hundreds and hundreds of e-mails. I was so far behind and I decided that like long-term, this isn’t how I want to do e-mail. Decided that I would shoot for this inbox zero thing. To me, I’ve always viewed this maybe a faddish thing or like the – it’s the flavor of the day for was it like personal organization or time management. But frankly, it feels good. It’s been about 10 or 11 days now and once I got through all that e-mail, got it to zero, I used, you know, Boomerang to remind of stuff so that I didn’t have to leave it in there and see it all the time.
[01:02] And then I also moved tasks directly from Gmail in to Trello. So, if I need to respond at some thing later or if it’s a lower priority than right now, then I will say like respond to this e-mail in Gmail, you know, I copy that as a Trello item. It’d be nice to have like a one-click way to do that but for now, just getting to this point is kind of my minimum viable strategy and then I’m sure I’ll go out and look for a better tool to do it at some point if I keep this up.
[01:28] Mike: Well, personally, I have subscribed to inbox dozen or so. So [Laughter] I tried inbox zero for a little while and it worked really well and so, I got the certain things that were either longer term things or things that I couldn’t respond to right away for one reason or another and I really needed to keep them there because otherwise, I would just use Boomerang for them.
[01:47] So, certain things I haven’t quite been able to do that for but there’s definitely stuff that I just keep it in my inbox just to keep it kind of at the forefront of my mind I’ll say because certain other tools like if you use your e-mail as a to-do list, it’s just eventually gets too long and you get overloaded and you just can’t keep up. And then if you shift from taking your inbox stuff and move it at someplace else, eventually that other thing seems to get overloaded because there’s always more work to do. So, I think that there’s this balance you have to strike about stuff that you decide you’re just not going to do it and you just throw it away.
[02:18] Rob: No, there is a huge amount of stuff that I over the past couple of years as my, you know, e-mail and just all the management tasks that I have to do have increased. I’ve made a lot of decisions to blanket not reply to certain things and then I’m not able to address certain things. I’ve also started to bulk reply to a lot of things where I shouldn’t say bulk, I should batch reply. You know, everybody who asked for advice, I put them under advice tag and then I throw them to Trello and say I respond to all the people under advice and I’ll take 30 minutes or 1 hour each week and I’ll just go through them all.
[02:53] And if there’s 10 of them, then I know that I have 6 minutes per and that’s all I can give. In the old days, I used to sit there and respond with 5-paragraph essays to everything. But it’s just making adjustment, you know, as the volume increases. How about you? What’s going on on your end, anything new?
[03:06] Mike: Well, I have my first mastermind meeting got-together and we used the Google Hangout and things went really well. And we’ve all got things that were tasked for doing the next time we meet and we’ll be meeting again next week. So, we’re going to do it every other week as opposed to every week. It seemed like it was a good meeting. Everyone kind of threw out some feedback afterwards and it looks like it’s going to go well. So, we’ll see how it goes and you know, four to six weeks or something like that. And I’ll report back with the status report of how things are going.
[03:32] Rob: Yeah, definitely and then we could, you know, since the two of us are involved in masterminds and we could in a couple of months probably share our thoughts on how we think they should be run, some potential mistakes we’ve made, pitfalls and that kind of stuff just our structure that we have in mind for like a software or startup mastermind. A lot of people have talked about masterminds but the specifics of them aren’t talked about that much and when they are, they tend to focus on other niches.
[03:58] So, hey, Derek Sivers e-mailed me and he actually e-mailed me because he’s launched a new venture. It’s WoodEgg.com and they’re basically startup guides for 16 Asian countries that he co-wrote with some folks who were on the ground in those countries. And he e-mailed because he said he’s hiring people to help create the 2014 editions because the 2013 ones are just out and he wants to update him every year. And I’d just wanted to throw it out there as a call, you know, if you’re in one of these 16 Asian countries, go to WoodEgg.com/help. Get in touch with Derek. I mean he’s awesome to work with and it’s certainly a good opportunity, good thing to have on your resume number one. You can make a bit of change for sure some good experience to kind of be involved with someone like that who’s really executing on stuff.
[04:39] If you don’t know Derek, he had CD Baby and he built it up over several years and sold it for 20 million bucks in 2007, 2008 and since then, he’s been kind of globetrotting and preparing to launch some new ventures. And this is really the first thing that’s come out since then. So, definitely, wish him luck with that and again, if you’re on the ground in any of those countries and at all interested in working with Derek, go to WoodEgg.com/help.
[05:01] Remember back to episode 115 when we talked about Proposition HN, it was a guy who had made a post on Hacker News. He did it anonymously and he said, “I’m going to fund a couple of ideas. I have enough money to give.” It was like 5 to 8,000 bucks per idea and, “We – I own half and you own half. You’re a developer. I’m a marketer and let’s kind of build some MVPs and see what happens.”
[05:23] Well, he has given an update. I guess he has a blog. It’s HNProposition.blogspot.com. Last update was in February which was what, four months ago now and basically he updates that he’s gotten 250 something e-mails, kind of the break down of people who are interested or not or had more questions and then he talks about there’s basically five ideas that he plans to – or that he plans to green light. And there’s one SaaS app aimed at businesses, one SaaS app aimed at consumers, two games and a productivity app and so as of four months ago anyways that’s where it was.
[05:59] Mike: If I had to make a guess, I would say that the one SaaS aimed at business probably has the most chance of success. The other ones – the one aimed at consumer is probably not going to do as well. The games are going to be either completely hit a mess and then the productivity app, I mean there’s, you know, a million and one productivity apps out there and I would have a hard time believing that that one would do well in terms of monetary value.
[06:21] Now, I guess from my perspective is this a good deal for the person doing it? It depends on what their experience level is. I mean if you’ve never had any experience or doing any of these – any of the marketing side of things, getting the inside view on how that stuff is done if this person actually follows through with all of this stuff then, you know, you’re going to probably learn a lot.
[06:40] Rob: Yeah and I like that he signs up his blog post with, “Never forget premise number one, investors incubators overestimate their ability to pick good ideas and startups.” So, that’s what he, you know, basing all this on, just that he wants to have multiple things, multiple irons in the fire.
[06:57] Rob: Today, we’re going to be talking about some listener questions. We have a lot in the queue and I picked five or six that we’re going to run through. The first is about enterprise 2.0 SaaS startup looking for feedback. It’s an e-mail from Dustin DeVries and he says, “Hey, Mike and Rob. I’ve heard you guys talk about software consulting several times on the show and wanted to get your advice on finding certain types of software consulting work. I’m primarily PHP, Python and frontend.”
[07:21] “I’m currently trying to build an internet-based business to bootstrap it and provide for my family so, I do consulting work in the meantime. This has worked pretty well for me. I average rates of 75 to $85 an hour while there are plenty of jobs for remote consultants within the software industry. Most of the ones I stumbled across are part of a bigger team. So, I’m one of many developers building an app for a company. So, I have to be on Skype 9 to 5, engaged in daily scrum meetings, et cetera.
[07:45] While this is definitely better than a salary gig, I prefer to find gigs that are more goal/milestone-based where I’m building an app to a specification with weekly and or monthly deadlines. This allows me to work on my own pace. I managed to find a few of these gigs and they are awesome but they are usually through networking, word of mouth or wherever else. Do you have any suggestions for finding this type of work? FYI, I’m not real intrigued by things like oDesk because they feel like a sweatshop for developers. I also suspect that I wouldn’t be able to command the rate I’m used to charging at least not until I build a reputation. Thanks for the advice, Dustin.”
[08:49] Now, whether that’s creating tools that the community uses or becoming a recognized expert in that area, you know, those are all ways to kind of establish a reputation there but I would definitely agree that going to the type of communities like oDesk where you’re essentially bidding and trying to end up, you know, what – amounts becoming the lowest bidder for many of these jobs. And it’s not to say that everyone is going to hire the lowest bidder for the job but the vast majority of the people on there are going to be asking for rates significantly lower than what you’ve specified there.
[09:21] The other thing that you can do is you can hit up your network. Definitely leverage LinkedIn a little bit. You could probably try some advertisements on there that might get you some work. Introduce yourself to some recruiters and the LinkedIn obviously had some tons and tons of recruiters on there. And they have tons and tons of contacts. So, if you could get in with a couple of them, then those realms as an expert in PHP and Python that could lead itself in to more projects for larger and larger companies.
[09:46] The other thing that I would do is I would probably look at raising your rates if you’re going to be going down that road because you don’t want to be seen as the run of the mill PHP, Python consultant. What you want to do is you want to kind of separate yourself from the pack a little bit. And I’m not saying you raise your rate across the board, you could try it with a couple of strategic customers that you would like to acquire and see what happens, see if you can position yourself as that expert. And if you can, great, you’ve just increased your rate. If not, then, you know, maybe you talk to them about lowering your rate a little bit back to, you know, “90 to $95” an hour which is still more than, you know, the 70, 85 – the 85 that you said.
[10:19] Rob: Yeah, I would agree, oDesk is not the place. If you’re already billing 75 to 85 an hour, I just really don’t see that being a good fit for you. It’s also just a lot of hourly work. So, it’s kind of getting away from what you want. The way I look at this and when I was doing consulting, as I looked at is as we used to call it body shop work versus project work. And body shop is when you are a body and you put on a project to work on a team like you are – and they’re so much more of that work available. There’s tons of it because enterprise development shops all over the country, all over the world need you and that’s a lot of software built is just internal business apps and there are teams working on it. So, there is so much more of it available.
[10:58] Project work on the other hand which is what you’re talking about where you have milestones and goals and stuff where you’re working autonomously and independently, it’s so much harder to come by as you found. And so, the bottom line is you have to stand out. You have to either be as good as you are now and do the project work at a lower rate so that you are better than the other people in that rate or what I would say is you have to start building yourself a personal brand a kin to what Mike said.
[11:22] The way I did this because I went to the same path, I went salary then I did body shop work and then I did project work. And for me, it happened to be the blog, I blogged Software by Rob. My early days were about software development technical stuff and there were enough people finding me through that. I had enough of a name in that that I was able to basically score a project work for a bunch of random startups all over the country. It was all remote. It was all milestone and project-based.
[11:47] I’m not saying that that’s the only way to do it but that is definitely one way to do it. It’s building a name for yourself within a community. You know, very much like what Mike said just a different approach but that’s one way to kind of make yourself stand out and get yourself because this is the premium work. Everybody wants this work, right? There’s no coincident that you want to do. Everybody who’s in your position wants to do it. And so, you have to stand out from the others and you just have to figure out the best way to do that. So, I hope that helps, Dustin.
[12:13] Our next question is an enterprise 2.0 SaaS startup looking for feedback. This e-mail is from Edward Anderson at ProcessSmith.com. He says, “Hey, I’m a longtime listener and my startup Process Smith has been shaped by your guys’ awesome podcast. Process Smith is a platform running reoccurring business processes. Process Smith takes user creative flow charts and runs them. It’s sort of a lightweight BMP engine. I launched it the beginning of this year and I still need to increase my users. You can check it out at process-smith.com. I’m a programmer not a sales person and I struggle to find a good method to sell Process Smith.”
[12:48] “I think part of my problem is that it’s such a generic tool. It doesn’t scream, “I will fix X.” But I also think that is one of its strengths. I’m trying SEO but the keywords for my product are really competitive. I’ve been putting off inside sales but it’s increasing and becoming a last resort option. Given my product to either of you have a suggestion on effective marketing plan to get users. I know it’s a really broad question. Any other feedback would be extremely valuable to me.”
[13:11] Mike: I have a couple of thoughts on this. I think one of the things that you need to do is focus in on a couple of very specific problems that you think that larger businesses are having that are more general purpose. So, one that I can think of for example is an onboarding process. So, when a new employee comes in to the company, what does it take to get that person up and running? What sort of things do they need? Do they need new hardware? Do they need new software? Does the HR Department need to have things filed? You know, does the person need an active directory account? Do they need an e-mail account? There’s all these things that kind of go in to onboarding a new employee.
[13:46] Now, on the flipside of that, you could also go with the employee termination – now, whether the employee is terminated, you know, because they quit or because they did something wrong or because there are layoffs, things along those lines. Those are the two types of problems that jump in to my mind as to things that you could target and if you position your product in such a way that it says, “Hey, this is a general purpose tool but these are things that it does really well. We can do an onboarding process. We can do termination process.” And that kind of leads more in to the realm of creating processes for like the HR Department.
[14:21] So, both of those two things, there’s a lot of crossover between the HR Department and the IT Department because obviously, the IT Department has to handle the account creations and things like that. But I would probably try to go after those people in HR Department to try and make their lives easier because the IT people already have all these different systems that will do things for them and track the stuff that they have to do. The HR Department probably not so much.
[14:43] So, I would look at those types of HR problems that you could create a workflow or a process for that is going to vary from company to company and that’s where your engine comes in and it’s extremely valuable because although it’s geared for these types of processes, you don’t want to present it as, “Oh, this is a very general purpose tool. You can use it for anything.” What you need to do is focus it down and tell people, “This is what you can use it for. Sure you’re using this for all this other things but this is what you should use it for. This is what it’s really good it.” Does it have to be really good at that? No, it doesn’t because that’s marketing issue. It’s not a technical issue at that point but you’re trying to position it in such a way that people are going to find it for a very specific problem that they’re having.
[15:23] Rob: Yeah, you nailed it on the head. The phrase that every – using his e-mail where he said, “I think part of my problem is that it’s such a generic tool. It doesn’t scream “I will fix X.” But I also think that’s one of its strengths,” that is the problem. No one – I mean I looked at the website and there are a bunch of uses listed and that is completely not helpful because if it’s not built for me, then there’s no reason that I’m going to sign up and pay 50 bucks, hundred bucks, 200 bucks a month for this product.
[15:48] I think that is the number one thing that you have to figure out before you do anything else. Do not write another line of code. Figure out who’s using your app, who is paying you for it and what do they using it for and then just go after that market. Since you don’t have funding, I’m assuming you’re number one thing right now is to find a problem, a desperate pain point that you can solve for people. And I would build an entirely new – I go to an entirely new domain name, entirely new website, entirely new value proposition and focus on that and get 100 customers paying you a hundred bucks a month and there is your ten grand. Quit your job and then move on to, you know, either broaden that. Go horizontal. Look at other verticals.
[16:25] That’s where you can really start playing the game because for now you have this very general purpose tool. We see this a lot. I see this app builders, these things that make it easy for HR Department to build an app or to build some type of web app or a website builder or something and there’s a bazillion of these and they have all their unique takes on it but none of solves such a desperate pain point that are more focused tool doesn’t solve better. I think you need to find a desperate pain point and go after that and once you have solved that problem, hopefully, you will have what we call problem solution fit, then you can actually figure out how to market that. And that’s then you’re going to take your product. You’re going to map it to a market. So, I hope that helps, Edward.
[17:05] Our next question is about whether the internet is lot more competitive than it was three to four years ago. It’s from Mitesh Chauhan. He says, “Hi, guys, great show. One thing I’d like to ask you, Rob started out by having a few niche sites which in the end help him quit his job. However, would you say that back then the internet was a lot less competitive? Can we still apply the notion of several zero niche sites to bring in 400 plus dollars a month given how competitive the internet is these days in 2013?”
[17:33] Mike: I think that as time marches on no matter what the internet is going to become more competitive, this year is more competitive than last year. Last year was more competitive than the year before and you can go on and on. It’s just doesn’t matter. It’s always more competitive today than it was yesterday. I distinctly remember thinking this probably 10 or 12 years ago and I was like, “Oh, if I’d only been born a couple of years before, I would have gotten in on this particular wave of the internet and I would be in such a great position.”
[17:58] And that’s just totally not true. That’s not how the world works. There’s always new markets that are coming out. There’s always new problems to be solved and as long as you’re building solutions that people find valuable, you can build a niche for yourself and you can build a product that goes out to the market and is successful. But you have to start some place. If you don’t ever start because you’re afraid that it’s too competitive then you’ll never going to finish, you’ll never going to succeed.
[18:20] Rob: I agree. It’s always more competitive than the prior year and that’s been the case since it came out in ’96. Do I wish that we could have, you know, built an e-commerce website? Would had it been less competitive to try to build an online store in ’96? Well, absolutely. Problem was the tools were so ancient at that point. And so, now in 2013, you have so many more tools at you’re disposal. You can get websites built faster. We have tools like WordPress that weren’t around in any type of former fashion and let’s say 2005. They just – they weren’t usable. Now you can bam, get a website up with one click. We have keyword tools that are far, far better than we had five, ten years ago.
[18:58] So, you have – it is more competitive but you also have these tools at your disposal. It feels a little bit like it could be use as an excuse of like, “Wow, it’s just too competitive and this stuff doesn’t work anymore,” right? Launching an online business is all done, you know. You can’t really do it these days because every niche has competition. Every niche might have competition now and it probably didn’t five years ago.
[19:17] So, going back to the original question, “Can we still apply the notion of several zero niche sites bringing 400 plus dollars a month given how competitive the internet is these days?” I do think that – I still think that you can build niche sites. I know that the AdSense Flippers were doing it. I know that there are people who do this and make money at it. Now, is that an interesting problem to solve? You know, is it something that excites you or that something that you think has longevity for you? Or is it just something to get you out of your job?
[19:46] Figuring out the answer to that question will help and I would say that if you do have something that’s really excited and really passionate about, then I would lean towards doing that because I do think that launching these niche sites is harder than it was five years ago. But at any point in time since the internet has launched, there’s always opportunity and that’s our challenge it is to find that opportunity and attack it. So, I hope that answers your question, Mitesh.
[20:09] Our next question is about the quality of a pre-launched landing page. This e-mail is Tom Nguyen and he says, “I know how you guys say we need to create an MVP which is the bare minimum to collect e-mails and gage interest before I really start working on my product. I created a launch page but now I have customers saying my design is bad and needs work. Should I ignore them or listen to their feedback and fix my design? Does the launch page still need to be nicely designed since that is a part of marketing?” What do you think, Mike?
[20:39] Mike: I think that having a launch page that looks reasonably nice is fine. I don’t think that it needs to look spectacular. I mean really the purpose of the launch page is just to get people at least some information about your product or your proposed product enough to the point that they’ll give you an e-mail address. And if you can’t get those e-mail addresses basically for free and just by showing a couple of pages of information about what it is that you’re trying to build or what it is that you’re proposing as a solution for a problem, then you need to go find different problem. I would not worry too much about what people think of your design. You know, you really need to focus on talking to those people figuring out whether it’s a problem that they have that they’re going to pay for.
[21:22] The design I mean if you go back and look at one of the early forms of my Altiris training site, it looked awful and I still got people to pay for it. I mean it was, you know, it was great that I had all this traffic coming through and people were paying for it but I had to go through and refund their money. It looked…it looked okay. I mean it was a theme that I bought but it was not the greatest in the world. The website didn’t have a lot of great information on it. It’s significantly better today than it was then but then I didn’t have a product. I was just kind of testing the water to see if it was actually viable.
[21:51] And that’s what your – the purpose of your launch pages. The purpose of your launch page is to communicate with people not solely to look good. And it’s not to say that, you know, you can put something out there that looks like Craigslist and you know, be widely successful with it. But you…you have to at least pay attention to some things. You have to tweak some of the text. Try and market it as best as you can but in terms of the design itself, I don’t know that I would worry too much about it.
[22:14] Rob: Yeah, in my opinion if people are complaining, that is a problem because if these are actually people that are in the niche that you’re trying to serve and they care enough design and you’re kind of violating that design sense, then it means that you don’t have credibility to them and I do think it’s going to impact your conversion rates.
[22:29] Now with that in mind, good enough is good enough like it doesn’t need to be spectacular. There are a number of options that work just fine for you. Install WordPress and download the Coming Soon plugin from John Turner. Go to LaunchRock.com. That’s where our MicroConfEurope.com landing page is right now. It’s LaunchRock and I think it’s free. Man, I don’t know, maybe 10 bucks a month or something. And I got that up in 5 or 10 minutes and it’s collecting e-mail and has an image in the background and it looks fine. It’s very simple. Easy to get…get a website like that up. Go to themeforest.net. Look for single landing page HTML template. They’re $7. Any of these options are going to be good enough in almost all niches.
[23:10] The thing you have to remember is that certain niches are really going to care about design. So, a lot of freelancers, designers, web people, they care more about design. Photographers are the same way. If you’re a non-technical niche, then they’re not going to care as much about it. So, if people are complaining, I do think that’s a problem. I do think it impacts your credibility. But the good news is that getting a landing page up that doesn’t insult someone’s design sense and hopefully can and create conversion rate is really, really easy these days. This goes back to our previous answer to the previous question of the tools that are available today are things that, you know, it would have taken a custom design and you know, 500 or a thousand dollars or more five years ago to get a landing page up. And today you can buy one a really attractive one for 7 bucks from Theme Forest. So, thanks for the question, Tom.
[23:56] Our next question is asking about a retirement plan for an entrepreneur. He says, “Hi, Rob and Mike. I’m a big fan. I discovered the show around episode 50 and listened all the way back to the beginning. The content you put out is great and I really appreciate it. You’re obviously successfully at generating and maintaining multiple revenue streams and that’s admirable. I would like to successfully do that as well.”
[24:14] “My question is what are your long-term plans regarding a steady income and something to live off when you retire? The idea behind multiple revenue streams is it if one fails, the other act as sort of a safety. So, your entire income doesn’t depend on just one stream. I think in the ever-changing world of technology, many products have a life expectancy of no more than a few years. I’m aware of the fact that I won’t be young forever and that the tech world is constantly changing.”
[24:35] “It’s reasonable to expect that when I’m 40 I’ll have less understanding than I do now of whatever the internet will evolve to and of course even more so at 50 or 60. I don’t want to be an old man trying to execute products in a world I barely understand anymore. What I’m getting at is what are your long- term plans? What do you see yourself living off when you’re 50 or 60 and in retirement? Thanks. Keep up the good work.”
[24:56] Mike: I think that over time, you know, if you’re building a portfolio, the level of success that you achieve with those products tends to go up and it’s not to say that every single one is going to a hundred thousand dollars the first one and 300 with the next one, you know, three and a half million with the next one. You know, you’re going to have some failures here and there. There are some things that you’re just going to tank after a few years. There are some things that you’re going to get bored with that you’re going to sell them off.
[25:17] If you kind of follow up pattern though, if you’re trying to build the portfolio products, eventually as you get more and more successful, the ones that you started out with, you’re going to essentially let them fall by the wayside. And whether that involves just letting them die or selling them off and reapping the rewards from that to plug in to your next venture, you’re going to be building bigger and bigger things. If you were to talk to an entrepreneur who went out and created a company and he sold it for a million dollars and you asked him what he’s going to want to do next, if he’s comes back and says, “Well, I want to build another company.” Your immediate thought is, “Oh, he’s going to go out and build another million dollar company.”
[25:53] And chances are really good that that’s not the case and chances are more likely that he’s going to want to go out and build a 5 million dollar company or 10 million dollar company because he’s already done that once, so why would he do it again and it’s not to say that, you know, it’s not financially blow off successful but people want new challenges. So, as you proceed in your career, you’re going to be looking for bigger and bigger things. And I think that, you know, over time as you progress from 30 to 40 to 50 to 60, you’re going to be building bigger and bigger things assuming that you’re successful with those previous products.
[26:25] Rob: Yeah, I think I’ll start by talking about my concept of retirement. I don’t intend to suddenly stop working one day when I’m 60. I went down to two days a week for about 10 months when my second son was born and I got really bored like I need to create things. I mean I think a lot of us do as entrepreneurs. So, I kind of reject the notion of one day I’m just going to suddenly not do any of that, any of the work that we do and any of the company running or company starting or all that stuff because that is one thing that actually excites me, right? It actually is interesting. Now, I do imagine that I’ll scale work back but even…even these days, I don’t work fulltime. And so, I don’t feel like retirement is going to be this massive change of stepping back and like letting all these companies go.
[27:10] The second thing, I don’t intend to really fall out of touch with the tech world. I mean I know people who are in their 50’s now who really live in technology and they understand it still. They may not be programmers, they may not be writing every line of code and they may not, you know, understand how to design hardware but they have a sense of it and they know where opportunities are. And so, personally, I kind of reject that premise that when I’m 50 or 60, I’m naturally going to be like our parents are now.
[27:36] The thing is we are although we’re not digital natives, I started writing code when I was eight. And so, to me technology is a huge part of my life and I think it will always be. Now, I may not understand, you know, there’s going to be a social network college kids or something when I’m 60, yeah, you’re right, I’m not going to get that. But that’s not where my business opportunities are going to lie anyways.
[27:55] So, the next thing I’ll say is that I do contribute to retirement accounts. I do have savings that is building up. So, aside from my businesses that provide me income now, I do have that traditional, you know, the IRAs or the 401(k)s that we call them here in the US but it’s just a big retirement savings account so that I do have money to live off of. When I get older, I plan to run my businesses as long as it’s fun to do so. And at this point if I really backed off and wasn’t creating anything, if I didn’t do a podcast, didn’t write, didn’t, you know, have the e-mail newsletter, didn’t grow the businesses and just put them in maintenance mode, I wouldn’t have to work very much.
[28:30] And so, that to me is a long-term strategy but I don’t want to do that. That’s actually boring to me now. And so, I’m going to run them as long as it’s fun and in the end maybe sell them to someone for cash at that point and you know, put that in to retirement to live off of. But I think that people like us, most people listening to this podcast, you always going to want to do something. You’re always going to be building and whether it’s you writing code or whether it’s you building businesses with other people, I just – I don’t know that that’s ever going to stop cold turkey for any of us.
[28:59] Mike: Yeah, you brought up something I forgot to mention. I contribute to a SEP IRA account and you know, that works out pretty well as well. I mean it’s part of my retirement strategy. I’ve got some other things that I do. When you get to a certain level with your products, it’s not as if you just are not contributing to some sort of retirement because you can treat that retirement as kind of a secondary or back up strategy for whatever you’re doing. You know, as long as you’re making a fulltime income from your products, you know, you should treat it as if it is your fulltime job, you should be putting some of that money away or for a retirement fund of some kind.
[29:30] Rob: And our last question comes to us from Ben Feldman. He says, “Hi, Mike and Rob. First off, I’d just wanted to say that I love the podcast. I’ve listened to every episode. I listen to similar podcasts and yours by far is the most informative and enjoyable to listen to. I’m looking for feedback on my startup idea. My idea is to “employ” the world with crowd sourced development. With the far reach of the internet and the reason boom in crowd funding startups, I believe that you can get any job done by outsourcing it to the world. That’s why I created a platform where someone can build a project or a startup idea for a software product and my team and I will breakdown the entire idea in to organized intangible development and business tasks then we crowd source the execution of each task where each task will be worth a monetary value for a paid project or a percent of equity for startup.”
[30:19] “Unlike other crowd sourcing tools like 99designs or designers compete for each task, here only one person at a time can work on a task and each person will be reviewed and tested before it’s marked complete and the person gets credit for his or her work.” I’ve summarized Ben’s e-mail here. It’s pretty long. This reminds me of tweaky.com. If you haven’t checked that out, it’s a pretty cool idea. It bills itself as the number one place to customize your website and it’s basically to design tweaks. If you send like a spec or a brief they break it down in to the series of tweaks and they charge $39 flat rate per tweak. They actually organize the tweaks in to $39 groups and then they will execute them one by one.
[30:57] So, it does seem a reminiscent of that which is an idea that, you know, as far as I know is working. Yeah, we can critic the business idea based on what we think but that’s almost less important than would you use the service? Or…or do you have reservations about using it as, you know, as a business owner.
[31:14] Mike: I don’t think I would have reservation using it as a business owner. I think that having it as a crowd sourced platform for building software that you want to get done for free, that seems like it probably may not work out very well, offering people a percent of the equity to get a project done that you’re interested in having done, it seems to me like it wouldn’t work out so well and I think that the primary challenge would be if you get let’s say ten developers who each, you know, say they’ll sign up and they’ll do 10% of the project to each 10% of it, that’s – so those 10 people own it.
[31:49] First of all, would be the question of how do you get paid for this? How are you getting compensated for running this and putting everybody together? And then the second thing would be, well, how does it get sold out in to the market and how are these ten developers going to see any sort of return on the work they put in to it? So, from that stand point I don’t know is this idea has a lot of legs but if there was a service out there that, you know, where you’re breaking ideas down in to manageable chunks and then outsourcing those individual chunks, the problem I think that you may run in to with doing something along those lines is that what happens if somebody comes along and says, “Here, please scope out this project,” and they do it and maybe it takes you 25 hours or maybe it takes you a hundred hours to scope it out and break it down in to those little bit size pieces. And then they say, “Oh, well, this is too much. I don’t want to have to pay for it,” and they just walk away.
[32:40] So, maybe you charge upfront for that sort of thing but I think that more of Rob’s question would I use something like that? I probably would but it really depends on the specifics of how you’re going to go about dividing up that work and how you’re going to go about charging for it to get done. I think the other question I would have in my mind what are the qualifications of the people who are designing and building it. And what sort of technologies and things like that. But I think that all of those are road blocks that have solutions for them and you can figure them out. I don’t know as I feel real good about, you know, handing out equity for people doing from pieces to work though.
[33:14] Rob: Yeah, I think the equity plus the pricing thing makes it a little too complicated from the start and I probably just focus on one or the other. The other thing is that design is tends to be let me say it’s simpler. It’s more visible. So, Tweaky focuses on tweaks to designs and they’re making it work. But you’re talking about building an entire app and that’s really complicated and they’re like an iceberg, right, where there’s tiny bit visible on top and then all the code could be crap behind it. But if it happens to work for a few weeks then there’s a person get credit for it who maintains the code like you don’t tend to maintain the “design.” Once the landing page is done, it’s sliced, you put it on the internet. If you need more changes, you go back to Tweaky.
[33:53] But code is not that way. A lot of code will have bugs in it that you’ll discover or it just constantly needs updating and I guess you could say you have to keep coming back to your service. But there’s a lot more added complexity with all that. I also think that this idea in general, this sounds way too complicated for unfunded startup. I know that this is one of those that you would need funding for and you need to build a team. You need to move really quick. Kickstarter didn’t just sprout out of, you know, some guy’s garage as a single founder idea. Pretty darn sure they raised quite a bit of money to get it off the ground. And this idea sounds like that. The number of moving parts, the two sided marketplace problem, all of that stuff, you’re just going to need raise funding.
[34:33] So, if you’re trying to bootstrap this, I would almost guarantee that this is not going to work. It’s just going to take too long. It’s going to take you years to solve all of these problems that we’ve brought up. It’s not to say that it’s impossible to solve, you have to move so fast that you’re going to need money.
[34:49] The last thing I’d say is prove it out, right now that it can work. Put up a landing page and instead of – you don’t need to write code. You don’t need to build an app to coordinate. You don’t need to do any of that. Prove it out with e-mail and you finding some people manually on oDesk and trying to sell this idea to someone who will actually pay you money, an end customer who wants an app built and just try to do a single app. Don’t even try to do the whole crowd funding part of it because that’s a whole other added layer of complexity. Just try to get an app built using this approach and see if it’s possible, see how hard it is and see how much you’re going to have to charge to make it worth your time and to make the business profitable because once you do that, you’ll have a much better idea of what this is going to take and whether the idea will fly. Thanks for the question, Ben, hope that was helpful.
[35:34] Child: So, that wraps us up for the day. If you have a question for us call our voicemail number at 1-888-801-9690 or e-mail us at firstname.lastname@example.org. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commotions. May I please have something to eat?
[36:02] Rob: Subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. See you next time.
That outro… cuteness overload.
So sweet 🙂
Agreed, the outro was super cute! 🙂
Haha, “MoooOOt”! Was laughing to myself in the office, hilarious.
Regarding Ben Feldman’s idea, it sounds a bit like SellAnApp https://www.fundedbyme.com/en/equity/start-up/420/sellanapp/overview/
SellAnApp targets the Apple iOS market, so maybe Ben can take inspiration from their model and launch something more targeted (like a certain type of apps) or a different market (like Android apps) to avoid competing head-on.