In this episode of Startups For The Rest Of Us, Rob along with guest Matt Wensing, answer a number of listener questions on topics including reaching high-touch prospects, finding advisors and more.
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Matt: Hey, Rob. Thanks for having me.
Rob: Absolutely. For folks who listened to the episode, I guess it was 2 weeks ago now, you were on episode 489. It was titled 15 years to a SaaS exit, plus why forecasting is crucial. You and I talked through your prior startup Riskpulse that you had replaced yourself, you’d found a CEO to run it after growing it to a few million dollars in revenue, several million dollars somewhere in there, and then you actually exited earlier this year after 15 years running it.
Then, we dug into your current startup Summit, which is a tiny seed company. We talked about how it forecasts for SaaS. All that stuff, all your forecasting experience and what you’re up to, so super cool to have you back to take having an experienced founder, multi time founder now with an exit under your belt to weigh in on a few listener questions.
Matt: Yeah, I love it.
Rob: Stoked to have you here. Let’s just dive right in. Our first question came from Twitter and it was Matt de Cure and he said, “What are some of the hard things you’ve experienced as a founder that you were surprised by?”
Matt: I think most of us could go on this all day responding to this. Life as a founder is really about discovering these things. Slowly, but surely, but few things that came to mind, and these are all hard. I look at this bulleted list, it’s like it’s hard to articulate these because there’s so much context, everything that’s difficult, but to keep it short. One thing is I had a co-founder, and we were 50-50. I’ll just say that even though that’s the obvious thing that most people do, that has unique risks.
My co-founder and I are still friends and it’s all worked out, but it was surprising to me that going 50-50 didn’t just, oh, it’s fair, it’s down the middle, that solves everything and it’s like, no, there’s still surprising challenges to that. We could do a whole episode on that. I think another one for me was just how hard it is to let go of people, and that’s both terminating for, I’ll just say the right reasons, meaning reasons that you understand. I would say it was even harder, though, is layoffs, and I had to do that in that long period.
I would say layoffs are even harder. In some sense, you’d almost think it would be easier because you emotionally understand the decision. It’s unfortunate, but you have to do it. I would say it was even harder than letting someone go because of whatever, performance, et cetera. Actually, as I looked through this list, I realized one common theme is I think these all have to do with people.
The other one that was the really hard lesson was that your best people will sometimes leave your startup for the right reasons. That was one where you’re definitely not expecting it, like your best people are your best people for a reason, and you just expect that you’re going to have them for the entire journey. Sometimes, that’s not the way life goes. People have very good and valid reasons for moving, or for graduating. If you open your business, that’s how we chose to look at it, but that was also something hard.
Two more. One is that no deal is done until the ink is dry. Whether it’s a big contract you’re about to win, or it could even be for those that are fundraising and investment opportunities. It’s just not done until it’s dry, and like there’s that truism, the last little part of something is the greatest amount of effort. Man, I just found that to be true again and again, and that was always surprising because especially as an optimist, you’re like, yay, the hard part’s done, but it turns out the last yard is often the hardest, just again and again.
I think this goes for everything, but so much of people’s willingness to buy from you just has to do with your credibility as a founder and your experience in a way. I would say it’s really to the extent of being unfair, and I experienced this, starting out just thinking that the world is a more equitable place. I think without getting cynical, it’s like unfortunately the world has learned how to be efficient by just learning who to trust, and who they trust, and who they’re going to buy from, and this gets into the brand of everything else.
Basically, as a first time founder, I think a really hard lesson to learn was everything I was doing was secondary to who I was, and whether they knew me, and there are no shortcuts to building up that reputation. That was a hard thing to accept, especially early on just knowing that this is going to be a long haul, partly because people just don’t know who I am.
Rob: That holds both for big customers early on, and also investors if you’re raising funding.
Matt: Yeah, and especially there it can feel so unfair, and yet that’s the world we’re in, so there’s a few.
Rob: Those are good. I’m nodding along as you’re running through them. My perspective, I had to go through almost all the things you mentioned. As well as the first thing that came to mind when I read this was one of the hardest parts for me, especially when I was running a team was having to lead and motivate, and have the vision even on days or weeks when I didn’t feel like it.
There were entire, I wouldn’t say months because that would be very long. You just go through rough patches as a human being. Each of us has ups and downs. When you’re trying to lead a team and get everybody on the same page, people look to you for guidance. They look to you when the company is being flamed on Twitter, or when you get this super angry email, and some days you only slept five hours a night before because the kid was throwing up and you’re just for me super tired. When I’m tired, everything’s negative, and I would have these weeks where it was just really hard to be the backstop.
I think partially, that was a little bit of my inexperience as a leader, and thinking that I did need to have all the answers, and I think about things differently now. I also think there’s experience and I also think there’s, depending on how you build your team, and how you construct everything you can feel bad or not, but that was the most poignant. As you said, I bet you and I could literally brainstorm 20 of these right now off the top of my head.
It’s a broad question, but it’s such a good question because it’s like what weren’t hard things as a founder? It’s like, everything is new, everything that you’re doing for the first time and that’s almost always hard by definition.
Matt: When I read this question, I actually saved it for the end because I knew just coming up with this list was going to require a breather afterwards, because it’s a tough one.
Rob: It makes you relive trauma or at least for me, I’m like oh, boy. I remember the sequel in that way. Cash flow, my other one. I messed up cash flow back in 2014, and it was really stressful for about six months where I was like, am I going to cash out a 401(k) or take out money on a credit card, which are things I’m quite fiscally conservative in terms of my own personal finances, never done debt, never done loans, never had credit card debt. And yet, I was evaluating who I can borrow money from to keep things afloat. It’s very, very stressful.
That was a good question. Thank you so much for that, hope it was helpful. Our next question comes from Todd and his subject, his thoughts on reaching a target audience. He said, “I have been a longtime fan of yours. I really enjoy listening to the podcast. The podcast has been very motivating to me as I have a SaaS startup called nursereferralpro.com. NurseReferralPro is electronic case management software for public health agencies and nonprofits.
Our sales cycle is very long.” He has a lot of Es in vary, “it’s so long that we’re going after an additional market social worker and offering the ability to sign up for a service via credit card instead of a PO. Do you have any tips for the best ways to reach enterprise clients that are high-touch? We are so hyper niched that our web traffic is extremely low. Would Facebook ads be worthwhile? Have you come across any other people in a similar space that have had success in reaching these types of users? We’re in the process of rebranding, and once that’s done in March, I want to make a big marketing push to get the word out to social workers. Thanks for any insights you have.” What are your thoughts on this? Matt?
Matt: I took a look at the site by finding the link and it looks like the rebrand is done. It’s called Olive now, and it’s tasteful, it makes sense to me. I couldn’t quite tell if it was a pivot in the sense of saying we’re no longer… but it does say an additional market of social workers. I’m going to give an answer and I’m going to assume that they’re still pursuing the long cycles, while also spinning up this other ability. I actually wanted to key in on that, it says offering the ability to sign up for service via credit card, and instead of a PO. In my experience, you don’t do POs because you want to–and that’s a purchase order for those that don’t know.
A lot of times, companies will say I need an invoice or I need a quote, and then I’ll give you a purchase order number. Then, you can send me an invoice using that number. Make sure the number is written on there somewhere. It’s like the number that someone’s going to need to know they have permission to pay this invoice and what budget that comes out of, so it’s basically this enterprise handshake or API, if you will.
You don’t do that handshake if you don’t have to, nobody does that for fun. It’s great that you’re offering this by credit card instead, and if you’re responding to customer demand, I understand. But the point of all that is you need to support enterprise clients’ buying process, how they buy is how they buy. You’re not going to change that, especially as the independent bootstrap startup, unless you’re changing an industry. You’re probably not going to change how they buy software.
My tips are all generally understanding how they buy, and how they prefer to buy, and then not taking any unnecessarily long routes to get to what they need. If they need a PO make that faster, if they need to meet in person, be where they are. One other question was who’s the buyer? Social workers and nurses themselves, are they actually making purchases? I don’t know this space personally, but I asked because you actually need to go where the economic decision makers are, who may be managing these teams of social workers and nurses, and meet those people in person.
Those could be conferences. Those could be some just long cycles, and I don’t think you’d be able to change the industry. I think at best you can just be as efficient as others are, and so I think my last tip is who’s your competition and how do they sell. If there is an up and coming competitor that’s proving to the market there’s this new way to buy, it’s a lot faster, use your credit card. Skip this skip that, that’s great. Maybe you want to copy them.
If it turns out that everybody that’s selling to this market is sponsoring the lanyards at the annual convention center in St. Louis every year, that’s probably what you need to do as well. I think with the limited budget, the best thing you can do is go there, and you’re not going to able to buy the $15000 lanyard Platinum sponsorship package maybe, or $150,000 even have a booth, but you can be there 8 hours walking the floor and just meeting everybody that you can possibly meet. That’s just a lot of hustle, which is what I had to do in going enterprise with my business. I hope that’s helpful.
Rob: My interpretation of what they’re doing with, so they were called NurseReferralPro but they wanted to branch into social workers as well because I think Todd was implying that public health agencies and nonprofits are very long sales cycle and social workers will be a short sale cycle because they’re more individuals and they can use a credit card.
That’s where the rebrand comes in, which I actually think is pretty nice, the site looks pretty nice. It’s at oliveapp.co, and certainly more branded than NurseReferralPro. I definitely like this. I would throw something out, Todd, I went to the website, I clicked on pricing, and that link is broken. Your pricing link which is one of the most popular links on your site is broken as of today, when we’re recording. I’m guessing by the time this podcast goes live, that’ll likely be fixed, but it is interesting.
He’s basically asking if you have tips for the best ways to reach enterprise clients like public health agencies and nonprofits that are high-touch. The thing that I see working for companies that are trying to do that is related to what you talked about, like the lanyard thing is, trade shows are actually still working in these spaces. It’s something that is so far removed from a lot of bootstrappers who want to do that $20 a month app and build a time tracker and that.
That’s totally fine but this is such a different ballgame that yes, trade shows, although for the next three, four, five, six months, maybe that’s not a thing, but that will come back. The other thing is essentially cold or warm outreach. You have to figure out if that’s something that some people are totally against cold or warm outreach and other folks do it with much success.
That could be cold email, it could be cold calling, warm email, warm calling, never heard warm calling, but you get the idea. I wouldn’t expect your website to be getting a bunch of traffic because how many people are out there searching for this. Search volumes got to be low. I would guess Facebook ads would not be worthwhile but I bet you that there are Facebook groups, or forums, or something where these folks gather public health agencies and nonprofits, they hang out somewhere.
Can you hang out there, and be useful, and don’t sell? Hang out for three months, and listen, and offer insight and advice, and don’t even have your URL and your signature for the first month. Once people realize, oh, this Todd guy is pretty helpful. You can start easing a little bit of that in, but you truly are offering value. This is not something like, oh, sneak in and infiltrate. I’m not saying that, I’m saying like genuinely, go in and answer questions.
When we were first starting Drip 2012, 2013, I was in all these entrepreneur and creative forums, blogger forums. People were talking about open rates, average spam complaint rates, and what do you do, just basic ESP stuff that I knew because we were building one. I would just go in and answer all the questions. I did it on Quora as well. It’s not something that scales, but A, in his space, you don’t need that many people to trust you, to build that six or seven figure business because the price points are going to be so high. B, building a reputation like that, a brand is really more valuable than getting Facebook clicks.
Matt: That’s right. They’re going to ascribe his expertise to the products at that point and say I wonder what he’s made.
Rob: That’s why, Matt, you and I both have podcasts. I’m a listener and podcasts are part of our personal brands. Some people blog a lot, you’ve written a lot of essays on Medium. All of this is just content marketing, I mean, you wouldn’t think of it that way, I don’t think. I never call this podcast content marketing. It’s just stuff that I like talking about, that I’m interested in, and I like teaching and helping people. Hopefully, for Todd, he could do it the same way, and it’s whatever modality works for him. If answering a bunch of questions on stuff that is really obvious to him because he’s in it day to day, if that’s fun and exciting, and it drives business, that’s amazing, if it drives some leads.
Todd, I can see you have a nice blog as well as white papers. Someone on your team who is a good writer, content is always a decent avenue for it. I don’t think that a podcast in the space is necessarily going to work. Although I guess here’s the thing, it wouldn’t be for the referral part or the Case Management part, it would just be are there public health decision makers and nonprofit decision makers? What podcasts do they listen to? Are there any industry specific podcasts? It’s an interesting question.
If audio and talking on the mic is not your thing, don’t go down this road. But if that’s fun and interesting, then maybe something to consider.
Matt: Maybe sponsor one of those podcasts.
Rob: Yeah, as a start, just to see. There are a lot of avenues, and I think that’s a really good question, thanks so much for sending it over, Todd.
Our next question is about working in public, and it’s from Corrine Pope. She says, what are the best ways for founders to, “work in public.” “I know I should be doing it, but I’m a little overwhelmed at where to focus my efforts. Blog, Twitter, forums, YouTube,” what do you think?
Matt: I think the keyword there is overwhelmed, because you need to be consistent. I think people are getting to know you, and that needs to be a story, and all good stories need to have an arc; a beginning, a middle. A beginning, a middle, and maybe there’s no end. It’s just a continuing saga of Rob Walling, or Matt Wensing, or Corrine here. In order to generate consistent results, you need to do the medium, or like you said, modality that works for you that you can just consistently publish. It’s never effortless but it just needs to be the one that works for you.
I’ve seen founders that work in public just try different things out. I know that Derrick Rhymer at one point was doing some YouTube videos of him cranking on Elm because that’s unique, it’s different, and people want to maybe see that. But he’s got a very popular podcast, and it’s just easier for him to get on the mic, I suppose. For me, I love to write, therefore it’s really easy for me to send out a tweet, it’s easy for me to write an essay, and I also like podcasting, but the point is consistency.
I’ve got a co-host on our podcast, Peter Suhm. If I ever don’t feel like doing it, or if I ever say I’m really busy right now, he’s really good about saying no, we have to get an episode out because as soon as we don’t, I’m sure that the drop off is huge in terms of not to say listeners, but your consistency is lost.
This is a know thyself answer for what’s going to work for you, and hopefully there is a medium of expression that’s going to work. I think there’s so many of them right now. It’s not that you have to worry that there isn’t one, but I would just encourage experimentation with a bunch of different ones to start and see what sticks.
Rob: I think that’s good advice. I think it’s really knowing when I think of Steli Efti, sitting down to write a 5000 word blog post, I don’t think that is his zone of genius. But him getting in front of a camera for six minutes, I think he’s better than 99% of people I see doing it. There are certain folks who you’ll read their writing for years and the first time you hear him on a podcast, you’re like, wow, I prefer to read your writing.
It’s just different things, and that’s not to say you can’t get better at things. I will say, before this podcast, I was writing multiple essays per week for years. My writing started off okay, and it got pretty good in the end. I could crank stuff out quick, and I was really good at it, but I wanted to go to that next level. We started the podcast, and as folks may have heard a couple weeks ago, you can go back to episode one anytime, it’s on the website. I put in the first five minutes of the very first episode to celebrate our 10 year anniversary, and it’s awful. We’re really reading from a script, and we just don’t sound good, the sound quality is terrible.
It’s not to say that you have to be a great podcaster to start, because certainly we were not, you will get better over time. I feel like it’s the question of what are you good at and what perhaps do you want to be better at? Do you want to be better on the mic, or do you want to be better in front of a camera? When you look at the people who really do have success on Twitter, what are they doing differently, because they take a certain approach to it.
Whereas we can see people who are not on Twitter at all, Seth Godin, example. He is not on Twitter. He has this broadcast account that’s called The Success Blog, and his blog posts go out there, but he does not respond, does not interact. And yet, we read his books, and we read his blog, a lot of people do. Of course, he branched into podcasting a year or two ago.
I think it is starting there of like, do you want to do long form, opinionated content? Is that where your zone of genius is? Then think about Medium, or your own blog, depending on how you want to do it. To add the last piece, what is your end goal here? Is it to reach an end user who may be a customer of yours in the future? You can’t just say what is it I’m good at or want to be good at, but then it’s like where are they as well? Are they truly everywhere, or are more of them engaging daily on Twitter, or do a lot of them listen to podcasts?
Are they a lot in these founder Slack groups or on YouTube or whatever? I realized this is an it depends answer, but it kind of is. Really, me trying to do a Steli Efti video, or whoever else, we can just think of people who are probably going to be incompatible with certain formats and really accelerate others naturally. You got to find your wheelhouse a little bit, I think.
Matt: I’m laughing because the Steli Efti video, the six minutes of high energy, say it go, that’s my kryptonite. I try, and I’ve given pitches on stage in front of people. For me, it’s just a different context. There’s the energy of the live audience, there’s the sense of performance, like that’s okay, but if I’m just sitting down in front of a computer, or in front of a laptop camera, it just does not work for me. Don’t get discouraged in other words, you might just need to change one little variable, and there you go.
Rob: Thanks for the question, Corrine. I hope that was helpful and look forward to seeing you at the next MicroConf, she comes to a lot of MicroConfs.
Our next question is from Dylan Barry. He asks for advice about advisors. He says, “I’ve been a longtime listener, two time MicroConf attendee. I wanted to first of all thank you for the most recent episode with Andy Baldacci. This shows how far behind I am on questions because that was probably more than a month ago. He said this was one of the better interviews you’ve done, and I love how you were able to dive in more than usual into some tactics and thought processes that Andy has around growth. Bravo.
I’m a co-founder of an iPad based visitor management software company in Denver, Colorado. At the leadership level, we recently started talking about how we might need or could get a lot of value from having more advisors involved. I figured it might be worthwhile sending you a message to see if you had any suggestions for how we could best go about finding advisors. We aren’t really looking for formal business coaching engagements, we’re really just looking to find a few people who’ve been there and done that to occasionally look at what we’re doing. Ask thought provoking questions, provide feedback on how what we’re doing compares to situations they’ve seen in the past, and give us a heads up as to things we should be looking out for as we continue to grow our small software company. Thanks again for the wonderful episode, and for the time and energy you continue to put into helping the bootstrapping community, Dylan.” Thanks for the question, Dylan. Matt, what do you think about this?
Matt: Great question. Advisors can be super helpful, and it can be formal or informal. This is one where I would love to just ask a question right back so I’m gonna have to make some assumptions.
Being based in Denver, there’s obviously a decent startup scene there. I’m not sure if there’s anything preventing interactions there aside from the current social distancing efforts. I found most of my informal advisors through just people that I met at events and you’re giving them the elevator pitch of my business as far as, hey, what do you do? If it’s an event where there’s a lot of startups there, there’s also going to be startup experienced startup founders, some of them angel investors and some of them venture capitalists maybe.
If you can go to one of those mixer types of events and share your pitch, in some sense, a great pitch should draw advisors out of the woodwork. One out of how many of those you talk to will suddenly realize, hey, I think I could actually add some value to this guy and their business like, hey, what do you think about this? They’ll want to keep in touch with you. That’s just the on ramp that I end up having with a lot of folks that became interested in advice. Even if you’re not raising money so they don’t become an investor, you can thank them for their time. You could give them an advisory agreement that gives them either a little bit of ownership or some small customary percentage or payment for their time.
I will say, a lot of the best advice I got was not through those, like Dylan said, official management, consulting, or business arrangements where it’s like I’m going to be an advisor to you and here’s my $5,000 month charge or whatever. It was mostly through just friends of the company that I met through these kinds of events.
Again, I’m probably biased towards these in person types of meetings because I just went through a lot of them in my past, but Twitter might be a more virtual way to do that. I think it will probably take longer. I’m not sure if there’s something I don’t understand about why it’s difficult, but if I had to pinpoint something, it’s a little bit of a litmus test of you to go to one of those events, talk to 20 people, give the pitch, do that five or six times. I would expect that some people are going to lean forward and want to help you, but obviously, mileage is gonna vary.
Rob: I like that. I almost never heard this question from people who have raised funding because once you have investors, you tend to allow smart investors in. Angel investors tend to be former founders, not always, but a lot of them have been there and done that. That’s in an odd way, I never suggest people should or should not raise funding. It all depends on it, but that’s the easy way. That’s the shortcut. Someone has skin in the game really quickly because they own part of the company and you succeeding helps them in a roundabout way. That’s the shortcut way.
The other way that I really like I think the in person stuff is really what it is. We’ve had, through MicroConfs. We’ve had people connect and start mastermind groups, start co-founder relationships, and also start advising relationships. When I think of informal advising with no equity given, my biggest question is why? Why should they do that?
Advisors are probably busy people that have run companies or whatever they’re doing, they have families that every minute or every hour and a month they give you they’re taking away from something else in their lives. There has to be some motivation. For me, it’s either they want to do a pro bono because you’re a not for profit or a B Corp, and it’s truly donating time. That’s going to be a small subset I think.
Much more often, I do see advisor shares that wind up being between half a percent and 1% of the company depending on the stage it’s at. I don’t know if you’ve heard numbers that are different than that.
Matt: Yeah, same.
Rob: That’s what you do. If you find someone really good and knowledgeable, it really can be worth it. There’s a value out there where they can save you months of time. Some people completely bawk at not only owning 100% of their company, and that’s fine. In that case, maybe you should go to Clarity.fm or Clarity.com and you can get some advice. There are founders on there, they’re not just business coaches. In that case, I feel like you should pay them for their time or they should get paid in equity. I think those are the fair arrangements that you’re getting some value so they should also get some value.
Matt: Again, that goes back to do they believe that a half a percent or 1% stake in your business is worth something? That goes back to your pitch. Just to put in perspective too and a little advice, you never give that percentage upfront. They earn that over a two-year period. If you think about it, it’s like wow, they’re gonna get 1% for 24 months of giving me advice and help. You feel like you’re getting the good end of that deal if they’re good.
Rob: I like it. The in person stuff is exactly what I would be willing too as well. For the next three to four or five months or whatever, that might be tough, but that’s how you’re going to break through the noise because most of the advisors who are knowledgeable and experienced are really going to bring a lot of value, tend to be in demand, and they get a lot of emails in questions about can you be an advisor, so you do have to cut through the noise there.
Thanks so much for the question, Dylan. I hope our thoughts were helpful.
Our next question is from TJ Zastrow from crewbooks.app. He’s asking which niche to focus on. He says thank you for everything you do, Rob and crew. I need help narrowing down which niche I should focus on finding product market fit with. I have several niches which my product might serve but I’m a bit stuck in analysis paralysis deciding which of these, if any, could scale if I find traction. The product is crewbooks.app. The H1 tag on the homepage is generated by a book with friends just by sharing a link. How it works is each contributor fills in a form and gets a single page included in the resulting physical book or PDF.
TJ lists a bunch of different niches that you might focus on. First one is schools as a fundraising tool. I think poetry, anthology, and short stories. Second one is gyms or fitness studios as a skew that they can sell from their front desk. The third is craft breweries or other industries could benefit from a collaborative industry guide. The fourth is funeral homes as a package add-on that they could sell. I think friends and family are contributing. Five is SMBs looking to boost company culture where everybody collaborates on something. Six is churches or groups as a directory book. Seventh are conference organizers to have custom swag to give away. These are all interesting niches. What do you think about this, man?
Matt: I empathize with this completely because I had a weather data proposition for people back when StormPost was getting off the ground. It started out B to C but then we went B to B. When you go B to B, you’ve got to have messaging that isn’t just for every human on the planet. It needs to have some niche focus to it.
I went through this process for TJ. I would say start this way. You got all these niches and you could probably come up with 20 more if you just spent one more year looking for more. I don’t know how long he came up with these seven, but SMBs was one. If you double click on SMBs, there are probably 500 within that one. It’s an endless list.
My advice was just abstract away the niche for a second and just think about all of the assumptions that a successful implementation of this product requires since the product is generating books by sending a link to your friends. That was the H1 because that has to be totally generic. We’ll run with that for a second.
What I think has to be true for that to work as a business, and he said something that’s going to scale, is the readers of the book that gets created, they actually have to care what the contributors write. The contributor’s content has to be high quality or it has to be someone that’s special to me. If it’s my grandmother, quality doesn’t matter so much. She’s special to me. If she’s not my grandmother or I don’t have a personal connection, it needs to be really good. For example, there are a lot of conferences I go to where I necessarily think that every attendee has something valuable to contribute to a book. I’m not sure that the book is going to be super high quality necessarily. That’s one, the readers need to care what the contributors write.
Number two is your customer. Crewbooks customers, they have to have this need to create books on a monthly or better basis because you need to have this customer coming back to you again and again to create another book because if they have one conference or fundraiser per year, that’s just not enough average revenue for them for you. They’re gonna pay you that one time thing per year and that’s it. That’s not good enough.
The last one is that Crewbooks customers need to have an audience and that audience needs to be somebody where they have access to their pocketbooks. For example, social media influencers, they might have 59,000 followers. They have an audience but they’re just posting on Instagram and they don’t have access to the spending of their audience. They don’t have their credit card numbers. Your customer, whoever buys your software to create these books, I think it’s really important that their audience is already used to buying things from them and doesn’t just have an audience that listens and says, okay, now you’re going to buy something from me. It’s just not natural.
I don’t know if you agree with these or not TJ, but if you agree with those and maybe there’s more, you should be able to use that to filter out bad niches and not waste your time. I can’t tell you which one is the right one, but if you use that to filter that would be how I would approach it. Once you do pick that niche, man, you got to niche down the website significantly because once you pick, you need to go all in on that niche.
I looked at one example that came to mind, a cookbook for example that friends want to put together, you need to own them like cookbooks.app, myfriendscookbooks.app, or whatever it is. That’s where people land. It appears to people that all you do is that and all the language needs to be about that. Maybe at the bottom, it’s like powered by Crewbooks. I don’t know how much appetite you have for this, but if you find two or three niches, this might be a powered by situation where maybe you don’t find any one that scales.
This is really tough because I hate to split focus, but if you find two that are halfway there or three that are a third of the way there, and you combine all those, I don’t know how much bandwidth you have. Ideally, you find one but this could also be a powered by situation where you’ve got three or four landing pages or micro sites that in aggregate built a decent business for you. I would flip the script a little bit on this one.
Rob: I love it, sir. That was really good advice I think. I echo pretty much everything you’re saying. I feel like this is a solution in search of a problem, really what it is, and how do you find people that have this problem.
I see two avenues to go. If this is a stair step approach, I could see this as a step one business where it is just one time, maybe it’s B2C, and it’s all driven by Facebook ads, Instagram, or something. It really is going to grow to $2000, $3000, $4000 a month and that’s it. You use this to step to your next thing. That’s one avenue to go down. That can be fun and you can learn a lot but it’s not going to replace your income likely and it’s not going to grow into some seven figure business.
The other avenue is exactly what you were describing, where it’s like probably going to B2B because the consumer is not gonna be super price sensitive and need to do this on a recurring basis, so probably go B2B, go with people who are doing a recurring, make sure you charge enough. That’s a whole other avenue to go down. I don’t see a straight path on this one because until you find that group of businesses, whether it’s a vertical niche or whatever it is, who have this problem that you are the solution to, you don’t really have much. You have some software that does some stuff.
Matt: One last thought. The funeral homes for example resonated because it has this emotional appeal. They have to do this again and again, but how many funeral homes are going to go to where somebody says, oh, we’ve been so frustrated with the way we do this today, we’ve been looking for a better way to do it. They’re probably gonna say, oh, yeah, Nancy takes care of this. She has this thing, a catalog that she orders books from for people. It probably solves problems for a lot of these folks. There’s not enough pain in those niches to necessarily change how they do things.
Rob: Thanks again for the question, TJ. I hope that was helpful.
Our last question for today is from Tyler at createdwithlove.com. He says, “I’ve been listening to Startups for the Rest of Us for about three years. I currently own a physical subscription product.” Actually, Tyler has written into the show several times. He says, “I’m looking to launch a SaaS app this year. This podcast has been a huge inspiration for me. I have a lot of experience with the subscription model, as well as design, data analysis, and a little bit of sales. My co-founder for the app is very strong in digital advertising, SEO, and inbound and outbound email with basic knowledge of the code. However, together, we don’t have the technical skills required to build the app. We’re self-funding, we have an agency building a very low cost MVP so that we can start testing and gathering data, but we know this is not a feasible long term development solution.
What are a few tips or guidelines you’d give to non tech founders who are working on their first SaaS app, imagining the results of the MVP show the build is worth pursuing? Thanks again for all you do. I’m very excited for this idea because it means I can go back and re-listen to all the episodes.” I wouldn’t go do that but maybe go pick somewhere where we talked specifically about it.
This is a good question. I like it. For non-developer founders, I do think that there’s a tough process you can think about. What you got for us, Matt?
Matt: I look at this one saying what can you do before you code, because you basically said you have a lot of other skills. I think the answer is you can do everything that a great product person does before they code which should be a lot. Tyler is on the right track to be thinking MVP. They said they wanted to learn whether the app is worth pursuing. This is the right mindset. They’re doing the MVP to learn, but have you written down the things that you’re looking to learn?
Let’s say for example you’re hoping to learn that there’s going to be consistent engagement and willingness to pay because those are the things that are going to convince you that this is worth pursuing. I would list out explicitly users will use the MVP when they need to do blank. Users will use this MVP weekly. Customers will show interest in subscribing with the current feature set even if we don’t have a mobile app. You need to list out the assertions about the MVP. By having that, you can disprove those things.
I’m just talking about maximizing the value you get from this MVP because you said collect data. I just want to make sure that the data you’re collecting has been thought through enough to falsify or prove wrong the things that you need to be true to bother investing more. You’re like, hey, these things are true. We’re gonna invest more. Let’s find out if they’re not true.
If you disprove one, then you celebrate, you write it down, you put on your product management hat, and you keep collecting these items. What you have is a very specific and well-defined set of requirements to give back to that agency and say, this MVP isn’t good enough but we think a 1.5 or 1.1 iteration is going to get us to where we need to go, and it’s just these things.
Remember not to let the agency get between you and your end users. Work really closely with your first 10 to 20 users, finding fit with them through these small controlled iterations so you don’t waste money or time. This is obviously the lean approach. When you’re talking about not having a technical co-founder, what I’m actually implying is in this scenario, I wouldn’t advise going out and finding a CTO or technical co-founder. I don’t think Tyler is saying that’s what they want to do. What you’re doing instead is you’re going to learn the product management skill and these lean techniques to a level where the technical role that you need to fill is really small.
The agency might even want to do more for you than you actually need at this point because all you’re really asking for at this point is you want an individual contributing developer, maybe somebody that you could bring on a contract to hire in the future. You’re just bringing engineering skill in house to execute on your product direction, but you need to get really good at product management and not wasting your engineering time because that’s a direct cost to you and the clock is ticking sort of way. That would be my approach.
Rob: I like the way you’ve pointed out product management and product ownership is a skill that most people don’t know exists. They think that to build a software product, you hire a developer. Yes, the developer writes code, but who decides what gets built and how it gets built? How is it architected on the back end? What it looks like on the front end? These are really detailed, technical, and also some artistic and design. There’s just so much that goes into all the decision-making.
Even if you don’t write code, I’ve never seen anyone hiring out product direct and product vision. I’ve seen people hire out the code because they say I know what needs to be built. I generally know how it’s gonna work. I’ve educated myself on product best practices, whether that’s following Basecamp 37Signals guys or whether that’s reading.
I think it’s Steve Krug who’s written several books on usability and how to think about that or listen to a product, focus podcasts, or hear people deciding how do you ingest 100 feature requests and figure out which two features to build and how to build them. That’s where the knowledge has to be with you. I think that’s my first tip or guideline. Have a vision for your product. If you don’t, find one, make one up, figure it out through conversations with the users, as well as educating yourself on what it means to be a product owner.
These are roles at SaaS companies. They’ll have an entire engineering org, 10, 15 engineers building features, then they’ll have an entire product org. When I say org, I just mean a department or just a group of people who work together. The engineers are scaling and building features. The product people, maybe three, four, five of them, are typically UI designers or UX focused people. There’s typically a product manager which is the word you used.
A lot of people think is a product manager just someone who is in Gantt charts? No, product manager is different than project manager. Those are two very different things. Project managers tend to look at dates and critical paths and get resources to do this and that. They’re communicating and they’re trying to get everybody on the same page. Product managers are doing all that but they’re doing it for a product. They have to be opinionated about what gets built and they have to get people on board with what’s going to get built next.
When you’re at an org of 100, 200, 300 people, that role looks a certain way. When you’re at an org of two or three people, it looks different but someone still needs to take that reigh. Someone needs to have those conversations with customers, decide what to build, and communicate to the engineers what to build, how to build it. Oftentimes, that’s a collaboration. If you’re not writing the code yourself, you do need to find one.
Let’s say the MVP shows up, people love it, they want to pay money for it. What are your next steps? Personally, if you’re truly self-funding this, I would probably not go with an agency because they’re very expensive. I have in the past gone and hired freelancers. It depends on your situation. You can hire a freelancer on a contract to hire a type of thing which is probably what you want to do, to have someone in house who owns that code base. Owns meaning they care about downtime, they’re keeping unit tests being written, and they really are guarding that code base. That’s what I’ve tended to do. If you’re really low on budget, then yes, sometimes you have to hire an engineer that’s not as good as you want. I do think that there are really good engineers especially over the next six months that are going to be coming more available, unfortunately, given the impending economic stuff.
Matt: The agency they have and the relationship they have right now has already been set. This might not apply but you do want to effectively bring product management in the house. You and your co-founder own that, the cost is controlled. You’re outsourcing that project management and engineering execution by giving them a very clear spec. What engineers love is a very clear spec of what you expect and what you want.
The last technique I’ll mention is Patrick Campbell gave a talk at MicroConf a couple years ago now on these techniques. It was an hour long talk. Part of it was a quilting example like building an MVP for a quilting company through talking with his mom. He used these couple techniques in there which are surveys and very good at helping you develop a clear spec on what features to build and not to build just by surveying your intended target audience. You could do all of that yourselves and then say we’re confident that this is the feature set that we need to go live with. I hope they’ve already done this but if you haven’t, do all of that before you spend more money on engineering.
Rob: Thanks for the question, Tyler. It does sound like you have your wits about you in terms of you didn’t go spend $50,000 with an agency to build some full-fledged product. It sounds like, since you’re self-funding, you’re going with a nice low budget to try to prove it out. Hopefully, our discussion today was helpful.
Wensing, thanks so much again for coming on the show. Folks want to keep up with you. They can head to the Out of Beta Podcast. You and Peter Suhm ship that almost every week. With our crowd, I often say, you ship most weeks because it winds up being three weeks a month, but you guys have been strikingly consistent.
Matt: Thank you, Peter.
Rob: Awesome. You are Matt Wensing on Twitter as well.
Matt: That’s right. Thanks, Rob. My pleasure.
Rob: Absolutely. Thanks again to Matt for joining me today. If you have a question for a future show for myself or a guest, you can email us at email@example.com and send it as a text or send it as voicemail. If you send a voicemail, it goes to the top of the stack. Subscribe to us by searching for ‘startups’ in all the podcatchers. If you want a full transcript of these episodes or the links from the show notes, visit startupsfortherestofus.com. Thank you for listening. I’ll see you next time.