In Episode 576, Rob Walling chats about permissionless entrepreneurship, why you probably shouldn’t be a media company if you’re an early stage or bootstrapped SaaS, and the importance of exploring beyond what your customers ask for to find out what they actually need.
The topics we cover
[2:01] Permissionless entrepreneur
[9:25] All startups should not become media companies
[15:10] Find out what your customers need, not what they ask for
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Something I’ve said in some of the intros of this show is that you should be building your business instead of your slide deck, and that revenue is the best slide deck, that if your revenue tells a good story, you don’t need a slide deck if you did want to go raise money, and frankly, revenue solves all problems.
Today, I’m doing a solo episode, a Rob solo adventure as I tend to call them, and I’m going to be covering three topics today. The first is permissionless entrepreneurship. The second is why you probably shouldn’t become a media company if you’re starting a SaaS. If you already have an audience, great, but if you don’t, one of my most popular tweets ever is about not building an audience first if you don’t already have one. There are so many other and better ways to drive customers for your SaaS. Then the last one is just a fun little anecdote about don’t build what your customers are asking you for. Build what they actually need.
The first topic, the permissionless entrepreneurship, is something I’ve been thinking a lot about. I think it’s because I went to my older brother’s wedding last week in California. I was reminded just how different my life is now than it was growing up. I was the second person in my family to ever go to college. First person was my brother who’s four years older than me and it’s an extended family.
When I got out of college, I was making $15–$17 an hour at a job. I was an electrician and didn’t enjoy the work. I wanted freedom, purpose, and relationships, and it was hard to do a construction job. It was a long commute job that wasn’t fulfilling to me, wasn’t that interesting, and it was a grind. I remember really not liking it.
As I got back into my old hobbies, one of the things that I had learned to do in (I think it was) junior high was to BASIC, write code. I learned a programming language. It was fun to create things and I had made games, just simple text-based games.
What I realized is that it was actually a valuable skill that I could manage to capitalize on. But of course, what I had learned wouldn’t get me a job. I would drive to the library, I would check out books on what I thought and what turned out to be some technologies that were being used. There was Perl, PHP, and HTML. I didn’t know any of that. I wasn’t taught any of that in school.
Then I started writing code and hacked my way into being an entry-level developer, basically nights and weekends. Then I got a job as a developer. That got me out of construction and suddenly, I felt like I had more freedom to be creative. I was working for other people, in essence—it was either salaried or contract—but it was a path for me to escape what otherwise was a not a very happy existence day-to-day. Worked a lot of hours in construction and didn’t enjoy it. It was not fulfilling. It brought me no purpose.
Going back to my brother’s wedding, I was reminded that most people in my family are still there. We all came from that. It was striking some of the conversations, just hearing, like I’m in my 50s or early 60s and I just don’t like my job. I’ve kind of moved from one service job or one construction job to the next. My boss is this and that, and I dread Sunday nights. It’s just such a different world.
I’m not there anymore. The reason I’m not is because I didn’t have to ask someone permission to basically become an entrepreneur. My life changed when I started launching products, most of which failed early on, until that first success after years and years of doing it nights and weekends. My life has been changed much like so many people who listen to this podcast or in our community, especially bootstrapping, I think.
That’s something that I’ve struggled with a lot. I was under the impression for so many years—I think a lot of the world is—that this script and the narrative is that if you want to be an author, then you need to ask a publisher for permission. You need to get on the radar so the publisher will publish your book. If you want to be a filmmaker, you need to ask these movie studios permission for them to make your film and to give you a budget to do it. If you want to be an entrepreneur, you have to ask permission from someone with funding from a venture capitalist or from angels to do it.
That’s just not true anymore. That’s why I believe, like today, we live in the best time ever in history to be creative, to be a maker, to be an entrepreneur. It’s changing lives. Hopefully, that’s why you’re listening to podcasts like this one and anyone else who’s talking about entrepreneurship and actually showing you a real path, because this is possible and you don’t need anyone’s permission to do it.
That’s what I love about bootstrapping, is that anyone who wants to do it, and who decides they want to do it, and they’re exposed to it, you can do it. I had businesses doing $5000 or $10,000 a month and no one paying for those products (or basically making revenue that went into my pocket), knew if I was a man, if I was a woman. They didn’t know my ethnicity. They didn’t know anything about me other than I had this service that they wanted to pay for. It was transactional but in a good way. Transactional in a way that it just mattered if I solved a problem that was worth paying for.
That’s the beauty of entrepreneurship. That’s the beauty, especially of being able to bootstrap and get these things off the ground, really, without asking anyone else’s permission, especially these days. You look back 40 years and if you were to try to start a company, do you have to beg the bank for a loan if you don’t have the money? Do you ask, again, permission from venture capitalists or angel investors, and then it’s only if it’s a high-growth startup. There were just no single founder startup companies in the 70s, in the 80s. It just wasn’t really a thing.
I mean single founders who just kind of built great lifestyle businesses because the cost of distribution was you had to get into a big box store, or even just a software store. You had all this upfront cost to print discs, CD ROMs, and the artwork. That’s where Microsoft, Intuit, Oracle, and all these companies got really big because they had a stranglehold on that, and the Internet really democratized that for the rest of us.
I think I just want to leave you with a thought that we exist at the best time ever in history to be an entrepreneur, specifically a tech or a software entrepreneur, and that I feel like I have a newfound gratitude for the way it has changed my life. Because of these interactions with families, people who I love, and who I grew up with, but realizing that that’s where I was, I’m in a different place, and it’s purely because of this.
My hope is that you, whether you’ve had a modicum of success, whether you still aspire to be successful, whether you’ve had incredible wealth or lifestyle generation, freedom, purpose, and relationships, if it’s brought all that to you, I think we should all be a little more grateful.
That practice of gratitude is not only just a better way to live day to day, it’s a better way to live me to stay mentally healthy and all that, but I also think it’s a way to put positivity into the world and to just continue to make this community of mostly bootstrap founders, community of makers and creators to continue pushing that forward in a positive way. This community is outrageously positive, outrageously supportive of one another. That’s amazing and I want to keep it that way. Those are my thoughts on permissionless entrepreneurship.
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The next topic I want to talk about is that all startups these days should become media companies or that they are becoming media companies. I’ve heard this in some podcast interviews. I listened to put it online. There’s been some forums, kind of marketing forums that I’m involved in, some private Slack and that kind of stuff.
I would caution you against following this advice, thinking that it is the right way to do it for a kind of startups of our size—SaaS apps wanting to become a million-dollar- or a $10-million-company—instead of the companies that we see are doing this, like the multi-billion-dollar companies like HubSpot, for example. HubSpot has acquired a couple media properties. Didn’t they acquire the Hustle? That’s right.
It can seem like they know what they’re doing and boy, that sounds fun. I’m a podcaster, I want to run a media company. I want that to be our main marketing channel and not have to do the really hard work of cold outbound email, or SEO, or that kind of the tried and true approaches.
I just want to caution you against blindly following a tactic or strategy that multi-billion-dollar companies are doing, HubSpot is an example. Drift does some things really well, but they’ve raised a gajillion dollars. I don’t know what their current valuation is, but it’s got to be in the 9 figures, if not 10. Whiskey has done a bunch of media stuff. Moz did back in the day. Even Jordan Gall with Rally is kind of doing a media arm, but he has raised, I believe it’s a public number, it’s many millions of dollars in funding.
That’s what I’m seeing, is that the companies who are doing this and actually making it work are way further down the line, or they have millions or tens of millions, if not more money in the bank. It’s such a long-term play. Building a media brand is very, very expensive and it’s a several year timeframe, because you start a podcast, a YouTube channel, or whatever else building a media brand seems to you, whatever it means to you. And it’s really good and catches on super quick. That’s like 6–12 months before you have any type of meaningful audience, and then 1% of those people will actually convert to customers.
If I were building a SaaS app these days, I wouldn’t be starting a podcast. If we were in the first couple years of Drip, there is no way I’d be starting a YouTube channel or a podcast at that point. There are harder ways, but better ways to get customers.
Here’s the problem, they’re less fun. They’re hard, but they’re not fun. It’s the business development partnerships integrations, it’s PayPerClick advertising, it’s content marketing, it’s SEO, it’s cold outreach, it’s the SaaS marketing playbook. It’s all the approaches that I could list that when you hear you’re like, oh, those are a grind. Those don’t sound fun, because I just want to make a great product, and I want it to sell itself, and I want it to be viral. I want to be able to just hop on a podcast and have people come suddenly in droves. The podcasts are so popular that it drives people to come and use my app.
It’s easy to convince yourself that the approaches I just mentioned aren’t fun. I don’t want to do them or even here’s the other way, the kind of nefarious way we sabotage ourselves as entrepreneurs is, those don’t work in my space. Those don’t work in my industry or with my product. My product is this unique snowflake and any of the things that I mentioned SEO, content marketing, pay-per-click, integration marketing, cold outreach, those things aren’t going to work.
I find that that’s usually said by founders who don’t want to do the grind. They want to go and do the fun stuff, which look, I like doing the fun stuff. I like podcasting. I like live streaming. I like interviewing people, doing conference talks. That’s all media brand stuff. I’m in a different spot. I’m not building a SaaS app these days, a tool that solves a specific problem and then trying to cast this huge wide media net. I’m in a completely different ballgame running Startups for the Rest of Us, MicroConf, and TinySeed.
Yes, the media brand thing does sound fun. I think it’s a great mistake if you don’t have millions in the bank and a many year time horizon before you need that to pay off.
I’ve talked about in the past, just freemium work, or doesn’t it? It’s not a does it work or doesn’t it, and neither is a media brand, does it work or doesn’t it. These things have very long time frames, they’re very hard to get right, and usually unless you the founder are going to do the media work yourself and you’re gifted at it, it’s usually a very expensive proposition to do it.
The bottom line is like you and I both see it. There are so many crappy podcasts, video series, and YouTube channels that just come out from businesses. They’re kind of doing content marketing or they’re trying to build that media brand, and frankly, no one’s listening to those. I think if you already have an audience or a brand right now, and you’re going to use that to kickstart your SaaS, of course you should do that. You should leverage every advantage that you have, but to sit here and think well, my big go-to market strategy is to build a media brand and then drive customers to a B2B SaaS app that solves a very specific problem. Again, will it work? Yes, it’s possible.
I think a lot of people waste a lot of time because it’s easy to do it poorly. If you don’t have millions in the bank, a many year timeframe to build it up, or the ability like HubSpot to just acquire a media brand that’s already there, then nurture that—I mean, they’re building a whole podcast network—it’s tough. I will say there are ways to kind of bring things that larger companies are doing, downsize or microsize them to where they might be able to work at our scale, but I wouldn’t put that at the top of my list of things to do if I were at $5000 MRR, $20,000 MRR.
There are, I would say, more critical, more important, more proven things in the marketing playbook to drive new leads to SaaS that can either work faster or more reliably, and more repeatedly than going out and starting a podcast or a YouTube channel.
The next topic I want to talk about is just a funny old anecdote that I remembered in the early days of building Drip. The lesson from here is to find out what your customers need, not what they asked for. Customers used to write in and say, I want an integration with Google Analytics. I want Drip to integrate with Google Analytics. I remember sitting down with Derek and saying, what does this mean? They want us to hit the Google Analytics API and pull out data and crosscheck? What are they saying?
We would ask folks like, what do you mean by that? It’s like, well, I want my Google Analytics data to update and it was kind of like people almost didn’t know what they meant. They just wanted there to be more stuff, but didn’t really know how to describe it. Then at some point, someone said—a customer—I want to be able to see when someone clicks through a link in a Drip email that it shows up in Google Analytics when someone converts, when they hit the site, and when they do things.
I was like, okay, so that’s just UTM parameters? And they said, yes. I said, do you realize you can just add UTM parameters to any link at any time by putting a question mark, and then UTM_, and the name of the parameters? I don’t remember if they said they didn’t know and that helped them. I think that was a temporary fix.
What we realized was that, since it wasn’t surfaced in the UI as this field of like enter UTM params here, check this box to make UTM params available, maybe have global UTM params that by default are set, and then you can override them, these kinds of concepts, none of those were in the UI at this point. This is early, early on. This is 2014 even before we had product/market fit.
Later on, we built it. It was not like a super top high priority, I’ll admit. Once we found product/market fit, I remember starting to add these things into the UI and people being so happy that we had integrated with Google Analytics. I would never call that an integration. An integration is when you hit an API, whether it’s a legitimate API, or you’re scraping, and you’re pulling or you’re pushing data in, this was just adding query string parameters. But that’s the words that our customers were using.
We had to dig in and interpret, not what they were asking for because at one point, they’re looking at the Google Analytics API and saying, what can we push in and pull out? That would have been wrong without the extra information.
Moral of that story, something I’ve said many, many times on this show before, but it’s when customers ask for something, they often will ask for a checkbox to do a specific thing, but when you dig in, they don’t want the checkbox. They probably want your app to do that automatically. Or they asked for a really complicated, convoluted way to get to some very specific thing, and you realize, oh, if I built a generalized version of this, that will solve all of their problems.
That wraps us up for today. Again, today, I talked about permissionless entrepreneurship, about why—if you’re early stage or bootstrap SaaS—you probably shouldn’t become a media company, and then wrapped it up with the story about integrating with Google Analytics. Thanks again for joining me again this week and I’ll be back in your ears again next Tuesday morning.
Thanks to our sponsors, Software Promotions. Software Promotions has been managing Google ads and Google SEO for clients for 22 years, if you can believe it. They’ve worked with more than 600 businesses. They’re no nonsense, a lot of transparency, and one of the co-founders—Dave Collins—has spoken seven times at MicroConf. You’ve likely seen his videos if you’ve checked out our YouTube channel. He’s also spoken at Business Software and countless other conferences around the world.
If you’re looking for someone to help you with your Google ads, whether you’re just getting started, whether you want an expert eye, whether you want someone to manage that for you, as well as SEO from audits to getting down and dirty with organic search, Dave and Aaron know what they’re talking about. Those are the cofounders of Software Promotions.
You can head to bit.ly/tamegoogle to learn more about Software Promotions, or head to softwarepromotions.com and let them know you heard about them on Startups for the Rest of Us. Thanks to Dave and Aaron for sponsoring the show.