In Episode 593, join Rob Walling for a Solo Adventure as he chats about accidentally deleting all of his old tweets, retaining talent, the ideal market for a SaaS business, and more.
The topics we cover
[3:10] Deleting old tweets
[8:43] Retaining talent
[12:39] Ideal market for a SaaS business
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!
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Rob: Welcome back to Startups for the Rest of Us. I’m Rob Walling. This is a show for ambitious startup founders who want to grow incredible companies and maybe not change the whole world, but just our little corner of it. We do this for freedom, purpose, and relationships.
I had a fun episode this week. It’s a Rob solo adventure. I’m going to talk through a couple of listener questions, tell a story or two to kick us off. There are first stories that still kind of pain me. It goes under #toosoon, but it reminds me of those times where if you have written a database query, and you forgot the WHERE clause, where you write, update this column in the database to XYZ, then you forget to hit WHERE, you submit that clause, and you wipe out a whole column in a table and you have to go back to a backup.
It also reminds me of the time, Derek will be fine with me sharing this, but this is probably 2014, maybe even late 2013, we’re like a year into Drip. Sunday night, my phone rings, the first problem is we didn’t call each other, it’s all texting. If someone calls me, I consider that they are being held hostage in an overseas prison somewhere or that something’s on fire, their house or our servers are on fire. I literally picked up the phone. I said uh oh, that’s how I answered it, and it was Derek just sweating bullets. He said do we have a backup of the database? I said yes, we have a backup. What happened?
He had done something like that where I think he forgot the WHERE clause, it was in the credit card table. I think we had a hundred customers at the time so it would have been bad but not the end of the world. Basically, I think it had overwritten all the credit card numbers in the table or something like that. We didn’t even store the full credit card. Maybe it was the Stripe customer ID that allowed us to charge it, it was easily fixed, and we lost no data.
I remember that feeling when I did that, I did it to an ecommerce website back in, it must have been 2001. This is before Shopify. We had built a custom ecommerce shopping cart and the whole website was all custom. I did that to the order’s table or the order in progress table or something, and it’s just the worst feeling because I hit this update, I forgot to say which row to update, and it’s taking way longer than I think it should to execute. Why is this going? About 10 seconds in I’m like oh, good Lord, how do I cancel this command? Of course, it’s already done tens of thousands of rows of damage.
That was another one. We had a database backup and refreshed it. The reason I’m telling all these stories is that a couple of friends of mine over the past year or so have started deleting old tweets and I didn’t really understand that. They set up a service that recurring go back x months and just deletes anything before that in their account. I was asking one friend about it. I said, why do you do that? He said people will go back through your tweets, they’ll go back 10 years, 12 years, and they’ll dig something up like quoted out of context, basically. I just never wanted that to happen.
When he said it I was like yeah, I guess it could happen but it feels a little overly paranoid. Then of course, in the past three months, I’ve seen this happen twice to notable people where someone just comes back through and says something, well, that’s not really what I meant or cultural norms have changed. There are all different types of things that can happen.
The most recent one was someone built a copy of Wordle on iOS and just duplicated it. Wordle wasn’t even original to the guy who built the web. Is there a web version? I don’t play Wordle, I don’t know. Who built the version that’s popular right now, it’s actually from some game show in the ’70s or the ’80s.
Anyway, this guy builds a copy and there’s this big hubbub. They go back through his tweets and they just roast this guy. There’s a big pile on because it’s Twitter, of course, and there’s a certain group of people who kind of just want to be angry about stuff all the time.
Anyway, I’ve sat, watched these, and kind of listened to […]. I think, you know what, I don’t say controversial things in general, that’s just not that’s not my bag. That’s not how I built my personality or my brand. That’s just not really who I am so I’ve always been careful. I have nothing that I’m worried about in particular, but I started tweeting in I believe it was 2009, so we’re talking 13 years.
Over that time, I found out because I signed up for some software and it said I had 9300 tweets, likes, and retweets. Not actually that many, which I think shows a little self-restraint and also a few years where I completely quit Twitter while I was building Drip.
All that said, I thought, what does it hurt if I go back and I delete even the first 8 years, 10 years of my tweets. I don’t need them. They’re these super ephemeral things anyway. These aren’t like blog posts.
I went back through robwalling.com and I had a couple of hundred essays there. I read through a bunch of them and I was like these don’t hold up. These were really a point in time where Digg was a big thing, social media, or social news websites, it’s not relevant anymore. I even had to prune some of those a while for both for SEO purposes, but just to get the old thinking off of the site.
I was like yeah, I’m going to delete 6000, 7000 of these. I think it was the first 10 years basically in my history. I feel like since 2018, 2019, I’ve been tweeting more, and I’ve been more consistent about it, really giving more thoughtful tweets, doing threads, and that kind of stuff. I figured, hey, I’m going to keep that and delete the rest. I don’t see any downside to doing it.
I went into the software, it was recommended, and it was good, it was fine to sign up. It’s relatively inexpensive. I started using it and their date picker is a little finicky. I really struggled to get the first 10 years, 8 ½ years, or something, and eventually, I did. It’s like cool, those are all the tweets. You have to go through this whole process of downloading an archive and uploading it into the software.
I took a deep breath, it was a Sunday afternoon, and I hit submit. I sat back and it said deleting 9300 tweets, likes, and retweets. My eyes got wide. I was like what? It is that hair stands up on the back of the neck, all the blood rushes out your face, and I’m like it’s deleting everything, everything I’ve ever tweeted.
I get this mini panic attack. I knew the date thing was finicky, but it’s deleting everything. I like to go and look for a pause or stop button. I emailed their live chat. Of course, they’re in Eastern Europe so it’s midnight, 2:00 AM, or whatever it was. I hope that your bug is not deleting my entire Twitter stream, all my tweets forever. Of course, it did.
For hours, I was in shock that all my tweets, they’re gone. Before long, I realized it doesn’t matter and that’s the shocking revelation is it just doesn’t matter. That’s how ephemeral these things are. No one noticed, not a single person pinged me, asked me about it, mentioned it, called it out. I deleted a tweet I think from less than 48 hours prior and it just doesn’t matter.
There are a couple of things. The interesting thing is that man, it sucked and it’s kind of a funny story to tell in retrospect. The other interesting thing is that I feel like if I deleted all my essays or all my podcast episodes, that would matter because people go back, they listen to them, and there’s still value. If I deleted my book, pulled it down from the internet, people would still buy and read that book, my first book Start Small, Stay Small.
It continues to reinforce this idea in my mind of ephemeral things like social media and I guess the questionable value that I see in them. Of course, you’re going to still see me on Twitter because that’s what we do and that’s where we hang out.
All that to say, I don’t know if there’s a great lesson to take away from this other than it definitely made me continue to think about social media, what is the value of it, and knowing that the value is probably not in any type of long term staying power. It’s much more about that at the moment part of the conversation.
My next topic before I get into some listener questions and comments is from a conversation I had with a founder who was asking me how I can retain this person? It is a senior dev at his company, who I think is working part-time, half-time as a contractor, and works on other projects as well. The founder was asking me, how can I motivate this person to come and work with me full time? He has a lot of options. This is the gist of the message that I sent back to him.
I said, I would ask what he was looking for. Some people are less motivated by money and they might want one of the following: control over what they work on, to have a big impact on the app they’re working on, to know for sure the job is stable, to not have their spouse/family be suspect that they’re making a bad choice taking the job, more money, flexible working hours, to manage or not manage people, remote work, autonomy, the potential for advancement, ownership along the lines of stock options or profit-sharing. I would just ask him what’s important and try to give that to him.
The reason I’m reading that here is when you’re hiring or retaining, keep in mind that not everyone is motivated by money. I think in sales and on Wall Street like in finance, traditionally, people are motivated by money and that’s why they gravitate towards those things. I don’t think it’s a stereotype as much as it’s mostly the way things are done. In a lot of other roles, money is lower on the totem pole than that list of things that I just mentioned.
In particular, I think in this competitive job market where everyone can be remote, anyone can now get a job at Google or Facebook and get these really high salaries because they basically pay above market. If you’re qualified, they pay above the market rate in your city or town. Think as a founder of other ways to motivate. It’s harder to do when you’re first hiring because you don’t know the person and it can be awkward to figure it out or ask.
Retaining is different because oftentimes, you’ve worked with that person and you kind of learn what their personal life looks like. You realize that, wow, for this person, maybe working four days a week, just working 80% of the time is actually a huge benefit to them. They will stick around a long time, a lot longer, if you are able to give them that flexibility, or as I said, to know that their job is stable, to have a huge impact on the app that they are working on, and have more control to manage or not manage people.
There are all types of things. I think we often get stuck on this transactionality of it where it’s salary and benefits and it’s kind of those things. As startups, we still have advantages over these larger companies. It’s not just remote work like it has been for the past decade, but it’s several of these other things. It’s the flexibility to be able to meet people where they are, where they want to be met, and potentially retain some people who might otherwise leave even if you don’t have the money to pay them top dollar.
My next topic is a topic submitted by a listener, and actually, I want to go back on what I said earlier about not losing anything by having my tweets deleted. The one thing that I lost is I tweeted a question. I said Courtland Allen’s come on the podcast, what should we talk about? There were about 25 or 30 pretty interesting topics and we only covered maybe five of them in that. Then I’ve covered I think four or five since then. There were still 15 or 20 topics that I think could have made great conversations and of course, they’re gone now.
This was from that. I had already copied it into our Questions Trello board. A question is if you had to start a new SaaS today, what are all the criteria that the market or the app would need to have? There’s a lot and this varies by person.
I remember sitting down with Derek Reimer before he’s going to start starting SavvyCal and he had his list of personal requirements. I think some people, if you’re a true lifestyle bootstrapper and you just want to build $100,000, $200,000 a year app and live the amazing four-hour workweek life, then your criteria will be different than someone who wants to build seven- or eight-figure business and sell it for $30 million or $40 million and get there in three or five years. The markets are different, the problems that you’re going to tackle have to be different to have those different velocities.
My list is from someone who has stair-stepped his way up into a place where I’m not going to build a small app anymore. If I were ever to build a SaaS again, I would not want it to be a six-figure ARR company because I’ve been there, I’ve done that, and it just wouldn’t be interesting. It wouldn’t be learning for me at this point. Even building a low seven-figure SaaS app would be retreading old ground.
My criteria come down to several of the following. I don’t know if this was an exhaustive list, but I jotted a few down coming in because there are a lot of things to be thinking about. The first thing, of course, is business to business. I wouldn’t go to consumers and I frankly wouldn’t want to be marketing to aspirational folks or prosumers. There’s just too much price sensitivity and the churn is too high.
The next thing though and what’s super important to me is that it has some organic reach, meaning that people are searching for it. This goes all the way back to the Start Small, Stay Small days, but not just that they’re searching Google for it but there just is a market-proven out for it because inventing a category or building out a market is not something I’m particularly interested in.
If you think of Drip and how it started, before it was an email service provider. It was actually an email capture widget and there were no other apps doing that. There was no sumo.com. There was no OptinMonster when we launched, or maybe OptinMonster was WordPress, and it launched within a few months of us. It was really right around the same time.
We were moving into this new category and then what I realized was there was so much demand in this existing category of email service providers and that the big ones weren’t able to provide for their customers and that’s why we basically moved into that space. Within months of launching in 2013, we moved into that space. It was very fast. I would want there to be an organic reach because I have the experience and the resources to be able to get in front of whether it’s search volume or wherever else that reach is playing out.
Another thing I’d be looking for is some kind of virality. It doesn’t need to have this incredible built-in viral loop like a social network, but when I look at SignWell which is e-signature from Ruben Gamez, when I look at SavvyCal which is a scheduling link software from Derek Reimer, they both have pretty neat viral loops of when I go to sign a document and I invite other people, they see this neat app that’s easy to use and better than the other products on the market.
Even that little bit of virality that is a natural spread, that’s a really nice flywheel. In the early days, it wasn’t that important but when you get to 100 customers, you get to 1000, you get to 10,000, suddenly that loop becomes a chunk of growth.
The next thing I would think about is I would not enter a space that didn’t have notable expansion revenue because I want net negative churn in any app. After building Drip and having that negative churn in that app, you get spoiled, frankly. I call it the golden ticket. I called it the cheat code of SaaS, but net negative churn is 100% an incredible lever in SaaS companies.
Everyone else who’s not SaaS is trying to get to recurring revenue and SaaS has built-in recurring revenue. We get that cheat code for free, but net negative churn is then the next level. It’s where if I had zero customers this month, my company still grows, -1%, -2% churn. It means you grow by 1% or 2% even if no one signs up, it’s incredible. That would definitely be something I’d be looking at.
The other thing is I would, at this point in my career, only leverage an existing asset that I had. Whether that’s an audience, my network, something to that effect, or something I’ve built, I wouldn’t start from scratch in just a brand new space like I’m going to go build software for construction managers these days because I have advantages that I can and should use. In fact, all of my apps up until Drip pretty much didn’t use any of my advantages. Maybe you could say HitTail did, but I remember having tens of paying customers for my audience at the time, which is not huge.
Everything before that was things like I had an ebook for bonsai trees, I had software for .NET developers, I had no .NET audience, wedding website, SaaS, have any reach into the wedding industry, printers, lineman jobs, which was jobs for powerline electricians. I was grinding it on the marketing approaches. It was SEO, the pay-per-click, the display ads, content marketing, some partnerships, integrations, and affiliate. I am doing the left brain like knowing your funnel and crack on these apps not using the audience, it was a personal brand.
Drip was really the first one that my audience I think had leveraged well. It obviously was in a different space and a more ambitious project, but it definitely showed in the early days with the growth that I had an asset to leverage. Again, I want to reiterate, if I was on step one of the stair-step approach, some of these wouldn’t apply. Maybe I don’t have any assets to leverage, maybe I don’t need net negative churn because I’m just looking to build something that’s going to make my house payment.
Two more things that I would want in a SaaS if I were to enter a space. One is little or no platform risk, ideally no platform risk. What I learned is that almost everything has platform risk to some extent. You have a web hosting provider and you’re kind of on their platform if you think about it.
Sending email, I remember thinking that email is essentially this open-source protocol and that Drip would have no platform risk. Then you send 100 million emails a month through SendGrid and people start marking them as spam, so now SendGrid says, hey, maybe we need to shut down your account.
You have platform risk there or SendGrid is cool with it and the email blacklists were like these bizarre, archaic 25-, 30-year-old things run by these curmudgeonly people who kind of could just add you if they felt like it. It was really this bizarre look into that whole space and it’s one I don’t care to go back to. If they put you on the blacklist, now your IPs are blacklisted and your deliverability goes in the tank.
That’s where I’m saying it’s tough to have a business with really no platform risk, but as small as possible is something that I would want because I don’t want someone else in charge of my destiny. If I want to build a several million dollar company and have a lot of folks relying on it for their livelihood. It’s just not cool to wake up at night and think, can this be put out of business overnight?
Lastly, it’s kind of a two-parter. I would enter a space where there’s not a ton of price sensitivity and that would probably mean having a dual funnel where on the higher end, you can charge $500, $1000, $5000 a month to big players who come through, Fortune 5000 companies who are real enterprise or mid-market.
Also, you have inexpensive entry-level plans, whether you have a free plan or whether you have that $20–$50 entry plan much like an email service provider could have, much like Percy Pricing works if you have an electronic signature or if you have a CRM. People can come in on a small team and hey, it’s $15 a user, $30 to get started. By the time you have 10, 20, 30 people on that team, you get both expansion revenue but you also have that lower-end funnel where you can have a lot of customers.
We see a lot of TinySeed companies come through and they are purely mid-market and enterprise where they only have high price plans. Those are great businesses too and they can grow really fast because the contracts are so big. The ones that I see growing fastest have two funnels and they have the self-service low price funnel.
Squadcast is a great example of this. They are studio quality podcast recording software in your browser. You can think about the avatars that they have where they have the fly fisherman on the low end who’s really a hobbyist, Dungeons and Dragons podcast who $5–$10 a month is kind of where they want to be.
Then you can think about Startups for the Rest of Us, Tropical MBA, any type of business, or any podcast. Certainly paying $50, $100, even $150 a month for my recording software is not that big of a deal. Then you have massive podcasts studios or even radio stations who need to record remotely due to COVID and they can and should pay $500–$5000 a month. You think about that as that dual funnel is having the high end and then those low end plans.
The nice part about both of them together is, (a) your revenue can keep growing each month even if you’re not landing these huge deals because you do have the influx of the lower priced plans kind of like a more self-service model, but (b) the more people you have using your product, the more chatter is, the more of a brand you have.
The difference between having 1000 and 20,000 users/customers like active users is in the Facebook groups, in the Slack groups, on social media, on Reddit, or on Hacker News, people are like, yeah, I’m familiar with that, it’s a great product, you just have so many more. If you had 10,000 customers paying you $10 a month, aside from the obvious price sensitivity that I think would happen as well as the high churn, 10,000 customers are kind of an army, especially if you build a great product. That’s where these dual funnels are quite exceptional.
Those are several criteria I’d be looking at if I was building a new SaaS. Yours may be different or maybe you can borrow a few of mine.
My next topic is actually a thank you email from a listener Pawel Brzeminski who has actually offered some good advice and corrections on my Episode 581, inflation for founders. He wanted to send in some kind words. He says, “I should have included some nice words about your podcast. Startups to the Rest of Us have been absolutely transformational to my entrepreneurial journey. You may not remember, but I came to MicroConf back in 2015 and did a short attendee talk.” I actually do remember.
“The talk was about how I was starting Snap Projections from zero, then grew it to high six figures in a very competitive space, and sold it to a public company within four and a half years for a life-changing sum of money. This would not have been possible without your podcast and the additional resources you’ve created. I’ve always had tremendous respect for everything you do to support young entrepreneurs and enable them to succeed, so big thank you to you.” Cheers, Pawel.
Thanks for the comments. As I say, I put these in a label in Gmail and they mean the world to me. A huge amount of my satisfaction these days comes from emails and stories like these of folks who say your podcast got me through a hard time, whether it was a hard time in business or just a hard time personally. I have podcasts and virtual mentors who don’t know who I am, personally, and I listened to them and they get me through these hard times. If I can be that for you, if I have done that for you, I consider it an honor and I consider it my life’s work. It’s my legacy at this point.
My mission, which is now the mission of this podcast, MicroConf and TinySeed, is to multiply the world’s population of self-sustaining independent startups. I hadn’t realized that I started doing that in 2005, 17 years ago. I just kind of started writing a blog and writing about entrepreneurship. I hadn’t realized it when I wrote my book in 2010, started the podcast in 2010, and started MicroConf in 2011.
These are just steps along the way, you just take the next step, and there is no strategy behind it. It was just something that I was doing to meet other people and to hopefully help folks but also just to get thoughts and ideas off my chest because I come up with these frameworks, I see mental models, I see what worked for me, and it just seemed the right thing to do to share them with people. It would be boring if I didn’t. Just running businesses for me is fine, but it’s not as interesting as interacting with other interesting people.
It wasn’t until probably right around the time I was leaving Drip. It was three, four years ago, where I was like you know what? This is the mission now. This is my legacy and what I’m going to do for the rest of my life is to multiply the world’s population of self-sustaining independent startups. Thanks, Pawel.
If you have a success story and you want to mail it in at email@example.com, as well as if you have any questions or any topics that you’d love to see discussed on the show, even just random little topic ideas or specific questions about your business. I’m actually running very low on questions at this point and so that would likely be covered relatively quickly in our next listener question episode or two. That’s going to wrap us up for today. Thanks, as always, for joining me this week and I’ll be back on your earbuds again next Tuesday morning.