In episode 610, join Rob Walling for a solo adventure where he talks about the benefits of working a day job before launching your company, some bad habits he picked up in the early days, why the college dropout narrative is annoying, and what he would do if he was starting over today.
Topics we cover:
[1:08] The benefits of working a day job
[6:20] Some bad habits Rob learned as a solopreneur in the early days
[9:45] Why the college dropout narrative is bs
[12:51] What would Rob do if he was starting over today
[19:22] The benefits of starting a business today vs. 10 years ago
Links from the Show:
- Episode 551 I Task-level vs. Project-level Thinkers, No such Thing as an Autopilot Business, and More
- The Stair Step Approach to bootstrapping
- Quiet Light
- 68 B2B SaaS marketplaces with opportunities for indie hackers
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.
Rob: They’re commenting on things that they haven’t themselves done. I think it is easy to follow a path of too many voices and too many people saying too many things trying to be experts. That wasn’t necessarily the case. There was a lot less valuable information back in the day, but the couple sources of it, at least, you could probably trust that they were valid and that they were giving you good advice, versus today where you really have to separate the wheat from the chaff.
This just might be another episode of Startups For the Rest of Us. I’m Rob Walling. Thanks for joining me today, I’m doing a Rob solo adventure. I’m going to be talking about four topics. The first is the benefits—even for software founders who want to start their own company—of working a day job.
The second topic is bad habits I learned as a solopreneur. Then I’ll talk about why the college dropout narrative is such an annoying […]. Lastly, I cover, what would I do if I were starting over today? I get asked that question now and again. I’d like to have a more or less definitive answer to share with you today.
My first topic is on the benefits of working a day job. Even if you’re going to be a founder, you’re going to start your own company. There are tremendous things that I have learned and I’ve seen other founders learn at day jobs, at full time jobs. Frankly, ideally working at a startup. I think you can learn some good, but some bad habits at Fortune 5000 companies, at large companies.
The good habits often are process and structure—how to work with others and structure of the company. Really, you think about how they hire, how they retain, how they train, and how they evaluate. There’s all this stuff that you can pick up. But I also think you learn a lot of bad habits there about moving slowly and taking six months to ship something that should probably take a month and bureaucracy, politics, and all these things that we don’t like.
In a perfect world, I would honestly say I think you’d get more benefits out of working for a startup. This doesn’t need to be a venture-backed startup. How many thousands of bootstrapped and mostly bootstrapped startups are there in the world that are hiring developers, designers, customer success, sales, or whatever. I think there’s a tremendous amount that you can learn from having that day job.
Do I wish that I’d never had a day job? Pretty much. I wish I’d started a company in college and then it had taken off. We’ll get to that in the third topic of today. Dropped out of college and never had to do the unhappy slog that I endured working day jobs. I didn’t hate all my day jobs, for sure.
It’s interesting. When I see founders who have never had a “day job” and have never worked as a developer, designer, salesperson, customer success, or whatever it is at a startup or at a big company, there’s a certain level of understanding of how businesses work and how they should be structured that I know they miss out on.
Again, I’m not saying you have to, but I do want to point out some pros of working a day job because I do think there are a lot of benefits. I’ve kind of run through a few of them, but it’s just general office communication and culture, like when to CC versus BCC, when to put multiple people in the to line of an email, how to run a meeting, how to use Slack properly? These are things that can be taught.
As you grow an org, you yourself should have the basics of this in some type of employee handbook where someone brand new coming out of college or someone who’s never had a day job, if they join your company, you should have a basic explanation of these things. They seem like common sense, but they’re not because when you first start out, you just don’t know.
Other things I learned were how to use basic technology tools. Straight out of college, I worked construction for two years, and then I got a job as a developer. That was when I learned to use tools that are now antiquated, but really, I learned email, I learned basic design skills, and just a lot of stuff that today would be Google Drive, Dropbox, Notion, Airtable, and Trello.
If you haven’t worked at a company, oftentimes, you just won’t be exposed to these tools. It’s not that they’re that hard to learn, but there is a ramping up or a learning curve. If you go out and start your own company, you don’t know these tools exist. Obviously, Drive and Dropbox, but maybe you’ve never heard of Notion or Airtable because you just weren’t in those conversations. That can make your founder journey, your startup journey, a little more difficult.
Some other things that I learned were how to structure teams. Whether it’s all developers on a team or a developer paired with a UX person, a designer, or a product person in these little pods, they’re just job titles in general. Why shouldn’t we make up our own job titles? There are a bunch of reasons for this. I probably am not going to go into them here in the interest of time, but making up your own job titles is a mistake. That’s something you’ll learn if you work for a company.
How to hire? I was involved in the hiring process. Even before I started a single company, probably 30 different hires, which means I literally did hundreds of interviews. I used to do the initial phone screen. We were at a credit card company and I would do the first 10- or 15-minute phone screen just to make sure someone was reasonable and should be brought in for an in-person interview. We had an office in Los Angeles.
Just learning that hiring process, being part of it, learning how to evaluate people, and then making a thumbs up, thumbs down decision. That was a skill that I had to learn. It was not there from the start. When I became an entrepreneur, it was really nice to have that skill.
Firing is another one. If you do get into supervision or management, you’ll learn when you should fire and you’ll learn how to fire. Leading, managing, I could keep going for a while. But the bottom line is, I think if you are working a day job or you are a freelancer right now and perhaps you don’t want to be and if you want to have product income, I would say, absolutely go for that.
Is it better on this side, is it better on the other side? When you’re an entrepreneur, a founder, and you are basically calling your own shots and fulfilling your own destiny, in my opinion, it is. I would never go back. But I also think that you should do what you can to learn about companies while you have the chance. Look at the silver lining of your situation. Even if you don’t love that day job and you want to escape it, there is so much that can be learned by working for an organization.
The second topic I want to cover is some bad habits that I learned as a solopreneur. I read The 4-Hour Workweek in 2007. I was already trying to be a startup founder and entrepreneur. In fact, there was an email artifact that I read here on the show 50, 70 episodes ago. You can actually search for Email Artifact from 15 years ago. I think it was the episode title.
I was talking in there about just how early and nascent things were 15, 20 years ago. When I read The 4-Hour Workweek, it made me realize, oh my gosh. I had this realization that I should go hire VAs. I was still doing email support because I had a product that was working when it came out.
I believe The 4-Hour Workweek came out in 2007. I already had DotNetInvoice. I was doing all the work myself. In The 4-Hour Workweek, the big lesson I took away from it is delegation. I did appreciate that lesson because I didn’t realize that I could hire people for so cheap.
I was imagining trying to hire someone in the US to do support on this little product I had that was doing $3000 a month. It just wouldn’t have made sense. But to hire someone part time overseas who could do it was incredible.
There are a bunch of benefits that I learned from being a solopreneur, for sure. I was learning everything and doing everything on my own. One of the big drawbacks for me is I really got stuck with the idea that you should hire task-level thinkers, and it trained me poorly to scale. It trained me that looking for cheap resources, whether it’s junior people or whether it’s folks that are overseas, was the way to go. That was the scrappy bootstrapper thing to do.
I think in the early, early, early days, it was. When I had my first $1000, $2000 of income, it was. But I then didn’t make that transition to realizing, you know what, I should spend more and I should hire project-level thinkers, owner-level thinkers. It took me a decade at least to make that decision.
I’ve talked about it here on the show that one of the hard parts of running Drip in the early days is that we were cash-strapped, so I hired all junior people and we trained them up. Many of them were project-level thinkers. They were great, great people. They were good at their jobs, but definitely, that frugality seemed clever to me at the time. For a while, it was. But it was a bad habit that I had to unlearn once I was growing a company that was growing at a pretty strong clip.
The other side of that is I learned the ability to delegate as a solopreneur, but I kept that idea in my head that I was always responsible for everything. It all came back to me that in essence, I was the owner-level and the project-level thinker. I think learning earlier that I can hire folks who could handle larger projects would have made my entrepreneurial career a little easier.
While I was running these small, amazingly profitable lifestyle businesses, it was great. It was a skill set. I could bring people on, they did tasks, and I kept them very profitable because they were just contractors. But the moment that I did want to grow that team and hire full time, I was not as prepared for it as I would have liked. It took me a while to make that transition from more of the lifestyle bootstrapper to an ambitious, growth-oriented bootstrapper. It’s different skill sets.
Dan and Ian talked about this on the Tropical MBA last few months about what made them super scrappy and clever in the early days actually was an anti-pattern that it became detrimental to them down the line. I guess that’s really what I’m saying here today.
My third topic is about why the college dropout narrative is annoying […]. Here’s what I’m talking about. I read a headline the other day that said, The newest billionaire in China is a 23-year-old college dropout. It’s a headline and it’s clickbait. It just doesn’t mean what it used to.
I think in the ’50s, or the ’60s, you’re going to college and you’re dropped out, it was a huge deal, like, what are they going to do? They’re going to be an alcoholic, they’re going to just travel Europe and do nothing, and waste their lives. Today, it’s not the case. You’re not dropping out because you couldn’t hack it. You’re dropping out because you built a business that’s taking off like a rocket ship. You can always come back to college, you can start another company, or you can get a job with the skills that you’re building.
It’s more of a rant than anything. Every time I see this now. I’m like, someone was a college dropout. If I’d built a great business, I would have dropped out of college too. Then I would have gone back if it wasn’t successful. The downside of this was just so low that using this phrase, I feel, is disingenuous.
In fact, I would attest that if you start a business, and it takes off, you are in college, and you’re making a full time income or more, if either of my sons did that, I would say, drop out of college, man. Stop going to college and follow this path. You might have lightning in a bottle here.
Most people start multiple businesses in their lives. Most entrepreneurs start multiple businesses. Right at the time when you’re getting enough confidence as you’re in college to kind of risk it on your own and your parents are no longer forcing you to go to school, I don’t see what other alternative you would have.
I do. The other alternative is to let the business flounder, be part time or whatever as you continue to go to college. There’s a whole other conversation about the worth of college and how the cost in the US compared to the actual value it gives. It’s not at all what it used to be.
My wife and I have had this conversation with our boys about there is college money if you want to go to college. I think there are developmental reasons to do that. But also, if you decided instead you wanted to start a company, we will angel invest in you.
We will make sure that you can do this if this is something you’re passionate about, you have some traction, and you’ve shown validation, I don’t see why we wouldn’t encourage that. I think college is now one of many paths that can get you where you want to go because the world’s changing and the old scripts are now, I would say, much less valid than they used to be.
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My fourth and final topic for this episode is, what would I do if I were starting over today? This is a question that I often get if I’m on a podcast or I’m doing an in-person talk. I talk about the recent successes or whatever and someone will ask that. Like you’re 21 and you’re starting over today, what would you do differently?
Sometimes I think it’s asked kind of in a trolling way of like, well, you’re successful, but we can’t relate to that. I can’t relate to that because I’m not successful yet. I would say, mostly because you haven’t put in the work. It’s probably my assessment of folks who asked it in that tone.
I do think there are a lot of folks who are genuinely asking. I think the question should probably just be rephrased. What should I do? I’m a 22-year-old and about to graduate from college or I’m a 19-year-old and I want to start companies. What should I do? I actually think that’s just a better question because what would I do if I was starting over today?
I do want to point out that this is different than if you were to ask me, if you were going to start your next SaaS, Rob, what would you do? Because I have a whole mental framework of, I don’t plan to ever start a SaaS. But if I did, there’d be a bunch of stuff I would do. It’s not what I would recommend if you’re a 20-year-old, 25-year-old. Really, age doesn’t matter.
I’d say an inexperienced startup founder who wants to make it, who wants to launch a product and support themselves full time, or maybe have a multimillion-dollar business and bootstrapped or mostly bootstrap this thing. When I think about it, I really think about a couple of options, and it’s within the stair-step approach. What I did was the stair-step approach. One key of this is I worked my ass off.
I think a lot of bootstrap founders who become successful don’t have to work that hard forever. But in the early days, you’re probably going to be doing nights and weekends, unless you have a really nice arrangement. I wasn’t lucky enough to have that. I think that’s just something that’s going to take. It’s going to require working hard.
I love the framework of the stair-step approach to bootstrapping because I have seen so many founders do it. It’s a nice, predictable on-ramp into working your way up. We’ll go through these two options. Option one is something that I did. I’ve seen others do it, but most people don’t want to do it.
They think of reasons not to do it. Some of those might be valid and sometimes I think they’re excuses, but it’s to save up money. It’s to work a day job, save up money, and buy something. Buy something on sideprojects.com, 1kprojects.com, MicroAcquire, Quiet Light, or FE International, and frankly learn marketing from that project.
Ideally, if you bought something with existing traction, you could see what marketing purchase had already worked. You could double down on those and grow it. Most people don’t want to do this because they want creativity, they don’t want to inherit someone else’s code base, or what if I get ripped off? There are all these thoughts. But frankly, buying something saves you 6, 12, or 18 months depending on time building and trying to find product-market fit.
To be honest, what I did is I was working a day job and then I was consulting nights and weekends. When I started out, I was billing $75 an hour for the consulting, then it was $100, and then it was $125. As it went up, I got a stockpile of $10,000, $11,000 in what I called the business account.
Sherry and I talked about it and I said I want to use this to grow a business, whether that means to go full time, consulting eventually, or to buy software products, I didn’t really know. I had never heard of anyone acquiring or doing these small acquisitions. So we agreed that the income that came from my day job went to the personal account, as well as hers. Then anything that I did on the side, I could use to “grow the business”.
What I eventually did was I dropped $11,000 on DotNetInvoice. That had enough traction. There was some SEO. I believe there were some Adwords going on. I don’t remember all the approaches at the start, but I learned some stuff from what those guys were doing about what was working and what wasn’t. There were already customers, and I tripled the price because you should always raise your prices.
I told the story over and over, so I’m not going to go into it here, but it was really an interesting option. Yes, it took time to find it. That one kind of stumbled in my lap. But then I wound up acquiring (depending on how you count) 20, 25 more small online businesses over the next several years.
Some of those were content sites and just barely making hundreds of dollars a month from AdSense. Others were full blown ecommerce sites, SaaS products, ebooks, and downloadable software. I did it many times and I would rehab them. Basically, I was a value buyer and I would rehab them. The profit that came off of those allowed me to quit my full time day job. It is an interesting approach if it’s something you want to consider.
Option two is to build an app for an app store. I’m defining app store as not just iOS App Store, but the Shopify store, the Salesforce ecosystem. HubSpot has one, Zendesk, HelpScout, GitHub, Heroku, Atlassian, AWS, Magento, WordPress, and Squarespace. I could go on and on.
In fact, over at rocketgems.com, an indie hacker and fan of the stair-step approach named Ramy put together essentially an essay called 68 B2B SaaS marketplaces with opportunities for indie hackers. That’s probably what I would do because this is step one of that stair step approach. All you need to know is how to rank in that app store.
As long as there’s enough traffic for it, they handle all the marketing. The distribution is done. You don’t need to think about them. One of the hard parts that we see with a lot of TinySeed and with a lot of MicroConf companies is they have a good product, they’re trying to find product-market fit, but they just don’t know how to market. They don’t know what to try next and they don’t know what to do next.
With this approach, if you can get in and get essentially that free traffic from the App Store, now it’s not free because you’re probably paying them 10%, 20%, 30% of your revenue, depending on the App Store, but it makes things a lot simpler. I think as a permanent solution, if I wanted to build a multimillion-dollar SaaS company, I wouldn’t do this, but this to me is that step one. If I were starting over today, I would use one of these app stores.
They didn’t exist when I was starting out. I am envious of folks who are starting today because they have this benefit. In fact, I’m going to go through some pros and cons of starting companies today versus 10 or 15 years ago.
Me and another old-timer are waxing poetic on the podcast. We say things like, man, remember how easy SEO was 15 years ago? You could just do this and that. It sounds like it was all sunshine and roses. But in fact, it was very much not so. I actually have more benefits of starting today than I do the negatives. There are more pros than the cons of starting today.
One of the benefits is that labor is cheaper now than when I started really in 2002 to 2003, which was when I started launching my first thing. There was no Upwork and there really was no hiring internationally by an individual. It just didn’t exist. The first time I ever heard about it was Tim Ferriss talking about it. It sounded like it existed. People kind of knew about it for a year or two.
Bigger companies had done the offshoring thing, but an individual hiring another individual in another country, there was no Skype, there was no way to communicate with them except email. How would you pay them? There were just so many complexities that don’t exist today. Not only are those things better today, but frankly, labor is just cheaper. It’s a global economy. That wasn’t something that we could do back in 2005, 2010.
The second benefit of today is there is so much more specific tactical information available about how to start startups. You think of pre-this-podcast, pre-Microsoft, pre-whatever. Wherever you go for your resources today, they probably didn’t exist 15 years ago, so I was very much in the dark.
In fact, the way I learned marketing was I read a bunch of internet marketing books, which was like info marketing. Even the old school folks who used to write actual physical sales letters in the ’90s like Dan Kennedy and Joe Polish I think.
I got to be honest, a bunch of their stuff, I’m pretty judgy about it. It did not fit my style. It was way hard selling and their products were not great. I don’t think they were selling info products, really overpriced. I don’t think that a lot of them were fair or 100% ethical. I’m not calling out those two names in particular, but just that space was known to be pretty crappy.
I didn’t have to take that away from it. A lot of their tactics and a lot of their thinking were actually pretty accurate about how to market, how to sell, how to write copy, how to write an ad, and how to give someone some time pressure to buy. There were all types of stuff. That’s how I learned it.
I would just go buy books and read through it because there just wasn’t anything online like you can get today with. There were remote events. There were in-person events. There were articles on Reddit, SaaS forum, and entrepreneurship forum on Reddit. Stack Exchange, Stack Overflow, these things are amazing. There is so much more specific tactical information available today than there was 10 or 15 years ago.
In addition, there are more marketing options available today. When I looked back at the list that was possible back then, it was just a handful. I’m not going to name them all, but you could do cold outreach, you could do SEO, pay-per-click ads became available around there, and then there were display ads. That was kind of it because there weren’t social networks. I guess Hacker News came around that time and there was Digg. These were literally the five or six things that I knew about.
There were obviously in-person events, there’s cold calling, and other things. But for someone bootstrapping a company, you didn’t have access to those more expensive things. The number of options available today with all the social media groups, these places where entrepreneurs, and your potential customers hang out, all the ad networks, there just is a lot more online you can do today. While some of the Adwords and Facebook ads are expensive and they get more expensive over time, I still think there are so many more ways to reach people today online than there were 10 or 15 years ago.
The next benefit of today is these app stores that I already talked about are just an amazing opportunity. I think that goes without saying or I guess I’ve already said it in this episode, but I think that today is where I would be going. In addition, there are more things available to buy. There’s actually a thriving ecosystem with the brokers and the marketplaces that didn’t really exist. I think that’s a nice opportunity, as you heard in option one.
I think another pro is that if you build something, if you build a SaaS app that’s even doing $5000 a month in MRR, it’s sellable today at a really good multiple. Back when I was buying stuff, you could sell it for 12–18 months’ net profit. It was just brutal.
While that is good when you’re acquiring, it’s really tough if you work your butt off and you build a SaaS company for $5000 a month, $60,000 a year. You can sell it for almost all profit. You sell it for $60,000–$90,000, there just isn’t a ton of value. You just have to build up these cash flowing businesses versus today.
Let’s say you build a SaaS for $5000 a month. Again, for easy math, let’s assume it’s 100% profit, $60,000 a year and you sell it a 5X profit multiple, so you’re getting $300,000 for building the SaaS company. Its long term cap gains if you hold it for longer than a year, although that’s not tax advice. That’s just amazing. It’s an amazing nest egg and an amazing way to basically angel invest your way into your next company.
The last couple of pros of building today, there’s a bunch of them. But in the interest of time, one is there are more communities—MicroConf, Indie Hackers, Dynamite Circle, ecommerceFuel, and Rhodium Weekend. There are so many amazing groups of people who are helping one another.
Going back to the tactical information being available, a lot of that is coming from these communities where people learn and are sharing it with one another to make a name for themselves, but also to help other founders. That isn’t something that existed. In 2005, the only two bloggers that I knew that were talking anything about this were Paul Graham and Joel Spolsky.
I started blogging about it in 2005, 2006. The only other people that I can remember the next few years with were Peldi Guilizzoni from Balsamiq and Patrick McKenzie. There was a business that software forums run. Anyway, there wasn’t very much. Now you couldn’t name them all.
I could name everything that was available at that time in less than 60 seconds. Today, we have this embarrassment of riches that I think is beneficial. I think these communities are great for not only the information, but it’s for the accountability, for the ability to say, oh, I see other people can do this. If they can do it, I can as well.
The last pro I will throw out today is there’s just more tooling. There’s just better tooling today to build SaaS companies or to build startups. There’s Rails, Django, and a bunch of new platforms that I’m forgetting. There’s Hotjar, Mixpanel, AWS, no-code, and there’s low code. You can do a lot faster today than you could 10 or 15 years ago.
Let’s look at a few cons. Ad networks are more expensive. Google ads 10 years ago were cheaper. The advice I would say here in terms of ad networks is if you look for newer ad networks, they usually start off with cheaper clicks, and then over time, they become more expensive. That’d be the thinking that I would have there.
The second con is this is more competition across the board. There are more SaaS being launched. It’s an amazing business model. It’s amazingly lucrative and a lot of folks want to do it. There is more competition and more niches. That means there’s more competition in SEO and the marketing approaches and more competition for the same customers. That does make that specific piece harder.
The third thing is that things are moving so quickly, they change so quickly. I’m not 100% sure on this, but I feel like you could have an autopilot business more realistically 10 or 15 years ago than you could today. I think given all that competition, so much is happening. So much has been developed so fast, new features, and all of that.
I think that there’s a lot more happening in a shorter period of time. I think that means that you have to stay moving or else you get caught. I think most people listening to this podcast are probably not looking to autopilot their business. But I do think that with things moving faster, it’s kind of more churn and just more competition.
Lastly, there’s a lot more distraction today, whether it’s social media or just a lot of people claiming to be successful entrepreneurs. At least, maybe they’re not even claiming. They’re just commenting on how you should start a company when they’ve kind of never done it or they’re commenting on things that they haven’t themselves done. I think it is easy to follow a path of too many voices and too many people saying too many things, trying to be experts.
That wasn’t necessarily the case. There was a lot less valuable information back in the day. But the couple sources of it, at least, you could probably trust that they were valid and that they were giving you good advice, versus today where you really have to separate the wheat from the chaff.
I want to leave you with the idea that it doesn’t matter if it was harder or if it was easier 10 years ago or 15 years ago. The bottom line is it just doesn’t actually matter that much. Because if you do want to start a business and want to be an entrepreneur, then you don’t have a choice. You don’t have a time machine. You can’t go back 10 years. It doesn’t really matter if it was easier or harder.
I would say, seize the day. This is why I’ve done 600+ episodes of this show. It’s because I love seeing new entrepreneurs get started. I love seeing existing entrepreneurs start new companies. I love seeing folks able to find their freedom, find that amazing purpose, and have these healthy relationships.
That’s what, to me, bootstrapping is about. It’s about this great equalizer that allows all of us, not just those who can seek venture capital or who can use to be moved to the Bay Area, frankly, to raise a venture, but it allows any of us to start a business that provides for us and provides for those closest to us. All the while, being ambitious with our business but also balancing that with our life, our family, and our lifestyle.
Those were my four topics for today. The benefits of working a day job, bad habits I learned as a solopreneur, the college dropout narrative, how I just don’t love it, and what would I do if I were starting over today? Thanks for joining me again this week. Signing off from episode 610. I’ll be back in your ears next Tuesday morning.