Episode 801 | Competing Against Incumbents, Technical Co-Founders, Trademarks, and More Listener Questions with Derrick Reimer

Rob Walling:
Today’s sponsor is hres. They’ve built a full-blown SaaS marketing platform to help make your business discoverable. They recently launched a tool called Brand Radar, which helps you analyze your visibility in ai, chatbots like chat, GPT, or perplexity and compare against competitors. There’s no need to juggle a bunch of disconnected tools. Get hres all in one platform to make your brand unmissable in a fast moving world. Get started today at hfs.com/awt. That’s A HRE fs.com/a wt. This is Startups For the Rest Of Us, and I’m your host, Rob Walling. In this episode, I’m joined by fan favorite Derek Rimer and we answer your listener questions before we dive into the episode. Early bird tickets for MicroConf US 2026 are now on sale. The event is April 12th through the 14th in Portland, Oregon. And right now ticket prices are as low as they will ever be, and we have sold out our last four events. Ticket prices will go up on October 22nd or after the first 100 tickets have sold. If you’re planning to come, you should get your ticket now. That’s at microcomp.com/us and you can use promo code Rob 50 for $50 off. And with that, let’s dive into listener questions there. Grimer, welcome back to your 21st appearance on Startups For the Rest Of Us.  

Derrick Reimer:
Wow, did you go back and count?  

Rob Walling:
I did. Just like a minute ago, I didn’t even ask Chat. JBTI went to startups For the Rest Of Us dot com. I went to the search, search for your name and then I walked through and there were 20 appearances. I think you hold the world’s record  

Derrick Reimer:
Really best appear. Oh, that’s  

Rob Walling:
Awesome. I can’t imagine anyone else that’s been on that much. I think Ruben’s been on like five or six times. Hot take Tuesday. A r has probably been on, I don’t know, eight or nine if I were to guess A couple more. Tracy’s probably been on around there. But yeah, aside from Mike and I think my original co-host, I think you hold the record, man. Wow, congratulations. Awesome. How does that feel? Is this one, is this such a culminating moment in your  

Derrick Reimer:
Life? It is, yeah. I’m honored to hold this world championship of this title starts For the Rest Of Us appearances. Yeah. Oh,  

Rob Walling:
You get to just Lord it over all the other I  

Derrick Reimer:
Will  

Rob Walling:
Past guests. I  

Derrick Reimer:
Definitely will.  

Rob Walling:
You are back by popular demand. The reason I keep bringing you back is because every time I mention that you might be on the show, people are like, oh my gosh, another episode with Derek. I really want to hear Derek’s opinion. I really want, and I’m just like, all right, well maybe he maybe should just be Derek For the Rest Of Us. No, I never said that. No, it’s good to have you back. And of course, per our usual format, we are going to be digging into some listener questions. If you are listening to this and you’d like myself and or Derek to answer a listener question in the future, you can email it questions at startup For the Rest Of Us dot com. Or you can just head to the website and there’s an ask question link in the top nav that gets you to a video ask page. You can submit a text question. Of course, I would discourage that if you submit audio or video, it goes to the top of the stack. And so today, I believe we have four audio slash video questions and then I snuck one text every once in a while because man, the text ones they kind of languish for a while, so I snuck one in so that we could dig in. And with that, let’s dive into our first question about competing against a startup incumbent with more money.  

Speaker 3:
Hey Rob, longtime listener, big fan. Today I have a question which my co-founder and I have been struggling with somewhat and just to set the land. We are based in Germany and the Netherlands and we just cannot find enough information on this particular subject. I’ve checked Reddit. There just isn’t anything that really touches on this problem enough, which is we are in the B2B SaaS space. Well, we build softwares of businesses can make B2C their own Cs lives easier. So you can think agencies, you can think hospitals in HR tech, right? And we have an incumbent who’s hitting up the entire market and they have been around a bit longer. They’re not a large company, they’re a startup. They’ve been around since 2020. And every door we knock, they just seem to be behind. And now there’s a lot of information about competing against a massive conglomerate. 

In many ways our prefer competing against a massive conglomerate. They’re slower, they’re lazy, et cetera. But this guy has raised around many millions in 20, 22 years ago. We are entirely confident that our solution is better, it’s more fit for the market. We’ve gotten some of their clients to have a look at us, one or two have switched. I think now we’re slightly more affordable. We are certainly better software, much, much simpler to use and we do provide more value in some ways. But my question I guess is in summary is how do you compete against an incumbent who’s a startup, who’s a few years ahead of you who not a massive conglomerate, there’s enough information about the massive conglomerates, but it’s competing against the slightly more established startups who are perhaps slightly slower but equally as hungry as you are that I really were really, really struggling with. Thanks for everything. I hope this gets on. We might be bankrupt before we listen to it, but yeah, you get the point.  

Rob Walling:
I really like this question and I like the way that Shane differentiated between, it’s not a 10,000 person company. It’s not a stodgy old whatever, a Fortune 500, fortune 1000, but that it’s another startup that is better funded and as a hungry as essentially as he and his co-founder are. So what are your thoughts to kick us off on this one?  

Derrick Reimer:
This is definitely a tricky place to be in because if you think about the classic, like choosing an old 800 pound gorilla in a space to compete against, usually you can feel pretty confident that they have a lot of legacy, they have a lot of bureaucracy, maybe people who have been there a long time that care about certain things not changing. So just inherently, you can lean on being a lot more agile and nimble and you can run circles around them on being able to be responsive to customer requests and you can give them more time and support. And these things all remain true when you’re competing against another hungry startup, but that hungry startup is likely to have a lot more attributes that overlap with you. So it, it’s tough. I would say I’ve experienced kind of both sides of this in my own companies. 

So a couple of things to think about. I guess one is that a funded startup is going to have some inherent pressures that you don’t necessarily have if you’re bootstrapping a big one being like they have to make sure they’re targeting a big enough tam. The total addressable market is large enough to kind of satisfy all the stakeholders. And so that potentially means you have an opportunity to outmaneuver them by positioning yourself more specifically for a niche, something that would be just a little too specific for the comfort level of the funded startup that’s trying to, maybe they have the traditional VC aspirations of a hundred million dollars in five years, so they just can’t afford to narrowly position themselves. So you might have an opportunity there. Another thing that came to mind, I think Shane mentioned kind of being a slightly cheaper alternative, and I would be a little cautious about that, especially if you’re competing with someone who has deeper pockets than you, they can potentially afford to underprice themselves in the market in order to land grab a little bit. 

So I would think about taking the offset strategy. How can you potentially have a more premium experience and charge more and position yourself as if you want something that’s cheap and cut rate, you might go this direction, but if you want something that’s premium where we can, and you have to layer on actual premium benefits, you can’t just call yourself premium, but maybe that means you have a more personalized onboarding experience or your customer service is better in some very specific quantifiable ways. And basically just sort of contrast yourself as a different position in the market so you’re not trying to literally have the same sort of premium level positioning as them.  

Rob Walling:
I really like that approach. I think everything you’ve said I agree with and my yes, and to that is I would be giving a lot of thought or doing some research about where are they messing up because there’s always some flaws in execution, whether it’s their sales people or their sales model requires a demo in an annual contract and everyone hates that. And so can you just do the opposite? Is their product lacking? You said chain said their product is better. And it’s like, cool. And how do you position yourself such that you’re different? You’re different. That’s the biggest thing. It’s like you don’t even have to be better. You just have to be better for a subset of the market that’s called positioning. You elbow out a corner of that market and you say, we are really good at this one thing, and sometimes you’re only good for 5% of the market. 

And so you will cap your growth at that point. And then you kind of wedge in, you land and expand and you expand out. How do you find these things they’re doing wrong? Well, you try to talk to their current customers, customers, ex employees on LinkedIn. How many dms have I sent to people who used to work for a competitor of ours and then had a conversation with the sales guy, had a conversation. It works. It’s a technique. And it can also go on Capterra G two and look at product reviews. And I think a few people have talked about this, but I really like this thought of go to the one star reviews. What are people upset about? And maybe that’s your angle. And it’s not just about building a better product, of course, it’s about then communicating how you’ve built a better product and how you’re better, I guess, positioned how you carve out that positioning in this space. 

And with all that, if you truly are differentiated, then yeah, you can consider charging a premium. Sometimes charging a premium is part of that positioning where the premium, whatever, you could also take the other tact. I like how you said if they have infinity money, they can just drop their price and be true. Question is, will they, if they already have a bunch of traction at a certain price point, let’s say they’re $500 a month and up and you come in at 300, will they drop their price? And if they do, they’re going to decimate a bunch of their MRR. Are they willing to do that? So it could be a game of cat and mouse there. I’m not saying that’s the right choice, but with Drip, we were what, 20% more than MailChimp? I think 20 to 25%. And we were like, well, we were way cheaper than all the marketing automation. 

Infusionsoft and such was like five three to 500 and up and we were like 50 to a hundred. I dunno, we were less expensive than them and a better product and they weren’t willing to lower their price because they had all that MRR and they maybe even had private equity investment. So I do think there’s, maybe it depends on that one. All that said, I’ve seen exactly what you said happen too with, we had a TinySeed company, there was a competitor. That competitor raised 10 million in venture and they did just drop their prices to a third of the TinySeed company and they did a lot of damage there. So it happens both ways. And I think I would try to assess more. I try to get more information if I could.  

Derrick Reimer:
Yeah, something I’ve seen happen, and this has happened in my space as well, sort of a race to the bottom on a freemium play. I don’t know if that’s happening at all in Shane’s market, but this sort of clear strategy of we’re trying to suck up the bottom end of the market and just get ’em in the door for free. We want the word of mouth and the benefits that come with that. And we’re trying to monetize at a higher tier, for example. And I mean, that can be tricky to outmaneuver when people are like, well, I’d like to use your thing, but there’s a free alternative, so maybe I’ll just use that. And then they’re kind of locked into that ecosystem. But I think, I don’t know, as you’re communicating with prospects about what you’re observing as just the realistic market dynamics, I mean that’s something to call out. It’s like, well, okay, this is free. What do you get with free? Where is this company actually focusing? And you can justify charging money for something if you’re communicating that we charge money because we actually provide service behind this, and we’re not just monetizing at a tier of market that doesn’t apply to you.  

Rob Walling:
It all reminds me of an old Paul Graham essay, and this is probably from like 2002 or something, but it’s still online for sure. He keeps all his archives up there. And I remember being surprised at this realization, but nowadays I’m like, oh yeah, that’s totally obvious to me. The realization he said was, if you’re a startup and you’re entering a market, you should not be concerned with the big incumbents. They are not your biggest threat. The biggest threat is the other startup down the street that’s trying to do the same thing. And I remember being like, what? But why? The incumbent has so much money? And it’s like, no, you actually do want to compete against really big, slow moving dumb incumbents with entrenched interests in politics and a big, they have a lot to lose. And the other startup, if they’re at your level or just a little ahead of you with a little more money, they’re the one that’s really hard to compete with. 

And if you enter a space where you’re kind of the only startup and there’s a bunch of other incumbents where the market’s been proven, that’s a really nice position to be in. And the moment you do, and if you start talking about it online, you will have competitors because people will see like, oh, this is an interesting market. So again, Shane, I appreciate the question of this specificity. It’s not just like, oh, I have a better funded competitor. It’s like, no, they’re a startup too and they’re as hungry as I am, and how do you do it? And the trick is, you just got to find out. To me it’s like what are their Achilles heels? And maybe that’s product and maybe it is pricing as Derek and I have batted around, it sounds like you’ve built a better product, so then maybe you try to position it better. And then how are they doing marketing and sales? Are they missing any angles there? Are they overselling and being over pressure and the model there? Are they missing marketing edges? It’s a challenge, but  

Derrick Reimer:
I’m curious to hear your take. What would you say to this sentiment that you shouldn’t worry about your competitors at all? This is a common trope we hear, right? A lot of people talk about this and as a way of saying, I’m going to take the high ground or something like that, or it’s more strategic, more stoic, more zen, whatever, to just focus on your own business and don’t pay attention to competitors at all. And it’s something that people talk a lot about. I think rarely in practice do people actually ignore their competitors, but what would you say to that sentiment?  

Rob Walling:
Yeah, I remember speaking of 2002, Joel Spolsky wrote an essay and it was like, don’t pay attention to your competitors. Pay attention to your customers. And I was like, oh, that’s an interesting thought. I would’ve thought you’d look at your competitors a lot. So as I’ve done this, they’re really, and I’m just going to say this, there really needs to be a balance because I think if you’re not looking at all or paying at all any attention to your customers, you are doing yourself a disservice in the long run. You cannot pay attention to customers for a few months, but if you try to do that for a few years, you need to know where they’re going and what’s happening because product-market fit drifts and the market itself will drift in different directions. And suddenly, if you have this, let’s say you have pretty strong product-market fit and you’re growing, and then tomorrow a completely open source and free version of your tool has launched up, this happened to multiple TinySeed companies, actually that market has changed and that is now a competitor. 

And you have to think, okay, do I have a free plan? Do I drop my prices? Do I go all up market and I have a free and it’s a thousand and up for the what do you do? You do in fact have to react to some of these things. However, do you remember after we got acquired and we were in the Leadpages drip slack and with this 200 employees or whatever, and there was a competitor channel and people were pumping stuff in there every day, it drove me fucking nuts. It was way too much, way too much paying attention to all the little things. And it was like, no, what I really needed was AI to probably didn’t exist back then, but to look at that whole channel over the course of a week and kind of summarize some key takeaways that actually mattered because the volume was just like, no, no, no, no, no. 

We are way over indexing on this. And in fact, there were some folks there that we worked with that I think over-indexed on looking at competitors because they themselves didn’t have the core vision and strong opinion about the market and our product. You and I have all made very opinionated software there, and we had a real strong opinion about what the market was and it should go. And we were trying to be market leaders and sometimes we succeeded and other times we didn’t with stuff we launched. But if you don’t have that vision or that opinion, then you’re looking to go back, well, what did they do? Well, now should I copy them? You know what I mean? And I think it can be a crutch. So that’s my spectrum. There’s the not at all. And then there’s the too much. Have you given this thought? What do you think about it?  

Derrick Reimer:
Yeah, I think I would agree with pretty much everything you said. You can’t just ignore them in part because one of your biggest jobs in selling your own product is helping your prospects understand the difference. And if you don’t know anything about the other players in your space, you’re not helping them make that decision with clarity. I’ve noticed this a few times in a few sales cycles I’ve had to go through in purchasing various products, and I was doing my diligence, I was getting quotes from a few different providers and having conversations as most of them required some kind of demo conversation. So I went through that and I was basically bringing up like, okay, so I’m looking at this other company, I’ve done my research trying to see how you guys are different, but I’d love to hear in your words, how are you different? Help me understand why I should choose you in light of the other alternatives, because if someone is a rational buyer, they’re at least going to do some kind of diligence. And if you don’t have a good answer to that, you’re just doing yourself a disservice. So I think understanding what you’re competing against and then of course looking more long-term on where the market’s going. Like you said, I think it’d be a big blind spot if you’re trying to gather all of that insight just from customers. You’re just missing a data source.  

Rob Walling:
I agree. And I remember knowing I had it all in my head, I think you did too of that space, specifically ESPs, marketing automation. And I remember folks coming up, whether it was if they were curious in becoming a customer, or even within the Drip lead Pages team, there were folks who were new to the product and they would say, oh, so there’s active campaign. How are you different? How’s Drip different and MailChimp, how’s Drip different? I remember genuinely saying, well, we do some things these things better, and they do these things better. Be honest about it too. That’s the other thing on a sales call, do you have to tell ’em all the great things that ActiveCampaign is over you? Probably not, but you can admit that you may be the best product overall, but for this particular use case writer in these areas or in this feature set, whatever, you can’t be perfect.  

Derrick Reimer:
And that honesty, I think resonates too with, I mean, depending on who you’re trying to sell to and what your buyers care about. But I know for me, when I had a few of these conversations, sometimes the vendor would just be like, well, we’re the biggest, we’re the number one dah, dah, dah, dah. And they were just, it was just ego driven all about, look, we’ve achieved this in this top quadrant on this G two report or whatever, and that’s all we care about. And it’s like, okay, you’re not building your case. Demonstrate that you’re being honest about this.  

Rob Walling:
Yeah, yeah, it’s a turnoff, isn’t it? So cool. Now I have to go find this for myself. I need to know where the edges are. Every piece of software has edges, the edges of where you aren’t the best. So yeah, thanks for that question, Shane. Hope our thoughts were helpful. Next question comes in from Ryan and it’s about when to move on to pivot or power through.  

Speaker 4:
Hey Rob, my name is Ron Hemlock. I’m from Lancaster, Pennsylvania, and my question is about do I keep building what I’ve been building or do I pivot something else? And then how can I know when to power through or pivot, switch it up. So for context, I was a freelance videographer for the past three years, and then I transitioned to become a developer because I fell in love with the SaaS model. So for the past two months, I’ve been building a tool that helps other freelance videographers generate video ideas and scripts, not only for themselves but also for their clients because typically freelance videographers create a lot of videos every single month. So I currently have 29 people who have signed up, and that’s really cool because I’ve built the MVP and got this 29 people in a span of only two months. And that honestly feels pretty fast. 

I’ve only put out a couple of social posts within Facebook groups and whatnot, but the problem is that there’s 29 people, they’ve signed up, they use the tool a few times, but then they haven’t been back since. And so I feel like this is telling me that I’m not actually solving an urgent problem, and if I really wanted to solve the core of the problem and make the tool even cooler, I feel like I would end up just building notion, which is already a powerhouse tool. Yeah, and the more I listen to your podcast, the more I’m realizing that the problem I’m solving for may not be urgent or strong enough to charge a lot of money for and keep people around for a long time, especially since Notion is free, for example. So that’d be tough, especially in the film and videography landscape. So my question is, if you were in my shoes, would you continue building this tool and figure out how to differentiate it in a way that is competitive with other products? Or would you try looking for a different market for the tool, or would you stop building the tool altogether and just look for a different problem to solve? I would hate to keep building the tool for another three to four months and find out doesn’t actually help anyone curious to know what you think.  

Rob Walling:
Thanks. Alright man. So he’s built software for videographers, sounds like he’s doubting, doubting if he’s made an aspirin or really built something that people want. What are your thoughts for him on his options?  

Derrick Reimer:
So he mentioned, okay, 25 people have signed up and it’s not clear whether they’re paying, I’m assuming they’re not paying that maybe they’re just kind of signing for a trial or something to test it out at least. And he said that the retention is not, hasn’t been stellar. It must be tracking whether they’re logging back in and they’re not really coming back. So what I would do as a first step is try to interview as many of these people as you can. 29 is not a big number. You’re not going to talk to all of them. So I would reach out to all of them, maybe incentivize them with a gift card or something. Can I have 30 minutes of your time? I really want to just learn about what’s going on in your world and get a copy of Deploy Empathy. It’s a good kind of summary of not paid to say this, just it’s a good summary of the jobs to be done methodology with scripts and some other just sort of actionable takeaways you can apply to your business right away. 

And Michelle has done a good job with that. So I would pull some of those playbooks from there and just kind of run jobs to be done style interviews to figure out were these people just wandering in from a Facebook ad and not really trying to solve some burning pain point that they have or is there something there? I think he’s operating from a hypothesis of or from a place of having this hypothesis informed by his own experience in the industry, which is good. That’s good to have that. He didn’t just choose this randomly, he was a videographer himself. So it’s possible that something’s there. It’s also possible that this is just envisioning something that he would’ve found useful himself, but that doesn’t necessarily translate to will people actually pay for it. So I think there’s more data to be gathered here before making a decision.  

Rob Walling:
I think that’s what you got to do. I mean can also, this is tough, right? Because it’s like we have these terms product-market fit, and it’s like what does that actually mean? And usually it means, well you’ve built a product. I mean this product-market fit is the several steps into this journey. The first one is, can I even find a problem that a business has, or in this case these freelance videographers, so it’s more super SMBs, right? It’s like hobbyist plus plus. And I know that they’re charging for things, but they think more consumers I think than businesses. And it’s like you found a problem probably that you had and either these 29 people didn’t have it or it’s just not worth the squeeze to solve it in this way. I think it’s probably one of those two. And so you start with a problem and then it’s like what are all the possible solutions? 

There can be 10 different solutions to this. I could hire a virtual assistant, I could do it myself. I could just not do this thing. I could use software for it, I could use Notion for it. There’s a bunch of solutions. Finding problem, solution fit is where you’re at right now. You’re still trying to find that. And then it’s like, okay, now do we build a product around it? Can we reach people at scale and below our cost to acquire blah, blah, blah? There’s all the unit economics of a business. So there’s these steps. I saw a diagram about this the other day. I was like, oh, that’s actually pretty cool. But it was kind of laying that out and Ryan is in that spot of this is the hard spot where it’s really fuzzy. And for me, you have to have conversations with people like you’re saying, and you have to ask yourself the gut feel here, do you think this problem is really, really that desperate? 

And if not, can you pivot this piece of software into something that is similar enough? It’s like, oh, I’m going to add a feature or I’m going to approach it in a different way or whatever. Or as you’re saying, should I start over? And that to me, when pivoting first came out, they would say Slack, it was a video game company. And it’s like they pivoted the video game into Slack and said, that’s not a fucking pivot. You just started a new product. Let’s not, let’s be real about the right pivot was overused To me, a pivot is like there’s still some core of the thing you’re doing. Drip was a pivot where we had the email capture widget and sequences and that was it. And then we pivoted into becoming a full-blown email service provider and there’s Zoom in and do about pivots and there’s 11 different pivots I think. 

But I think the thing Ryan to think about is like you asked, should I do this? Should I do that? Here’s the thing. It’s like, I don’t know. I don’t know. And that’s the honest answer is this is such a hard place to be. And the question I’d ask is, do you still have ideas? Do you still have to do this? It sounds like you have enough data that the current thing that you’ve built, isn’t it? Do you just start over with something you’re more excited about or given that you have built something and got some traction, do you keep, like Derek said, have conversations and try to figure out is there some version of this problem or an adjacent problem that you already have a start, you have kind of a kickstart into solving? I don’t know that I have any more than that. This, it was one of the hardest parts, not hardest, certainly the fuzziest parts of the journey is this early time of, I mean you were here right before Savvy Call, remember this for a year or something? You were doing static kit and you were like, these are problems and you were going after ’em and it’s like the signals are really muddy and it’s usually not very clear.  

Derrick Reimer:
Yeah, that’s the other thing I’ll mention. It’s even after doing these interviews, because done a lot of customer interviews over the years at different stages of the business at the super early stage and at the more mature product stage, and I will say at all stages, it is still extremely difficult to pick up on good signal. So even with this sample size, there’s a very real chance you would go through that and come up inconclusive or trying to spot patterns. It’s really fortunate when you can actually land on something that’s like, aha, I can see a pattern in the market and I think I can extrapolate this pattern and we can be off to the races. That’s where a lot of this stuff at the early stage is like you’re starting with a well-founded hypothesis hopefully, and you’ve kind of at least napkin out the business plan on how you could envision this working based on everything. And then you’ve done the right thing in putting together an MVP and trying to test it as early as you can. But yeah, you’re looking for some kind of signal, something to catch some kind of response, and when that’s absent, it’s really tough to know where do I go from here? And so it is a matter of searching for signal or like you said, resetting with another idea that you’re really excited about and then trying again to see if you can find that signal.  

Rob Walling:
So thanks for that question, Ryan. Hope it was helpful. Our next question comes to us from Martin.  

Speaker 5:
Hey, Rob Martin here. First time caller, longtime listener. I’m the founder of photo consent at GDP Art SaaS tool for photographers and marketing teams. I’m a non-technical solo founder and I’ve hit all the problems that you often mentioned on the podcast. My issue is that I work with a couple of really great freelance developers, but they’re always tied up with other assignments with other clients. So my project never gets enough time and progress doors, all hours goes into maintenance and security updates, no new features, and even the smallest update can take a year. So I’m stacked on a plateau and I have really, really slow growth. I’d love to bring in a more stable developer or even better technical partner, but I don’t know where to look and since I don’t code, I don’t have any way of judging if someone’s work actually could. So what should I do? Any advice from you would mean a lot to me, and thank you, Rob, for everything you do, bye.  

Rob Walling:
We get some variation of this question and it’s usually either how do I find a technical co-founder or how do I find the marketing sales? We get this to the show periodically. I actually get it a lot via email and dms, and I think I want to caveat everything with you and I are probably going to give ideas of how we would think about doing it, but this question really, it’s so similar to me to someone writing it and saying, I would like to find a spouse or significant other. How do I do that? And it’s hard. It’s possible. It’s just hard, right? There’s no silver bullet easy answers to this. Much like you would say, well, a spouse or significant other, well I guess go to dating apps and swipe right, you know what I mean? It’s like, I don’t know, you would do some stuff and it’s a bunch of work and you’re going to have a lot of, I guess time investment and you might make the wrong choice and then you might need to break up and then they own part of your company and all this stuff. 

We can go down that whole rabbit hole. But the idea here too is if you find a co-founder have vesting, have four year vesting with a one year cliff such that if things don’t work out after a few months, they don’t walk away with a big chunk of your company. We have seen TinySeed applicants that we were unable to fund because a co-founder walked away with 30 to 50% of the company and it’s like now we can’t fund it and no one down the line will. So just a brief word warning before we get there, but with that, I’d like to kick it to you. What are your ideas on how to fund a technical co-founder?  

Derrick Reimer:
Yeah, I’m trying to put myself in this because obviously I am a technical founder myself, so I’m trying to think of this from the lens of if someone were trying to court me, what would be potentially effective? 

Because it’s funny, I jotted a few notes down ahead of us recording and the literal first bullet point I put down is finding a co-founder is kind of finding a spouse, just that exact sense. It’s that level of effort and kind of unpredictability I guess, because a lot of things have to come together in just the right way and it’s a very human problem. This is not an engineering problem. This is a squishy soft human problem of do we get along? Do we have the same motivations? Are we looking for the same outcome? I mean, there’s so many things to consider before going into business with somebody, but even just getting to the stage where you can start to have those conversations, where do you find this person? And I think it’s swimming in the circles where those other people are likely to be. MicroConf is a great place because there’s a lot of people at different levels. 

There’s people with mature businesses that are probably not going to be looking to partner up with somebody, but then there’s other people who are there to get into the industry, and a good chunk of those people aren’t necessarily partnered up with someone. They’re either technical or non-technical coming in trying to start something and might make a good pairing. But I think in order to get to the place where you can actually start seriously talking to someone about Do we want to get married? You got to date ’em a little bit. You got to meet, you got to build rapport, and I think this just happens through the hallway track at MicroConf is a great place for this. I’m sure there are other venues where you could do this, but local meetups perhaps, or there’s other places where people interested in doing similar types of business as you would hang out. So I would think of that as the step one, I guess.  

Rob Walling:
Yeah, I would agree. And it’s going to obviously takes some time and effort. There are some co-founder matching services that exist and all the reviews, not all the reviews, a lot of the reviews are like, yeah, this don’t work. They’re really hard because this spouse matchmaking services also aren’t going to work. Within MicroConf, probably two years ago, two and a half years ago, we went down, we spent a couple weeks saying, let’s start a co-founder matching service, and we went down how we would do it with personality tests and assessments and this and that, and then we would pair you up and then you get three options and then you’d meet ’em all and blah blah via Zoom and such. And what we realized, well, we realized a couple of things. Number one, I still don’t think it’ll work very often in, and I’m not saying we’d never do it, but I was like, we have to charge like $3,005,000 for this to make it. 

It’s so much fucking effort. And so it was like, I don’t know that this is a viable product. A lot of people have the need, but are they actually willing to pay for that to solve that problem? I don’t know, because they’re really early stage and so they don’t have a lot of money doing it. It’s that kind of thing. Anyways, so I have thought about this because it comes up. The thing that you’re going to be thinking about is as you look for this, I think there are four places where you need to think about compatibility, and the first is goals. Do you want to build a sweet little lifestyle business doing 20, 30 grand a month and the two of you split that and it’s just great and you work as little as possible, or you just do your thing and you have side projects? 

Or do you want to build a seven or eight figure SaaS company or do you want to build a unicorn? And there’s more than three? Those are just three off the top of my head. Finding someone with similar goals I think is important because if you have, I’ve seen folks who, one founder wants a lifestyle business and one founder wants to exit for 30 million bucks, and those are different trajectories. Second thing is just personality. You don’t have to be best friends, but you should get along. You’re going to spend a lot of time together and be able to have a drink and have a conversation, and there’s just a click, just a culture fit between the two of you. Just a friendliness again, even if you’re not best friends. The third one is the one that maybe is a question mark for me. I’m not a hundred percent sure this belongs here, but it’s like work style. 

There’s something about some people really like to work solo and don’t interrupt me. Some people are super extroverted and it’s like, dude, I want to be on calls and collaborate on everything. And that would drive me nuts if my co-founder wanted that. I remember when it was just you and I right in early days of Drip, and it was like we would text a couple times a week or a couple times a day and then it’s like, show me some screenshots and we get together once a week. And it was like, that was plenty. We just didn’t need the intense extroversion. And so I dunno if it’s work style or introvert extrovert. There’s something there that I think, and maybe that just comes down to personality, but I think work style and personality are actually two different things I could get along. I have friends where personality wise, they’re great and I like hanging out, but I don’t know that I could work with ’em. 

So I do kind of break it apart there. And then the fourth is technical acumen. Are they a good developer and goal’s, personality and work style? I think you’re going to have to evaluate yourself. I just don’t think anybody’s going to do it. Technical acumen, which is really what people always bring up. I’m looking for a technical co-founder, but I don’t know how to assess a technical, technical acumen is important, but it’s one of four things that I’ve just named. And so technical acumen, find a senior super senior dev that pay him a consulting rate a hundred to 200 bucks an hour to help you hire this person. I’m not saying technical acumen is easy to assess, but it’s probably easier to assess than these other three that I mentioned. So I’d probably be giving a lot of thought to how am I going to assess this? And this is why it’s so hard, is to find someone who has same goals. That alone is hard, who has a personality to get along with and works in the same way as you do. It can happen, but it’s spinning a roulette wheel a little bit, and it’s trying to find that special match.  

Derrick Reimer:
Yeah, I think about Ben Orenstein, my previous podcast, co-host, founder of Tuple, co-founder of Tuple. They ultimately ended up kind of going their own paths in part because some wanted to move away and be remote, and Ben’s like, I really want to be in an office with people. I’m super extroverted and I’m actually not happy working this way where we’re not able to meet up together. Also, things change. They made some of these decisions deeper into the business, so that could always happen too, where people discover more about themselves or learn about what their preferences are, but ideally you try to get ahead of as many of those things as possible. I think that’s a good little framework you just laid out there for thinking through stuff beyond just the obvious.  

Rob Walling:
Yeah, can they write code that doesn’t crash? But then to the broader point is, okay, so you have those in mind and you can evaluate, what do you do? To me, it’s in person. You have to go to as many in-person things and be involved and online, whether you are on Indie hackers, MicroConf Connect, I hesitate to say Reddit because whenever I’m on Reddit slash SaaS and r slash startups, I’m like, oh, this, I, Ooh, this is tough. Different  

Derrick Reimer:
Vibe.  

Rob Walling:
Yeah, it’s a different vibe. And there’s some paid SaaS communities and some private founder slacks and this and that, and usually you go to a MicroConf or you go to an in-person event. If you’re in London, is it indie bytes that Charlie runs? There are these local groups that you can be a part of. The ones that have gone to meetup.com and all that that are public, I’ve never found one that’s any good. It’s always the stuff that we are, it’s in our community, our Twitter SaaS community bootstrap community that I think is probably where I’d be looking. So thanks for that question, Martin. Hope it was helpful. Our next question is about when to register a trademark.  

Speaker 6:
Hey, Rob, huge fan of your podcast and books. My SaaS is doing over 10 KMRR, and I want to continue growing it and settled one day. I heard it’s important to some buyers that you’ve registered in a trademark and also just in general that you should do it. What’s your opinion? When should one worry about this and also where to register a trademark? I was thinking the eu, which is where I’m based and half my customers are located and also the US where another quarter of my customers are from, in case it’s relevant. Myas is called Web design and I convert websites to apps. Thanks in advance for your insights.  

Rob Walling:
Derek Rimer, how many trademarks have you registered in your years here? 15 years of being a SaaS founder?  

Derrick Reimer:
Yeah, myself. Zero. I was trying to remember if we did it at one point with Drip and maybe you remember.  

Rob Walling:
We applied and got rejected.  

Derrick Reimer:
Okay.  

Rob Walling:
They said they’re like, it’s too generic. That drip email is a thing that’s existed for the prior art is what they said.  

Derrick Reimer:
Yep. Yeah, so it’s not something I’ve generally given a ton of thought. Obviously not a lawyer, but I know at least in the US there is some degree of protection when you start using something as your business name, even if you haven’t formally registered it. So if someone were to blatantly try to name themselves exactly the same thing and you really wanted to take issue with it, you theoretically have some defensibility there. I think that’s just not generally something I would want to even have to do as a bootstrapper. That’s the last thing I would want to worry about. So I would be thinking about picking a name that’s unique enough where Savvy Cal, if someone starts calling themselves Savvy Cal, that’s a pretty unique combination of words. It’s unlikely to happen, and if they did, it would be something very malicious. So I think the odds of that happening are low. So yeah, I guess those are my thoughts on trademarks.  

Rob Walling:
Yeah, talk to a trademark attorney and they’ll tell you, you should file a trademark for everything you have. And I talk to most startup founders and you find that almost approximately zero of them have ever filed a trademark. I mean, within TinySeed, if I were to guess it’s 2% of companies or 5%, it’s a minuscule, minuscule number. I believe I have a trademark for MicroConf and startups For the Rest Of Us eventually. I was like, and I got those two years ago. Think about that. 

They’ve both been around for 15 years. And so again, not saying you shouldn’t do it, is that the number one thing you should be worried about right now? I don’t know, but you’re at 10 KMRR. So there’s some services that you can go to and you pay 5, 6, 700 bucks to file it, at least in the us. And if I were in your shoes, I would file in both EU and the us. If it makes you feel comfortable and you’re fine spending whatever is that $1,500 maybe total to file those two and have it, I don’t know, and maybe it takes you to half an hour or to an hour to fill out paperwork or something. You can always do it yourself or you can pay, right? But the idea is that if there’s any dispute, then having someone that you’ve paid can kind step in and help coach you of, I don’t think we’re going to get it or we will. So yeah, I guess it’s like if you were telling me you wanted to print some swag and print, I might be like, well, that’s not going to move your business forward, but you’re a 10 KMRR. Do you want print, swag and print? I find it kind of fun. And so if you want to do that, go ahead and do that. Trademarks obviously a little more practical, but I don’t feel like there’s a desperate need for most startups to trademark what they have.  

Derrick Reimer:
Yeah, I was thinking that this just came to mind and I was just thinking about this question that there’s that new email thing, it’s BIMI or bmi. I don’t know if people say BMI or what, but have you heard of this? It’s basically the thing that will allow you to show your logo and a verified badge in inbox, like in Gmail, for example, and only, well, a lot of the major clients support it. I don’t think Microsoft does right now. But anyways, you have to have a trademark to get that thing, for example, and it costs like $1,500 plus the trademark. So that would be a practical reason. That would be a reason to do it.  

Rob Walling:
Yep, I would do it. If I was going for that, I would a hundred percent pay to do that.  

Derrick Reimer:
Yeah,  

Rob Walling:
I just haven’t heard of that and I don’t know of anybody using it at this point. Right. So is it worked  

Derrick Reimer:
Out? Yeah, I think it’s still pretty obscure, but who knows? It’s expensive, so I don’t know if it’ll really become a major thing or if it’s just going to be mostly larger brands and stuff.  

Rob Walling:
Yeah, I guess the other thing to think about is I believe in Google AdWords, if someone is using your name, your company name in the ad copy, if you have a trademark, I believe you can get Google to take it down, and I don’t think you can do it if it’s not trademarked now, they can still pay to show ads on your company name. So when someone types in Savvy Google and Hits submit, I could still say looking for a better calendaring solution. And I can say calendar stuff, but I can’t. Then if you had Trademark Savvy Cal, I can’t then put Savvy Cal on that line of, so that might be another might be, again, we’re kind of reaching here, but those could be reasons to do it. 

So thanks for that question. Hope it was helpful. Last question of the day, and looks like we’re running a bit long, but let’s tackle this one. This is about churn. The question asker says, I’m working on a startup idea involving multiple products for large and small players in a vertical market. There’s a large incumbent in this space that I’ve done some research on and identified what I’ve believed to be several vulnerabilities in their business model, one of which is that they lock their customers into annual contracts. An obvious counterpoint for me is to offer monthly pricing in offering monthly pricing. Though I can imagine what I have to offer could be attractive to some smaller customers for use cases that are by their nature time limited. Though I don’t want to plan to include these customers in my marketing efforts, nor include them in my ICP. 

They may find me anyway, and it would be remiss of me to discourage or refuse these customers as a small business. These customers would necessarily drive up customer churn as they sign up to use my product for a specific situation and then cancel once their use case has concluded. My question is, should I be concerned about this kind of churn? Is there such a thing as good churn and bad churn? Should I at some point discourage such businesses say, depending on business size or use case, all churn is bad churn. But yeah, lemme just say that right off the bat, but let’s talk about this. What do you think about this?  

Derrick Reimer:
Yeah, I think it’s actually a really good question. I do too, because I remember thinking early on when you’re just fighting for survival and you’re just like, anybody pay me money for anything? I’ll take anybody. That’s sort of your natural inclination. You’re just trying to survive. And I guess it depends at an early stage, maybe you have the funnel wide open because you’re just trying to learn who am I going to be able to build for and achieve product-market fit with? And maybe it’s in the early stages, it’s unknown. Is this going to attract smaller companies? What’s it going to be and who am I going to enjoy serving the most? So you could think of it at that stage as sort of an experimental thing where you are taking in customers that fit different profiles and you’re trying to see which ones you enjoy serving the most, which ones you’re able to serve, who sticks around the longest, where’s the churn for each of these cohorts. 

And so you could think of it from that experimental point of view. I think ideally you would get to the place where you have identified who your ideal customer is. It sounds like he has sort of defined that, I don’t know with how much certainty, but has a pretty clear picture of who the ideal customer is and then is considering serving people who he knows Don doesn’t fit with where the product’s headed. And I would say, I guess in general, it kind of depends on what you’re hoping to do. If you’re hoping to build a business with healthy metrics that you might be able to sell one day, for example, then ideally you’ll have strong filters up where you’re trying to just attract and onboard people who match the vision of what you’re building for and you’ll exclude those who don’t totally fit. I think the risk is that, one, your churn metrics will look bad, and two, that it come without a cost on your whole business. 

If you have people in the product every day that are using it, but it’s not quite a great fit for them and they don’t see the new features moving in a direction that serves them, they’re going to eventually become dissatisfied. They’re going to hit up your support channels, especially if they’re lower paying. The less they pay, the more they’re going to hit up support. It’s just how it works. There’s some law out there about that, I think. And then they’re going to go write public reviews and they’re going to say, yeah, this service was not great, dah, dah, dah. So it’s just going to muddy things up if you, you’re keeping the door open for people that are not in alignment with where you’re taking the business, and you’re going to feel the weight of that too. I think if you’re trying to do your job of listening to customers and you’re just hearing this drumbeat of the smaller customers that aren’t a great fit, requesting things that you don’t plan on building and you have to keep turning ’em down and people start building cases for why you should maybe build some of this stuff and now it’s a distraction from your core business. 

I think just a lot of it can put a real strain on a company to not have clarity.  

Rob Walling:
I kind of feel like I’m in the same boat where it’s like, if I was super early, I might use this as a tactic because an Achilles heel, but I would not be betting on this in the long term because I think it makes a real crappy business to double down on this. So I think you and I are in alignment of kind of like, am I doing the short term and in the longer term I’d be looking to filter it out. The challenge of having high churn with these kind of, they’re more one-timer project based users, raising funding and exiting are both going to be severely impacted by that because the metrics look bad. So what you could do is be like, well, there are more these project-based users and they churn at this rate, and then these other people, everybody else churn at this rate, which probably means they need their own plan. 

So that started getting me thinking, could you have a pay as you go plan or a, it’s kind of a one-time use plan. So if the projects are a month long, then they can pay your annual only or they can pay for one month, but it costs like three months where it’s a quarter of the annual plan or something like that. Or if it’s two week projects, you get the idea, you make it expensive and there’s no churn. You consider it a one-time fee, and so you just funnel those people into that plan and you keep your ideal ICP of people who need to use it longer term. And I think examples of this are old SEO keyword tools or just any SEO keyword tool. It’s like an SEO agency needs an SEO keyword tool every month forever, and a small bootstrap startup needs an SEO keyword tool once and then they need it again six months later because you do a bunch of research and you forgot the keywords and you attack ’em and then you get the results, blah, blah, blah, and then you need it again six months later, and that means it’s not the best business model for SaaS, at least if you’re serving that non-ideal customer, the one-time use. 

So do you just turn them away? Yeah, longer term probably. Or do you have this other pricing tier that is more of a one-time thing pay as you go, either one. With all that said, I have seen multiple companies bootstrapped and mostly bootstrap companies do what I just said with the pricing tier, and almost all of them have eventually killed it because they’ve been like, it’s such a headache. To your point, it’s a headache because those are not best fit customers. I’m not building a one-time payment product. I’m building SaaS and I want subscriptions and as much as Derek, as much as your proponent of once.com, I just have to disagree with you. That once is great for customers maybe, but it’s in long term. I don’t even know that it is, but for us as bootstrap SaaS founders, it’s not good. So that’s where it’s like, ooh, in the near term, maybe I do this if I really thought that was my only competitive advantage, but boy, I do not want to build a business for customers like that. I don’t want to build a tool that really has a significant number of project-based customers.  

Derrick Reimer:
Yeah, I think that’s a good point. I would be deliberate about it. I think you kind of talked about how given the fact that he might offer monthly pricing instead of annual contract, it might just incidentally look attractive to smaller companies. They will be less turned off by that and it’s like you don’t want to attract them. Incidentally, you want to be deliberate about it if you’re going to do it, I think is the big takeaway.  

Rob Walling:
In a perfect world, your competitor is annual and you offer annual and monthly, but the monthly is sticky. The product is sticky enough that there are no project based folks. I mean, I think of Drip as when you and I, Chad, I often do because we offered monthly and our competitors, a lot of ’em were annual only, but Drip was super sticky. The churn was net negative, and so we didn’t have this particular issue and it allowed us to kind of outmaneuver and outcompete based on that pricing model a little bit cheaper and monthly and that was a big, big win for us, but it didn’t come at the cost of having this segment of the user base that is churning constantly. I do want to call back to what you said five minutes ago of like, it takes a toll on you. It takes a toll on the business, the support and the cues and the muddiness, and if you get a team, you start getting 5, 6, 7 people in there. 

They don’t know not to listen to those people. No matter how much you tell it. The onetime use are not our ideal best fit customers, but if that’s what’s hitting support, it’s tough and it takes a toll on you as a founder to sit there and watch that churn and to watch. Every time you think about your CAC and you’re like, I’m paid to acquire these customers, and then they come through and they turn after three minutes, it’s hard on you. You need more wins. So that’s where it’s at. I think you and I land on a kind of, it depends on this. I think in a perfect world, if you had, let’s say you had raised some funding or you were just in a spot where you didn’t need to grow and maximize revenue quickly and you could kind of be patient, take your time, I would turn ’em away. I would literally not allow, I think in the long term that’s the right decision, but the big question is it depends when you’re bootstrapping sometimes trying to get to five KA month or eight K to quit your day job, as you said, you just take whatever revenue you can get and so in that case you just deal with the headache of it.  

Derrick Reimer:
Right? Yep.  

Rob Walling:
Derek Rimer, thanks for joining me for your 21st appearance. I need to now go back and ask chat GBT if this actually, because I counted it, I paged through search results and stuff, but we’ll see if this is it.  

Derrick Reimer:
That’s awesome.  

Rob Walling:
You are Derek Reimer on X Twitter, and if folks want to see the best scheduling link on the internet, of course, that is savvy cal.com. Indeed. Thanks again for joining me,  

Derrick Reimer:
Man. Thanks for having me.  

Rob Walling:
Thanks again to Derek for spending time and joining me on today’s show and giving back to the community by answering your questions. Again, feel free to hit startups For the Rest Of Us dot com if you have a question for the show. Thanks for joining me for yet another episode of Startups. For the Rest Of Us, this is Rob Walling signing off from episode 801.