Episode 822 | No-code vs. A.I. Coding, SaaS Margins in the A.I. Age, and More Listener Questions (with Derrick Reimer)

Rob Walling :
Hiring engineers right now is noisy. You post a role and get flooded with AI polished resumes from people who’ve never actually shipped anything. G two I cuts through all of that. They’ve pre-vetted over 8,000 engineers, all with over five years of experience, and they do live technical interviews with real humans checking for real skills. There’s no time wasters, no guesswork, just candidates who can actually get the job done. Meta trusts them, Microsoft trusts them, and so do bootstrap founders who need to move fast without making expensive mistakes. Check them out at g2.co/robb. Get a seven day free trial and $1,500 off when you mention startups. For the Rest Of Us, that’s G2 i.co/rob. It’s another episode of Startups For the Rest Of Us. I’m your host, Rob Walling, and in this episode I sit down with fan favorite Derek Rimer and we answer your listener questions. 

Topics range from comparing building SaaS with no code versus ai, vibe coding, how to think about taking a small amount of funding in the early days, whether SaaS margins might be compressed in the AI age of software and more, and you’ll have to tune in to hear the final question before I dive into my conversation with Derek MicroConf Europe is coming to Iceland September 21st through the 23rd. Prices for tickets are going up on March 1st. I would love to see you in Iceland along with 160 ish of your favorite bootstrapped founder. Friends, you have a great speaker lineup. Iceland is amazing. If you haven’t been to Quebec, you’re going to want to come. That’s MicroComp europe.com to grab your ticket and I hope to see you there. With that, let’s dive into listener questions. Derek Rimer back for your 22nd, 23rd appearance on the shift.  

Derrick Reimer:
I’ve truly lost count at this point. That’s  

Rob Walling :
Fine. I’ll ask chat g PTE again later. It’s great to have you back, man, and it’s always by yeah,  

Derrick Reimer:
To be back.  

Rob Walling :
Popular demand. Yeah. Whenever we mention you on X Twitter that you’re coming on, people are like, yeah, yeah, these are some of my favorite episodes, so it’s great to have you. Here we are digging into listener questions. First question comes from CIA Hope. I just know I’m mispronouncing. That name question is about no code versus ai, vibe coding, and I would say even versus AI coding in general, right? I wouldn’t call you a vibe coder. You’re a senior engineer using AI to augment and move faster and write better code quicker. Then there are folks, you and I have a friend or two who are just vibe coding and that’s one’s like, yeah, they’re not a developer and they’re just doing the best they can. So let’s get into this email. Hi Rob. I’ve been listening to you for years and I’ve gained a lot of insight, wisdom, direction, encouragement, motivation, et cetera. 

Wow, that’s awesome. That’s a lot of stuff. While I’m not a developer, I’ve run a small agency building e-commerce solutions and done custom development for years. I’ve always wanted to develop a product but never had the skills. I’m a solo founder and I’ve spent much time learning bubble and have launched a SaaS product that has subscribers. It’s been hard, tiring, and at times slow. That’s SaaS. It sucks, but it’s like, oh, yeah, been there, done that. That sounds like you’re right on track. Now I have the skills and I’m building two other products. I haven’t hit revenue goals yet, but I’m determined this has been a very time consuming side hustle. I get customers, I implement, I listen, I iterate. I improve the product, and I ship fast, but it still takes time testing and effort. Then I see folks online using AI tools to prompt and launch very fast, and it’s scary. 

I’ve played with these tools and they look cool, but I feel like they don’t compare to building slower and having control of your app and understanding the whole thing. I’m using AI, but to build and run features within the app. But as you’ve mentioned on the show, I am scared of being left behind, becoming obsolete or missing this opportunity because I’m not moving faster. Then I also hear of cases where people are developing products and making X amount of dollars in a very short time, and I think, am I going about this the wrong way? I’d love to hear your thoughts on no code options compared to ai, vibe coding, and he specifically mentions Rep lit, but you know what? N eight N and lovable and all these other options, or I even imagine I could go ask Tropi your Claude code today, build me something in an English sentence and have it spit it out. So there’s a lot here, but I really do appreciate this question. I want to kick it to you first. What are your thoughts here?  

Derrick Reimer:
Yeah, yeah. I think for better or worse, this is going to be probably the epicenter of where a lot of questions are going to come from over the next year at least. I think as we enter this kind of new era, the industry’s shifting and I think this feeling that he’s describing, he or she’s describing is the fear of being left behind, the fear of not moving fast enough. Oh my gosh, it looks like everyone’s moving so fast now is very real. I think that’s being felt at a universal level. I certainly feel it from time to time and have to remind myself that it’s not necessarily always rational to get all riled up about it because certain things have changed and some things haven’t. So I guess I would say don’t sell yourself short on the progress you’ve made on building products to delivering to customers and the work you’re describing of iterating, listening, improving, and it’s been agonizingly slow. 

We were kind of joking about upfront that is SaaS, even with AI tooling that allows developers who know how to write code to move even faster. It doesn’t make all parts of the process faster. It doesn’t mean you’re able to listen to customers faster or to figure out the right things to build necessarily that much faster. So yes, it’s giving some people a leg up in the actual implementation phase and in the strategizing using it as a thought partner and which you certainly have access to that as well. So it’s making certain parts of the process faster, but other parts are just, you can’t shortcut them. So I think the trajectory you’ve been on is preparing you to still do well. Even as we enter this new era where there’s a bunch of new AI tooling, you’ve got kind of the foundational pieces down, which honestly the fundamentals of business are still the same. 

Nailing the problem to be solved, finding customers, retaining customers, keeping them happy, supporting them, all those things are going to remain the same. So if I were you, I’d be thinking of this as your tech stack, and that’s something that developers have been thinking about for a long time when they’re starting startups is like, what tech stack am I going to use? And the general answer is, it kind of doesn’t really matter. Go with what and don’t let that be an impediment to making progress on solving business problems that you can charge money for. And so I kind of see that the same way Bubble. I am not super familiar with Bubble. I haven’t really used it myself, but I was looking at it ahead of this recording and it looks like they’re moving more and more in the direction of putting more AI tooling into their tooling to let you build stuff. So it’s like you’re getting to draft off of that as well. I’m imagining you’re going to get to move faster using Bubble as Bubble keeps putting more AI stuff into their platform. So I think rising tides, lifting all boats, that kind of thing. Yeah, I guess to conclude my thoughts, there’s a ton of noise out there. The algorithms are really geared towards rewarding the braggy, fomo inducing posts, and you just got to try to tune that stuff out and stay heads down, focus on your customers.  

Rob Walling :
Yeah, I think that’s a great summary of it. When I read this, I asked myself what would I do in his shoes? I haven’t written production code since you revoked my credentials to get, I know you didn’t, but I haven’t put code on a production server since 2013, maybe somewhere in there 14 with Hit Tail. I didn’t write a line of code on Drip, so it’s been a while. I can still go back and hack stuff. I’ve written non-production code. I started teaching myself Python after I left Drip just because if I wanted to do something and so I was asking myself what would I do if I wanted to build an app today? And I personally, aside from hiring someone to do it, let’s put that aside. If I really wanted to do it myself, I personally would learn to use AI to do it, and I would pick maybe a stack that I’d probably, for me, it’d be like Ruby on Rails or Python Jango or something that I’m at least kind of familiar with. 

I don’t know either of those languages, but I know there’s tons of resources. The ecosystem’s ample, right? I do know PHPI probably wouldn’t go back and try to build something in PHP or Laravel today. No shade on it. It’s just to me it just feels like an older, I know it. I started coding it in 2001, and so it’s like that just feels like there’s better things that I would choose these days. But the problem with that is I used to be a developer, so what I would do versus what I think he should do is actually different. Then I asked myself the question of what if Producer Ron, who’s on the MicroConf TinySeed team came to me and said, I want to build an internal line of business app. This isn’t even for external customers, it’s just for three of us to use or five of us to help produce the podcast to be a workflow management. 

The pings, I set a status to ready to edit and it hits our editor and blah, blah, blah. And the reason I bring this example up is because we actually have three or four of those that Ron has built and they’re all in Airtable. So Pat is podcast Airtable, VAT is video Airtable. We have lat, which is LinkedIn, Airtable, we don’t use it anymore. We don’t do LinkedIn production, but then we have an one for ad reads as well, and these are all just basic workflows and they’re built in Airtable. So when I’m imagining Thought Experiment, Ron built those in Airtable as a non-developer and did a great job and we use them. I mean I’m in them every day and we’ve used them now for years. So what if Ron came to me and said, I’m going to build it in Airtable, this system, or I’m going to Vibe code or I’m going to build it in Rept or Lovable or one of these other tools, or I’m just going to vibe code it in Claude code and I’m going to deploy it to a production server somewhere, and I started asking myself, which of these would I want? 

And it’s really obvious that I want the no-code. I do not want vibe coded solutions that I’m using, and there’s a bunch of reasons. I think you and I have talked through ’em before. There’s scalability, performance and maintainability and just all the management, the complexity of having service, blah, blah, blah. We could talk 10 reasons why I don’t want that. Now, we could also talk reasons of why no-code has platform risk and why there may be reasons not to do no-code, but for me, if I was working with a non-technical, like a guy who’s not a developer, I would prefer no-code today. That might change over time, as you like to say, and I appreciate this. Today is February of 2026 and it might change by March or April depending on eight. You know what I mean? These things change very quickly, so there are trade offs to this. 

I love that you brought up that bubble. That was going to be my next thing is, well, can you do no-code and use AI to move faster? And it sounds like they need to build it into the tools, but that’s I think maybe a place where I would lean. The last thing I want to say that I thought about is the question in my mind is how long until I have to rewrite this till I have to have someone rewrite it? Because it’s not if, but well, you get any success if you never have customers. You only have two, three customers, maybe you never need to rewrite it, but every company that I’ve invested in or otherwise had visibility into that has been no code or has been poorly coded. I will say, I’m just going to assume that AI vibe coding is poorly coded and hard to maintain long-term. That may or may not be correct, but when I see apps that are poorly coded, inevitably they need to be rewritten, and so that’s what I’m wondering. Maybe both of these need to be rewritten. The TinySeed no-code apps, there’s only I think three of them. I think they’ve all in the process of being rewritten or they will be, but they have thousands or tens of thousands in revenue in MRR, so it got ’em to the point where they needed to. I don’t know. You have any other thoughts based on what I said?  

Derrick Reimer:
Yeah, it’s tough because it’s hard to imagine being able to go run forever on a no-code built thing, but in the spirit of lean startup principles or whatever, this is the right path to validate something to get something initially built. But I guess that does, I mean thinking of it from the other side, Claude code is getting increasingly good. I know you and I both know multiple people in our sphere that are non-technical building new products from scratch just in cloud code, and I don’t totally know how I feel about that. I think just for their own sake, is this the wise route to go not being a developer and using these tools, but I guess part of me assumes that something like Bubble will help put more guardrails up so that you don’t have security vulnerabilities potentially that or permissions logic that gets missed as Claude is trying to bite off a huge chunk and just, oh, that was an oversight, which I find it doing quite often in my own projects. So I guess I’m assuming that some of these no-code platforms have more guardrails that prevents you from making those types of mistakes, but maybe that’s a faulty assumption. I’m not really sure  

Rob Walling :
I’m making that assumption too.  

Derrick Reimer:
So I don’t know. We might be getting closer to the place where just using Claude and having it build something from scratch might be approaching the level of quality, I guess, of something built in no code for the purpose of producing an MVP. So I don’t know. I don’t know where I totally fall on that this day. February the fifth, 2026.  

Rob Walling :
No, it, it’s a tricky question and I hear what he’s saying of I’m painstakingly building this stuff and then someone just basically vibe codes it and they get to market fast. I mean, I guess the one other thing he had the question of you also hear when people are developing products and making X amount in a quick time and you think, am I going about this the wrong way? So there’s a couple things I think there. Number one, social media is a bunch of bullshit, so don’t believe most of what you read. The other second thing is likely they just got really lucky if it’s actually true, and then there’s maybe this small niche of people who it is true and they didn’t get lucky. I don’t know how many people that actually is. So  

Derrick Reimer:
It’s often the people with the big networks like the Peter levels of the world where it’s like I built an AI thing that my 500,000 followers on Twitter really like to engage with and whatever. It’s a totally different way of going about  

Rob Walling :
It. It is, and comparison is the thief of joy. While I’m not saying, oh, you’re doing everything and you shouldn’t change what you’re doing, I think you’re being smart and prudent to be looking around at other approaches, but I think it can be really easy to look at social media and see people’s highlight reel, let’s just say a hundred thousand people who are trying to do this. The number’s probably not that big, but oh man, I saw five people last week with all this success. It’s like those numbers are not great. So don’t think that everybody’s doing that because they’re not. There’s so many more failing or so many more that are moving slower than you are.  

Derrick Reimer:
Yeah, I think the other thing to keep in mind too, we’re in a bit of an echo chamber being adjacent to all this technology being developed and the people who are making use of it in our kind of Twitter sphere. So everyone’s kind of rushing to try out the new tools, use them, see a bunch of performance gains from them, but the reality is most industries, it’s not like you’re going to lose out because someone else is vibe coating a solution way faster and they’re going to take your market. Most of the world is moving at a slower pace, so the need for you to necessarily move faster, that might not actually be true in order to keep your market, especially if you’re serving a niche that’s like if you’re out there trying to build a agentic coating harness, well then yeah, that is like breakneck speed, but if you’re building some line of business application for a niche, the odds that there’s a bunch of vibe coated competitors moving faster or whatever is probably pretty low,  

Rob Walling :
And it sounds like maybe he’s less worried about that and more becoming unmotivated, taking so long and motivation is a real, I call it emotional runway. It’s like there’s financial runway and there’s emotional runway and you need both of those as a bootstrapper really, the financial runway you don’t worry about because you’re not spending more than what you have, but your emotional runways what eventually runs out funded companies fail when they run out of money. Bootstrap companies fail when they run out of motivation. And so I think it’s a good question and when we obviously don’t have an unequivocal answer on, but I really appreciate you sending it in. I hope that was helpful. Our next question is on taking small funding early versus pure bootstrapping.  

Speaker 3:
Hey Rob, this is Gavin Beach. I’m a veterinarian and working on my first SaaS startup called Scribe ed, which summarizes and organizes large veterinary medical records for veterinary professionals. I’m new to the world of SaaS and startups and I have been deep diving into startups For the Rest Of Us over the past year, and I just recently attended my first MicroConf remote event and both have been a huge help to me so far. Scribe at is in the stage of alpha testing our MVP and getting close to hopefully taking on some first customers, which is both exciting and terrifying. My question for you today, centers around money and funding, we are pre-revenue, so everything has come out of our own pockets so far. We have started getting some interest though from some individuals in my network about independent funding. I think this would into friends and family slash angel investments. 

I’ve heard you talk a fair bit about the different levels of funding and your 1 9 90 rule in regards to venture indie funding and pure bootstrapping. You have also talked about how funding can buy you years of time in your business. We know that we are not looking at venture capital. We want to stay independent and in control, but my co-founder and I both work full-time and have been building what we have on nights and weekends and it’s been slow taking some funding could let me scale back on my full-time job and focus more on scribe that and could give me the resources to hire some contract work to push things forward a little faster. What I don’t know is whether that is what dictates me being in the 9% rather than the 90. It seems like everyone would be in that same boat in that a few hundred thousand dollars would let them focus on their SaaS and give them the best chance possible to get it off the ground. I know you can’t tell me specifically as to whether I should take some funding or not, but in general, what factors do you think influenced the decision to take some independent funding to get things started and gain traction versus purely bootstrapping all the way? Thanks for your help, Rob. I don’t think I could have even made it this far without you.  

Rob Walling :
What are your thoughts on this, Derek? As someone who has been involved in bootstrapping has worked for a venture funded company after we acquired and who raised effectively this indie funding that Gavin’s talking about for your current effort savvy, what’s your sentiment?  

Derrick Reimer:
Yeah, I mean I think he’s really thinking about this the right way, bringing up your kind of framework, the 1 9 90 rule, which is kind of a helpful lens to think about this. So I guess in my mind the central question is always have I de-risked the business enough to feel confident it’ll work? And that’s something that I personally want to see before taking funding. I think it’s different for someone on the venture capital track where it’s like those often start out with early funding before any kind of validation and that’s just sort of how the Silicon Valley VC track works. But I think when we’re thinking about angel funding for more of the TinySeed scale type of businesses, it’s a much more prudent thing to be trying to de-risk it a bit more. And I think that’s probably where you can speak to this, but that’s probably where the kind of TinySeed we look for at least some early MRR to prove that you’re onto something or to give evidence that you’re onto something before it makes sense for TinySeed to invest. 

And so I think that’s just a helpful way for someone who’s thinking about taking funding to also apply that to themselves. So I think he’s got some things playing in his favor, deep domain expertise, being a veterinarian, identifying a problem building for that space. It’s a vertical play as a co-founder. So these are all positives I would be thinking about. Do you have a sense for where and how to find customers repeatedly? Have you gone down that road yet or is it still really early in alpha? Are you picking up signals from your early testers? Have you had those conversations around willingness to pay and is this something that you find useful enough to actually lay down real money for? And so these are some things where I’m not sure if he’s quite there yet, and if not, I would be wondering, can you keep forging head on the nights and weekends things until you have that at least a few thousand dollars MRR? Because I think that helps in a lot of ways for you to justify your valuation to people who are giving you money, prove that you’re onto something, you’ll feel better about it. People giving you money will feel better about it if you have clarity about your scale of ambitions. All of this is easier once you have a little bit of early traction.  

Rob Walling :
Yeah, I like the way you’re thinking about it. I also liked the way Gavin said specifically, this is what we’d spend the money on always. My first question is, great, so you’re going to raise 2 5500, whatcha going to do with it? And he said it could let me scale back my full-time job and put more time in, describe or it could allow us to hire contractors and move a little faster. And I think those are both good things, but to your point, do these things get you traction? Meaning do they get you customers? Because most people stay pre-revenue for too long and if I’m going to raise this money, you’re right, I would want some traction before I did. That doesn’t mean everyone needs some traction before they do. I do know some folks who raise pre-revenue and that’s okay if you raise it from your network, but I would want to put that money not towards building the fricking product. 

I would want to put it towards sales and marketing. And one of those ways could be buying out your day job time so that you work halftime or whatever, and that gives you 20 hours a week or 20 hours during the day plus another 10 to 20 hours nights and weekends to then sell and market this. So if Gavin were to say, we have friends and family or my network who are willing to invest at this stage, as long as it’s not some crazy low valuation, it’s like you don’t want to raise money at a 250 or $500,000 valuation, then you’d never raise again. You sell too much to the company as long as you can raise at a reasonable valuation and you have let them know, hey, this is going to be a great mostly bootstrap business that sounds like your objective and that if success might look like a $10 million, $20 million, $30 million exit, if everyone’s on board with that, you’re not on the venture track. 

And I think it’s fine, but there is a danger. And both Eric and I have seen folks who raise before product-market fit and burn through all the money and then they’re just starting to get product-market fit and they have no more money left. So then they have to let staff go and then they’re left to just kind of like, well, I don’t really have any resources to grow this now and I can’t raise money because I’ve kind of plateaued at four KA month or something, so no one’s going to give me any more money and I miss my shot. So that’s the thing I’ve tried to be really careful of here, but if you’re being really capital efficient and you’re listening to this podcast and you’re hearing the guests, the folks like Derek or the people that I interview and you hear how none of us blow through a bunch of money, even Jordan gal has raised a ton of money. 

He’ll come on the podcast. He didn’t blow through it though. He’s very frugal and prudent with it. Jason Cohen was on here a couple of weeks ago. I saw that guy raise, I think like he said, his series A was 1.2 million or something like that. It was such a small amount, but man, was he capital efficient with that even though he did eventually go on the venture track, he didn’t blow through it. And I don’t think Gavin’s going to either, if he’s taking lessons from our type of founder, we’ll get back to the pod in a minute. But if you’re running a SaaS company doing between two and 25 million and a RR, you’ve almost certainly got an inbound acquisition interest. Maybe a private equity firm reached out, maybe a competitor made some noise about acquiring you. And here’s the thing, how do you know if the number they throw out is any good? 

This is why I tell people to talk to Discretion Capital. Nick Davies, a longtime MicroConf attendee, worked with discretion to sell dentally. Nick said the team was pivotal in increasing his deal value by over 60% and they improved the terms on top of that 60%. Think about that for a second. Einar Vollset runs discretion. He’s my co-founder at TinySeed and they’ve done more than 40 of these deals. If you want to understand what your company might actually be worth, go to discretion capital.com and book a call and then to figure out a valuation, can you raise that valuation when you’re pre-revenue, that doesn’t hamper future. That means you don’t sell too much, right? And it’s a balance man, because let’s say you raise at a million dollar valuation, it depends on how much you want to sell. Then if you, I’m sorry, it depends on how much you want to raise because if you want to raise 500 K, you don’t want to sell 50% of your company to investors, so that’s not going to work. 

But let’s say you like, all right, so we’re going to do a safe at 4 million, which is a lot. It’s a lot for if you’re not going to go venture track, if you’re going to be a mostly bootstrap B2B SaaS company who wants to sell for, well then you don’t want to sell for 10 million because that’s only two and a half X to those investors. Nobody wants that. So now you’re like, well, my minimum that I really want to sell for to do right by them is probably 20, 30 million, but 50 is better, 40 is better. So 10 x. So then if you raise it 4 million and you sell, you do a $400,000 raise, you sell 10% challenge there is you have raised ahead of your valuation. So if you then get some traction and you apply for TinySeed and let’s say you’re doing five KA month by the time you apply and we’re like, we want to fund you, we have seen companies in that position where their prior investors are like, we’re not going to let TinySeed invest because we don’t do 4 million valuations. 

We do 10 to 12% for, what is it, 120 to usually two 20. So the valuation, I think that’s one to 2 million or one to two and a half million. You get it. And the two and a half million, 3 million valuations we’ve done, someone had a hundred K of MRR when they applied. That’s the top, top end. So then they come in and we’re like, cool, we’re going to invest at you at 1.5 million or 1.7 or whatever, and we will do that and the founders want to do it, but their prior investors. So that’s where it’s like there’s a balance here. And I’m not saying either one of these is the right call. You do want to think about this, that if you raise a head of valuation, you have to then get back to that before you raise your next round. And this is a lot of what happened to companies in 2021 when the valuations were insane. 

People were raising at, I don’t know, 50 x revenue or something as a venture valuation or 30 to 30 to a hundred. It was crazy. And then it’s like PO funding dries up now it was more reasonable. It’s like 10 to 20 is now the valuation. It’s like Uhoh. You needed to grow a lot to be able to raise that next round. And that’s venture funded companies. That’s not where we’re, that’s not any funded and mostly bootstrapped, but that’s the way I’d be thinking about it. Our next question comes from Vance and it’s about SaaS margins in the AI age of software.  

Speaker 4:
Hey Rob, it’s Vance with budget sheet.com. I have a question about AI software development and SaaS pricing, SaaS margins specifically about if you think in the future with a lot of new software being developed with AI being developed faster with smaller teams, if it’s going to put pressure on the typical margins that we see in SaaS companies and how that will impact the, I guess the traditional advice you hear of charge more, raise your prices kind of thing, if there can be more entrants that develop their software quicker with smaller teams and specifically how you might advise a portfolio company on that, maybe in that position they have an existing SaaS and they have competitors entering their space that are developing their products much faster and cheaper and then charging less, maybe putting pressure on them. How would you think about that and how might you advise your portfolio companies? Thanks,  

Rob Walling :
Rob. So I found this question interesting. I definitely think people no code and AI coding is going to help more people build things faster. So I do think it’ll be more crowded in general, but what do you think about how he’s talking about it, that it’s going to, he brought up smaller teams a lot and build it faster and therefore will it drive prices down that you won’t be able to have pricing power? What are your thoughts there?  

Derrick Reimer:
Yeah, it’s interesting because I feel like SaaS has always been sort of high margin because the value delivered, there’s such a gap between what the value able to capture is and what it costs to do it, and the costs are going to go down quite a bit I think because of ai. And just in terms of the product on the product side of things, does that fundamentally change how much value is being provided? I mean, I guess there’s competitive pressure potentially, and there’s going to be some, I think I’ve talked about this before. I think there’s going to be certainly some subcategories of the industry that are just going to get subsumed by the AI models. Certain things, opportunities will just sort of vanish because now we just turn to Claude or chat chip T to do that thing that we used to pay an external service for. 

So that’s going to happen to some degree, but then in the areas where it’s not directly within the scope of what the foundational models can subsume, I don’t know. I think increased competition for sure could always drive down margins, but I don’t think I tend to take the more optimistic side of this. I mean a lot of people are reporting that SaaS is dead and this has been going on for a long time though, and I think we’re pretty far away from the SaaS business model dying. And I think there’s potential for even higher margins. I think there’s a case to be made for that at least for a little while. And then again, put the time marker on this because things might shift faster than I expect, but that’s at least my kind of initial take.  

Rob Walling :
Yeah, part of the point I think he was making is that it’s like you said, it’s cheaper to build because you’re going to do it with smaller teams, you’re going to do it faster, so it’s cheaper. So then will the price be lower? And I was the same thing. It’s like SaaS shouldn’t be and has never been priced based on the cost to do it unless you had a cost heavy thing. Obviously if you’re sending SMS, you need to charge for that, blah, blah, blah, but generally it doesn’t cost Basecamp, whatever. I dunno what they charge. I don’t use Basecamp, but it’s 99 bucks a month or whatever. It doesn’t charge not based on that, it’s based on the value. It’s what you said. But I don’t think that’s his whole question. I do think the big thing is will prices go down if a bunch of competitors come on the scene? 

And I’ve seen markets where a bunch of competitors have come on the scene. We’ve seen CRMs, we’ve seen email service providers. What are the most crowded horizontal markets that we know of? ERPs, we could name them and have prices come down a little bit because think of when we launched Drip that it was a bunch of kind of enterprisey software plays and then there was the cheaper value players like MailChimp and AWeber who didn’t have automations at the time, but there were a bunch of people charging a bunch of money for marketing automation. And we did come in and undercut them because we could and we changed the sales model and that was an advantage that we had. But I haven’t seen it go to zero. I haven’t seen it just keep getting cheaper and cheaper and there are, I don’t know, 500 ESPs probably there might be more. 

So I don’t know that a bunch of AI coded stuff is going to change it just based on how we’ve watched all these other markets already play out with that. I think that when we do look at these markets, the pattern we see is that it is like it’s not winner take all, but it’s a handful of brands that own most of this space. So in CRM, who is it? Salesforce, HubSpot, and there’s a third that, again, I don’t use a CRM and maybe it’s just those two have a huge percentage, but maybe there’s a third. And if we were to say ESPs like market share got to be MailChimp, and who do we think is number two? That’s an interesting question. Kit is big, but it’s not. I mean MailChimp is a hundred times bigger or something like that. I don’t know who number two would be. It might be someone like Constant Contact or someone who’s just started so long ago and has Momentum  

Derrick Reimer:
And then upscale. There’s, well, HubSpot, there’s Pardot, those types of guys,  

Rob Walling :
The enterprise ones enterprise and there are hundreds and hundreds of them, but it shows, I think that having a brand still has pricing power. MailChimp hasn’t lowered their prices ever that I know about. And I mean I used to monitor their prices, we competed with them, never saw them lower them. Salesforce certainly hasn’t, and there’s hundreds of competitors. So I don’t know the answer to this honestly. It might impact it, but in the markets that we’ve seen, I guess if someone came in and built something and open sourced it, that’s going to hurt you. If people came in and built, they built a business and they’re like, we’re going to charge, everybody else is charging a hundred to a thousand and we’re going to charge nine bucks a month for it. They would get a lot of customers, but that’s a business, so how long are they going to stick around? 

We know that. You know what I mean? It’s just like nobody wants to race to the bottom unless you don’t know any better. And if you don’t know any better, I don’t know that you’re going to last that long. So it makes me feel like it can’t go to zero. We see a little impact because more competitive pressure to what you and I are saying. Yeah, but I don’t feel like similarly, like SaaS isn’t dead and I don’t think all SaaS is going to be free or so cheap. And because it’s not commoditized, SaaS is some SaaS is commoditized  

Derrick Reimer:
Today and we’re going to have to put increasing emphasis on the service part of SaaS because yes, the technology is cheaper than ever to create writing the code that puts the data in and out of the database is getting easier and easier and cheaper and cheaper. But companies still pay for SaaS because they don’t want to own all of that themselves. They don’t want to have someone inside of their organization create this thing from scratch. Then they have to own the hosting of it. They have to own the uptime and all of the service that comes with buying off the shelf SaaS. And I think that’s where most of the value is. And as long as you’re continuing to provide that, there’s some kind of value captured to be had. I also think about, I think there’s going to be probably increasing pressure on horizontal general purpose products. 

Those are always kind of the most vulnerable probably to the kind of competitive pressure in the race to the bottom dynamics. But I think about in my own space, savvy Cal is pretty horizontal, pretty general purpose. And there are players who are relatively new that are focusing on a specific corner of the market and have just continued to raise their prices and go up and up and up because they’re honing in on say, the sales use case and then continuing to branch out around that and being able to say that they’re helping drive revenue. And there’s just a different story to tell than just like we provide scheduling. It’s like we drive revenue for your business and then we start to charge accordingly. So I think positioning has a lot to do with it too and having some restraint in where you niche and how you’re describing the value that you’re delivering.  

Rob Walling :
Yeah, I think that’s dead on positioning as a premium product and being worth it and not being a commodity continues to be super important. I mean, that carries over into marketing as well, right? It’s like as much as I don’t want people, I don’t want founders to feel like they have to get on camera and be a personal brand to promote it, that does help. Founder-led marketing is a thing that I think more people are going to do. I still think you’ll be able to succeed without it though. Just like I think as more AI players, AI bill players come in the product. I mean, we see this all the time on X Twitter, someone saying, look, it got easier to build SaaS. When Ruby on Rails came out, it got way faster, it got easier to build it when no code happened. It’s gotten easier to build it when any of these frameworks have happened. 

It’s only gotten easier and faster as these coding ecosystems specifically designed to build web apps have made it so much easier. When I used to hand code a P two or P one, I remember active server pages and PP back 25 years ago, dude, it took us forever to build a shopping cart and now you could build that in Ruby on Rails in a weekend, probably this stuff we used to build. But that doesn’t mean that it’s all gone to zero still. It’s distribution, it’s marketing, it’s positioning, it’s brand. That’s what we’re saying. So I don’t think it’ll have zero effect, but I don’t think it’ll have near the effect that a lot of people think.  

Derrick Reimer:
Yeah, that’s something that just popped in my mind too, that it’s going to become easier for companies to sort of expand where they are in the value chain. So when it was more expensive pre AI to build stuff, it was generally wise to kind of stay in your more narrow lane and focus in on the part of the value chain that you’re good at. But now that we can build a lot faster, theoretically, it’s easier to kind of expand your scope and think about what comes before and after the part of the value chain where my product offers and customers often love a good bundle that one bill, and they can knock off multiple parts that they were maybe paying independently for before. So this is something I’m starting to pick up on with Avial appointments as I’m talking to SaaS platforms that are wanting to provide scheduling to their customers because thinking about how do I make my product more valuable? How do I offer more things to my customers in addition to my core offering? And now with ai, it’s more feasible to do that if they have a dev team and they like, we can bite off more now and so we can become more valuable by offering more things in our bundle. And I think that’s a trend I’m starting to see happen.  

Rob Walling :
I like that Savvy Cal appointments. So if someone runs a SaaS app and they want to integrate SAVI Cal appointments in scheduling into their application, what should they do? Derek?  

Derrick Reimer:
They should reach out to me for sure. Head to savvy cal.com/appointments. We have a little landing page describing the product there. But yeah, hit me up, derek@avial.com. Would love to chat. We’re gradually coming out of stealth mode on this product and starting to fill the sales pipeline a bit. So yeah, reach out for sure. Stealth  

Rob Walling :
Mode, my favorite. Don’t do what Derek’s doing. Don’t do stealth mode. No, it’s fine. I know what you’re doing and why you’re doing it. So thanks for that question, Vance. I hope our vamping was helpful. Next question comes from Nick about asking the best question to get feedback from customers.  

Speaker 5:
Hey Rob, my name’s Nick. I’m in the B2B SaaS space marketing to enterprise customers. I’ve been listening to startups For the Rest Of Us for pretty much exactly a year now, and I can’t tell you how much your podcasts have helped me. Really, every single question query problem that I have, I’ve literally searched the back log and found something to listen to that has been helpful. So thank you so much for what you do in this space. My question today is around gathering feedback from users. I have a feedback function on my platform and I’m struggling with negative feedback, not that there’s lots of it, but when I get negative feedback, the reason for the feedback is sometimes quite questionable. The question that I will put to the user is how well do you feel we supported you today? Now if somebody feels that unsupported or when they used our software, things didn’t go the way that they wanted to, that is usually due to an external factor that I have no control over whatsoever. 

I can’t go into too much detail, but basically it could be that a text message wasn’t delivered or it wasn’t interacted with or a link wasn’t followed, all sorts of things like that which are out with my control and out with the control of the user. So fully dependent on a third party. So when that happens, I’ll get a negative feedback ping and it’ll say something like, the mobile phone is turned off. So the message never actually got delivered again, not my fault, not my user’s fault. And I was wondering what is the best way to ask for feedback? What’s the best question? Really interested in your thoughts on this because I’d really like to make some progress and get valuable feedback to make actionable decisions on. Thank you so much. Again, take care of yourselves.  

Rob Walling :
So the first thing I want to say is A, I don’t know if there’s a best question, but I will say that getting negative feedback that you can’t fix or remedy, that’s just going to happen no matter what you do. And I would just shake that off and be deleted. Or maybe it’s like you can respond and explain, Hey, this is up to them. It’s not something we can control. Sorry, it was a bummer, blah, blah, blah, or you do nothing with it. That would be my take on it. But beyond that, the way he’s asking the question is, how well did we support you today? What do you think? It’s a good question. I think there’s a better way to ask that.  

Derrick Reimer:
Yeah, I don’t know. I’m not entirely clear where this question is surfacing in their current flow. He said it’s in their platform, so I don’t know if it’s just a little intercom type popup or something like that. But I don’t know. I had a little bit of different insight come to mind when I was reading this because in my experience, you generally only hear negative things, unfortunately, but there’s often some kind of deeper insight to gather from it. So in his example, I think he’s talking about someone blaming their platform for some message that was sent where the recipient had their phone off. It’s like, well, we couldn’t control that. We couldn’t make them have their phone be on, and maybe this is not applicable in this specific case, but I think just more generally when I hear that type of feedback where it’s like the intended action didn’t happen due to some external factor, it’s often worth trying to dig a little deeper and think about, okay, maybe they’re just venting to you and wanting someone to blame and they’re just blaming you, but maybe there’s also something they have in mind where if you had just done X, Y or Z, this would’ve been better for me. 

Handling a failure mode that’s external to what you have. So I would probably mean depending on how, if the person’s just being a jerk, maybe you don’t want to engage, but if they’re truly, it often comes initially as complaining about something that is seemingly out of your hands, and if you dig deeper, there might be something there on like, oh, maybe instead of a text message, this should also be an email or some other delivery mechanism where it’s more likely to be received, or maybe there should be some kind of loop back where if the person doesn’t confirm their receipt of it, we notify the sender to let them know like, Hey, there maybe is something you can still do to make your product solve the job to be done better. I think about this in Savvy Cal. We have a lot of integrations that you can have hooked up your calendars, your Zoom, your CRMs, there’s all kinds of stuff, and any one of these could fail at any time. 

And we’ve gone through a bunch of iterations over the years on continuing to refine how we let you, as the savvy Cal account holder, know that certain things are failing, right? And we always send an email if an integration breaks, but sometimes people miss that email and then they get mad at us because this thing was broken and I didn’t know. And we could just say, well, we sent you an email too bad. But also that gives us an insight that maybe we need to send more emails, maybe we need to do some other mitigation to try to make the experience better. So I just think often masked behind these pieces of negative feedback that are seemingly out of your control. There’s often a kernel there that you can maybe work with.  

Rob Walling :
That’s such a good answer. I have nothing to add. I like it. Yeah, I think we’ve done a good job today of hearing a variety of questions and coming up with our best answers.  

Derrick Reimer:
Yeah, it’s fun.  

Rob Walling :
Yeah. Thanks for joining me and if folks want to keep up with you on X Twitter, you are at Derek Rimer and of course the best scheduling link on the internet. They can find you@savvycal.com. Thanks again, man.  

Derrick Reimer:
Thank you.  

Rob Walling :
Thanks so much to Derek for coming on the show. And a reminder, if you’re looking to build scheduling functionality into your web application or SaaS app, you should reach out to Derek. Go to savvy cal.com/appointments to find out more about that functionality. Thanks for listening this week and every week. This is Rob Walling signing off from episode 822. 

If you’ve made it this far, you’ve made it to the hidden track where I ambush my good friend, my sweet summer intern, good friend with trivia questions. In the past, we’ve done d and d, that reality show that you watch that I can’t remember the name of Making Latte or Espresso. What else? What else have I grilled? John, maybe that’s it. Yeah. Today, given my top secret informant, oh boy, have a mole, have a spy. For folks who don’t know, I have Derek’s wife. I have her phone number, and so I texted her and she just gives me all the deets, and so, oh boy. I’m to be asking you five trivia questions on baking sourdough.  

Derrick Reimer:
Ooh, okay. Alright, I’m ready.  

Rob Walling :
All right. Can we do this?  

Derrick Reimer:
I feel ready.  

Rob Walling :
They’re going to get increasingly difficult.  

Derrick Reimer:
Okay.  

Rob Walling :
What is the main reason? Sourdough dough is usually mixed and needed less aggressively than yeasted dough  

Derrick Reimer:
Because it goes through a natural fermentation process that helps develop the gluten so you don’t have to force the process with kneading.  

Rob Walling :
There it is. Ding, ding, ding. One for one. What is ly? A-U-T-O-L-Y-S-E. And why is it used in sourdough baking?  

Derrick Reimer:
I don’t think I’ve ever heard of that before.  

Rob Walling :
Wow. I wonder if it’s not used in sourdough baking and Jet GPT hallucinated.  

Derrick Reimer:
It probably is. I thought you were going to say, wow. And you call yourself a sourdough bread baker.  

Rob Walling :
Oh, my freshly hatched amigo.  

Derrick Reimer:
What does chat GPT say about it?  

Rob Walling :
Lye is resting flour and water before adding starter and salt. It improves gluten development and dough extensibility.  

Derrick Reimer:
Okay. I do that.  

Rob Walling :
Yes.  

Derrick Reimer:
But you didn’t know it was called. I just didn’t know that was the term for it.  

Rob Walling :
Interesting. See, these are tough for me where it’s like, technically you didn’t get it, but it’s like, come on man. Maybe I just didn’t know the name of the thing.  

Derrick Reimer:
Yep, yep.  

Rob Walling :
How does temperature influence the balance of lactic acid versus acetic acid in sourdough fermentation?  

Derrick Reimer:
Well, I’m going to say that sourdough generally in my experience, goes through two fermentation phases. Your bulk fermentation where it’s countertop or room temp or a little bit more, and a cold fermentation phase, which is like put it in the fridge overnight and let it go for eight to 12 hours. One probably influence a certain type of process. And the other, another one, but I don’t know which is which  

Rob Walling :
I am totally giving you credit for this. Warmer temperatures favor lactic acid, cooler temperatures favor acetic acid. There we  

Derrick Reimer:
Go.  

Rob Walling :
Got it. You got it on instinct on that one. Yeah. Nice job. Alright, the two hardest questions are coming up. These are difficulty nine and 10. So I said on a scale of one to 10, start at a three and give me a bunch of questions. And these are nine and 10. Why does adding salt after auto lyse matter in sourdough dough  

Derrick Reimer:
Development? My understanding, which may not come from anything other than intuition, is that the salt retards, the yeast activation, you want to give the yeast a chance to get revved up before you introduce salt, which can kill it.  

Rob Walling :
Here’s what Chad Tippee says, salt tightens gluten and slows fermentation. So delaying it allows better gluten formation first.  

Derrick Reimer:
Okay, I buy that.  

Rob Walling :
Yeah, and that’s different than what you said.  

Derrick Reimer:
Yeah. I think I’m taking that from your classic baking recipes where they say, don’t dump the salt right on the yeast. And I just always assume that was because it might kill the yeast, but probably has more to do with that.  

Rob Walling :
All right. Well,  

Derrick Reimer:
I’m going to trust your friend on that.  

Rob Walling :
Yeah, I think chat might’ve been at this. I think you’re two and two. Technically, if we don’t give you the autolyzed ones, so, all right. This is tough. These are tough. These are nines and tens. What is the most common technical cause of a sourdough loaf that spreads outward instead of springing upward in the oven  

Derrick Reimer:
Over proofing?  

Rob Walling :
Boom. Geez, that was the 10 and you nailed it over Proofing, which weakens gluten structure and reduces oven spring. Dude, you really know this stuff. When you do stuff, when you have hobbies, you really nerd out on them. Let me just say this.  

Derrick Reimer:
Yeah, I try to  

Rob Walling :
Aspire to that. I aspire to that level of knowledge, stupid shit that I do in the kitchen. That’s awesome.  

Derrick Reimer:
That’s good. It’s fun. It’s a fun hobby.