Episode 829 | AI is Bad at Product, Top 5 Startup Success Factors, and the Beastie Boys (A Rob Solo Adventure)

Rob Walling (00:00): This podcast is brought to you by Mercury, the banking solution I use across all of my businesses. I manage half a dozen Mercury accounts from my personal single member LLC to MicroConf, our seven figure global events and education platform to TinySeed, our venture fund and accelerator. Mercury handles every one of them. Traditional banking forces you to duct tape tools together and work around slow processes. Mercury doesn’t. The dashboard shows me exactly where each business stands at a glance. The interface is simple enough for daily banking and paying invoices, but can also handle the multi-step approval processes we need when wiring large sums of money to the dozens of companies we invest in each year. There’s a reason more than 300,000 entrepreneurs have made the switch. Anytime founders ask me where to set up their accounts, I send them to mercury.com. It’s free to get started with no in-person visits and no minimum balance. 

Rob Walling (00:54): Visit mercury.com to apply online in minutes. Mercury is a FinTech company, not an FDIC insured bank. Banking services provided through Choice Financial Group and Column NA, members FDIC. This is the difference between being a developer and being a product person. A good product person would never do this. Whereas a developer says, “Oh, I have these tools and email’s the easiest one and I have this whole class already built to send emails, so why wouldn’t I just do that without thinking through the ramifications for your end users?” Another Tuesday morning and another episode of Startups for the Rest of Us. As always, I am your host, Rob Walling. And in this episode, I tackle a few solo adventure topics. I revisit the core four SaaS skills and talk about what AI can do and help you with in terms of the core four and what it cannot do and what I’m not convinced it will ever be great at. 

Rob Walling (02:05): I talk about a terrible user experience decision that a local Minneapolis app has made, and I want to walk you through why it’s bad so that potentially you can learn from that. I want to talk to you about a few success factors in companies. According to Bill Gross, he studied 200 different companies and has several factors in order. And maybe I’ll finish with a little anecdote about the Beastie Boys. Before I dive into the meat of the episode, I want to thank you for listening, whether you’ve been listening for a week or a year or 10 years. Startups for the Rest of Us just recently hit its 16-year milestone. So on March 30th of 2010, my former co-host, Mike Taber, and I launched the first episode of this show. And that was obviously just a few weeks ago here, 16 years ago. And after the first few months of getting started where we shipped some episodes every other week, past those first few months, we’ve shipped an episode every week since 2010. 

Rob Walling (03:12): And the reason that I’ve continued shipping, even when it’s hard or when I’ve had a lot going on, or when I was building a company, selling a company, leaving a company, questioning whether I wanted to stay in the startup space at all, as I did in the 2017, 2018 timeframe. But the reason that I kept shipping is because you kept listening, is because it was obvious that this show impacts a lot of people. And as people have told me, it punches above its weight class. In terms of having a relatively small audience compared to someone like Joe Rogan, Tim Ferriss, even My First Million. And yet the impact that it has on people is significant. The tens of thousands of listeners of this show, I think, get a lot of value from it because of how focused it is on SaaS, on startups, on software, on bootstrapping, and mostly bootstrapping. 

Rob Walling (04:09): But really it all comes down to entrepreneurship, right? And it’s how each of us is able to change our lives through starting our own companies. And this is not something that would have been very possible at all 20, 30, 40 years ago. And that’s why I think it is, in fact, the best time ever to be an entrepreneur. So thanks for listening this week and every week, as I have to say in my sign off. I look forward to continuing shipping these episodes every Tuesday morning. I’m going to dive in to my first topic in a moment. Before I do that, I want to let you know about my premium coaching program called SaaS Institute. SaaS Institute is where we’ve gathered together world-class SaaS coaches. We have a list of seasoned mentors and we’ve curated a community of SaaS founders doing seven and eight figures of ARR. 

Rob Walling (05:06): Our goal is to give you the support and the connections that you cannot find anywhere else that can help you continue to grow your company and to help you feel a lot less alone than you probably feel today. So you get one-on-one coaching, you get direct access to subject matter mentors, you get a curated peer group, not only a mastermind that meets once a month, but our Slack channel that I think is one of the best in the world for SaaS companies. If you’re interested, head to SaaSInstitute.com to apply. As I said, we have a curated group in there, so you do have to qualify to become a member, but it’s an incredible group, SaaSInstitute.com, if you’re interested. My first topic of the day is which parts of the core four do I think AI can do? So to briefly recap, the core four are development, product, sales, and marketing. 

Rob Walling (06:01): And of course, we know that AI is making development easier and faster. Now, it’s especially working for people who already know how to write code because you can then look at the code and say, “This code is not good because AI doesn’t write great code.” Sometimes it does, but it’s very hit and miss. So we can obviously say that AI augments development. It can make that faster. It can also create a lot of AI slop that will be unmaintainable and insecure and have a lot of bugs in three, six, nine months. But realistically, AI is not terrible at helping with development. AI can also assist you with sales. It can craft outbound emails and DMs, and it of course can automate sending those. The real job of sales though, that’s just lead gen, right? The real job of sales happens when someone wants a demo and they want to have a conversation and they want to pay you five, 10, or $50,000 a year. 

Rob Walling (07:03): And that part, while AI can help you improve, it can record your sales calls and help you improve on those, it’s not doing it for you in the same way that it can with development. So AI can augment sales, but realistically, as a founder, you still have to learn to do it. You still have to learn the core skills until you are at the point where you’re doing a couple million dollars a year, and then you can potentially hire someone to take that over. And of course, you can bring on sales assistants before that, but I’ve talked about that in a prior episode, so I won’t beat it to death here. Marketing is an interesting one. I always talk about how marketing is three separate roles. It is strategy, project management, and then being the individual contributor who actually goes in and clicks the buttons in the interface. 

Rob Walling (07:47): And similar to sales, AI can obviously help with marketing. It can help generate first drafts of content, of blog posts, of social media posts. Anyone who’s publishing AI content directly to the internet, I think is making a mistake because even well-trained GPTs or Claude chats still need massaging. It’s not there yet. So is it augmenting marketing? It is. Will it do marketing for you? The way that we’re seeing these companies on social media talk about how they just clicked a button and this whole Kanban board of all these tasks happened. And then this AI, whether it’s OpenAI or one of these others is just doing it all for you. And that as of today, as I’m recording this in early April of 2026, is still a pipe dream. It’s doing mediocre and usually pretty bland work. And I’m of course using AI. 

Rob Walling (08:45): My whole team is using AI to generate stuff, but we never publish 100% AI generated stuff directly to the internet because with sales and marketing, it’s a nice augmentation. It can get you started, but you do still have to have an editorial eye, right? You have to have taste to realize that the code that this AI is putting out or the copy that this AI is putting out or this cold email it’s putting out in terms of dev, marketing, and sales, that it’s not great, that it’s okay. It’s fine. It’s passable. If I don’t know anything about cold emails, when I have AI generate a cold email for me, I might think this is amazing. And a lot of the takes that I see on the internet where it’s like Jason Cohen, I had him on the podcast a while ago and then we published some snippets of his interview on my YouTube channel, youtube.com/robwalling. 

Rob Walling (09:32): If you’re interested in following along there, it’s brand new content every other week, except very occasionally, like every six months we’ll pull something from this podcast. And in this case, we did. And Jason Cohen was talking about how AI isn’t perfect. It’s not there yet. Maybe it’s 80% there. And there were all these comments that were like, “Oh, you just haven’t tried Opus 4.6 yet.” Well obviously this was recorded before Opus 4.6. You know what? I’ve been using Opus 4.6 since it came out. It’s still the same. It’s not 100%. And the people that I see saying that AI can do all this stuff and it’s magic, they don’t have taste. They don’t have an editorial eye to realize that the marketing copy it writes is fine. It’s not great. That the cold emails and the recommendations it makes for your sales process are fine. 

Rob Walling (10:14): They’re not great. And the development, the code that it writes for your product is fine. It’s not great. You’re seeing the pattern here. No, I’m not saying it’s never going to be that way, but as of today, it’s just not there. And so as an augmentation, great, use AI, but you somehow magically pushing a button and having it generate a product that then it goes market and sells, it’s a pipe dream. It’s someone trying to sell you something if they’re saying it’s this easy that AI is just going to do it for you. Now you’ll notice of the core four, I’ve mentioned three: development, marketing, and sales. I haven’t touched on product. And of the core four, I think AI is by far, far the worst at product. It’s just not good. It’s just not good. Remember, product is not, “Oh, I want to write code. I want to build a product.” It’s what should you build? What should you build? How should you build it? What should it look like? How do I listen to my customers and give them what they want without just building everything all of my customers ask for? 

Rob Walling (11:02): Just because you can build it faster doesn’t mean you should build more into your product. We’ve all seen these Franken products that are hundreds and hundreds of features because a developer went into their basement for a year and built all this stuff and that usually isn’t the product that wins. You have to be opinionated about what you build and how you build it. And again, as of April 2026, AI is not going to do this for you. And is there a point where AI will be good at product? I don’t know if it ever will, and it requires so much specialized knowledge. 

Rob Walling (11:48): I guess I can imagine a future where it takes in all of your support emails and all of your live chats and everything on the internet and it somehow knows your customer as good as you do. Yeah, it’s hard to say in a few years, the advances that AI will make. But here’s the thing, the interesting spin on that is if you are good at product, if you have a decent idea of really what needs to be in there, maybe how it should be built, I think that AI dev boom especially is actually a pretty big win for you because if you’re good at product, you can just get there a lot faster. I think back to how much faster we could have built the first version of my last SaaS app that took, oh, what did it take till we got our first customer? 

Rob Walling (12:30): It was like seven months. And I think that timeline could have been a month or two and we would have learned so much faster and the journey would have been less painful at least in those early days. So that’s if you’re good at product. If you’re bad at product, I think your product’s going to be a mess and a big tangled web of features that no one really wants. I think your positioning is still going to suck, that AI is not going to bail you out of that. So this is where if we’re on the internet, people say AI is the savior of everything and it’s the future. Or AI is terrible and it can’t do anything and it’s neither of those. It can do some of these things and it can augment you like a mech suit if you’re writing code or doing some sales or doing marketing. 

Rob Walling (13:10): With product, can it help you maybe make some decisions? Maybe. Every spreadsheet that I’ve ever seen by a product manager who is trying to make a case why we should build things, I’m always like, “Yeah, we’re just cherry picking data here.” There is no right answer. We don’t know. And we’re going to use our founder gut. We’re going to mix that with our understanding of our customer and we’re going to make the best choice that we know how. So those are my thoughts on AI as applied to the core four SaaS skills. My next topic is around the five factors in success across more than 200 companies. And this was a post put out by Bill Gross. Bill Gross is a venture investor and he has invested in hundreds of companies. In fact, he founded IdeaLab, which was an incubator that started companies. It’s not just an accelerator like TinySeed or Y Combinator. 

Rob Walling (14:07): They would start the companies themselves and I believe they’ve created more than 150 companies. So he has just a lot of experience doing this and he looked across 200 companies that he’s involved in. And this is from October of 2025. It’s from a few months ago. But the top five in order in terms of the success factors, he has number one as timing, number two as team/execution, number three, idea or truth outlier. Number four is business model and number five is funding. And the reason I want to call these out specifically is as I read these, I realize that these apply to venture backed startups because timing is so critical when you’re trying to hit the gap and become a billion dollar, 10 billion, 20 billion dollar company. If it could have been built five years ago, it would have been. And so you have to hit things at just the right time and shoot that gap. 

Rob Walling (14:59): But guess what? If you want to build a $3 million SaaS company that’s growing fast and could sell for 20 or 30 or more million dollars, you don’t need to be so worried about timing. Even if there is already a big player that owns a big space and you jump in and you figure out why people are leaving, we used to call them refugees, whether they are leaving that platform, whether it’s price gouging, whether the product sucks, whether their sales and support isn’t great, you don’t necessarily need great timing. Now you do need team and execution. To me, that is often the number one. And you’ve heard me talk about how it’s like team times the idea, times execution, and then I probably throw in times luck. Luck always plays a factor. It almost goes with that saying, but team times idea, times execution. The business model that Bill Gross talks about, I mean, we’re in SaaS. 

Rob Walling (15:55): What’s the business model? It’s a monthly, it’s an annual fee. Sometimes you add percentage of payments that you’re processing. It usually doesn’t need a ton of innovation, whereas in the venture space, there’s always like, “Ooh, we have this new two-sided marketplace thing where we’re going to charge the this and the that.” You know what I mean? So business model I think takes more into account there versus like, I’m going to build software that when it has one user is as valuable as when it has a thousand users. You don’t need scale because everyone is paying you a certain amount of money. And funding, of course, in our bootstrap and mostly bootstrap circles is not irrelevant because it can get you there faster, but I think a lot of the companies that we see in MicroConf, TinySeed, Startups for the Rest of Us ecosystem, they probably could succeed with or without funding. It’s just going to take them a lot longer. 

Rob Walling (16:42): So funding and business model, much less relevant for our kinds of companies and timing, which he names as number one, I also think is much less relevant for our types of companies. So team, idea, and execution are the things that I see over and over either causing SaaS companies to fail or to wildly succeed. And sometimes I’ll see a team execute really well and the idea is a so-so idea and they just grind, grind, grind their way into a great little million dollar business over the course of several years. Sometimes that’s because the idea wasn’t great or the niche, the industry, the space that you picked, it was a two or three out of 10 idea. And then other times you do see a great idea and a team that’s decent, but they happen to execute pretty well. 

Rob Walling (17:34): So you’ll see them have wild success because, again, it’s kind of a multiplier. So the reason I’m calling these out is I saw this all over the internet and I have a lot of respect for Bill Gross. It’s Bill T. Gross, by the way, because there’s another Bill Gross who’s like a bond guy who does bonds and stuff. The Bond King, I think he’s called. It’s just unfortunate they have the same name. But I saw this on the internet and it’s not that I disagree with Bill Gross or that I think his original ranking of timing and team, idea, business model, and funding in that order are incorrect. It’s that this is where you have to consider the source. This is where you have to think. Is he talking about the types of companies that I’m starting, types of companies I hear about on Startups for the Rest of Us, see at MicroConf, see at TinySeed, maybe over on Indie Hackers, or is he talking about the traditional venture capital chasing $20 billion outcomes? 

Rob Walling (18:27): Because those paths are very, very different and the success factors between them are going to be very, very different. So this is where you have to be careful not only with who is telling you the information, because let’s just say on the internet, I don’t know, 80% of people are full of it. Maybe it’s not that high, but it’s a lot, especially people trying to tell you business advice and tell you how you’re going to succeed and basically trying to sell you something along those lines. But in addition, even those folks who I think have done it, have been there and have a lot of knowledge like Bill T. Gross here, they’re often talking about their type of company or their type of approach. And if you’re not going to do that type of approach, you either need to ignore their advice or find out from someone how this is different in your space. 

Rob Walling (19:14): This is the same reason I cringe when people talk about reading Zero to One and then trying to apply that to bootstrapping or that that’s a big motivational entrepreneurial book when they’re starting, when they want to start a million dollar SaaS company. It’s like, I get it. I’ve read Zero to One. Or The Hard Thing About Hard Things. Like those are cool books. They’re interesting. They got me thinking, but I never once thought, “Yeah, the information in here is going to help me bootstrap my next SaaS company.” Those books aren’t written for us. They’re written for folks who want to start these, again, 10, 20, $50 billion companies. And so is the advice that Bill Gross was giving out here. For my next topic, I want to walk you through a little decision that the city of Minneapolis is making with their parking app. So one of the luxuries we have here in Minneapolis and St. Paul is that the cities are relatively well funded and the money tends to be spent, I would say, in productive fashions. 

Rob Walling (20:08): I’m from California where the taxes are high and everything’s broken all the time. And we can talk about reasons why that is in terms of just the sheer volume of people who live there and all other types of situations. The quality of life here in Minneapolis is high for a lot of reasons, but one of them is that things just work. The schools are high quality, the city has their act together. The bike paths are plowed in the winter and they have an app that you download to your smartphone to pay for parking and that’s so cool so you don’t have to carry a bunch of quarters around. And we were actually driving out in the suburbs and we were in a city and needed quarters. And I was like, “Whoa, I haven’t done that in a long time.” But they have this parking app that helps you not freeze your butt off when you are in the middle of winter and you need to pay for street parking. 

Rob Walling (21:00): But the interesting UX decision or customer experience decision they’ve made over the last few years is kind of befuddling me. And I’m guessing they have some third party who’s building this because when I look at it, I’m like, “Whoa, this is not good.” So originally you could log in and it would keep you logged in for a long time, for a month or two, because your parking app, does it really need to be super secure and log you out every time? Well, they then started doing that. So then it would log you out every single time. And so every time you go to pay for parking, you would need to log in and it wasn’t just Face ID. You would have to enter username or password, which could obviously come from the OS remembering that, or you could OAuth using Google and other things, which is eventually what I just started doing because I got tired of the passwords not auto-filling on mobile and whatever. 

Rob Walling (21:49): So that alone became enough friction that I have more than one friend who’s just like, “Yeah, I just couldn’t be bothered and I just paid for parking tickets if I get them.” It’s like that much of a frustration, that much friction does that. And I’m still puzzled why they just don’t add Face ID if they’re going to do this. If they’re going to make you log in every time and they think it needs to have bank level security, just add Face ID. But I saw the other day, there was a pop up when I went to pay for it and they said, “We’re adding two factor authentication.” And I was like, “Oh no, are you kidding me that in order to pay, oftentimes it’s 75 cents that I’m paying, $1.25. In order to pay that at a particular meter that’s locked to my license plate, I’m going to need to log in and then enter a code from an authentication app.” And it didn’t even say that. 

Rob Walling (22:38): It said that the second factor of authentication is that they’re going to send an email. So I can’t even with this, what are you talking about? Who thinks this is a good idea? So you’re going to log in and then it’s going to say, “We just sent an email to your address on file. Go log in to your Gmail or whatever else, pull that up, enter a code, click on a link, like what’s it going to be?” You know it’s on mobile. It’s not going to work well. It’s going to turn what should be a 30 second process into at best a couple of minutes every time for hundreds and hundreds, if not thousands of people every week who are doing this. And at worst, it’s going to turn into a 10 minute ordeal where the email doesn’t get sent. The email goes to spam. 

Rob Walling (23:24): The email has a delay because of mail servers and you’re sitting there waiting five or 10 minutes. People are just going to give up. I know that’s what I’m going to do. So maybe they’ll start sending texts, maybe they’ll start an authenticator app, but I don’t particularly want to flip into an authenticator app and enter a six digit code every single time that I want to pay for parking either. So it just feels lazy. It sounds like a programmer that’s not at all a product person or anyone who gives a crap about the end user. It’s just some developer somewhere or some politician somewhere who basically doesn’t know app design is being lazy to try to enforce some standard that I’m sure someone somewhere has sent forth to justify their own job. So if you’re building an app, this is the difference between being a developer and being a product person. 

Rob Walling (24:09): A good product person would never do this. Whereas a developer says, “Oh, I have these tools and email’s the easiest one and I have this whole class already built to send emails. So why wouldn’t I just do that without thinking through the ramifications for your end users?” My last topic of the day is about the Beastie Boys and their seven platinum records. So they’re doing some kind of promotional tour, I think, because they were on Conan O’Brien’s podcast and I somehow stumbled upon this given the YouTube algorithm because I don’t follow Conan. I think he’s funny, but it’s just not the type of stuff I watch on YouTube and I’m not particularly listening to the Beastie Boys anymore. I haven’t listened to them since, I don’t know, early 2000s, but I saw that there was a clip and I downloaded it just out of curiosity and it was fun. 

Rob Walling (24:56): And of course, it’s only two of the three surviving members because MCA passed away from cancer, I don’t remember how long ago it was now, maybe 10, 15 years ago. And so there was a part of this show that I enjoyed. I enjoyed the back and forth. So Conan O’Brien says, “You guys have seven platinum selling records.” And he’s saying it as a compliment. This is a rare thing. How many artists in history have seven platinum records and Ad-Rock, that’s a stage name, his name is Adam Horovitz. He turns to Mike D and he says, “What happened to the other albums? We’ve released more than seven. What happened to the ones that aren’t platinum?” And Mike D says, kind of shrugs and says, “Everyone’s got a couple duds.” And Ad-Rock says, “Well, I liked them.” I like six things about this interchange. 

Rob Walling (25:44): So first of all, it’s such a trip that had Ad-Rock never thought before about why every album wasn’t platinum. Is this the first time this realization had happened and he had to ask this question? Because I imagine as you’re cranking out albums, and I’m guessing the Beastie Boys had 12, 15 albums, not all of them are going to be platinum and that at a certain point you would pay attention to that, but maybe they stopped, maybe at a certain point you just don’t care anymore. And that alone is kind of an interesting, I think just an interesting side effect of just shipping, of just shipping. You ship your first podcast episode and you think about all the things you want to tune and optimize and you scour through the analytics and you spend every day waking up refreshing that. You write your first book and you ship it and you track the sales and the profit and the gross profit and all this stuff. 

Rob Walling (26:34): And then when you ship your fifth book and your 800th podcast episode or your seventh album or 14th album, I do think that at a certain point the process takes over and the desire to ship things into the world overrules or outweighs necessarily these ancillary feedback mechanisms. I’m not saying a platinum record is a vanity metric because it’s a big deal to sell a million records, but I think when you have 10 records, you probably just kind of stop caring. And that I think is demonstrated by this quote. And I have myself known founders who are on their third, fourth, fifth startup and they care about very different things than they did when they were building their first. Likewise, I care about very different things these days on this, my 829th podcast episode than I did on the first one or 10 or 20. 

Rob Walling (27:28): So I like that part about it, right? Just the realization of like they’ve shipped so much art into the world that not sure if he’d ever thought about that before this. Then the critical eye of like, “Well, what happened with the ones that weren’t platinum? What happened? Why aren’t we platinum for every album we’ve released?” And Mike D says, “Eh, you win some, you lose some.” Everyone’s got a couple duds, which I think is an interesting thing as well. It’s like the non-platinum records probably still very good. They just didn’t have the public sign off or the public sales to justify it, but then it comes back to Ad-Rock saying, “Well, I liked them.” And I think that truly is the sign of an artist or a creator, maybe is a better way to say it, who has come to peace with being who they are and come to peace with the art that they produce. 

Rob Walling (28:17): And while I don’t believe that this podcast is art, in terms of the definition, one might think of art being purely for enjoyment, not having utility. And obviously this podcast has utility because it helps people start companies, but there’s definitely a certain level of creativity and craftsmanship that I put into my YouTube channel and this podcast and the books and my essays, robwalling.com/subscribe if you’re not on my email list and getting my weekly essays that I’ve just recently started writing here in the past month or two, and I’m not alone, right? It’s like you look at the creators that you listen to and you can tell they really care about their craft and it’s the craft of imparting wisdom and knowledge. It’s a craft of sharing what they’ve learned, educating folks, and generally trying to make the internet a better place, or at least their corner of it, a better place. 

Rob Walling (29:13): And I think when you first start out, you are terrified and you over index on public feedback, especially the negative comments. And then I think over time, you come to the realization of, “Man, I’ve done some really good things and I’ve also had a few duds because everybody’s got a couple of duds, but I still liked them.” So I really enjoyed this analysis, this back and forth. Ad-Rock saying, “What didn’t work? What could we have done better?” And Mike D just saying, “Look, we’ve shipped so much stuff into the world. It’s just how the chips landed.” So thanks for joining me today as I walked through a few of these fun topics for entrepreneurs and founders. Next week, I’m going to be recapping MicroConf US in Portland, recording it just a day or two after the event with fan favorite Derrick Reimer. And we’re going to talk about the highlights, the takeaways, and all the fun that happened there in Portland, Oregon. 

Rob Walling (30:15): So thanks for joining me this week and every week. This is Rob Walling signing off from episode 829.