Episode 838 | 6 Key Takeaways From a TinySeed Batch Kick-Off

Rob Walling (00:00): For example, if you’re 5x underpriced what you could be charging, you will build a $250,000 business at best when it should be a $1.25 million business. And frankly, if you’re that far underpriced, you’re probably not going to have the money to market and sell it in the way that it needs to be to be a successful business. Underpricing, bad value metrics, pricing that’s overly complicated: there’s a bunch of different ways to do it wrong and there’s only a few ways to do it right. It’s another episode of Startups for the Rest of Us. I’m your host, Rob Walling. And in this episode, I talk about six things that I took away from our recent TinySeed batch kickoff. We did it just a couple weeks ago in New York City, and in these small group settings, I always notice struggles that many founders are experiencing and other things that I think would be helpful for you as a bootstrapped or mostly bootstrapped founder. 

Rob Walling (01:16): But before I dive into those, I want to let you know about the SaaS Institute. It is our premium coaching for seven and eight figure SaaS founders. We have B2B founders, we have B2C, and we are growing. We’ve recently added two new coaches, Julian Marzuk and Ryan Angley. SaaS Institute is for founders who want community, who want coaching one-on-one and in a mastermind setting, and want advice from mentors like myself. If you go to tinyseed.com/mentors, you can see the stable of mentors that you can tap into as a SaaS Institute founder. We also have a couple of in-person events each year that are very small, like 10 to 15 people. And the founders in SaaS Institute are executing at a very high level. It’s an amazing group to be part of. So if you’re a seven or eight figure founder and you’ve been looking for community, mentorship, advice, coaching, masterminding, head to saasinstitute.com. 

Rob Walling (02:19): And with that, I want to dive into six key takeaways that I pulled from our TinySeed kickoff. A couple weeks ago, I sat in a beautiful conference room in an amazing hotel that producer Sonya picked for us in the Chelsea district of Manhattan. Einar Vollset and myself and Alex Craig and producer Sonya hung out with about 15 TinySeed founders, brand new. It’s our batch 19 or 20 probably. It brings our total number of companies funded to 217 and my total up to 241 investments in SaaS companies. We spent a pretty incredible two and a half days together. We had some dinners, we had some walks around Manhattan. We had some activities, you could call them team building, but it’s just fun to meet the new founders and to build that camaraderie within the batch. 

Rob Walling (03:21): We found that these kickoffs and these in-person events are so crucial to forming the cohesion that will have the batch really help one another. Because TinySeed is such an amazing network now of mentors, investors, and founders, having a smaller group that you can belong to, like your batch, is super important. It’s like your high school class or your college class. When you enter the room the first night it’s kind of awkward and you don’t know any of the founders around the table. And by the time we all leave two and a half days later, all of us feel like we know each other and like we’ve shared so much experience and I know their businesses so much better than the day we arrived. During the work sessions, which we have a solid one each day, we did some masterminding. 

Rob Walling (04:13): We went around the room to all the founders and said, “What tactic or strategy are you using with sales and marketing that is really working for you now?” And I love it. It’s one of my favorite parts of the event because I hear things that you don’t see out in the wild, you don’t see people talking about on X/Twitter. I don’t have them in my book. People are being super creative and they’re coming up with new and innovative ideas to find new leads and close new deals. And then we have our famous pricing reviews, or pricing teardowns, where Craig Hewitt, Einar Vollset, and myself go through every founder’s pricing with a fine-tooth comb. We spend about 20 minutes per company, which doesn’t sound like a lot, but you can really dig in. We are pattern matching based on hundreds and hundreds of examples. 

Rob Walling (04:57): We’ve seen bad pricing from folks that we haven’t funded. We’ve seen good pricing from folks we funded, but most of the pricing we see has some issues. About 80% of any batch has an issue with their pricing. Sometimes they need to raise it. Sometimes their pricing is just too complicated and they need to dramatically simplify it. Other times their value metric is off: they’re not measuring the right thing. And through conversations with the founders in the room, everybody’s in the room at once and we just go around the room 20 minutes at a time, really informative. Folks can start seeing our rules of thumb, the ways that we think about and evaluate pricing. And we dig into it this early because if your pricing’s off, it’s the biggest lever in SaaS. 

Rob Walling (05:44): And if your pricing’s off, it can be very hard, not impossible, to build a great seven or eight figure business. So that was the general course of events over those few days. Now I want to dive into my six takeaways. The first one is the importance of asking why. It’s the importance of finding a root cause, and you don’t even need to do the five whys. You may have heard of the five whys. Oftentimes it’s just one why. I see folks on X/Twitter saying, “I’ve plateaued. What should I do?” And my question is always, “Why are you plateaued?” There’s a reason I wrote an entire MicroConf talk delineating the seven and only seven ways that a SaaS app can plateau, so that you at least have a menu to choose from. Because once you know that, “Oh, it’s not enough new leads. I’ve tapped out my entire market. I’ve lost product-market fit,” there are all these different reasons. But once you figure that out, then you can at least come up with a plan. 

Rob Walling (06:37): Or if you’re struggling with churn, which a couple of the new TinySeed companies are, my first question is: why? Why are they churning? How bad is churn? Who is churning? Is it a certain ICP, or non-ICP, that’s churning, and why? You have to get that information in order to begin to troubleshoot it. There was one founder struggling with activation due to a demanding onboarding process. A lot needs to get done for their customers to get value from the software. And so the first question I asked that we dug into is: why is the process what it is? Are there two or three components? Which part are they falling off on? Are all of them absolutely necessary? Can any of them be automated with AI? Can one of them be handled by a customer success person that you hire? 

Rob Walling (07:23): Once we got into the nitty-gritty of what was actually going on and why people aren’t finishing the onboarding process, that really helped us as a group, in a mastermind setting, think it through. And this isn’t hard or complicated. There’s not a huge framework around this. On almost every advising or strategy call that I do with a founder, I usually wind up asking a lot of “why is that happening?” questions. It’s gotten to the point where most founders will say, “I’m sure you’re going to ask me why.” And I’m like, “I am.” Because without that, we’re just guessing. I’m struggling with churn or I’m plateaued, what should I do? I can make some things up, but that’s not helpful until you know why. 

Rob Walling (08:09): Founders who succeed are the ones that do ask why. They think about it logically, they think about what’s going on, and then I can help you brainstorm or pattern match on what I think will have the most success. But I can’t do that unless we know why. Takeaway number two is that new customers and new revenue fixes everything, unless you have high churn or your pricing is bad. High churn is the death of SaaS. You can’t outrun it. The thing I want to call out is that pricing is the biggest lever in SaaS. And if it’s messed up, for example, if you’re 5x underpriced what you could be charging, you will build a $250,000 business at best when it should be a $1.25 million business. You’ll build a $400,000 business when it should be a two million ARR business. And frankly, if you’re that far underpriced, you’re probably not going to have the money to market and sell it the way it needs to be to be a successful business. 

Rob Walling (09:57): Underpricing, bad value metrics, pricing that’s overly complicated: there’s a bunch of different ways to do it wrong and only a few ways to do it right. I’ve heard some folks giving founders advice and saying, “Well, there are no right answers.” Would that imply that any answer is equally good? Because that’s not true. There may not be one correct way to price your SaaS, but if there are a thousand different ways to do it, there are probably two or three that are really, really strong. Then another six or seven that are so-so, and then the rest are probably garbage. And there’s a reason that we see so many founders not succeeding: they are underpricing or mispricing their product. New customers and new revenue can fix everything, unless your pricing is screwed up. 

Rob Walling (10:59): Takeaway number three is that pricing is the biggest lever in SaaS and I think positioning is number two. I’ve been saying “pricing is the biggest lever in SaaS” since the first TinySeed batch in 2019. I saw across a swath of companies, I think we had 10 in that batch, that the pricing advice we were giving them and folks either increasing their prices or going upmarket or changing their value metric, whatever it is that they corrected, seriously changed their business. And that has just played out over and over as we’ve funded more and more companies. And I’ve always wondered, what’s the second biggest lever? And I think it’s positioning. This is the first time I’m saying this. I’m trying this on for size. 

Rob Walling (11:48): The difference between succeeding with Drip, which started as email marketing and became “lightweight marketing automation that doesn’t suck,” the difference between success and failure was finding our positioning. We positioned ourselves against the simpler email service providers that are perfectly competent and good tools: MailChimp, great tool. AWeber, others that at the time didn’t have any type of automations. And then we positioned ourselves against the bigger incumbents as much less expensive, less complex, with less onerous sales processes compared to Infusionsoft (now Keap), Marketo, Pardot, Silverpop. Once we leaned into that positioning and built the feature set to defend it, we could enter a market with a bunch of hated competitors. Our pricing was the biggest lever and our positioning was the other reason we succeeded. 

Rob Walling (12:47): When I think of positioning as a bootstrapped founder, it’s about carving out a corner of the market: why are you different? If you just build mostly a clone of an existing successful tool with a brand name, you’re just not going to win. Could you just be cheaper? Well, if you’re half the price or a fifth of the price of a big hated incumbent and you can still make really good money at that price, that could be your positioning. But I don’t like being the low price leader. The lower your prices, the higher your churn, the higher your support burden. 

Rob Walling (13:40): There are other ways to position. “Lightweight marketing automation that doesn’t suck” implies it’s much lighter weight, probably pretty easy to use, and doesn’t suck. That reinforces the idea. You can see this with any successful product if you go read their H1. The H1 on SignWell, founded by Ruben Gamez, is “eSignature solutions built for simplicity.” The H1 for SavvyCal from Derrick Reimer is “the fresh way to find a time to meet.” The H1 of Senior Place, a TinySeed company, is “HIPAA compliant placement software built for professionals.” Think about every word in those H1s. These are all successful companies by any measure. Those H1s position the product for professionals, for simplicity, for being a fresh way to do something. 

Rob Walling (14:49): If you want to learn more about positioning, you should watch the MicroConf talk by Anthony Pierri on SaaS founder positioning. I actually interviewed Anthony on this very podcast in episode 72: “Highly Effective Framework for SaaS Positioning.” The talk on YouTube is better because there are visuals. If you want to dig into positioning, that’s exactly where I would start. 

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Rob Walling (16:32): Takeaway number four is a quick pricing test. One of the quickest ways to test whether your lowest plan is actually doing you any benefit: usually your lowest price plan, if you have three tiers plus “call us,” has the highest churn. I’ve seen a TinySeed company that had a $19 plan with 11% churn, and then a $99 and up plan with net negative churn, around negative 4%. Those are just two entirely different businesses. One quick way to test whether that bottom-end pricing plan is doing you good or harm is to just hide it. 

Rob Walling (17:26): Just hide a div on your pricing page and watch your numbers. This works for lower-touch signups, not sales-led or high-touch funnels. Do you lose a ton of those lower-end customers, or do they start migrating up to your middle plan? Then dig into your numbers: have people who signed up for your lowest plan in the past upgraded to your middle and up plans? If there is an expansion path for them, then that lowest plan, even with high churn and likely more support, might just be worth it. But if it’s causing headaches, high churn, more support, and almost no one upgrades from it, it’s probably time to hide it for a test and do a poor person’s split test: hide it and see what happens in the coming weeks. 

Rob Walling (18:23): My fifth takeaway is that AI SEO is a thing, and so far it feels quite a bit like non-AI SEO, with maybe slightly more emphasis on Reddit. TinySeed companies, as well as TinySeed itself, MicroConf, this podcast, and Rob Walling are all getting referrals and traffic from LLMs: ChatGPT, Claude, and others. Some folks are paying for ChatGPT ads. It’s like the Wild West there. There are TinySeed founders paying for ads, there are folks creating content to get LLM mentions, sometimes programmatically, sometimes by hand. As the world moves away from 10 blue links, AI SEO is a thing and it will continue to be. 

Rob Walling (19:32): When we think about Google SEO over the past 20 years, every six to 12 months Google releases another big algorithm update. That means Google SEO has always been a moving target. But what Google is trying to do is find the right search results for your query: the most authoritative, the one that answers your question with the minimum amount of effort. That’s essentially what LLMs are trying to do too. They’re also looking for authoritative resources, maybe in a slightly different way, but as these algorithms improve, there is a ton of overlap between traditional SEO and AI SEO. The folks I know who’ve done really well with Google organic rankings generally seem to be doing all right with the LLMs too. 

Rob Walling (20:35): It’s not across the board. I’ve seen counter examples where folks who gamed Google SEO are now losing traffic, because LLMs may care less about links and more about certain mentions, like Reddit. But if I were a startup founder today, this is where quite a bit of opportunity lies: in these Wild West, unknown territories where you can really latch onto something and kickstart a great business. 

Rob Walling (21:31): My sixth and final takeaway from the TinySeed kickoff is to be around other people who are doing what you’re doing. I think back to myself getting started as a bootstrapper, building and launching my first thing on the internet around 2002 or 2003. I didn’t know a single person talking about it, thinking about it, or doing it the way that I was. It was all about venture capital and it was hard because I didn’t know if it was possible. I had to make all my mistakes myself. Then I found Joel Spolsky and Paul Graham, not about bootstrapping, but just about startups. Then I started blogging and found Patrick McKenzie and Peldi Guilizzoni and later Jason Cohen, who I think started blogging around 2009. 

Rob Walling (22:20): One of the reasons I started this podcast and MicroConf with my co-founder Mike Taber at the time was because we wanted to be around other people who were doing what we were doing. It goes beyond being the average of the five people you hang around with. It just gets lonely and you make a lot of mistakes if you don’t look at prior art, if you aren’t in some type of small mastermind or community where people are trying things and you can all learn collectively. If you’re not doing that, you’re going to make a ton of mistakes that you don’t need to, you’re going to burn out, and you’re going to be super lonely. And to see the energy created almost out of nothing by getting those founders in the room a couple weeks ago was just electrifying. 

Rob Walling (23:16): I think a little bit of friendly competition goes a long way. John Lennon and Paul McCartney talked a lot about how one would write a really good song and then the other would say, “Well, now I’ve got to go write a really good song.” That friendly competition drove the Beatles to be the best band of all time. Being around other founders who are doing what you’re doing and having that friendly competition, thinking, “Well, they’re making it work, I’m motivated now to make it work too. It is possible to do this.” As you look around and see other bootstrapped founders doing seven and eight figures, and there are a lot of them. I haven’t mentioned this on the show recently, but of all the TinySeed companies we’ve backed, something like 22% are now doing seven or eight figures of ARR. 

Rob Walling (24:02): It’s a significant number of companies. And being around that kind of momentum and that kind of community is invaluable. I wished that I’d had that opportunity when I was getting started 20-something years ago. And that is one of the reasons TinySeed is structured the way it is, with batches. It would be so much easier if we were just a venture fund investing here and there: less travel, less time, less effort. It would be a simpler business. But Einar and I, when we started TinySeed, we didn’t believe in that. We knew that community was a huge part of it. We want to provide mentorship, advice, guidance, and funding, but without community, you’re losing a huge portion of the benefit of this type of program. 

Rob Walling (25:00): Those are my six takeaways from the TinySeed kickoff here in May of 2026. Thanks for joining me today. I hope you enjoyed those takeaways. Thanks for listening this week and every week. This is Rob Walling signing off from episode 838.