Today, Rob flies solo to talk about 7 different things that he has learned in his 20 years of entrepreneurship. He also offers some feedback about what he is seeing in the startup communities today, advice on how to deal with competition, marketing tips, and how to build a team of developers.
The finer points of the episode:
- 2:35 – Be careful about over-generalizing from one win
- 3:33 – The three things you need in order to succeed in building a startup
- 8:10 – How to handle feedback you get on your product
- 12:48 – Rob’s personal experience and opinion on dealing with competition in the startup space
- 15:35 – Why word-of-mouth is not the right answer for where your leads are coming from
- 18:40 – The real reason why some startups are “transparent”
- 21:05 – Advice on how to build a team of developers
Items mentioned in this episode:
Welcome to this week’s episode of Startups for the Rest of Us. As always I’m your host, Rob Walling. Every week on this show I get on the mic, I often have a guest or sometimes do an entire round table of guests. Today, I’m flying solo and I do this two, maybe three times a year when I either have trouble finding a guest or I find that I have stuff on my mind that I’ve been thinking about and developing a framework for, and I just want to get it out there in a way that I don’t have time to spend four, six, eight hours trying to blog post.
I think it’s more substantive and perhaps will reach more people in a deep fashion than posting it into Twitter. Today’s episode is going to be walking through seven different, I would almost call them advice but it’s more like these are things that I’ve learned in my 20 years of entrepreneurship and some things that are going on in the world today that I feel like I have commentary on.
When I say in the world, I don’t mean COVID-19. I mean more in our startup communities. I’m going to be talking about advice and feedback, a little bit about how to give a little bit, a little bit about taking it, and we’re going to be talking about competition and some specific experiences I’ve had around it. Talk a little bit about some marketing stuff and it’s not going to be high-level, this is how you market. It’s just some specific advice and mistakes. I think antipatterns in ways that I think people have been thinking about marketing as well as managing developers.
This all revolves around sometimes just one, but often it’s 5, 10, 20 conversations that I’ve had with colleagues, founders, or aspiring founders. When I start hearing the same thing over and over and I realize that I’m thinking about this in a different way than perhaps the early stage founder or just someone who hasn’t been in our space for a long time. I just like to bring these things up and talk them through.
One thing I want to say before I start is that it’s such a trip. Probably once a month I get an email that says, “I’ve been listening to your podcast for years and I had bought Start Small, Stay Small years ago. I had no idea that you were the same Rob.” Every couple of months, I’m going to say that I wrote Start Small, Stay Small. If you’ve read the book, thanks. I appreciate it, but just to clear the air so that you know that I’m one the same. I wanted to do that.
Let’s dive in. I have three things that I wanted to say about advice and feedback. The first one is something that I think has always happened, but it definitely has gotten more and more prevalent in the startup space. The more people that are just online and doing social stuff trying to build personal brands. I just want to ask if you are a founder who has had some modicum of success, please be really careful about overgeneralizing from one win.
I think of it the first time you launch a product and you have some success, suddenly you feel like you know exactly how to launch a product and that your experience applies to every product everywhere for all eternity. I’ve seen folks grow an app to 10,000, 30,000, 50,000 a month with no employees and they typically admit that they got pretty lucky. They found a niche that happened to grow, they rode a wave, or maybe they didn’t. Maybe they really just worked hard and it took them five, six, seven years to get there.
But then, going out and giving advice on this is how to start a startup and this is how everyone should do it is really dangerous. I had this mental model and I brought it up in the podcast in the past about the three things that you need to succeed in (let’s say) building a startup. One is hard work, the second is luck, and the third is skill.
You might have these in varying degrees. If you have tremendous skill in marketing, or tremendous skill in building an audience or building a network, or tremendous skill on choosing niches and building a great product, you may need less luck and I personally always think you should put hard work in because that’s the one you control the easiest in the short term is to work hard. I don’t mean 90-hour weeks, of course. If you listen to this podcast, you know that my entire entrepreneurial career, I’ve worked 40 hours a week or less except for some very short stints where I did work 60 hours a week for 6 weeks at a time, 8 weeks at a time to get some hard stuff done.
Hard work and focus (I think) is table stakes in my opinion, although if you are really lucky, I do know a founder who happened to be at the right place at the right time and just stumbled into a hobby, became something that was really popular. He got really lucky and sold the company for tens of millions of dollars. He didn’t actually work that hard. Self admittedly, he never really worked that hard but he did have the skill to build a team and he did really get lucky in the right place at the right time so it’s totally possible.
Then of course, there are folks who don’t get lucky at all. They just put tons of hard work and they build skills, and it takes them five or ten years to get where someone who got lucky maybe would have gotten to in one year. Those three things I think make up the building blocks, but to build a SaaS app or any company to $3000, $4000, $5000, $6000 is hard. Typically, you need to put in some hard work. Typically, you probably need a little bit of luck although not at that scale. I do think that to get to tens of millions or hundreds of millions, that you do need all these things to fall into place.
Oftentimes, after your first one, you just don’t know. You don’t know what made it work. You think you do, but after your second one, your third one, your fourth one, you start to see the patterns. I’ve grown seven businesses to at least six figures in revenue. Seven six-figured businesses I’ve created in the past of about 15 years. Actually, some of those weren’t six; they were at least six. There are few that are seven figures. Seven six- and seven-figured businesses is probably a better way to put it.
After the first one, I really did think that I’d do it all and it’s such a natural thing to want to go out and tell everyone about. When I did the second one, I realized nope. The things that I thought made it successful, some of them were right but about half of them were wrong, and when I go back and read writings that I did 10 years ago, it’s a little painful for me. I think most folks are not doing this intentionally. I think it’s a natural human desire to want to teach and I think it’s a natural human desire to want to talk about how you have the right answers.
Just consider this, most people giving advice are doing it to build a personal brand so they can sell you a book, or a course, or they’re even some investors who do that, and a lot of Silicon Valley folks like the venture capitalist would blog in order to get followers and then people will say they know what they’re doing. But really consider a question that I often ask myself when I see a new expert or a new name come on the scene. I typically ask myself have they done it at least twice? Obviously there are exemptions.
Jeff Bezos has not built two Amazons. The Collison brothers, actually I think they did have a startup before Stripe that was successful. Most founders I know really who know their stuff, they have done multiple. I look at Eaton Shaw, Jason Cohen, David Cancel, Dan Martell, people who have done it two, three, four, five times and there’s definitely a learned experience and definitely a different communication of their learnings as they get further along.
That’s the big question I ask myself. If someone is giving advice, I think, have they done it at least twice or three times that they can start seeing patterns. I also ask, are they giving advice on something that they really are expert in? Because again if you grow an app to $30,000 a month then you’re working on your own, that is so different than building a team, building a startup, and knowing how to build a team culture, knowing how to hire people, knowing how to cross a million dollars in ARR, knowing how to cross $2, $3, $4 million. It becomes such a different experience.
As I’ve watched founders who I’ve invested in or I’ve worked with or just known through MicroConf in this podcast. Each step you’re learning a lot and overtime I think that you’re really building that corpus and that wisdom so to speak so that you can share with others. I’ll stop there on the advice and I want to switch to this topic of feedback.
What I mean here is if you’re building a product, you’re trying to build something that people want, maybe you do have product/market fit, and things are growing. There’s always going to be someone who wants to give you feedback about your product, who doesn’t tend to know what they’re talking about but thinks they do. It’s often hard to tell. So, the thing that I have started doing because when we were growing Drip and frankly every business I’ve ever grown has this whether it’s a MicroConf, TinySeed, Drip, HitTail, or stuff that I grew before, someone wants to give you feedback.
In the early days when someone gave me feedback, I thought they must be an expert because I don’t give feedback to someone unless I feel like I really know what I’m talking about. Other people don’t necessarily have that bar. I would get an email when we were running Drip and we’re literally doing millions of dollars in revenue. Someone would say you really need to change this font color, change this button, or this tab in the interface. Just these really small things that are nitpicks and frankly are not going to change the business. They’re not going to change the business. The UX was really good and really solid. Could you find one pixel out of place? Of course you could. Does that change the business? Should we be focused on that?
It comes from people who I think are not entrepreneurs. They’re not founders. They’re not thinking about the business. They’re thinking about their particular expertise. That’s where it has gotten to a point where I really need someone to have some type of credentials before I listen to them and I don’t mean academic credentials, but when someone emails me out of the blue, if it’s Eaton Shaw, Ruben Gomez, Brennan Dunn, or Jordan Gal in the email and saying, “Hey, there’s something in your product I think you should fix,” I’m going to listen to it because they’re a founder. They are product-focused people who know how to build a good product and their feedback is very likely coming from a place of I’m trying to help you build a better product versus feedback coming from someone I don’t know and when I go to look at them, either they are not a UX designer at all and they just have an opinion or they are a developer and designer and they’re trying to sell me their services.
I just don’t know their motivation and frankly making changes that random people on the internet suggest about your writing, your product, your podcast, your blog, or your conference, it’s dangerous. Now taking it in aggregate, of course, is great. If you fear the same thing from all the people especially if you have thousands of customers, when you start hearing the same thing you have to look for patterns, yes you should do that. I’m not saying don’t listen to anyone. I’m saying be wary of the individual who feels like they are so confident in their advice, but how do you know if they know anything? And oftentimes they don’t.
This is different than someone coming in your app and saying, “Hey, I’m confused by this. I’m confused by this onboarding. I don’t know what to do here.” That’s bad. You don’t want people to be confused. It’s different than someone sending you a screencast and saying, “You really need to change this,” because it’s always like that’s your opinion. That’s your opinion and one person has said this and since I have 3000 customers, I’m going to go with my opinion on this one and not chase down a rabbit hole. That’s number two. That’s be wary of product feedback from people without credentials.
Third thing is something that Sarah Hatter said. Sarah Hatter runs CoSupport and she said on a MicroConf talk once and it resonated with me, was years ago, probably five or six years ago now, and keeping on the topic of advice and feedback, this is the last piece of this. She said, “Don’t take business advice from people who have crappy personal lives.” Let that sink in. A lot of people who give business advice have crappy personal lives. Oftentimes you don’t know, but if you do know, it’s a really interesting thing to think about how someone treats people and I’ve added this to the end.
“Don’t take business advice from people who have crappy personal lives,” and my addition is, “or who treat people in a way you don’t want to treat people.” The reason I’ve added that is because from what I’ve seen, you can be successful in business and treat people right or you can be successful in business and treat people like […].
If you don’t want to do the latter, then don’t take advice from people who do because I do think that it’s a contributing factor to their success. If you try to replicate their success with their advice, but you treat people right, you treat them fairly and you’re nice to them, I think there’s just a disconnect there. I’m not sure that advice is going to translate into what you think it’s going to do.
Let’s move on from advice and feedback to talk about competition. This is an interesting one. Again, this is one that has happened to me several times. I think three maybe more and it’s happened over the course of 15 years. I’ve been an entrepreneur for 20 although I was a consultant early on and really started building products 2003, 2004 and started. I think about 15-17 years is really my entrepreneurial career, but I’ve had three people say almost this exact sentence to me over the course of this time and I want you to hear it.
The sentence is, “There’s plenty of room in the market for all of us.” The first time I heard it, it was from someone who had essentially seen that I was having success in a space and proceeded to copy what I was doing in a way that was really obviously a copy. As we talked about it, the person said, “There’s plenty of market for all of us,” with a smile and a pat on the back because they didn’t want to make an enemy.
The first time I was like, “Oh yeah. No, that’s a really good point,” then I watched him replicate pieces of our positioning, a bunch of features, start to try to take our customers, and just on and on. The second time I heard it, I knew what it was. It was years later and I knew exactly it was someone trying not to make me mad and trying to be friendly with a competitor but that they were going to screw me again. They’re going to backstab me, but I didn’t say anything. The third time I called someone on it and I said, “I’m not sure that that’s the case,” and it really put this person on their heels because they didn’t expect that. But it’s just a fascinating sentiment.
I do believe that markets are big and the free market is fine, but don’t sit there and look me in the eye and tell me that we’re buds, that we’re friends, right before you stab me in the back. If you feel like you have this conversation and someone ever tells you, “Hey, there’s plenty of market for both of us,” just expect them to start drafting off you if they’re not already. What will be interesting is that you’ll be able to tell their next three moves by looking at the last three moves that you made. It becomes painfully, painfully obvious with folks like this who are copying you.
I’m not saying don’t worry about competition. I do think that you should focus on your customers and your audience, but I do think that competition, especially people like this who try to act like that they’re not competing with you but they are effectively ripping off what you’re doing, sometimes even the same naming, I do think it’s something that can be upsetting, to be honest. Frankly, when I talk to people who do have competition who are basically copying them—you’re the innovator, you spend time to do it, you prove it out, and then someone just starts copying it piece by piece—it’s frustrating on a personal level.
There’s something about it as a maker having someone replicate it and typically they claim that it’s their own and claim that they came up with it. That’s the frustrating part. Just be wary of that when you’re in a space and someone tells you that there’s plenty of market for all of us.
Next, I want to talk a little bit about marketing. I have two thoughts here. I’ve heard entrepreneurs who launch a business, business growing relatively well, and when I ask them where your leads or where you’re new customers are coming from, they say word-of-mouth. When I dig into that, the real answer is I don’t know where they’re coming from. So if you don’t know, don’t say word-of-mouth. Say you don’t know or find out because I think it’s really dangerous not to know where your customers are coming from.
I bought a business at one point where the founder told me that customers come from word-of-mouth. I said, “Why is that?” and she said, “It keeps going up to the right. It’s growing slowly,” but in Google it just says direct traffic and it turns out it’s not word-of-mouth. There were a number of factors. I’m going to point to a number of things that would be really hard to track.
You can go on podcast and mention the URL. You can talk from the stage. Someone could read about it in a book. They could read about it in a newspaper or magazine. They can have their referral being cleared out when they click through. They can be on a different device than when they originally heard about it. It could be a returning visit. There are just all these things that can lead to you not knowing where they’re coming from and you’re not going to be able to attribute 100%. You can’t do it.
But having an idea and frankly asking customers tends to be the best way. Asking where they first heard about you or where they heard about you right before they signed up for first touch and last touch attribution, and then of course looking at Google Analytics or whatever analytics you use, these are all good approaches. But the right answer to where my customers are coming from is almost never word-of-mouth.
Word-of-mouth is a component. I remember with Drip, word-of-mouth as far as we could measure it was 15%, 20%, 25% depending on how you measure it. Word-of-mouth is when someone else mentions me on a podcast or is that podcast marketing, it’d be that kind of stuff. But it was somewhere in the teens to the twenties of growth and that’s great.
Once you get to the seven figures of revenue, you build this thing that Jason Lemkin calls a mini brand, were not a brand like Coca-Cola or Chevrolet, but you are a small brand in a small niche and the conversation goes from marketing automation to Infusionsoft and Ontraport. When we started Drip, that’s what it was. Infusionsoft and Ontraport, and I wanted to be the third. I wanted it to be Infusionsoft, Ontraport, and Drip. Then quickly, Ontraport went on its way out it seemed then it was Infusionsoft, ActiveCampaign, and Drip, and those were the three.
We built this mini brand and yes, did we have word-of-mouth? Absolutely. Did we have a mini brand? Absolutely. But I knew that 30% of our new users came from integrations. I knew that X% came from organic search traffic. I knew that X% come from the podcasts that I was on. You can always pinpoint it but while you can build good word-of-mouth, it’s often less than you think it is. Just be wary.
If you don’t know where your customers are coming from, that’s something you’ll see me push my table on often. Where they’re coming from, how you can find more of them, because if you don’t know where they’re coming from, it’s just people referring to one another, your growth will always be capped. It will be capped at the rate that people will tell one another about them. This is different from affiliate marketing. I’m not going down that whole thing. I don’t consider that word-of-mouth because it tends to be very intentional when that works.
The second thing about marketing and then I’ll move on to managing developers. My second thought here is (and this may be obvious to you) to some folks whom I’ve talked to, it’s not, so I’ll just say it and move on. It’s not that big of a deal. Transparency in the startup space is mostly about marketing. Most transparency, I’d say 90% maybe 95%, is just spreading the word so that people will talk about them and that’s okay. Marketing is fine, but I don’t have a problem with marketing. I have a problem with disingenuous marketing in all honesty.
When a big name, huge affiliate marketer, blogger, podcaster that we all know always says yes, I have affiliate commissions but doesn’t talk about how most of the products that he promotes, he gets shares in the company. He has an ownership stake in the company, but you never hear him disclose that. That to me is disingenuous and I don’t like that kind of stuff.
I feel the same way about transparency and I don’t know that people realize that again, I would say 9 out of 10, or 19 out of 20 folks doing transparency are doing it to spread the word for marketing or to brag. I think there’s a lot of bragging about how much money I made, look at me, or frankly to get attention for a personal brand so they can sell you something like a course.
Again, I don’t think this is bad on its own. Just think about this the next time you see a company being transparent with all the good things that happen to them. It can be a range of things. It’s whether having all your revenue dashboard public or whether it’s publishing all your salaries or your internal thought processes or income, whatever. There’s a bunch of ways to be transparent. You just really think about why this person is doing it. Are they doing it to help you or are they doing it to draw attention to themselves?
As savvy consumers of a lot of things in 2020, I do think we need to be aware of whose advertising to us, whose marketing to us, what the messages are, and what the thoughts are behind it. Whether it’s Apple putting a billboard up or whether it’s a commercial, you got to teach your kids how to interpret commercials and say, “Wow, the toys aren’t actually going to be that fun. It looks fun because the kids on there are making it look fun but really once you get it home, it’s going to be kind of boring.” Same thing with transparency. Just know the thought process behind it and be aware of that.
Again, I’m not saying no one should be transparent. I’m not saying it’s a terrible thing and I’m not saying that marketing is bad. To be really clear, just know what’s going on behind a lot of the transparency that you see.
Last topic for today, it’s on managing developers and this one comes from I think only two conversations maybe three that I’ve had during my career and it’s typically what it’s always been when I worked at a larger organization. My advice is don’t try to quantify software development. Software development is a craft. Software development is not manufacturing.
The difference is building really good software, you need crafts people and you can’t do this by building an assembly line. You can build […] software by building an assembly line. You can build a car on a manufacturing line, but it’s much harder to build an amazingly intricate piece of art or a piece of furniture on an assembly line. That takes a craftsperson. There’s just a certain element of creativity and craft that you need and software development can be either.
It can be manufacturing, but good software development is a craft and what I’ve seen manufacturing lines at big companies of 20, 30, 40 developers and they want to quantify stuff like lines of code written, bugs fixed, that’s when you go down this line of (a) building crappy software, and (b) all your good developers are going to leave.
This really comes up when I’m talking to someone who has never written code or who has actually just wasn’t a developer. They were managers and they could quantify at a high level the support team, it’s ticket resolved and time to answer the ticket and the happiness of the customer. They can look at sales and they can say leads talk to, close time, and how much money they brought in. Then they will look at the development and they will say I want to do the same thing there.
I always told them that doesn’t work. There’s no number. There’s no set of numbers. No, we can look at some OKRs and KPIs, two acronyms that I despise and hopefully I never have to use them at another company again, but we can put some things down and we’re shipping features. What’s our velocity? There are ways to quantify this.
There are agile development and sprints, and all this stuff. Yes, it’s cool. It’s good and we can have estimates and try to hit them. Yes, I believe all that. But to purely try to quantify things like I’ve seen people try to do, it doesn’t work in a way that you wanted to, and it backfires, and you’re going to lose your best developers. If you want to build A+ or A software, you need really good developers and you need to treat it like a craft.
If you want to build C- or D+ software, then that’s fine treat it like manufacturing. It really is this thought of how we can not treat every department as if it were an MBA, that we got a degree and we think we can middle manage all the departments because software development is not the same as customer support.
Those are my thoughts for today. You might think of them as if I was blogging. That would have been the last six months of blog posts and instead of condensed them into audio format, hopefully, you get some nuggets of wisdom out of these thoughts that I’ve been having over the past several months.
I’ll be back next Tuesday morning with another episode of Startups for the Rest of Us. As always, if you have thoughts or feedback, you can head up to startupsfortherestofus.com. Post a comment on each episode. I read all the comments or you can tweet me at @robwalling. Thank you for listening this week. I’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob talks to Simon Payne, a co-founder of Leadpages, about his journey from being a bootstrapped developer, to raising funding, and eventually moving on from Leadpages and developing his own product.
Items mentioned in this episode:
Rob [00:00]: In this episode of ‘Startups for the Rest of Us’ I talk about moving from bootstrapped to funded and back to bootstrapped with special guest Simon Payne. This is ‘Startups for the Rest of Us’ episode 304.
Welcome to ‘Startups for the Rest of Us,’ the podcast that helps developers, designers and entrepreneurs be awesome at building, launching and growing software products. Whether you’ve built your first product or you’re just thinking about it. I’m Rob, and today with Simon Payne we’re going to share our experiences to help you avoid the same mistakes we’ve made. Every once and awhile, Mike and I like to mix things up and have a guest on the show. And today I welcome Simon Payne, who many of you will know as one of the co-founders of Leadpages. He was, in essence, the developer who helped to Clay and Tracy build Leadpages from day one. And Simon lives in Prague. I’ve met him in person and we’ve hung out several times over a few years. And so there was a good conversation that we had about basically starting off as a developer and transitioning from this bootstrapped company to Leadpages raising their $37 million in funding. And then just recently in the past few months, Simon has moved on and has decided to launch his own product called Convert Player. You’ll hear us talk about that in the interview. Hope you enjoy it. And we’ll be back next week with more of our normally scheduled programming. Thanks so much for joining me on the podcast today, Simon.
Simon [01:25]: I’m happy to be here.
Rob [01:26]: You and I first met in person – was it in Prague when we did MicroConf there the first year? I think you came to MicroConf in Europe it was like four years ago, is that right?
Simon [01:35]: Yes, I went to both of them in Prague.
Rob [01:38]: It was cool. And then we connected again, I think in DCBKK.
Simon [01:41]: Yes, it was in Bangkok.
Rob [01:42]: Cool. So you and I have known each other for several years, and you’ve been a big part of the dynamite circle, which I’ve had some affiliation with. But the reason that I wanted to have you on the show today is to talk about your experience basically working with Clay Collins and Tracy to get Leadpages off the ground in the early days, and finding out what it felt like to go through that journey as the first developer. And then to see the company raise funding and, obviously, get very large – there are 160, 170 people today. And you did that all while you were working remotely from Prague. And then recently, you have decided to move on, from what I understand – we’ll dig into it – it was a mutual decision and very amicable. And I know you’re still in touch with Clay. And then you’re working on your own new software product called Convert Player. And if folks want to check that out, go to convertplayer.com and you’ll find out more about what Simon is working on.
So, let’s start by talking about – this has been covered elsewhere, kind of the advent of Leadpages and how you and Clay met, so I don’t think we’re going to spend a ton of time on it. What year was it when you and Clay connected and started working on it? It wasn’t even Leadpages at that point, right? I think Clay was selling info products, and you were kind of like the web guy?
Simon [02:47]: Yes, I was helping him transition from information products into software. So we did the first few software projects together. First ones were just [Wordpress?] plugin.
Rob [02:56]: What were those?
Simon [02:58]: The first one we did was Welcome Gate. It was a simple WordPress plugin. It was for free. It helped you to make welcoming gate when you arrived on some website that will cover the whole page and give you an offer the first time you visit the site.
Rob [03:12]: Right. And this was like – no one was doing it at that time. You had to hand code it, and people didn’t really use that tactic, is that right?
Simon [03:19]: Yes, it was a completely new tactic. People liked it, but they didn’t know how to do it, so we made it easy for everybody to do it.
Rob [03:24]: And what year was that?
Simon [03:25]: It was 2012.
Rob [03:26]: And then after that you did – was it LeadPlayer was the next one?
Simon [03:29]: Yes, it was LeadPlayer. It was like a month later.
Rob [03:32]: Got it. Wow, a month later. You cranked it out fast. So it was like a WordPress plugin for video? Could you embed videos and then you could ask for emails during the video playing?
Simon [03:42]: Yes. Exactly.
Rob [03:43]: Got it. And then was Leadpages on the horizon shortly after that?
Simon [03:47]: It was very shortly after that. Yes.
Rob [03:48]: Leadpages launched was it January of 2013?
Simon [03:52]: Yes.
Rob [03:53]: And from what I recall, it got big really fast. Right? Revenue spiked way up. Was that mostly based on Clay’s audience and just his marketing chops?
Simon [04:01]: I was watching it from the [?] perspective and I was just completely stunned by the growth, because I just had to keep up with everything. So yes, it was all stuff that was Clay bringing through his content marketing, his audience, and his great marketing skills.
Rob [04:15]: How did you scale that so quickly? What were you hosted on?
Simon [04:18]: I already had good experience with Google App Engine so I was pretty confident with using that. Without App Engine, you would never be able to scale so fast. So it was super easy.
Rob [04:30]: Yeah, for sure. You’re a contractor, you’re living in Prague, you’re working with Clay and Tracy, you’re writing all the code. And things start going hockey stick. You guys were – I don’t remember what the numbers were, but I remember you guys hitting a 100,000 MRR in like no time. It was crazy. Did you hire more engineers right away, or were you solo working on the product for a while?
Simon [04:53]: It was growing so fast we couldn’t properly hire fast enough. So, I think the first year and a half it was just two, three, four, five developers coming pretty slow. But those first hires, they’re developers that are still in the company today. We were very careful about hiring somebody who’d be like a technical leader later, and could manage other people. [?] with Tracy about hiring somebody really smart and I think that was one of the secrets that helped us along.
Rob [05:22]: Right. Was Tracy a big part of the – because it sounds like you had some really good early hires – do you think she was a big part of that?
Simon [05:28]: Yes. Tracy was awesome. She had like 25 years or more experience in HR and hiring all the right people. She hired me. And it was really interesting how we head-hunted some of the developers. We kind of like stole them from other agencies and ODesk.
Rob [05:45]: An interesting part of the story, very similar to how Derek was a contractor for me, and then he became W-2, and then he eventually – kind of retroactively – became a co-founder of Drip. A similar thing happened with you and Clay and Tracy. You want to talk a little bit about that?
Simon [06:00]: Yeah. I originally joined Tracy and Clay to learn more about marketing. But then I realized I can just refocus on myself and my software skills. And I didn’t even think that I would be a co-founder. I just worked so hard and passionately on the business that they invited me to kind of join the center circle of the three of us.
Rob [06:20]: When did that happen?
Simon [06:23]: I think it was like one or two months at the beginning. They told me, “Simon, you are telling us every day what should we be doing. You’re already a co-founder because you behave like one, so we don’t even need to make more changes.” I was so excited about somebody being able to sell my software because, as a developer, I wasn’t very good at that propagation and promoting my stuff. So, for me it was a very interesting experience.
Rob [06:46]: Well, yeah. You know, I was in a conversation with someone the other day – it was actually another podcast, Bootstrapped Web – and we were talking about co-founders. And as we talked I realized there’s kind of this framework that just came out of it which was: if you’re going to have a co-founder you’re going to worry about kind of the interpersonal relationship. Like can you work together well? Are your working styles similar? And that was the first part. The second part was goals. Are the goals similar? Do you both want an IPO, or do you both want to build a nice profitable lifestyle business. And the third was are your skill sets complimentary? Because what we find is if two developers get together and they both know how to write code really well, they’re going to stomp all over each other, and then they don’t have anybody to market the stuff. So, it sounds like you guys had a really unique situation where you were basically the technical co-founder, Clay, obviously, ran marketing, and then Tracy, it sounds like she did most of the business and the hiring. And that sounds like a pretty potent combination.
Simon [07:34]: Yeah. And I think most people just saw me and Clay, but they overlooked Tracy, and that was the key thing because she gave us the undisturbed focus on each of our doings. It was very important for us.
Rob [07:47]: It’s really interesting because I knew of you and Clay, and I had no idea you had a third co-founder until, I think, you and I sat down to lunch a couple of years ago and you said that. And I was like, “Well what does she do?” Because you have marketing and engineering down, but now I understand it. And having met Tracy now – for those who don’t know I work at Leadpages now. Drip was acquired by Leadpages about two months ago. And so, I’ve obviously been working closely with Clay and then Tracy came into town – because she works remotely – and I was able to meet her. And I started seeing that’s her super-power. It’s like working with people, reading people, talking to people. And so I can see how that was really an advantage for you guys as you grew. So, Clay was marketing info products for a while before – I think since 2009, right? Then he was getting into software in 2012, and I’d imagine that was a bit of a transition, right? In terms of moving from marketing info products to software. Could you talk a bit about that?
Simon [08:38]: Yeah, definitely. I was kind of guiding his hand through software, but the learning curve was pretty fast for him. We did quickly make the duration to learn fast. So first we did WordPress plugin. I think it coded over a weekend. And over next week he just started marketing it. The next project was a little bit more. It was a bait plugin. We did that in a month. And then Leadpages was, I think five, six months later. So, we started from small, free stuff, we moved to bait plugins, and then we moved to selling SaaS and subscriptions. We just went through all these phases so that we learn how to do each stage and that will help us to see how people react to software. How to sell them to get them to communicate about it because it was all new for Clay. But it was interesting how quickly he picked up everything.
Rob [09:27]: Sure, it sounds like you guys – you’ve heard of my stair-step approach of basically going from WordPress plugins or one-time sales up to SaaS – it sounds like you guys did that really fast.
Simon [09:35]: Yes.
Rob [09:35]: Normally it takes years. And that’s cool. And you said Clay picked it up really quick, which that seems like that is his super power, right, is marketing? So that makes sense. And so, you said even over the first year or 18 months, you hired as fast as you could but since you were picky and wanting to hire the best, the team wasn’t huge. You recently left Leadpages, maybe a month or two ago. How big was the team by that time, the engineering team?
Simon [10:01]: Engineering, I don’t know. I think it was like 60 or 50 people, including QA and other technical people.
Rob [10:07]: Was there a difference from when you guys were self-funded to when you raised funding? Did that change anything for you and the engineering team? Or was it kind of the same path the whole time?
Simon [10:18]: It felt literally – and I talked about it with Tracy – that I was working for maybe four or five different companies. There were different stages of the company’s life when everything changed, like from one day to the next everything was different. And we didn’t see that coming. So, I remember some people were saying, “We are the early people.” They were like remembering when the company was like under 50. And I was laughing because I was there when it was like just three. So it changed dramatically every few months. The first period was the longest. I think like a year and a half, we were like three developers maybe. And I think it’s kind of interesting because people think that many of this fast growth you need a lot of people. But if you do it kind of smart, and we used App Engine and we trie to do it kind of like a lean way, we realized we don’t need to implement everything and have all this staff. And it actually was enough in the beginning.
Rob [11:15]: And what was the next phase?
Simon [11:16]: The next phase was kind of growing the US team, because in the beginning we were completely all remote. And basically, even when we were five or six people, we each took one big chunk of projects on their own. One guy just went and made analytics, one guy made split testing, a new [builder?]. And we each worked individually. The biggest challenge was to build a team that can work together in US and be integrated with some management. And that started completely, from scratch and it was really painful and slow.
Rob [11:47]: Yes. That transition can be. Did you have funding by that time?
Simon [11:50]: I think so, yes. I think it was about the time when we needed funding. So it was even more motivation for us to get more structured. I call the early days like a [“Hero”?] development, when you just have one guy and you basically have one phone call, tell him what to do, and he goes and figures out everything. But the next stage shifts to stuff like QA and processes and you have to write requirements, and starting documentation and tests. And that’s – if you haven’t done it for a year and a half – then it’s hard to start with all of that. So we have to bring new talent and people that can do all of that. And it took us some time to do that.
Rob [12:22]: That’s always tough. It’s a tough transition. It also slows you down because it adds more process.
Simon [12:27]: Yes, definitely.
Rob [12:28]: And so, you and I talked before the interview about there was kind of a transition point for you. You were a co-founder and working for Leadpages, and there was a point where you were going to move to Minneapolis, because I’m assuming that it just made a lot of sense given that most of the team was here that you would come here and be involved. But tell us the story of that and how that turned into, in essence, kind of a transitional point for you mentally.
Simon [12:51]: I wasn’t sure. I was kind of trying to test it so I was coming just for a few months. I was highly considering actually moving there. But then I had some problems with the visa because we were growing so fast we didn’t have time to properly prepare for all the legal situations. And I was kind of delayed more in Prague. And eventually realized I kind of value my life in Prague and my environment more. And I felt more stable and more productive here then I would be maybe there. So eventually I kind of transitioned into staying permanently remote in Prague.
Rob [13:25]: So that was maybe two, two and a half years ago and you kept working for Leadpages. And why was that? What was the driving force that kept you at Leadpages working away as the team got bigger? I know things change. Sometimes that can be tough on an early engineer. But there had to be something that kept you there toiling away on the product.
Simon [13:44]: I still very much enjoyed working with Tracy and Clay and I still like the company. I wanted it to succeed. And I felt like I can help the company a lot doing it from inside. So, that’s why I stayed so long during these four years.
Rob [13:59]: Yeah, four years you were there. Cool. And then, recently like I said, a couple of months ago you decided to transition out and you’ve built a new product called Convert Player. It’s at convertplayer.com. And your headline there is ‘Turn your video viewers into email subscribers.’ I have an inkling that you are building this one on your own, and probably want to bootstrap it and make it into a lifestyle business. Is that right?
Simon [14:20]: I don’t like this term ‘lifestyle business.’ I just like building business. But yes, I’m going to bootstrap it on my own and I’m going to be doing everything. I’m already coding it myself, writing all the copy. I’m going to be doing some video marketing and email marketing all by myself. I think it actually might work.
Rob [14:39]: I think so. And you’re in kind of an early access right now? You have some folks using it already? Things are going alright?
Simon [14:45]: Yes. Things are going pretty well. I’m actually excited about how well it’s going. I like that.
Rob [14:51]: Good. Where do you want to take it from here? What does the next maybe six months look like for you with Convert Player?
Simon [14:58]: I have an idea that I want to implement and share and communicate and give away to people, because I feel like this is a piece of marketing tool that is kind of missing on the market. And I basically will be developing a new feature every week and then documenting it on video and showing it to other people to tell them how to do it because I’ve got some experience in that. So I think I’m going to be just doing this simple process like weekly videos and new features for the next half year.
Rob [15:28]: So content marketing basically demonstrating all the new stuff you’re doing and educating folks on how to use it.
Simon [15:33]: Yes.
Rob [15:33]: Yes. Do you want to tell folks – I gave the headline of what Convert Player does – but do you want to tell folks what it actually does?
Simon [15:39]: It helps you to get more email subscribers from the videos, which you can do on YouTube, but if you embed the videos on your site like WordPress or other site, you can actually achieve that by placing a special opt-in box anytime during the video.
Rob [15:55]: Got it. And is this WordPress plugin? Or is it SaaS?
Simon [15:58]: It’s actually SaaS. I was considering WordPress plugin and actually Clay gave me the idea that I should turn it into a SaaS. And I eventually did that.
Rob [16:08]: Yes, that’s cool. It looks like you support YouTube and Vimeo videos and, rumor has it that you’re integrated with Drip. Is that right?
Simon [16:13]: Yes. It is going to be one of my first integrations.
Rob [16:15]: Yes, that was cool. You emailed me and it was kind of fun to hear. Well, to hear A) you were working on a new project. Just because I’ve been watching what you’re up to with Leadpages for so long. Then it was nice that Drip was one of your first integrations.
Simon [16:27]: I’m actually using Drip for my own marketing and I’m using it, I have to tell you, I fell in love with that product. It’s really cool.
Rob [16:35]: Awesome. Yes, that’s good. Glad we could help. A few months ago, when you finally made the decision to leave Leadpages and go on your own and do Convert Player, that had to have been a pretty long thought process. And I’m wondering kind of what was the impetus for that? What eventually made you decide that it was time for something new?
Simon [16:54]: I was thinking a lot about how I could contribute to the company, and how can I help and contribute to the growth. And especially in the beginning, in the first years, I felt like really helpful and really valuable. And then the more the company grew it changed the different sizes and the environments, I slowly got the feeling like the skills I used to grow it from the ground are not as useful. But they are still useful for other things. So eventually I realized I’m going to use them to build a new product from scratch. Because I feel there are some people that generally good at taking a company that’s already launched and taking it to a higher level. And there are some people who are generally good at taking stuff from the ground, which I feel like that’s kind of like my domain. So, in that sense, I might have stayed even a little longer than necessary. But I felt I was still very productive.
Rob [17:44]: Yes. I totally get it. I feel the same way. I am a starter. I mean, obviously, right. I’ve started 20 things. But it just comes to a certain point where – and I don’t know if it’s – I guess it’s level of complexity, or it’s number of employees, or just at a certain point where your contributions aren’t as valuable as they were when they were only two or three people. So, that makes a lot of sense.
Simon [18:06]: Yes. And that start can be long. It could be a few years.
Rob [18:10]: Oh, yes. For sure. Well, and you know what I liked about it is I was basically coming into work for Leadpages as you were moving on, but the relationships are intact. It was a very amiable parting of ways and Clay still speaks very highly of you. And you talk about how Clay gave you the suggestion to go to SaaS. So, it’s obvious you guys are still talking and I know you’re still in touch with Tracy. That’s cool that it’s not some type of burning of bridges or bad blood or anything.
Simon [18:35]: Yes, that’s really important for me. And I want Leadpages to succeed, and I want to be really close to it as a partner business ideally. So, Leadpages incentive would be one of the integrations for Convert Player itself. And I just want to be around Clay and Tracy because they gave me so much and it was a very interesting and awesome ride.
Rob [18:58]: Yes, very cool. Alright, sir, thanks again for coming on the show today and talking about your journey over the past few years. I’ve already mentioned convertplayer.com if folks want to check that out. How else could someone get in touch with you if they wanted to follow what you’re up to?
Simon [19:12]: Well, I guess they can easily just follow me on Twitter and send me a message as well.
Rob [19:16]: Sounds good. What’s your Twitter handle?
Simon [19:19]: Mine is @SimonPrague.
Rob [19:20]: @SimonPrague. Sounds good. Thanks again for coming on the show, Simon.
Simon [19:25]: Cool. Thanks for having me.
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