In this episode of Startups For The Rest Of Us, Rob and Brian Casel of Audience Ops, answer a number of listener questions on topics including assessing product market fit, finding a mastermind and more.
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Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. This week, Brian Castle joins me on the show. We talked about assessing product/market fit, how to find a mastermind, and answer many more listener questions. This is Startups for the Rest of Us episode 477.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing ambitious startups, whether you’ve built your fifth startup or you’re thinking about your first. I’m Rob and today with Brian Castle, we’re here to share our experiences to help you avoid making mistakes we made.
Welcome back to the show. We have a listener question episode today, Brian Castle, who you may know from BootstrappedWeb Podcast. He was also on the show just a few weeks back talking about his experience growing a productized service called Audience Ops. It’s a content creation service that he grew, then had a 40% decline in revenue, and then built it back up through 2016-2017, and then he taught himself how to code and has since launched an early stage SaaS called ProcessKit.
Brian has a myriad of experiences under his belt. He’s still an early stage SaaS founder but he has a lot of productized service experience. He’s a blogger and podcaster. I enjoyed the conversation today. I felt like we attacked some pretty interesting questions in a very Startups for the Rest of Us kind of approach—building the ambitious startups, being meticulous, disciplined, repeatable, taking on these questions in a pragmatic way, and answering in a way that we would approach them.
Before we dive in, I’ve had a few questions about what I’ve been up to lately. I think the biggest thing I’ve been focusing on is TinySeed batch two. Applications closed about a month ago. I know I’m having a ton of conversations with the founders of companies who applied to be part of TinySeed and that’s been super exciting. Moving on that process, it’s super time consuming but it’s critical to making this whole ecosystem work. I’m just really digging in and spending a lot of time on that in addition to working on MicroConf stuff.
In fact, to the state of independent SaaS, the survey that we ran a couple of months ago, that report is almost done. We’re putting the finishing touches in the next week or two. I’m going to be doing a live video presentation of the high-level findings and the most important findings of it here in just a couple of weeks at the end of January.
If you’ve already responded to the survey itself and included your email, we’ll certainly notify you once that’s available. If you’re not on the list, obviously, microconf.com, that would be the place to get on that list. I think it says “[2:42] SaaS report” or something in the header, there’s a landing page where you can find about that. Whether you come to the live video event or not, we will have a full PDF report of that that will be made available.
There’s some crazy, interesting, findings. I’m super stoked to be digging in this data. I have this mental model of how these all shakes down but to actually have data to look at and to sift through, and to see which of my assumptions, and my experiences match up with that, and which are, perhaps, contrary or countered by the data has been super fascinating. I’m enjoying it a lot. I can’t wait for us to share that with you and the rest of the MicroConf community.
With that, let’s start answering questions with Brian Castle. Brian Castle, thanks so much for coming back on the show.
Brian: Hey, Rob. Thanks for having me on.
Rob: Absolutely, man. We’re going to answer some questions today. I think you said the Question & Answer episodes are some of your favorites. Is that right?
Brian: Yeah. I was just going to say yeah. This is one of my favorite types of Startups for the Rest of Us episodes. I’m excited to dive in.
Rob: It’ll be fun. I’ve already reminded people in the intro of your areas of expertise and everything. We have some voicemails to kick us off. We actually have a comment; there’s an interesting one about how to accept payment by check in a clever way that I had never heard about. I’m really interested to hear…
Brian: I saw that one.
Rob: … your take on it. I was like, “Hey, I learned something. That’s great.” Let’s kick us off with our first voicemail which is a question about the product market fit survey.
“Hey, Rob. This is Daniel from [00:04:13]. I’m curious whether you ever come across the product/market fit survey methodology and what your thoughts on it might be or if there’s other quantitative number-based survey methodology you’ve used to assess customer feedback? Thanks a lot.”
Rob: To give listeners a little bit of an idea, I’m pretty sure he’s talking about the Sean Ellis’ product/market fit survey which is one question and then with a follow up and it’s, “How disappointed would you be if this X product went away? You’re no longer able to use X product.” The answers are: Don’t care, mildly disappointed, really disappointed, somewhat disappointed. It’s four or five different options. If someone selects the top two of being really disappointed or incredibly disappointed—the topmost severe disappointment—if at least 40% of your current customers select that then Sean Ellis said that’s when he deems you have product/market fit.
I like this survey. I respect the hell out of Sean Ellis; he’s a great growth marketer. I like this survey because it gives you data and information. I think one of the cons is I don’t see the product/market fit as binary. This makes it look like, below 40%, you’re not; above 40%, you are. I feel more like it’s a gradient where it’s a spectrum of having product/market fit with certain audiences and often times, you have a little bit of a product/market fit but not a lot. When you start getting a lot, you really, really, know it.
With that context for the listeners, I’m curious, Brian, to hear your thoughts on this.
Brian: I definitely, completely, agree about what is product/market fit and that is not binary, 100%. We don’t have a lot of context in terms of what the questionnaire wants to use the survey for. What’s its current situation? Is it a new idea? Is it doing customer research to validate it? Or is it an existing SaaS with 1000+ users and maybe considering doing a pricing change or something? What is the goal for using that sort of survey?
I think the usefulness of it really depends on different situations. Without knowing that background, I have a couple of thoughts on this. I really do like using surveys in general. I’ve seen that one. I’ve seen different versions of it. There are all sorts of good questions that you can include but I always want to really stress that it’s really important to couple pure data from surveys especially if you can have enough responses to have meaningful data with actual conversations with customers. You’re really going to find much more real information from actual conversations or just understanding the language that people use or their body language and things like that.
One thing I do a lot in all of my products, especially early on during the validation stage but even ongoing, I even put this into an automation flows that happen all year long where a person gets a survey, asks a few questions like that like, “How did you hear about this? What’s the problem you’re trying to solve? What are the current solutions that you’re currently using for? Currently paying for?” A lot of those I actually have free form text answers. I could use multiple choice and you can get harder data that way. But I like freeform because it gets them at least typing. Then I can read those responses then I’ll handpick the ones that just gave a lot of information. They seem really into this problem and they want to answer questions about it. Then I’ll personally invite them to call us. That’s usually the flow—survey to reading their responses to picking out people then talking to them.
Rob: Yeah. I think that’s a really good way to do it. I agree with you that talking to customers is going to get you so much more contacts than a survey. With that said, I should’ve Googled this survey before, so I wasn’t stumbling around describing it. The question is, “How would you feel if you could no longer use the product name?” There’s only four choices. I remember there being five maybe it changed over the years. But it’s very disappointing, somewhat disappointed, not disappointed, not applicable, and no longer using the product. It’s a 40% or more say very disappointed.
I’ve run this survey with three and maybe four different products. I remember it being harsh. HitTail was growing very quickly. Everything was working. It was a smaller scale app. It peaked in low-mid six figures of annual recurring revenue. But it was growing and it seemed like people were using it. When I did it, I didn’t get 40% that were very disappointed. I think it was 25%-29% range. I remember being pretty shocked by that and also disappointed. I remember running it with Drip. I’ve run it with two others before that. I have no memory of what the answers were.
I remember running with Drip. This is when Drip was really starting to take off, it was starting to grow very quickly, and I knew we were onto something. People were coming in, and churn was really low. I think we might’ve hit negative at that point. We sent this out. I remember being just like, “Oh. This is going to be a 70%.” I think it was a 43%. I remember being shocked. It’s a harsh judge. I guess what I’m saying is this, it really is a high bar that if you get near 40%, you’re probably doing pretty well with your product.
Brian: Yeah. Especially, since it’s just one question, it’s sort of like jumping off point to go dig in deeper. It’s like, you do the survey, you get the data back. It’s below 40% or above 40%. “What does that mean?” I don’t think that should mean, “Let’s go change everything and the product now.” I think that should mean, “Let’s go talk to customers.” Then understand what the underlying issues are that leads to that number.
Rob: Yes, indeed. All right. Our next question is from a longtime listener and many time MicroConf attendee, Andrew Connell [00:10:10].
“Hey, Mike and Rob. First, kudos to Mike for being so open and honest about Bluetick and what you’re working through. Hearing what and how someone else is working through the issues that you’ve got such as what you’re doing is one of the most hopeful resources for the rest of us. Thanks a lot, good luck, and keep it up.
Now, for a bit of a show feedback, and questions, I love the new format. Change is always good and it’s nice to see the change. From a fellow podcaster who’s been doing this for six years on my show, I like that listeners develop a connection to the host. A change in the format is just like moving houses; it’s still in the same family, but the environment has changed. Well done and keep it up.
This podcast, this community, and MicroConf has done a lot for me since discovering it six years ago. However, I now feel like a fish out of water. My business is in info products. Mostly, one-time sales but some description stuff. It’s not something I’d call SaaS though. This is an awesome community and dominated by SaaS businesses, topics, questions, tactics, etc. MicroConf even feels more like it’s microSaaSconf these days and that’s coming from a four- or five-time attendee. I’m sure there’s plenty of stuff that applies to different businesses, but I suspect you get my point. I don’t want you to take that as a complaint or a gripe. It’s just an observation. Maybe it’s unfair but I’m a firm believer in doing your thing. You guys keep it up and do what you’re doing. I’m curious on what you would think about this.
My question is more about advice on other communities to explore. Over the last year, I’ve been looking into the different conferences trying to find other podcasts and communities niching down to just the info product world. Info products and non-SaaS businesses have some very specific challenges. There had been other challenges that SaaS businesses have. From the last few years of MicroConf, I suspect that there’s a pretty good tight of community because we bond together and have a pretty good side of meetups and dinners of considerable sizes. Maybe I’m wrong or maybe there are other listeners who hear this commoner question who may identify with it as well.
I guess I should have told you who I am, I forgot to mention at the beginning, this is Andrew Connell from [inaudible 00:12:10]. Keep it up and just curious to hear what you guys think about this. Thanks.
Rob: What do you think, sir?
Brian: Yeah. A few things, I think within the MicroConf community, people might be surprised even though it clearly has the emphasis on software and SaaS. That’s certainly true from the speakers and the overall themes of these conferences. I can personally say for sure that I’m friends with multiple people who return to MicroConf every year and they do not own SaaS businesses. They ran ecommerce businesses, I know some info product people, and those who are in that community. I think that’s a really good thing. I think you can still find those people within MicroConf.
Outside of that, one to consider would be Dynamite Circle from Dan and Ian from the Tropical MBA podcast. I was active in that for a while; not so much recently. That community is pretty sizeable similar to the MicroConf community as well. It has a wider variety. There are some info products stuff. There’s ecommerce folks in there, some stuff related to travel, and working from anywhere. That’s a good one to look into. I don’t know about info product stuff specifically in terms of communities, that could be hard to find, but those are my thoughts.
Rob: Yeah. Tropical MBA or Dynamite Circle is what I was going to suggest as well. Good community. I’ve always considered them like a sister podcast to us. They’re more about being a digital nomad but also have a nice variety of e-com and content websites. There’s a lot of Amazon and ecommerce sellers. There have been some WordPress folks and even some SaaS folks who straddled both lines. Like that community. I spoke at their event at Bangkok in 2014, I believe. It had been a long time. I admire what they’re up to.
There is a Rhodium Weekend or Rhodium. The Rhodium community from Chris Yates is very authentic community similar to MicroConf in the sense that Chris has just groomed it over the years. There’s just a lot of good people. That’s more of a buying and selling website but there are definitely folks there who do info products.
The thing is that then you get into the internet marketing stuff. You can look at DigitalMarketer and the digitalmarketer.com from Ryan Deiss. That’s an online training. I believe they run traffic and conversions. You can go to that conference. It’s more about marketing and less about the product. That’s where software and SaaS are pretty unique. We do get together and geek out about our products in addition to other things. The product is the thing that unites us.
Whereas Dynamite Circle, it’s not the product you have. It’s more of the travelling and going against the standard script of the rest of the world. That’s the unifying factor. Whereas with eCommerceFuel—and other community—they are more like us where they unite around ecommerce. I would agree with you that I still think that we do get info product questions. I have a course although I took it off of Udemy because Udemy, I don’t know if you’ve seen it lately, but it’s kind of a train wreck as a seller. They just keep changing the terms. It was more headache than it was worth.
I had a course on there about hiring BAs. I have multiple books. I’m a big believer in info products especially in that stair step—that step one to get you to the point of quickly buying out your time. I think they’re fantastic. For me, personally, long term, that recurring revenue, that growth, that high sales multiple, if you just had to sell, that’s the beauty of SaaS. That’s why I think so many more people aspire to run a SaaS company than aspire to run an info product empire. I also think there’s a lot more opportunity and there’s just a lot more people successfully doing it.
Obviously, there are folks, yes, can you make a $100,000 or $200,000 or $1,000,000 in an info product launch? Of course. We see people doing it. But they’re really few and far between. It’s a hamster wheel of content creation. Again, it doesn’t have the sales multiple that SaaS do and all of that stuff. I think they’re fantastic for a certain purpose, but I haven’t come across a whole community that is united around just building and aspiring to do info products.
Brian: Yeah. I’ll just add one shameless plug here if you don’t mind. I run the Productize which is a course but it’s also a community. We’ve got a pretty good Slack community in there now. It’s for people who are primarily consultants and they’re looking to step up to running a business with the team and a productized service business. There are folks there who coupled that with training program. There are some software people, WordPress people in there too. You’ve got a good little chat going in there in the Slack group for people who are going through that transition phase, so that’s another good one.
Rob: Glad you mentioned it. productizecourse.com is where you’ll go to find out more about that. Thanks for the question, Andrew. I really appreciate it. I hope to run into you at the next MicroConf.
Our third voicemail of the day is an interesting one. It’s about building a very similar app and making it more stable. He’s wondering if that’s competitive advantage worth pursuing.
“Hey, guys. I want to start by saying thank you for the work that you put into this show. I find it to be truly inspirational so keep up the good work. I’m working on my first SaaS app. I’m a web developer by day. I work on it on nights and weekends. The idea for the product actually came from my wife. She works in a totally separate industry and interacts with a certain SaaS app on a pretty regular basis. One day she was describing to me how frustrated she was with this app. It was slow, unintuitive, and sometimes experience downtime during the middle of the day.
I sat down with her to take a look at it. It really seemed like it was on a shaky foundation from a technical perspective. However, it’s the only product that meets the specific needs that it solves which is why her company uses it. Our current working hypothesis is that if we build a more stable, intuitive, and functional version of the app that has feature parity, we will have enough differentiation to break into the market. What’s your take on this? Do you think functional superiority with the same set of features is enough to differentiate us? Or should we be thinking about extra features that would set us apart from them? Thanks, appreciate it.”
Rob: Mr. Castle, what are your thoughts on this one?
Brian: Yeah. It’s a good question. I like the fact that your wife is a user of this other software so you have that really close used case where you can get that personal research into how she and the other members of the company use the product. That’s always good. You probably want to expand beyond that and maybe talk to her coworkers or other people who are using it. I also like the fact that there is this solution out there in the market. It proves that some people do buy the solution, but it’s not overcrowded from what it sounds like.
I would also just have the question in your mind to understand how easy it is to reach that market. I don’t think you mentioned what type of company it is or which industry it is. Even though you might be able to build something for that market, how easy it is to go find other people who are in your wife’s position in other companies throughout the world or throughout the country or the region? I think that gets to that question of product founder fit.
Sure, you might be able to build the same product or achieve feature parity, but do you have the inroads or the communities or the channels to be able to reach those people? I know there are enough of them. I think that’s something you can certainly vet out over the next few months.
Rob: Yeah. I like the pros you pointed out. I think the fact that they proved the market out by having this app is good. I’ve mixed emotions about this one. I think you need to ask more questions. The first question I have is we can all, with our high standards, and our impeccable taste in UX, and usability go use an app and say, “Oh my gosh, that app sucks. I could build it better.” Do their users care at all? Do they care at all? Do they care one bit?
An example: I was a contractor/contract developer for a consulting firm that was redoing an app for the Los Angeles County. They spent a million bucks and they paid us to build all these stuff. The old app was literally a main frame, it was a terminal app that they would log into. The UX is typing. It was just wasn’t particularly fun, it was hard to train people, it was a pain in the butt. The delete key didn’t work, command this didn’t work, there was no undo, there were all these things you couldn’t do.
We built a modern, quick web front end on it and a bunch of the users were either so used to the old UI that they were like, “Oh, I used to like type this and then hit three tabs and it got me to the other thing and this doesn’t do that.” I’m like, “Yeah, you don’t need to do any of that. You just do one click and it auto populates from this XML import.” They’re like, “Oh well, this just seems complicated.”
Change is hard—I guess is one thing—and also, a lot of people just don’t care, and they’re used to using something. That’d be the first thing I would really try to stress out is like, “Does everyone at your wife’s work, are they complaining about this software and just dying for a better solution. Do they really, really need something better or do they not care?”
Second thing I would ask is, what are switching cost? Because without knowing that, if it’s just an export of a CSV and an import of CSV and everything is set up, awesome. But if its switching cost is to retrain someone or retrain your whole team on it and move a bunch of data and do a bunch of other stuff, that’s tough. If everyone’s on annual contracts, that means you only have a once a year when you can basically get to those prospects because they can’t just cancel for the next month. Once they’re on a year contract, they won’t get there. Think about switching cost and I would inquire about those.
The last one is one that Brian brought up, and it was a first one that came to me is you build a better product, can you get in front of the users? What are the traffic channels? How expensive are they? Are these people online? If they’re not online, you’re talking about customer pain. I’ve talked about competitor pain and customer pain, in this case, you probably won’t have competitor pain. You’re going to be the pain to your competitor because you’re going to build a better product. But you will have customer pain. Or could feasibly have customer pain if it’s more of a brick and mortar type business where you can’t just run some Facebook ads or do some content marketing and generate a bunch of leads where it’s literally cold calling or going to the events or whatever.
Since you haven’t told this about the industry, we’re just completely conjecturing here. I’m not saying you shouldn’t do it, but these are the three yellow flags or the three big questions I would have with just doing this approach. But can this approach work? Absolutely. Look at what Xero has done competing against Quickbooks, most people don’t like Quickbooks and Xero built a web-based admin or a web-based competitor to it. I think the fact that there was Infusionsoft and then Drip and ConvertKit and all these other tools were able to come in and do similar things, that’s what we were doing. We’re trying to build easier-to-use, more modern with the integrations we wanted, just a more pleasant experience overall and it worked. It can definitely work but I think you need to answer some questions before you dive in with both feet.
Brian: Yeah. Just one quick thing to add–kind of a low hanging fruit. First thing to do on that last point to figure out how could you actually reach this market. A question to ask your wife is to understand how her company bought the software that they’re currently using. Whether she bought it or a manager or somebody else was the decision maker. Did they go through an enterprise sales process or did they just Google and find the website and buy it that way? Did they pay monthly, did they pay annually? I think those are better questions to understand than even how the product works, to understand what you’re actually getting into.
Rob: Totally agree. That’s a good point. Thank you for the question, hope that was helpful. Our next question is not a question, but a comment from Kenneth Caw and he has written in a few months in the past. He says, “Hey, Rob, enterprise sales guy here wants some help,” and he has actually written in when I had David Heller on the show to do a hot seat about enterprise sales and he had written in with a bunch of good suggestions. He says, “A lot of people don’t know this, but Stripe actually released a way to receive payments by paper check this year.” This was a question that I believe in the Laura Roeder Q&A episode. We were asked, “How do you manage paper checks and how do you keep track of them and this and that?”
He’s pointing now Stripe can do it. He said, “This makes things so much easier since they provide your customers and the address for the check to be sent to, receive and process it on your behalf.” That’s crazy. “Coincidentally enough, we used to do the same thing as you did with Drip, which is to set a discount code to the customer in Stripe and then put reminders in and then check it. When payment is due, once a year, we deal with six figure checks sometimes, so this has been a total efficiency improvement since Stripe deals with the invoicing, follow-up reminders, analytics tracking, repayments, etc. Best of all as a remote company, we don’t need to depend on someone making a trip to our company’s PO box to look for the check.”
I’m not sure why Stripe doesn’t advertise this enough, but you should let your listeners know about that. Since all one has to do is simply enable a checkbox—pun intended—in Stripe, which saves us bootstrappers precious time and resources managing this. Plus, it gives you an additional reason to deal with enterprise customers that want to do pay by checks.” Big smiley face because Ken is of course an enterprise sales guy.
Thank you so much, Ken, for writing in. Did you have any idea about this, Brian?
Brian: I had zero idea about this.
Rob: I never heard of that. That’s a great service. When he said by check I thought he was going to say, and his subject line is this payment by check, use Stripe. I thought he was going to talk about e-checks where it’s like just an ACH thing where you get the routing number. But I mean literally, an address the mail to check, that is bravo, Stripe.
Brian: That really is pretty incredible. I knew about the ACH thing. I kept promotional emails from Stripe. I have not received anything about this feature. It seems like a pretty killer feature.
Brian: I’m curious about your thoughts on accepting checks in general. I’ve seen this in my business in Audience Ops, I’ve had quite a few leads actually, ask for the ability to purchase our service using a check or having us invoice them and then them paying us like a more traditional agency or consulting model. I’ve refused those. We only stick to credit card and debit cards through Stripe subscriptions. I know for a fact that I have left some money on the table because of that, but I opt that way because I just don’t want to deal with chasing people down for checks in the mail.
Rob: Yeah, that’s the tradeoff. At Drip, once we started accepting checks, it was late, it was after we had a much larger team. There were salespeople that could manage it. That really is what it is. It’s like putting something on your calendar to remind you to check in with someone. But the bigger thing we did is we just said we had a minimum for a check. If I were in your shoes, I would only accept it for annual prepay. I would not do it on a monthly basis. It’s like, “Hey, if you really want to pay via check, then you gotta pay 12 grand all at once or 24 grand or whatever the price point is.” That would be how I would approach it at your scale because it’s not a requirement.
But yeah, once you get up in the 25K and up, maybe even 20K and up annual contract value, you need to start doing that at least in the B2B SaaS base. It’s great that Stripe accepts it. Obviously, it’s enough of a pain point that they started doing that. They wouldn’t have done that if people weren’t asking for it. But I also think then I wonder it says, they’ll take care of all the reminders and all that stuff that’s pretty fascinating. I’d like to almost investigate this a little more because again, we had to hand build something that reminded a salesperson to reach out and make sure that the check came through.
Brian: Yeah, for sure. The other thing that I would at least keep in mind for my business is that we’re a recurring service and that’s part of the reason why we don’t do checks is that we need the payments to keep coming in so that our team keeps working. If there’s a delay, then we would need to know to pause the service for a period of time. I guess if this works automatically through Stripe and then Stripe can just mark it as unpaid or paid, then that can be your indicator.
The other question that I would wonder about is international payments. Because that’s sort of a headache that we’ve seen just because credit cards internationally tends to decline, especially for higher dollar amounts more often than like US-based for whatever reason. We’ve had to fix failed payments more often with international. I wonder if this could somehow help that. I’m not sure.
Rob: My guess is no. I’ve not even Googled this, but international checks are so complicated with the banking that I would guess that would be a V2 if they were going to try to tackle it. There’s also big fees attached to it with sending checks and trying to cash them. If you send a US check to a Canadian or vice versa, there’s this big fee they charge to do that internationally. We experience all the same stuff you’re saying with the international credit cards being declined more often than that. I don’t think this would help.
Also, one other thing to throw in is, I wonder how much Stripe charges as a fee for doing that. This is something to think about. If you’re signing a $30,000 annual contract, a 3% fee on that is $900. That’s where it starts to make sense to maybe take a check because you can basically cash that for free. If Stripe’s still charging 3%, you have to think about that, but if it’s more like ACH where it’s half a percent or 1%, this could totally be worth it.
Thanks again for the info, Ken. Always appreciate your insights. Next question is from [Mereck 00:29:46] and he says, “Hey guys, great show. Would love to get your thoughts. I’m a cofounder in a small software house.” I think he’s an agency. Because they’re consulting from their hired hourly or by project. “The issue is that my cofounder doesn’t help company anymore. He made some significant contributions in the early days including his know-how, some money investing directly and working for free. But right now, because of an unplanned change of direction in the company, and a change of the market situation, we can’t find paid work for him. Not because he does not have value to give to the market, but for now the company is too small for two founders/CEOs.
He was upfront about his expectations about work and skills in the company and he still help out a few hours a week for free. No hard feelings between us, we aren’t looking for a legal resolution. I’m wondering if we should wait for the company to grow, if we should return him the money he invested, buy out his shares, or what you think? Thank you so much for your thought.”
This is an interesting one. We don’t often get a lot of too many consulting questions. But I feel this could happen with a SaaS startup. Skills no longer and neither might be an interesting one. I guess if you’re a salesperson, co-founded it and then you decide to go way down market and not need sales, that can be something. Curious if you have thoughts on this, Brian.
Brian: This one is tough. I don’t know all the details on this. One thing that stuck out to me is that he talked about refunding the money that he invested. I guess the partner’s actually put up some of their own cash other than just putting in their time. If it were just time and you’re talking about giving him compensation for the time that he spent, that’s a tricky one because you should have some agreement going into this thing that, “Hey, we’re all investing in this idea. We don’t know if it’s going to go anywhere. There’s no promises.”
Then there’s the question of, how was the initial partnership agreement drawn up, if there was any, which there really should, generally speaking. And there’s the concept of vesting and a vesting schedule. One model that I think we’ve seen recently is the user list. You spoke to Jane about this, is that right? They sort of paused her vesting so that her initial time was still–that value remained, but then from a certain date going forward, she’s phased out a bit. That’s one model to look out.
Rob: I think consulting firms don’t normally vest, but in this case that would’ve been super helpful. If he was above a certain number of hours per week or whatever he was vesting and then at the time that he leaves then yeah, you do, he either leaves it in until it grows. It’s up to him. If he owns 10, 20% of the company and he only vested that much, then he could say, “Hey, please buy me out.” And then you have to figure out, “Hey, we can buy it out over a year or two. We can pay this much per month out of cash flow.” Or if he wanted to grow, he could gamble and leave it in and expect the company will grow and it’ll be worth more when you get there.
I believe our consulting firms, obviously, there’s going to be a range, but I think valuations are around one times annual revenue. I don’t know if it’s looking ahead or looking back. I’m not exactly sure. But someone in the community might have more info on that. But I know the multiples compared to SaaS is pretty low because it is just hours. It’s a […] for hour-type thing.
Brian: Recurring contracts can help improve that.
Rob: Exactly. But assuming that he’s fully vested, and he owns a third or half of the company, I really do think it’s a conversation. I don’t think there is anything you should do here. I think it’s up to the two of you. With consulting firms, they can have pretty good profit margins. The cash coming off could be used to buy him out. I think that’s probably the long-term play. Say, you don’t have someone with stock who really isn’t working on the business.
The hard part is how to value if he’s doing all this work for free. I don’t know how you guys figure that part out. It’s just what’s fair there? Do you agree on hourly rate and try to estimate? Or is that just what created the value in the company and his stock reflects the value of that in essence.
Brian: Again, we don’t really know all the details here, but if it’s purely consulting and the work that he was involved when the work existed was just consulting project that started and finished, then I think that the question is, “How much does his contribution to those projects live on after he stops working in the company?” I think the simplest view is split whatever revenue came from those projects 50-50, whatever your partnership agreement was, and then new projects going forward that he’s not involved in, he doesn’t really have a part in those. That would be a simple way to look at it.
The other thing to consider depending on how big the numbers are that we’re talking about here and everything else, you might want to just talk to a third party. I know that there are professional arbitrators, but there are people in this community who…
Rob: It’s like mediators. That’s a good way to think about it is to get someone, other party, to just give you guys some direct advice knowing all the details because that’s the problem is, I think there’s some gaps here. Hope that was helpful, [Mereck 00:35:03]. Wish you the best of luck figuring that out.
Our next question is from Fred Myer and he’s asking for some advice for finding or starting a mastermind. He says, “Hi, I’m a web developer and owner of two lifestyle businesses looking for a mastermind to start or join. The easy to Google options don’t seem attractive. Do you have any advice on finding or starting a good mastermind?”
I’m going to assume that since he’s a web developer, he’s looking for a software-oriented mastermind. My recommendation is always Ken Wallace’s mastermindjam.com if you really have no network. My first recommendation is always, go to your network, go to events, be part of the Startups For the Rest of Us and the MicroConf community and you’ll find people. But if you haven’t done that, can’t do that, whatever, MastermindJam is a good alternative that Ken matches people up. What do you think, Brian?
Brian: Yeah. Totally agree. I recommend MastermindJam all the time. I also recommend going to conferences like MicroConf, like the upcoming MicroConf locals, that should be a good one too for this. Yeah, just getting into communities like that. In the past, when I was really early on in this industry and I didn’t know too many people, I had a bit more focus on my local community. I would go to local meetups. At the time I was into web design and WordPress, I went to local web design and web development and WordPress meetups. I met some really good friends through that. That turned into local mastermind groups.
These days, I’m not in a weekly mastermind currently like I was for a while. But my mastermind group now was borne out of the MicroConf community where we do TinyConfs a couple times a year. We all fly to one place and have a deep dive. We chat on Slack throughout the year. I find that that’s a good format for me right now.
Rob: Yeah. I think that makes a lot of sense. Sir, we are all out of time for today. If folks want to keep up with you, they can head to, let’s see, there’s productizecourse.com, there is audienceops.com which is your productized service where you and your team create content for content marketing for folks on a subscription basis, and castlejam.com, is that your personal website?
Good. Good call. Are you still @casjam on Twitter?
Brian: Yeah, my teenage AIM screen name lives on through Twitter.
Rob: I know. I registered software by rob.com in 2004, 2005 and started blogging. It’s like, “Why didn’t I just registered my name?” Maybe it was taken or maybe I didn’t think about it, but years later—it was literally in the past, probably 18 months—finally, I bought robwalling.com from the previous owner and redirected in it. It’s just so much easier. It’s so much more memorable. It’s like once people remember your name they can find you versus trying to remember this derivative of your name.
Brian: My whole life I’ve had people mispronouncing and misspelling my last name because they think it’s like the word castle. But then in recent years I’d have people mispronounce or not understand even what casjam even means which it doesn’t really mean anything. I just got sick of explaining that whole thing. It’s my name. That’s where my blog and newsletter and links to my podcasts and products and all that’s on there.
Rob: That’s the center. Very cool. If folks, they listen to this podcast, they will like the Bootstrapped Web podcast where you and Jordan Gall chat every week or so about this kind of stuff. I’m a long-time listener, long time first time; long time listener, first time caller. Anyways, alright man, I’ll let you go. It was a pleasure having you.
Brian: Yeah, good time answering these questions. Thanks for having me on, Rob.
Rob: Absolutely. That wraps us up for the day. If you have a question that you want answered in a future episode of the show whether by me or a guest, you can leave us a voicemail at 888-801-9690. You can email firstname.lastname@example.org. Obviously, you can have just plain text in there, you can attach an MP3 […] Dropbox link to an AIFF. You know the drill.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. If you’re not subscribed to Startups For the Rest of Us, you really should be, you’re missing out. Search for startups in any pod catcher. Visit startupsfortherestofus.com for full transcript of every episode posted within a week, maybe two of when the episode goes live, but continue to hear that the search for transcripts are super helpful for people so we will continue to do those. Thank you for listening. I’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob and Mike talk about five ways to structure your mastermind. They list some different formats to try and the pros and cons to each.
Items mentioned in this episode:
- Sherry Walling’s Retreat Book
- The Nights & Weekend Podcast
- Mastermind Jam
- The Productivity Project Book
Mike [00:00:24]: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about five ways to structure your startup mastermind. This is Startups For the Rest of Us, episode 277. Welcome to Startups For the Rest of Us, the podcast helps developers, designers, and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob [00:00:25]: Hi, I’m Rob.
Mike [00:00:29]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What are you doing this week, Rob?
Rob [00:02:16]: Well you know how at the end of every year I talk about how email had become such a problem for me. That’s kind of the one thing I’ve haven’t been able to fix. I feel like I’ve outsourced or delegated or figured out systems for so many things, but my inbox was always the one, it’s just hammering me non-stop. I finally might have a solution. Basically I hired a VA about, let’s see, six or seven months ago. And it was more like, I’d say maybe a step up from just a standard VA, and it was someone who called themselves an Executive Assistant so I’ll call her an EA. And Executive Assistants are more used to dealing with executives, in essence, and it’s not like I’m some high-powered executive, but they are used to managing calendars and going through email and evaluating things, and being less about – there is definitely some process there but it’s also a lot of pretty hardcore thought put into it. And so the one that I had before didn’t work out. It became a little too much of a process and she was basically just filtering my stuff into some categories and it wasn’t actually helpful. I let her go a while back, she eventually became not liable. And now I have a new one who’s been with me for about a month and I’m slowly ramping more and more up. I have notices a dramatic difference now. Instead of waking up to 70 or 80 new emails in my inbox every morning, and then I get another 50 during the day or something, it’s just way, way less, stuff that I’m processing. Because not only is she filtering things, but she is responding to podcast invites. I told her my criteria, my loose criteria for evaluating invites for interviews and guest posts, and even some partnership stuff and she’s starting to take some action on those and inquire for more information or to let someone know that not able to do it or to actually book the thing, and then she has access to my calendar and she’s booking that. A long way of saying this week I’m feeling finally good for a brief glimpse about the status of my email inbox.
Mike [00:02:21]: Cool. I just have one question about that. Are my emails getting directly routed past?
Rob [00:02:59]: They definitely are. I said one of my things is if someone seems like they know me and they’re emailing me, just put them into the ‘Today’. ‘Today’ is everything I handled today. I get a lot of cold pitches for different things and I’ve asked her that if they’re cold that either evaluate it yourself or if you don’t know how, let’s talk about how you can evaluate it in the future, and then she puts it into a ‘This Week’ label. And I check the ‘This Week’ label once, maybe twice a week. And that’s where I have some newsletters that I like to read and some other stuff. And it’s people asking for advice as well, if I don’t already know them. Stuff that I just want to do in a big batch. Yes, since you know me, you would go into the ‘Today’ label.
Mike [00:03:01]: Well that’s good to know, I guess.
Rob [00:03:22]: The other thing, too, is I’m not having her reply as me at all. For some reason that feels weird. I know some people have a VA or an EA reply as them and that, I don’t know that I will ever want to do that. I’d prefer for her to basically send it over to me and I reply or she can reply but signed as her just to let someone know.
Mike [00:03:28]: I was going to say you could just have her do that and do the reply but then also sign it as herself instead.
Rob [00:03:28]: Exactly.
Mike [00:03:29]: That would work.
Rob [00:03:31]: How about you? What’s new this week?
Mike [00:04:33]: I was reading a new book over the past day or two. It’s called the “Zen Founder Guide to Founder Retreats.” And that’s by Sherry Walling. We’ll link that up in the show notes. I talked about founder retreats in my book as well, but it was based on an interview that I did with her and also, obviously, she was the source of that idea. So this is probably the definitive guide, I would say. It walks through four steps to making sure that you have a successful retreat and then goes through various strategies and activities that you should use while you’re on that retreat. And then it also includes some worksheets along with it. Like I said, we’ll link that up in the show notes, but I would definitely recommend that anybody who’s out there who’s considering a retreat or even if you’ve already gone on a retreat, there’s a lot of good tips in there. I especially liked the strategy section where she maps out four different strategies specifically for how to answer some of the questions that you have in your head, or how to go about goal setting. Again, definitely worth a read. We’ll link it up in the show notes.
Rob [00:06:27]: I was pretty happy with how this turned out. I did absolutely none of the writing. I didn’t write a single word in this thing. I did read it over for her and give her a little bit of advice, but she really drove it. And this is the first product she’s ever launched so I’m excited about it and she’s certainly stoked about it. If you go to ZenFounder.com there’s a link to it in the right navigation and I think she’s selling it for $24.00 via Gumroad. If you’re interested in it you should check it out. I have another recommendation for a book. It’s something I stumbled upon from listening to the Unmistakable Creative podcast. And the book is called “The Productivity Project.” I’ve listened to a lot of productivity books over the years and I’ve become immune to a lot of them and they have a lot of suggestions and tactics that don’t necessarily work for everyone or they just become advice that you don’t take. But what this guy did is he did, I think, a 100 different productivity experiments over the course of a year or a little more, and he basically looked at all the best advice and some of the worst advice and just implemented it and then he recorded all the results and he published it on a blog. And later, that turned into this book. So the book itself, I think, is 20 or 25 of the ones that worked the best for him. Maybe I’m 20% into the book and I had to stop listening in the car because I wanted to take so many notes and I didn’t want to take notes while I was driving. It has really resonated with me in terms of actually having actionable stuff and things that I have implemented so far this week. I mean I’m only three days into implementing these, but I want to see if I can make them sustainable because I think his suggestions and his insights are worth doing. Again, I’m not a huge fan of these productivity books because once you read one, if you’re not implementing the suggestions, then you should not read another until you do. But if you think you’re at a point where you really need a boost in productivity and you’re ready to start building some new habits, and I think that’s the key, then I would check out “Productivity Project.” It’s obviously on Amazon and Audible. I’m listening to it on Audible myself.
Mike [00:06:40]: I was just going to mention that when you pick up those types of books, basically if you make the decision to go down that road, you’re creating work for yourself because you have to commit to doing those things otherwise reading the books doesn’t actually do anything for you.
Rob [00:07:13]: Exactly. And I think I’ve listened to three or four approaches and I’ve noted down one, one and a half. I made a variation on the second one. And that’s what I’m going to do, is filter each one and say, “Am I going to do that? Do I think it will work, and B, do I have the discipline and the head space right now to start doing that?” And my hope is not to come away with 20 new ideas, it’s to come away with about three or four, and then implement one, make it a habit, wait about a month and then implement the second, make it a habit, wait about a month. So that’s my plan with it. But hopefully it helps folks out if you decide to listen to it. What else is going on?
Mike [00:07:49]: We have a question that came into us from Don Falcor [ph] and he asks us about using Medium. And he said, “Hi Rob and Mike. I’ve recently noticed a slew of folks who are using Medium as their content marketing platform instead of their actual site. I noticed that Drip is also doing this. My thought process is that I’m now losing control of the platform and I’m not able to provide a Drip pop-up or email marketing opt-in form and cross promotion since I don’t own the platform. Medium’s rather limited, and though it’s a fantastic tool for writing and sharing content, I can’t get past the fact that I no longer own the platform and I essentially lose the extra opportunity to cross promote and upsell a reader. The question is why do you use Medium instead of your actual marketing site?”
Rob [00:10:29]: And the answer for us is that we started it purely as an experiment. I’ve got quite a bit of content, let’s say between two and four posts a week and some of those – we put a post out today on blog.getdrip.com. It’s essentially a 3,000 word teardown with a bunch of screenshots of Derek Halpern’s recent email sequence that he used to sell his seven figure course thing. So we’re putting out pretty big pieces of content like that, and what we found is if we didn’t experiment and we ran it on our blog where we send the tweets to send people to the blog, and when we email our list we send people to the blog, and we did all that and we looked at the numbers. Then we tried a separate experiment where we still posted to the blog but then we posted to Medium as well. At the bottom of Medium we have two things. One, we have a link back to our blog that says “This was originally published here,” and we then have a call to action, “You can get this free email marketing email course.” They have to click through and there’s a landing page and they have to enter their email, so it isn’t as nice as being able to embed an opt-in form there. But the whole Medium post is there and so far we’ve seen no Google content penalties or anything like that, having duplicate content. In addition, then when we do the tweets and we do the shares and we send the email we refer people to the Medium post. It still exists on our blog, people can find it. But we’re sending them over there and the idea there is that you’re basically using your network to get noticed within the Medium space. The more hearts and more reads something gets, the more likely it is to get onto Medium’s list of popular posts today. And if you hit one of those then your stuff skyrockets. You get 2X, 3X the traffic and the views and the reads and all that. So that’s the idea, is you’re trying to utilize some else’s network. I totally agree with Don in the sense that you’re losing control if you’re building it solely on Medium. We’ve gone back and forth and we’ve run different experiments and what we found is that we do definitely get more traffic and more reads over on Medium. We also have found that they tend to be, I’ll say less qualified. So we get less interest, less people clicking back to our site because they’re not on our blog anymore, right. So there isn’t a Drip logo on the header, we can’t directly ask for the opt-in. There’s pluses and minuses here. I don’t have a definitive answer. We have not made a decision to go solely with Medium. I wouldn’t make that decision because I still want stuff to live on our blog. We don’t want to be a digital sharecropper where you’re basically building this community and this reputation but you don’t own any of it like Don said. I guess that’s a non-definitive answer to what we’ve done and the experiments we’re still currently running. And we were just evaluating one today. I was evaluating with our growth marketer Zack about which way should we go? Do we need to make a commitment to these because some we’re posting on Medium and then some we’re not. I didn’t realize, that was a long answer. It’s probably the shortest answer I could give.
Mike [00:11:25]: So Don hope that helps. Thanks for the question. In today’s episode what we’re going to do is we’re going to talk about five ways to structure your startup mastermind. And back in episode 167 we talked about how to organize and how to run a startup mastermind. So if you’re not a member of a mastermind group or you’re thinking about starting one but you’re not quite sure, go listen to that episode and you can learn some of the basics of how to get started. But in this episode what we’re going to do is we’re going to talk about the pros and cons of some different formats that you may or may not have tried in your own mastermind groups. This came about because in my own mastermind group, what we’ve started doing is we’ve started experimenting a little bit and talking about what different things we can do and how we can continue to use the people that are in the mastermind group to drive our businesses forward, but also to do some experiments, to not just mix things up so that the format itself isn’t stale but to help identify whether or not there are other formats that would work better for our businesses.
Rob [00:11:31]: So today we’re going to be talking through five different approaches for structuring your startup mastermind.
Mike [00:12:28]: The first approach is to use what’s called the round table. In the round table, pretty much everyone speaks for an equal amount of time for each session. Let’s say that you have a mastermind group with three people and you’re meeting for an hour and a half, then each person gets about half and hour. There’s a couple of different reasons why you might go with this approach. We started using this approach very early on just because it was the one we came across first and it just made sense. But one of the benefits of doing this approach is that pretty much everybody gets to speak every single time so everyone has a reason to go there. Everyone has a reason to show up because they are going to be getting valuable feedback for their particular business. And another reason is that you always get an opportunity every single time you meet to bring up the problems and issues that you’re facing in your business that were a little bit different where, let’s say you were skipped on a particular week or you got less time then you wouldn’t have those opportunities to talk about the problems that you’re facing.
Rob [00:13:46]: And to be honest, this is my preferred approach. I wouldn’t say it’s the best one but it’s the one that I’ve found that resonates the most with me because since we only meet every other week in the two masterminds we do, I’ve always struggled with if we do a hot seat one or a rotating hot seat, that I may not get to talk about my stuff for four, six, eight weeks, and that’s just too long given how much is going on. I think it depends. It’s certainly a personal preference and maybe it depends on what stage your business is at and how fast things are moving and how often you meet. But I’ve always really like the round table approach. I’m trying to think if I’ve even ever tried any of these other ones. I don’t know that I have. I think we might have done a hot seat one at one point and I didn’t like it as much as round table. But I do know that some people swear by the hot seat approach. And one of the cons, or the con, I think, the biggest con of the round table approach is that you may not get enough time, you may not be able to dive in deep enough into specific topics most of the time if you have four or five people in a mastermind and you only have an hour to meet, then you have like 12 minutes. So you really need to focus on what you’re talking about. I think the way I’ve gotten around this if by keeping masterminds really small, like three people, and then meeting for 60 or 90 minutes so that you have apple time each time. There are some trade offs here, but that, compared to the others, that would definitely be the drawback of round table approach.
Mike [00:15:17]: The second approach that I came across doing some research was essentially doing a timed segment. In a timed segment, what you do is you divide the call into very short time segments for somewhere between five and ten minutes. Let’s say that you have five minutes allotted to you, you can talk for those five minutes and then you get one minute to ask and answer questions, and then you get about a minute to transition to the next person. Now, in this, the nice thing is that you get to speak multiple times. So if you’re meeting for an hour and there’s three people, you’re going to get four different opportunities to speak or somewhere along those lines. Obviously those extra one minutes in there, but you get to talk several times in a row throughout the course of the conversation. And one of the other side effects of this is that if you forget to bring something up, you can bring it up later. What I’ve found in doing the round table is that if I go first, for example, then I might speak for my half and hour and then a little ways into somebody else’s turn speaking I might remember something. It does give you the opportunity to come back and bring something up that you might have forgotten about. The other thing that it does is it helps to keep the call on track without meandering a lot. I have had calls where the mastermind group will go long or will meander into discussions which are sort of meaningless, but if you have a strict timetable that you’re trying to stick to, then this can help alleviate those. And it’s not to say that you shouldn’t have fun during your mastermind calls, but there are certainly times where conversation will meander a little bit and an hour and a half call can turn into two and a half hours pretty easily.
Rob [00:16:19]: What I also like about this format is in essence it keeps you from having to listen to the same voice for 20 or 30 minutes. Studies have shown that if someone sits there and talks for no visuals for a solid 20 or 30 minutes that people, you almost naturally tune out. Our attention spans are only so long when it’s just one person talking. And so this breaks it up more and gets multiple voices into the system. I think this is a cool approach. I hadn’t heard of this one before. Obviously there are a couple cons to this one. I think the first one is that you need to be really focused to talk about your topic in only five minutes. Five minutes goes very quickly, and so if that’s all the time you have then you need to present an update and then maybe ask a question, and then you just have time for one or two people to weigh in and you have to move past it. And maybe the other con is that someone needs to be keeping track of time because if someone doesn’t have a timer going that beeps, you’re going to go long every time because five minutes is so short. You would have to be more structured and be willing to cut people off with this approach, but there’s the only two cons I can think of.
Mike [00:16:32]: It seems like you have to be much more, not just structured, but it’s very much more business like. It becomes less of a, I don’t want to say less of a peer scenario or friend scenario, but you’re a lot more businesslike about what you’re doing, what you’re talking about because you have to stick to that timer.
Rob [00:16:34]: Yeah, a lot of discipline to get this one going.
Mike [00:17:29]: The third way to structure your mastermind group is to have a short hot seat. This is similar to the round table in that every person still gets a chance to talk during that session, but one person is going to get extra time on the hot seat that week. And everyone else who is not on the hot seat is going to provide smaller updates. Let’s say that you’ve got three people in a mastermind group that’s a 90 minute call, one person might get an hour and the other two each get 15 minutes, so that would carry you through that 90 minutes. One of the benefits to this approach is that you get to have longer between your sessions in order to focus on your goals, and then during your hot seat you would provide larger updates when you are on the hot seat. If you have three people in your group and you’re meeting every other week, then it’s going to be six weeks to focus on your goals and buckle down, and then come back to the group and be on the hot seat about what you were able to accomplish over those past six weeks.
Rob [00:18:08]: There’s a couple pretty solid pros with this one. First is that you get longer between sessions to focus on your goals, and so you’re able to provide larger updates when you are on the hot seat. Because, as you said, you have a gap of like six weeks or eight weeks between times you talk so you can get a lot done during that time. The other pro is that you get to do one or two deep dives during your turn and get more detailed feedback. Because if you’re really on the hot seat for let’s say, 45 minutes or something, you can cover two topics, even three, pretty in depth. And you can explain a scenario, ask for feedback, get a good discussion, and then move on. There’s just a lot more time here to dive into some things that you might need help with.
Mike [00:19:08]: There’s also a number of downsides to this approach. The first one is that there are obviously higher expectations for you when you’re on your hot seat. For example, if you didn’t perform and it’s been six weeks since your last hot seat session, it’s really hard for the other people in your group to let that slide because you’ve had a number of weeks in order to work on that stuff and to get things done. The second thing is that it takes a lot more preparation for when you are on the hot seat. You really have to spend some time in advance of the call and make sure that you’ve got all your numbers laid out and you come to the group with some very explicit questions along with the data that you can present to them that will, essentially, give them some context about why you’re confused or why you’re not sure what to do at that point. So those two things definitely factor into the cons list. And this is an approach that we’ve tried in our own mastermind group. We’ve tried the round table first and then we went over to a short hot seat. And these are some of the things that I’ve brought out of that as cons for this particular approach.
Rob [00:19:40]: I think another couple cons to this approach are, one, that it can be easier to let things slide a bit during the weeks that you’re not on the hot seat. If you’re really going after strong accountability, then having six or eight weeks between each time you talk might not be optimal for you if that really is what you’re looking for. And the other con I can think of is that you might not get the ongoing attention you need if you run into a serious problem right after you have a hot seat because of the delay between them. Obviously you could always have email exchanges and get around that through other means, but that is definitely one of the cons.
Mike [00:20:42]: The fourth structure that we have here is a dedicated hot seat, and this is different from a short hot seat where a short hot seat, you still get an opportunity to speak every week. With a dedicated hot seat, each session is focused on a single person and that’s the person who’s the focus of the entire session. Obviously the benefit here is that you get an entire session that’s dedicated specifically to focusing on your startup and the problems that you’re having and being able to really dive deep into a lot of the issues that you’re facing. But that also comes with the drawbacks. And the drawbacks are that it could be several weeks before you give any kind of update to the group, and a lot can happen during those six or eight weeks. If you’re going to do an approach like this then it would seem to me like you’d probably want to also have another mastermind group that you’re part of that is not doing a dedicated hot seat approach. That’s where I think this would probably best fit in. I don’t think that it’s something that you can do alone. But if you do this in conjunction with some of the other mastermind formats then it would probably work out quite well.
Rob [00:21:15]: This is taking the rotating or the short hot seat approach to an extreme, I think. Obviously you get a lot of good time dedicated to your own startup and your problem when you’re on the hot seat. I think the cons here are again, there’s going to be several weeks between giving any kind of update. So that could be, I think, a real detriment to you. Also, it’s easier for someone to justify skipping a session because they’re just contributing ideas and really not getting much out of it. I think you’d have to have a certain kind of group and attendees if you’re going to do this, because if people start skipping sessions then it really isn’t going to work. It isn’t going to be an optimal mastermind at that point.
Mike [00:22:57]: And the fifth way to structure your mastermind group is to use a moderator. And if you’re using a moderator then I think what you’re going to want to is you’re going to want to bring somebody in from outside the group in order to moderate the call and drive those discussions forward. There’s a number of different benefits to this approach because that moderator can be used to ask the hard questions and help push for results from people. Sometimes it’s very difficult to put pressure on your peers because you don’t want to come off as being overaggressive or overbearing or even taking hot shots at somebody who came back to you and said, “I think this thing that you’re working on here is a terrible idea.” You can essentially have those things piped through the moderator and the moderator can help do those things. They’re also there to help mediate any personal conflicts between people, which hopefully in a mastermind group you wouldn’t have, but those things do come up on occasion. The moderator can help with that stuff as well. The last thing that a moderator can really do is they will do a better job than you probably would of tracking people and holding them accountable to their goals. And what I found that is in the mastermind groups that I’m part of, I tend to focus on the things that I’m working on and keep track of those things very well, but when it comes to what other people are working on, unless they bring it up, it’s very easy for me to forget something that they commented on or that they said that they were going to do a couple of weeks ago or a month or two ago because I’m so focused on all the different things that I have to do. Unless you’re very regimented and disciplined about keeping track of lists or checklists where people can literally check-mark things off and say I did this and I did this and did this, unless you are doing that kind of thing, it’s very easy for somebody to just let something slip through the cracks and then not notice it for weeks or even months at a time if you notice it at all.
Rob [00:24:34]: I think this is an interesting approach and I think this is the old style of running mastermind. There would be an info-marketing guru in the ’90s or the early 2000’s and they would say we’re going to have a mastermind and they’d get eight or ten people together and then I think they would moderate it or they would get one of their minions to moderate it, and then they would charge for it. And they’d charge a lot for it, to be part be of it. And I think there are arguably some value there to be given advice by someone who’s ahead of you, as well as to be around other folks. I’ve always had an issue with A, the overcharging of this stuff and, B, the fact that there’s eight or ten people in the group really is beyond me. I can’t imagine that actually being that productive. Since I haven’t participated in one, I don’t want to speak too strongly about it. With that said, I think there’s maybe a more modern approach to this in having a moderator in a smaller group of, let’s say, between three and five people. And still compensating that moderator, because I think that if you really are going to moderate, which means you’re not going to be one of the participants, then you need some type of compensation. And that may be monetary and it may be something else. But it has to be worth you spending the time to do all of these things that you said, tracking the meetings and asking the hard questions and mediating personal conflicts and all that. I don’t think it’s a sustainable model. I don’t think someone’s going to do it for a year or two if they’re just doing it as a volunteer thing. But I definitely see the advantages of using this approach, especially if you really do want to be all about business. Like you said earlier, it’s less of a discussion and maybe a hang out time and conversations between friends, and it really is a hardcore moderated business discussion with someone keeping it on track.
Mike [00:25:05]: I think one of the downsides that I can think of for this particular approach is that if the moderator ever is unable to make the call then the call is probably going to get canceled at that point. Because if you’re so used to having that moderator around to drive the conversations, you may very well find yourself a little bit lost if they’re not able to make it for whatever reason. And then there’s the obvious things of being able to compensate that moderator for their time. And then the other problem of some people are just really not qualified to be moderators so you have to have the right type of person who is filling that role for your group.
Rob [00:25:50]: I think another con to it is scheduling becomes slightly more difficult because there is another person involved in the mix. Easy enough to work around, but it is something to think about. I think another con to it is I don’t know anyone who’s doing it today. And so there’s no model for it. It would be experimental and you would have to spend some time to find that moderator and the experiment with it and figure out if it’s going to work and you’re kind of pioneering it. So it’s less about listening to what others have done and more about pushing into some new territory, which is not a bad thing, but it’s going to take time. It’s going to take adjustment and it’s probably not going to be optimal at the start. To recap, we talked about five ways to structure your mastermind group. The first was a round table, second was timed segments, the third was a short hot seat, fourth was a dedicated hot seat, and the fifth was using a moderator.
Mike [00:26:18]: And we mentioned it earlier on that if you’re not a member of a mastermind group, check out episode 167 where we talked about some of the basics of finding a mastermind group and setting it up and finding people. Something else that you can do is you can head over to a Web site called MastermindJam.com. We’ll link that up in the show notes. It’s run by one of the MicroConf attendees named Ken Wallace who also cohosts the Nights and Weekends podcast, which you can find over at nightsandweekendspodcast.com.
Rob [00:26:35]: And we don’t get any type of commission or anything like that from using Ken’s service. We just know that he’s a smart guy, working on this problem and trying to solve it for the community. And if I was looking for a mastermind today I would either go to my network or I would go to MastermindJam. This is a place you’re going to want to do it in the bootstrapping circles.
Mike [00:27:02]: And what he does with that service is he actually puts you together with other people who are in similar situations and who, based on the data that he has available to him, are probably going to fit well because they are in similar market verticals or let’s say, if you were building a SaaS company he would put you with other SaaS founders with similar revenue numbers. And he does that work on the back end to make sure that the group that you end up with is a good fit for what it is that you’re trying to achieve.
Rob [00:27:23]: And with that, we’re wrapped up for the day. If you have a question for us call our voicemail number at 888-801-9690 or email us at email@example.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.