In this episode of Startups For The Rest Of Us, Rob and Mike talk about finding your competitors’ customers, pre-validating a WordPress plugin, how to hire a CTO, and they answer more listener questions.
Items mentioned in this episode:
- Restaurant Engine
- MicroConf Europe
- Endo Creative
- Easy Digital Downloads
Rob [00:00]: In this episode of Startups For The Rest Of Us, Mike and I talk about finding your competitors’ customers, pre-validating a WordPress plugin, how to hire a CTO, and we answer more listener questions. This is Startups For The Rest Of Us episode 249.
Rob [00:23]: Welcome to Startups For the Rest of Us, the podcast that 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 Rob.
Mike [00:31]: And I’m Mike.
Rob [00:32]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?
Mike [00:36]: Well, we’re ready to announce the final two MicrConf Europe speakers. We’re going to have Brian Castle, the former owner of Restaurant Engine and he’s off working on Audience Opposite at this point, and we’re also going to have Justin Jackson who is in the midst of writing of a book on Marketing for developers. He’s the podcaster behind Products People and Behind Build and Launch. So it would be great to see those guys. I think both of them were on the stage over in MicroConf Vegas so it’ll be great to see what other things they come up with.
Rob [01:04]: That’s right, yup. Some more folks who have made the lead from coming and doing an attendee talk at MicroConf and stepping onto the main stage. So, we’re looking forward to hearing from those guys. Yeah, we’ve been getting a lot of really interesting listener comments on the podcast blogs so it’s at startupsfortherestofus.com and folks are commenting on individual episodes. We have a comment from Mathew on Episode 243 where we discussed the tools that we used to run our startups and we mentioned Skype and Mathew commented, he said, “We switched from Skype to Appear.in which seamlessly integrates into Slack. You can start new video chat by typing /appear and then a roomname. It also makes sharing screens easier and we can have multiple people on the same call. We’ve also started using Appear.in. It is nice that it integrates with Slack. It’s also HTML5 so it just goes right in your browser. You don’t need to download a [?] or anything. The drawbacks that I found to it are A, none of us can get it to work in Chrome. There’s no audio to it and I’ve emailed back and forth and done run diagnostics and all types of stuff with the Appear.in guys and it just won’t pick up any of our audio even though our audio works with whatever approaching that we use. In addition, Appear seem to, I don’t know if it’s an HTML5 where it renders in the browser or whatever, but it just hammers through processors, processing cycles. So, you run away like my pancakes on as soon as we started chat and it makes all of my internet browsing really slow. So if you’re going to try to browse and talk, it’s kind of tough. I have like almost like a brand new MacBook Air with a nice processor and everything. So, I like it for quick chats but it we’re going to do anything more involved, we turn to switch over to Hangouts or Skype.
Then we had a comment in episode 244 which is where we interviewed Josh Pigford and we talked about a number of things in that episode but one of them was transparency and Simon from [Small Farm Central?], he says, “I like the idea of “point in time transparency” rather than this level of sharing that only seems to help competitors. If the story of your business is important and you are targeting people who would care about revenue, then this point in time really makes sense because it allows you to craft a story and release only the metrics that are important for the story, rather than baring everything to the world.” So, I enjoyed that comment from Simon and it was kind of a summary there were a lot of folks who Twitted and emailed about kind of the discussion about transparence in that episode so I appreciated it. And the last one was on episode 247 where we talked about whether you should focus on people versus process and Jeremy Green posted and he said, “I just gave a presentation at WordCamp Boston on this very subject. It’s at http://www.endocreative.com.” And we’ll link it up on the show notes. He says, “In creative work, the most important thing is to have a process in place for the tasks that are the same for every project. That leaves you more energy and brain power to focus on the creative side of the project.”
So thanks everyone for your comments. There are more there than we can obviously read but I wanted to call at a few of those because they seem to really kind of hit the nail on the head and add something to the conversation.
So today, we’re answering a number of listener question. We have a pretty nice backlog right now. So, I had to call through those and pull out the best that I could find. The first one is about which niche should I focus on first and it’s Hylton from GroupAgree. And in that, I’m going to summarize because the email is further long and so Hylton is working a GroupAgree which he summarizes as a drama-free group decision making. And he says is that during his alpha, he’s found that his users identified a number of different context for making surveys. And so I’ll start to read his emails from here. He says, “Casual, such as what movie should be see, what restaurant should we go to, what game should we play at our land party. And then the second one is academic, what should our book club read, when should I reschedule my class so most students can make it and what should the topic be for our final project. And the third is business. How should we prioritize our customer’s feature request, when should we meet with the client, what should we do for our offices at summer activity.” In Hylton’s words, he says, “My question is this, with a product so broadly applicable that my users have successfully taken it lots of different directions, how do we identify which of these three niches to focus on first? This may sound like a good problem to have but it’s definitely stressful because it will define the direction by initial marketing campaign and I’m worried that choosing incorrectly now will send me back for to six months.” What do you think about this Mike?
Mike [05:07]: Well, I think even those three different niches that he identified. To me, it seems pretty obvious as to which one to go after and the three options were casual, academic, or business. And to me, I would go for the business because they are much more likely to pay you than any of the other ones. Like I could see myself using an app like this with my friends to find out like what restaurant we should go to or what movie we should see but I can’t possibly see myself actually paying for it. And then in terms of academic use, I can definitely see some uses for it but again, I think that it would be difficult to identify places where there’s like a business justification for actually showing out money for it. So to me, it seems obvious that you really need to go to the direction of the businesses because they’re going to be more likely to pay you than any of the other groups.
Rob [05:50]: Yup, I agree. And how to make a statement that having a broad appeal seems like a good problem to have and I disagree, I think it’s the exact opposite. I think having a great appeal is a bad thing early on when you don’t have a ton of money, a ton of staff, and you have to focus. You really want that narrow, narrow focus so that you can get a small group of people in there who just love, love, love using the product and then we’re in town from there and go broad later.
Mike [06:14]: One other thing that comes to mind though about this given the broad appeal in those other spaces, it might be possible to come out with and I wouldn’t do this right away. But down the road, when you kind of have things locked in, come up with something of a free plan or a free model where it’s like free for personal use or casual use only or something like that, it’s definitely not for businesses but to help essentially expand the footprint of the product and get it in people’s mind so that when they go to work and they start seeing places where they could use it, then it almost becomes an upsell opportunity or a lead generation engine for you. Again, I wouldn’t do that upfront because I think that freemium right off the bat is probably going to hurt you a lot more than it’s going to help but it might be something to consider down the road.
Rob [06:57]: So thanks for the question, Hylton. The next one is about licensing and delivering a downloadable product and it’s from Brian Wall. He says, “Hi, Rob and Mike. Thank you for your podcast. I’m a 14-year faithful employee for a software company in Fresno.” Which is funny that I’m never run into Brian. He says, “After all these years, you’ve opened my eyes and inspired me to take the plunge. I’m taking the stair step approach that Rob talks about and my first product will be a downloadable plugin for a product that runs on Windows and Unix servers. I expect it to be fairly low-touch in terms of sales. My question is, how to license and sell a downloadable product like this? Is this a good candidate for something like Gum Road or would you build your own dedicated storefront? I’m not so worried about activation keys but I do need a way to manage licenses, updates, renewals, cancellations, et cetera. What do you recommend?”
Mike [07:40]: This is hard because I don’t think that there’s a good option, but I don’t know as I would go about building my own dedicated storefront. There’s a lot of different options out there that allow you to do payment processing and I think that it feels to me like the underline assumption here is that you’re worried about too many orders coming in and having to process them all, and I don’t know as I would worry about that problem just yet. I would worry about it once you find that you’re getting a lot of updates and renewals and cancellations and things like that. I mean as long as you can issue a license to somebody, it doesn’t really matter. The other things, you’re not going to have such a high volume of them for the first probably 6 months or 12 months and it’s going to be a big deal.
Rob [08:19]: Yup. I would probably do it pretty manual at first, just with a stripe account is what I would start with. And I totally agree with Mike. I would absolutely not build my own storefront. There are a couple of ways to deliver digital products that you might want to migrate to after you’re getting more than, what purchase a week that you’re manually fulfilling. One that I’ve heard a lot of good things about is SendOwl, it’s send, O-W-L, and it’s Gum Road A in the little more at technical folks and I think it has more API stuff. So you might want to take a look at that. It’s a SAS app. The other one is a WordPress plugin. So you’d need a WordPress as your frontend but it’s called Easy Digital Download and I’ve heard a lot of good things about that. It’s written by a WordPress developer named Pippin who sells his own WordPress plugins through it. So if you have a onetime download and you want to manage license keys and annual renewals and all that stuff, it’s kind of baked into that. So if you’re willing to put WordPress as kind of the storefront, I think Easy Digital Downloads is probably what I would go with. But this is a good question, thanks for sending over Brian.
Our next question is about how to find people who are currently using your competitor’s products and it’s from Ryan@builderbuilt.com. He says, “Hey, guys. Great podcast. You continually provide well-thought out actionable content in today’s episode about why people might not switch to your SAS and provide some good tips on how to convince them to make that switch by removing barriers. My question is, how do I actually go about targeting companies who use my competitors’ solution so I can market to them?”
Mike [09:41]: I think there’s a few different ways that you can go about this. The first one is to find where those people are hanging out and talking about the competitors’ products online. And now, if this is on your competitors’ forum, you probably don’t want to overtly go in there and start pitching your own products. It’s not going to work. It’s not going to go over well. And the people who are currently happy with that products are probably not going to take kindly to you going in there and kind of pitching your own products. I would answer questions but I don’t necessarily think that I would say, “Why don’t you try this to solve your particular problem instead of trying to work within that competitors’ solution?” Another option would be to go over to core and see if there are people asking about what types of alternatives there are for specific products. So, if let’s say somebody is using unbalancing, go over to core and start looking around for people who are talking about unbalance and looking, actively looking for people who have offerings that are in an adjacent market or a competitors’ to unbalance because they’re looking to switch. They’ve already kind of made up their mind and they want to move away. Another thing that you can do is you can use SEOs. So, if you have a specific webpage you set up on your website where you talked about those other competitors and present them directly as competitors to your own products, you can essentially create your own story about those things. So, those are a couple of different things that I would think about in terms of ways to get in front of those people and then depending on what your personality is and how much time you have to go about that and the type of products you have, it may makes more sense to do one versus the other.
The last thing I can think of that you might want to do is offer what’s called a competitive upgrade. So if somebody already has the competitors’ products, you can offer them discounts for essentially turning in that products and switching over to yours and you could offer like onboarding [?] services and move to your data over and all kinds of different things. But again, that can be more of an enticement than something that actively convinces them to switch products.
Rob [11:30]: There are two services I know that actually crawl websites and they can actually figure out what stuff is Built With. The first one is called builtwith.com and these are both SAS subscriptions and they’re not cheap but builtwith.com is the service that I know that several of the kind of outbound legion guys use and they’ll say, “Well, my competitor is X, Y, and Z and it’ll give you a list.” Now, Built With crawls certain amount of websites every so often. The second competitor is more expensive but they crawl daily. So they cannot only tell you who’s using what, they can tell you someone started a trial of this yesterday, like they just installed the code. So it’s much more powerful but they are more expensive. That service is called Data Nyze, it’s data, N-Y-Z-E.com, both of those if you’re willing to put down the money are going to be good services to find out who’s using your competitors and for full disclosure, I am a small angel investor in Data Nyze but I have seen and used the interfaces for both of those tools. So thanks for the question Ryan.
Our next question is on validating a WordPress plugin before using and it’s from Dave Bush. He says, “Hey, guys” one of the things he mentioned on our recent episode was to avoid building before you validate a product idea. One of the things I still can’t get my head around is how to validate a WordPress plugin without actually building the free version first. There’s so many WordPress plugins out there, how can you get away with testing your idea for WordPress plugin without actually building an initial free offering?
Mike [12:54]: I think the misconception here is that in order to validate something, you have to go out and specifically talk to people or have a free version available. I think that there’s multiple ways to do can go about validation, and I think the bottom line is that validation is about gathering information and being relatively confident and what’s your analysis of the situation is. So, in this particular case, you sure getting a working prototype built and put it in out there and driving traffic to it and having people go through is going to give you that validation, but at the same time you can also get that validation by looking at what people are already doing today. So, instead of driving people to your own plugin and looking at those download numbers, take a look at the existing download numbers of other plugins that are doing similar things and measure those overtime and it should be fairly simple. You can go into wordpress.org, just take a look at the download numbers and it will tell you flat out like whether somebody’s downloads are increasing overtime or are they decreasing, when the last updates were, all that kind of information. And you can get a sense from that information alone as to whether or not it would be possible to put another plugin that offers similar functionality that it also going to get a some level of attraction from people who are looking for that type of plugin.
Now, it’s not an absolute guarantee but at the same time nothing is. I mean unless you have people giving you credit cards saying, “Hey, take my money,” that’s probably the next best thing that you can get without building something.
Rob [14:19]: I take it a step further. I think that is the initial validation. I would agree that I would poke around and look at what people are talking about, what the download numbers are; with a WordPress plugin, in my opinion, you can’t validate it until you’ve built that free version. WordPress is so much different from SAS and that with SAS you need some customers paying you a decent chunk of money and spending a lot of time validating that upfront is worth it because to build your SAS app might take you a year, I mean tremendous amount of time. It might take you more than that if you’re doing it part-time. Whereas with a WordPress plugin, you can build it yourself at nights and weekends in a month or two months, I mean you can build it full-time to get a kind of a prototype free version out there, probably in a lot less than that, you can hire developer. WordPress plugin developers don’t tend to be that expensive. WordPress plugins are not that complex to maintain. You don’t have to get servers up and running and do dev up stuff and there’s just all the stuff that makes is so much simpler to validate that after I did some initial look at numbers and other downloads, if I knew it was for a specific niche mark and then I knew that it fixed a problem for them, yes, I would reach out to some people I know in that market. But to do cold calling and do the interviewing and the other stuff that you would consider doing if you’re going to do customer development for a SAS app, I don’t think it’s worth it because the WordPress plugins that I see are making in volume, right. They’re doing $20 for a one-time thing or $40 or $50 for a one-time thing.
So going and trying to find 10 people who are willing to pay you for that, I question if you shouldn’t just go and build the thing, get it out there fast. And now, if you’re trying to build some super exotic that WordPress plugin is going to sell for $1,000 license, then yes. Now we’re talking about enough of a lifetime value where it’s worth really doing a bunch of upfront research. But if you’re sitting there, trying to think about how to validate something that you’re going to sell for 30 bucks one-time, I would say just go do it like go build the thing, go hire somebody to build the thing. Get it in the store, you’re going to learn so much by doing that and it’s really not that big of a risk compared to actually building a full-fledged app.
Mike [16:17]: And I think that’s the key point here which is the risk versus reward versus the investment that you’re taking and if it doesn’t take you very long to do it, you may as well just do it. I mean if you were going to build a plugin that literally only took you two or three days to build, would you go out and do the customer development? And the answer is no, why not? And the answer because, well, it’s going to take you more than two or three days to do the customer development. You may as well just build it and see if you can sell it at that point because your investment is so incredibly small.
Rob [16:42]: Right. I feel like this ties in to Dan Norris’s idea of the 7-day startup of if it’s going to take you less than 7 days to build the thing, then just go build it. I would say seven days collectively like if you would work let’s say 10-12 hours a day for 7 days, so what is that? Maybe 80 hours, if you can build it in less than that, even if you don’t have the 7 days and you have to do it 80 hours nights and weekends for the next month or two, I’d be more of the might get the code out there and will validate. So I appreciate the question, and I hope that helps.
Our next email is actually not a question, it’s some advice on hiring a CTO, it’s an audio recording and it’s from Ben Cole. And he says, “Hi guys. You briefly touched on hiring a CTO to help find and manage a development team in episode 242. I’ve had some experience in this base and a particular quick audio response with some tips for your listeners.
Ben Cull [17:28]: Hi, guys. First of all, I just want to say thanks for such a great show. I can’t wait for each new episode and you really got me hooked. Thanks for all the great info. I just wanted to talk about a topic that came up recently about CTOs for hire. Now, I’ve been in this position myself a couple of times recently and I think I’ve got some great advice for your listeners. My name is Ben Cull. I’m a senior .NET consultant for a company called SSW in Australia. And first of all, what you going to want to do is to find yourself a senior developer. Try and get them in as early as possible and get them into the meetings with your potential development teams because they’re going to ask the right questions and know what kind of team is going to work for you. Second of all, find a CTO that understands process because about two-thirds of what you’re going to be doing is ensuring the process is going smoothly. Now personally, in SSW, we use the scrum methodology but you don’t have to be that formal. My advice is just to ship small, ship often, and ship all the way to production. It really forces you to get your process together by even shipping your very first feature even if it’s a registration page. Ship it to production and you’ll understand that you need all the environments, and all the automation to get things running smoothly.
My next tip is to use video to describe your requirements. Now, as a product owner, you can get across way more information in the video than you can with just pictures and text. And on the flipside, get your developers to put together a video to demonstrate the functionality that they have just developed. This lets you give feedback a little easier and you can pick up on more of the problems quicker.
Finally, have retrospective meetings. This is probably the most important tip. And for people that don’t know a retrospective meeting is where you ask three questions; what went well, what didn’t go so well, and what can we improve. Now, you include the development team, the CTO, and the product owner in this and you’ll come up with things like, what went well. We had meetings at 10:00 AM instead of 8:00 AM because everyone has had their coffee and they’re raring to go. What didn’t go so well was support tickets took a while to answer. What can be improved, well, I think that the moment database development is a bit tricky. Maybe we should have one person in charge of that. Let’s try that out this week.
These are just a few tips to managing your remote development team and hiring a CTO to help with that. If anyone has any questions, you can catch me on Twitter. My name is BenWhoLikesBeer. Cheers guys.
Rob [19:44]: So thanks a lot, Ben. Thank you for that, and hopefully that’s helpful for folks out there who are considering doing kind of that CTO approach where instead of managing a develop for yourself, if you’re looking for an intermediary because you might not have the technical experience to hire someone yourself.
Our next question is about conversion rates from a launch list to paying customers. It’s from [Percaush?]. And he says, “Hi Mike and Rob. My question is about conversion rates. Is there a general conversion rate to keep in mind to translate from a beta signup list to a trial signup to paid subscriber. Put differently, how many in a range of beta signups lead to one paying customer?” Here are two additional pieces of information in case they matter. Number one, these beta signups are coming from a landing page and not necessarily from friends and a network so they are not well qualified. And number two, it’s a SAS product costing between $100 and $300 per year. Thanks in advance, you guys rock. So, this is a really hard question because having cold signups and trying to convert them to trials is hard enough but if you don’t have a product that someone wants to pay you for, meaning if you don’t have product market fit yet, then your trial signup to paid subscriber ratio is very likely to be somewhere within the approximation of zero, literally zero. I’ve seen people with launch list of 1,000 get one or two paying customers right out of the gate and then lose them within a month or two because they turn out. So, there is literally no number that I could throw on this that could give you an idea. Now, I can tell you that if you have a beta signup list of let’s say 1,000 people, if you mark it really well and you build anticipation and you’re sending them screenshots and the product looks good, and it solves the problem that they want, and you send a sequence of launch of emails instead of a single email, I think that you can get upwards of 30%-40% of your list to sign up for a trial. I think that’s your range. I think the low end is literally zero if you fumble a ball in all respects and if you did everything really well executed, I may even rich and say if you get 50% into a trial, but I think a reasonable performance is somewhere between about let’s say 20%-35% to trial. Then the number of trial folks who convert to paid and then who stick around, it’s all a bunch of other numbers, right? If you don’t have product market fit, then that number say from trial to paid, if you ask for credit card upfront is going to be between 10% and 20%, and if you do have product market fit, when you ask for credit card upfront, maybe it’s between 40% and 60%. If you haven’t asked for credit card upfront, then it’s going to be between 0% and 10% or 15% depending on if you have product market fit. Then insurance is going to kick in and you’re going to lose somewhere between 5% and 25% of your people per month depending on how well they like it, how much of a problem this solves for them.
So, that gives you an idea of how wide ranging these numbers can be, and if you multiply those numbers, those ranges that I gave you, it can give you literally anywhere from out of 1,000 people, it’s like anywhere from zero to several hundred paying customers. So, I think that’s the answer is not to try to think of what is the number that’s going to become paid. It’s the real question is how can you optimize every stage of this funnel and just wild up hands off of people so that they really want to stick around to the next page especially if you have a new product be listening to what their requesting so that you can actually build something people want because that’s the goal with this launch, right? Is to get to the point where you have something people want so that you can then continue on from here and scale it up. Thanks for the question Percaush, that was helpful.
Our next question is from David Sandbrand. And he says, “Hey guys. In the context of your listeners, when is a startup no longer a startup?” So of course if someone stops pushing forward and essentially folds, that would count. But I’m wondering more on the side of success post launch. So is it the number of clients, is it time since the launch, is it revenue based? I’d love to hear and extend the discussion on when is the startup no longer a startup? Is it Eric Ries’s or Steve Blank’s definition? Is it a startup is in search of a repeatable and scalable business model? And so once you’ve achieved that, then you become a – you’re not a startup anymore. So like HubSpot would not be startup right because they kind of raised funding when we need a product market fit, and then you figure out how to scale your marketing and sales, now you’re scaling and you’ve less startup, that’s a fair definition of it.
Mike [24:06]: Right. Yeah. I guess from my standpoint, it depends on how you classify yourself. I mean there’s different points of view that you can look at. It’s like, is your business no longer a startup by your definition or by somebody else’s? And at the end of the day, I almost wonder like does it actually even matter? And I think in most cases they answered that as really no. I’ve almost feel like when company’s self-identify as startups, they’re hungrier. They do a lot more things and they’re much more aggressive about taking a different path as they go down. But once a business kind of stops referring to itself as a startup, then it’s much more of a mature company, double quotes around the mature part, but really they stop going after things hard because they don’t necessarily have to anymore, they get comfortable. And I wonder if to some extent, somebody might look at that and say, “Well, that’s no longer a startup.” And it could be very early on.
Rob [24:54]: Yeah. I think it’s an interesting question. I wonder if it really matters. I guess I’ve never been at the point where I have not thought of myself as a startup, so I guess the companies I’ve worked at that sees being startups like you said become a little more maybe process-driven, they become bigger, they become – they’re trying to scale up. They’re not hungry. What’s a good word for it?
Mike [25:12]: Yeah, I mean I just remember when I was a pedestal and we were required, we had like 60 or 70 employees or something like that and we got acquired but to us, we were still a startup. We just raised like $8 million or something like that and then even before we got a chance to really start spending it, we got acquired. So, I don’t know.
Rob [25:29]: Yeah. I think the lean startup, or I don’t remember from Steve Blank’s definition or link startup where they say it’s a scalable, repeatable business model where it’s a company in search of a scalable, repeatable, business model. I like that definition in terms of summarizing what a startup is but I think in terms of what David is asking about, I think I would go beyond that because as soon as you find that scalable, repeatable business model, then you have to execute. You have to find hungry people. You have to motivate yourself and them, and in my opinion, you’re still a startup there. You are scaling revenue up but you can find that business model and only have 10 grand a month in revenue and I think you’re still a startup at that point because you’re still kind of clawing your way forward. So I think there’s a certain point where I don’t know, I don’t think it is just headcount. I don’t think it is just clients. I definitely don’t think it’s time since launch because that’s going to depend why learn if you built something people want. I definitely think that it’s way pass product market fit. It’s like product market fit, then scaling things up and I think for me personally, I would call something not a startup when there’s so much process in place and such a headcount that it’s now feels like kind of a big company. And even for me like working, I worked at a company that when it hit 100 employees, it felt like a big company because I’m not a fan of organizations that big. And so that was when I was kind of like I started thinking about taking my exit because it really didn’t feel like a startup any longer, but I think that certain companies could still feel like hungry startups even with more employees than that.
Mike [26:53]: Yeah. I mean I’ve been looking at over at the leanstartups.com right now and the quote that I think that you might have been referring to was that Eric Ries said that, “A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.” And I think that last part right there is really the key, it’s like “extreme uncertainty”. So, if you haven’t fit product market fit yet, then you’re probably still a startup and you should still be classifying yourself as a startup because you’re still hungry, you’re still trying to figure things out. And because you don’t have it figured out yet or you got that uncertainty, you need to keep going. You need to keep moving forward because you don’t know specifically what is going to work for you moving forward and what’s not. But once you figure that out, yes, you can be radically hit the product market and continue to grow, but once that I think starts the level out or once you’ve got it figured out, maybe you’re no longer a startup at that point.
Rob [27:42]: The quote I was actually referring to is Steve Blank’s quote from January 2010 on his blog, and he says, “In this post, we’re going to offer a new definition of why startups exist. A startup is an organization formed to search for repeatable and scalable business model.”
Mike [27:57]: Yeah. Tough question though.
Rob [27:57]: I agree. It’s a good one to think about. Thanks for tossing that to us, David. All right. We’re going to wrap up with one final question and it’s about client work versus the uncertainty of working on your own product, and this is from Joe Robinson of greenflagdigital.com. He says, “Hey guys. Have you seen any research or discussion topics about how when working for clients, your brain just clicks and does the work, but when you’re trying to work on your own products, there’s often too much resistance to fight through. Does this mean that fear of a client dropping you is way more than an incentivizer than the vague idea of success on your own product?
Mike [28:32]: I haven’t seen any specific research on that part of it, but I think I can talk generally around the kind of the concept of working on your own product versus working on something that somebody else is paying you to do. So, if you were working on a project that you’re getting paid to do, there is a very concrete and definable ROY on that time versus working on something of your own where you don’t get that. You don’t necessarily know if things are going to work out. So, it can be demoralizing to look at two different sets of task, one of them which you may or may not get paid at the end of the day versus one of them where you know you’re going to get $125 an hour. Most of us are going to gravitate towards that one that pays us $125 an hour unless we absolutely hate it and we will do anything to get out of staying on that treadmill and we will work on the other stuff on the side in the hopes that it will turn into something that gets us off of that treadmill. The other thing that I think comes into play really heavily is the fact that when you’re working on your own stuff, you don’t necessarily know what you have to do. There are a million and one things that you could be doing and you’re not quite sure if any of them has the right one to do. So, with client work, you know what you have to do and you know what you have to get done because the clients already told you or they’ve given you a problem and you have to solve that problem. You’re working towards kind of a known goal. But with your own products, yes, you have to build the products but at the same time, there’s all these other things going on with SEO and marketing, and code, and process, and SSL [?] and all these other stuff that’s kind of thrown in your way, that’s really hard to kind of sort out sometimes. So, you don’t know which you should be doing first. You don’t know what problems you should be prioritizing over others. And it makes it that much more difficult because you don’t necessarily have the experience to deal with any of them either because theoretically, you’re probably in a position where you haven’t really launched very many products of your own. You’ve launched them for other people but those people have kind of set the timelines and deadlines and things like that versus your own where it’s kind of on your own time, you’ve got a million different options and you’re essentially in a position where you have so many options, you don’t know what to do.
Rob [30:37]: Yeah. And for me, I think the latter one has a lot more impact. I think both of them are valid reasons but I think the indecision and the analysis paralysis of your own product, and not knowing what to work on next is what keeps a lot of people from working on their product, and also feeling like maybe their throwing their time away. But the fact that a client basically typically tells you what feature to build next or at least you can ask them and they have to make the decision, that makes it a lot easier because then you can go in, you can design, you can write some code. Whereas if you have to decide what you’re doing next, and that’s always a hard point. That’s always a sticking point in your schedule is any time you have to make a tough decision.
Mike [31:15]: I think some of that also comes down to the ability to self-regulate as well and I think that some people are more inclined to do that from a younger age than other people. There are specific studies that I’ve seen are about little kids who were given us option of getting a candy bar now or getting two candy bars if they wait, and it’s about that delayed gratification and whether or not they can handle it and I think that there are certain people who are predisposed to taking that instant gratification versus looking much longer term and being able to go down that road instead. It’s not saying that you can’t fight it and go against it, but I think there is a certain amount of predisposition of one towards the other.
Rob [31:51]: We appreciate the question, Joe.
Mike [31:52]: Well, I think that wraps that up for today. If you have a question for us, you can call it into our voicemail number at 888-801-9690 or you can email that to us at firstname.lastname@example.org. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.