In this episode of Startups For The Rest Of Us, Mike interviews Brianna Wu, founder of Giant Spacekat, about sex and software. They discuss many racial and gender issues that face the software community.
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Mike [00:00]: In this episode of ‘Startups for the Rest of Us,’ we’re going to be talking about sex and software. This is ‘Startups for the Rest of Us’, episode 322. Welcome to ‘Startups for the Rest of Us’ the podcast that helps developers, designers and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first project or you’re just thinking about it. I’m Mike, and today we’re going to be sharing our experiences to help you avoid the same mistakes we’ve made. Today’s episode is going to be a little bit different. Today we’re going to be talking about sex and software, and today’s episode starts with a listener question. This listener question comes from [Simmore?], and he says, “Hi. I was wondering if you could do a show on what we can all do to reduce the amount of straight-up misogyny female coders and founders face. Last week I followed a tweet from Justin Jackson – and we’ll link that tweet up in the show notes. He says, “That led me to a presentation by Jenn Shiffer at the XOXO Festival. I also watched the Talia Jane presentation at the same festival. The amount of vitriol these women suffer is incredible, and I just don’t understand why it has to be that way. Where does all this anger from men in tech come from? What have you guys seen in your experience? My experience is as a consultant, and there’s an incredible amount of sexism in IT consulting, but I don’t think I’ve seen all this anger – or at least this level of anger – played out in front of me as a past manager. I love the show, of course, and it would be nice to hear what your own goals are in terms of women and female coders in the new year. Also, since I am black, what has been your personal experience in goal-making around diversity in general? Thanks, and I’ll see you at MicroConf.” I think that there’s two different pieces to Simmore’s email. The first one is that there’s two different questions in there. The first one was: “Where does all the anger from men in tech come from?” And the second one is: “What are your goals in terms of female coders and founders in the new year? Also, since I am black, what has been your personal experience in goal making around diversity in general?” I do want to touch on that just a little bit from the perspective of running MicroConf. For a little bit of perspective, we don’t ask this question outright to our attendees. We don’t ask them, “What’s your racial makeup? What is your gender?” It’s just not something that one, we feel comfortable asking. And two, it’s really just not relevant to people coming to the conference. I talked to Zander a little bit about what we kind of believe that the makeup of female to male attendees is. It seems to be that it’s about 15%, but obviously that is based off of names, so it’s a little bit difficult to get exact numbers. In terms of what we do at MicroConf, one of the things we do is we do some active outreach to female entrepreneurs to make sure that they’re able to attend if they want to. I’ll say that we do take some liberties with the waiting list to make sure that people are able to get tickets if they need them, or if they want them, to help with that diversity, to make sure that females have a chance to get to MicroConf. In the past, MicroConf has traditionally sold out extremely quickly. To help out with that just – because if you’re not sitting there at the button it can be difficult to get a ticket. That’s one of the things that we do. Another thing that we’ve done is we implemented a code of conduct at the request of an attendee a few years ago. If you go out to the MicroConf website there is a code of conduct. It’s based on a publicly available standard for codes of conduct that are out there. Another thing that we do is we actively recruit female speakers. What we’ve found is that there is a tendency for female founders to not apply to speak at MicroConf. We do have an application process, but it seems like we do not get as many who come forward and say, “Hey, I would like to speak.”, so we actually go out and actively approach them and ask them. Another thing we’ve done is we have actively set aside pools of tickets for female entrepreneurial groups. So we’ve gone out, we’re approached those groups and said, “Hey, here’s a pool of tickets that is kind of separate.” It helps to bypass, I’ll say, the tickets going off the shelves very quickly, so that there are opportunities for female founders in those groups to purchase MicroConf tickets if they would like to attend. The last thing is we also have MicroConf scholarships. The past two years we had a couple of scholarships that have been given out. One went to Francesca, and another one went to Shannon. Both of those scholarships were actually given by MicroConf attendees. The MicroConf attendees said, “Hey, I’d like to do a scholarship.” It’s not something that we made a big deal about, and it’s not something that we talked heavily about, but those are the types of things that we have done at MicroConf. In terms of the question itself about where this anger comes from, my best guess is probably that it’s rooted in history. Humanity has thousands of years of history illustrating that people in positions of power are going to do whatever it takes to maintain that power. And, quite frankly, if you look at the balance of power over the past few thousand years white men have largely been at the top of that power structure. And, by extension, other white men have benefited from that arrangement. If you look at that historically, those people tend to be afraid of change. They’re genuinely afraid of women, or anyone who’s different than they are, from having those types of power, or perceived power, over them. I don’t think it’s just a gender issue, but it is also, to some extent, a racial issue. The bottom line of this is that Rob and I don’t necessarily feel qualified to answer the first question which Simmore posted, which was, “Where does all this anger come from?” Because, one, it’s not something that we really feel, but it’s also not directed at us. So, what I did was I went out and I decided to find somebody who I would see as an expert in this particular space, and I want to introduce you to Brianna Wu who is the founder of Spacekat games. Brianna, how are you doing today?
Brianna [05:00]: I’m doing excellent. I’m doing fine. It’s a pleasure to be on.
Mike [05:03]: Excellent.
Brianna [05:04]: I do want to say my company’s name is Giant Spacekat.
Mike [05:08]: Oh, I’m sorry.
Brianna [05:08]: Not Spacekat games. No worries about that.
Mike [05:10]: I apologize.
Brianna [05:12]: Can we go back to some of your answers to that previous question a little bit?
Mike [05:15]: Sure.
Brianna [05:16]: I am a software engineer, so something I think about a lot when I’m trying to solve problems is I ask myself if my underlying assumptions are correct. I assume you kind of do the same thing, right? I want to go back to what you were saying at the very beginning of this, where you said you didn’t feel comfortable asking attendees about their race and gender, because you didn’t feel comfortable with it and you didn’t think that was relevant. Is that an accurate assumption of how you feel?
Mike [05:48]: I’ll be honest, it’s not something that we feel is necessarily important to us asking the question.
Brianna [05:54]: Right. To us.
Mike [05:56]: Let me rephrase that, because I know how maybe that sounds. It’s more of a question of: Do we need this information? I guess, in retrospect, in even asking that question, maybe we do. I’ve never really considered that before, to be honest.
Brianna [06:09]: One of my first jobs was in politics, and I used to use the term “African American” when I was talking of racial issues, until someone that was black came up to me and said, “You know what? Black people, we don’t use that term so much. It’s kind of one that’s more about white comfort in discussing racial issues, and I very much prefer to be called “black”.” That was a real eye-opening moment for me, so I want to give you the other side of what it’s like to attend the conference if you’re a woman. This is a conversation I have several times a week. A friend is thinking about going to X, Y or Z Conf, and women in the tech industry have our own secret spaces to talk to each other. And the first thing we ask is, “Hey, I’ve just been invited to speak at “X” Conf. Is this safe? Does anyone have good experiences with this? How many women are there?” Then we’ve kind of had to form our own groups to give feedback about that, because you’re thinking like, “Oh my gosh! I could be uncomfortable by asking a question for a second.” The woman on the other side of that is asking really difficult questions like, “Am I going to be sexually harassed if I’m at bar with alcohol? Am I going to be treated fairly and equally?” Something I would really encourage, not just you but anyone out there that is in a position of privilege, to push past that and realize it’s not comfortable for me to be on your podcast today talking about this stuff, but it’s absolutely necessary, because women leave the software industry at a rate over three times of what men do. I would also say, you used the term “female coder” repeatedly when you were discussing this. I would just be honest and say most women I know prefer to be called “women”. Female coder signs like [Ferengi?]. It’s kind of demeaning way to talk about women. That would be my feedback about that.
Mike [08:00]: Got it. Okay. A lot of that makes sense. So, I huess, going back to your question of me about why we don’t ask that. In some ways it seems like there’s almost a boundary that I’m stepping over as the host of a conference, where I’m asking somewhat personal information about like, “Okay, are you male or female? What’s your racial makeup?” Stuff like that seems like why would I need to know that? How is that perceived from the other side?
Brianna [08:26]: I would say this, I’m an engineer. I can’t fix a bug in software right if I don’t have error reports, right? So you’ve got to measure data to figure out where you’re going wrong and fix it. I think it’s wholly relevant, if even internally you’re not putting together numbers about your number of women speakers. By the way, when we talk about this stuff, far too often people of color are left off this list. For me, in the things I do, I am very, very aware of how many people of color I hire, how many women I hire. Frankly because we’re such a company that is heavy with women working there, we have to go the other way and make sure we hire men enough. That would just be my feedback about that. You can’t fix something if you don’t measure it, or even understand if you have a problem in the first place.
Mike [09:18]: I think that also goes to how you ask the questions as well. You can’t just drop a question in somebody’s email box and say, “Hey, are you male or female?” I would at least say preface it by some meaningful information, or at least a couple of sentences about why it is that you’re asking that kind of stuff.
Brianna [09:35]: Sure.
Mike [09:36]: Okay. What are your initial thoughts on Simmore’s question itself about where some of the misogyny itself comes from?
Brianna [09:43]: I think it comes from a very predictable place. I was a child in the ‘80’s and the ‘90’s. This was a time where you really were punished for being a nerd. I remember liking Final Fantasy as a child and getting picked on mercilessly about that at school. I think it’s really true that a lot of geeks grew up and they kind of have a little bit of a chip on their shoulder. They feel like the underdog, and I think especially with women there is definitely a culture where a lot of software people maybe are kind of sensitive around women, or sometimes have some animosity against us that maybe they don’t understand. What you’re dealing with, at its core, is a culture filled with men who genuinely believe they are too smart to be sexist, but they have these really aggressive tendencies that they may not understand. It makes them uncomfortable. They’re very, very, very quick to reframe things to protect their privilege. I’ll give you an example. Oculus, which is a company that makes some technology we’re very interested in – virtual reality – they had yet another terrible scandal that broke two days ago, where one of their software people has been alleged of soliciting an underage girl for sex, a very serious crime. If you put this in context of their crisis of leadership of, A, not hiring women, B, having a founder that’s literally spending tens of thousands of dollars funding hate speech, it’s a really troubling pattern. I was discussing this on Twitter and I was instantly besieged by someone that believes he’s an ally to women in tech, but is instantly minimizing it, is excusing it, and is just throwing every argument there to say this isn’t a problem. That man believes that he is an ally, but, on an unconscious level, he is derailing and minimizing the conversation about structural bias, and that is everywhere in our industry. The way you will be able to know if you’re on the wrong track is if you’re looking at this problem of women in tech, or people of color in tech, and you’re say, “I know what the problem is. It’s those other guys.” No. You need to be saying, “I know what the problem is. That’s me.” I’m not just telling people to practice what I preach, yet for, me as a white person, I realize that I have tremendous advantages in our field, even as a woman. So I’m constantly asking myself, “Am I hiring enough people of color? Am I interviewing enough people of color? Am I networking with enough people of color? When journalists call me and say, “I’m looking for references.” Am I passing off enough people of color to them?” It’s that kind of constructive engagement that really makes you part of the solution, instead of pointing fingers.
Mike [12:42]: Going back to one of the things that you had said earlier, which was a lot of people feel like they are too smart to be sexist, for example. I’ve had conversations with people along that lines like, “Oh, I have two daughters. I can’t possibly be sexist.” You can almost find political memes around that too. It’s not hard to look for that type of thing. Are there specific signs that somebody can look for? I think a lot of the listeners to this podcast are more of the truth seeking variety. They’re really looking for validation of their ideas and thoughts and beliefs, and mostly that deals with marketing, but I feel like that applies in this particular situation as well. How is it that you identify the things that would say, “You know what? You aren’t too smart for this?” What are the canaries in the coal mine, so to speak?
Brianna [13:30]: Yeah. One of the things I said is imagine if you had a friend that was going through a divorce, and that friend was talking, and they’re like, “It’s just so hard. I’m not sure if I’m going to be able to see my kids again. I’m really upset about losing my partner. I’m not sure if I’ll ever find love again.” Imagine if, while you were talking to that person, you turn the conversation to yourself, and said, “Well, yeah, but how’s that going to affect me? Are we going to be able to hang out and goes see movies all the same?” It would be really obnoxious, right? In the same way, very, very, very often when women start talking about what our lived experiences are, men are so quick to turn the conversation to themselves, and talk about how this affects them, and I’m trying to think of a constructive way to say this, but I can’t. It’s just obnoxious. A really good hint that you’re on the wrong path is if you’re saying, “Well, you just feel this way because there aren’t enough women applying.” Or, “Well, what if I’m trying to apply to a job and I don’t get a fair shake? What if I don’t get into this conference because they’ve got a quota system?” This is all a good sign that you’re more concerned about your privilege than the problem. We all have work to do. I really want to emphasize this. I think something feminism could do a lot better, and I think “outrage culture” has a lot to contribute to this, but we’ve built this culture where everyone is one mistake away from being a villain for life, and I don’t think it’s a very good way to go forward. I myself, if I’m a half way decent ally to people of color these days, it’s because I’ve made so many mistakes along the way, and I’ve learned from them. We need to have a culture where men can make these kinds of mistakes and we can have an honest dialogue about it, and they’re not branded as villains for life. I think that we’re really missing a more constructive way to move forward on it.
Mike [15:32]: I guess going back a little bit, where you had said that one of those tell-tell signs is saying, “How does this affect me?” or interjecting your own thoughts on it. Previously you had come out with a couple of examples there of what those red flags look like, and I have friends who have said, “I have two daughters. I can’t possibly be like this.” Is that along those lines as well? Is that perceived as sexist? Because, really, I was trying to contribute to the conversation and say, “Look. This has been my experience.” Does that overshadow what we were talking about? Or is that perceived in a good light or a negative light?
Brianna [16:06]: I would take this in two parts. First, I want to check my own privilege and say I’m a non-parent, so I’ve never raised children, but I would say this, when a guy starts talking about how he’s raising daughters, a red flag that goes up for me right away is a lot of men bring sexist attitudes into their role as father. I think we see a lot of controlling things with that. We see a real culture of violence, sometimes, and ownership over their daughters. To me, I don’t read that as good or bad either way. I’ve certainly met a lot of sexist fathers throughout my career. As far as your own fears about that –
Mike [16:49]: What I was referring to is really the fact that I was bringing that up as an addition to the conversation.
Brianna [16:56]: Don’t stress it.
Mike [16:56]: No. Well, I think that it’s important to figure out what are your motivations for bringing up a particular point, because I’ve been in situations – and seen conversations go – where somebody will bring up something, and there is almost a sense of one-upmanship about, “Let me tell you this story.” And I can see that playing into this type of conversation, and how people portray themselves to each other, and how people talk to one another. That’s what I was more getting at.
Brianna [17:22]: No. I think that’s dead on. I want to step out and take a little bit of a meta view for a second. At my studio, Giant Spacekat, for our last game we had all women working on our team. It’s not a format that I’d have going forward, but it was how we shook out. I was really stunned by how different our culture was. It was hyper-collaborative. In other engineering environments, where I’ve worked with a lot of men, there does tend to be that sense of one-upmanship of, “I’m right here.” And, I hope this is okay to say, but it just seems like it’s boys with toys almost. At my studio, where it was all women, it was hyper-collaborative, and it was awesome. It was us validating each other, and trying to get input, and working on things together. It was just an entirely different culture. I do think that a little bit of that culture of one-upmanship, I don’t think it’s a particularly healthy trait of the software industry, and I think one of the reasons that teams with better gender balance tend to be more productive. I do believe when all genders are represented it brings a kind of stability, and a diversity of viewpoints, to the table. I think that’s very valuable.
Mike [18:34]: Yeah. We’ve noticed at MicroConf, when we started out back in 2011, the conference has always been very collaborative. Everyone is really comfortable sharing, for example, revenue numbers, and discussing specifics of how their business is doing. But one of the things that comes to mind is that most of these people come to MicroConf and then they leave and then they’re working in their own world and they may have a team, they may not. They’re usually only one or two people working on a particular product or project, and then they go out, they do their thing, and they come to MicroConf and they collaborate. But when they’re out working on their products, and in their business, they tend to be alone, or they tend to be working with very, very small teams. I wonder how those two things play together, because it seems odd that those types of people would go out and be as aggressive as they need to be to run their business and then come to a place like MicroConf where there is this community – or in the Founder Café – and then they’re very collaborative. It seems like those two things are very much opposed to one another.
Brianna [19:31]: Yeah. That makes a lot of sense. I want to touch on, for a second, that kind of bias that when we start companies we tend to seek out people around us that kind of mirror our values. I think a really big bias of this in the startup world this is this is why such a tiny sliver of startups have women or people of color on the board, because it is a culture that really pushes women and people of color away in ways we’re not willing to think about. I would use my own experience at Giant Spacekat and say I did this the other way, being a woman founder. When I started my company I looked for people, unconsciously, that looked like me. We had way, way, way too many white women on my team, and I realized that that was my own bias. We’ve got to get past this point where our own comfort is our highest priority, because it is right now. It leads to use cases that are just terrible. We’re talking about VR right now. If you look at the VR marketplace right now, for Oculus games or Friv games, most of these are made by teams of two or three people, always men. There are so many sexist assumptions built into these games as you play it that make it really damage VR from being able to pick up the mainstream. A lot of these games assume you’re a certain height. Most of them don’t contain female avatar options. All of them assume that you’re a man as you play it. It’s just really insulting in ways that I think these teams haven’t really thought about.
Mike [21:05]: Is that a function of the fact that it’s only two or three developing it, and so they tend towards doing things that are comfortable for them, and are also easy access to them, and more a lack of resources as well? I mean, if you’re going to create 30, 40, 50 avatars, I would imagine that that’s a lot more work than it is to create one or two. Is it a function of time and resources? Or is it a combination of that and the fact that they just say, “Oh well, I only have time for this, so I’m going to concentrate on getting something out the door.”?
Brianna [21:34]: This is what I would call an excuse. You and I both know the features that get into a product are the ones your team cares about. We all know this. GSX, the way we do it is we list every single feature as a gold, silver or bronze tier. Gold must be done; silver can be done; bronze is nice if we get around to it. The features that are on that top priority list make it into the game. So the answer to this is simple: the men making these products don’t consider it a priority, and by everything you just said, it’s not a priority. A guy can certainly do this well. I’ve seen it done, but it’s just not important to them, and that’s reflected in the software we use.
Mike [22:15]: Right. It’s more of a matter of paying attention to that kind of thing and making it a priority, as opposed to just saying, “This is on the feature list and one or two is good enough.”
Brianna [22:24]: Yeah.
Mike [22:25]: We’ve talked a little bit about some of the subtle things that go on. What are some overt examples? I don’t think that this is something that is front and center for most men in the industry, but what are the more overt things that you’ve seen?
Brianna [22:38]: This is such a good question. We have a real tendency in software development to network in a way that was created by men for men. I could not even count how many times I’ve been at a bar at night alone – been the only woman there – with a bunch of men that are drinking alcohol. This is something I think dudes don’t even think about. I have had so many friends in that situation that have been sexually harassed. In two examples I’ve had friends who have been sexually assaulted. In one example I had a pretty close friend of mine have her boss basically force himself onto her at night while everyone was drinking. There was some really inappropriate contact that was made. This is something that is much more of a problem than men realize. Our setup here is built in a way that networking is very difficult for, say, women over 30 with children. You’re not going to find many moms that are going to be out drinking at 11 o’clock at night at a bar to work on their career. But this is like where 99% of the stuff happens in the game industry. There’s overt things. A lot of men tend to treat women they run into in professional circles as someone to date. I want to take a step back and say I realize that feminism and women are sometimes – I think there’s a little bit of a lack of empathy for what it must be like for a male geek when he’s just lonely and looking for someone to be a partner. He’s looking for romance. And I realize there’s a sense of maybe sometimes it’s a sensitive spot for them. I have empathy for that. But it is so wildly inappropriate at the same time to treat a woman that’s coming in to network with you professionally as a potential partner. It sends every single signal out there that you’re not valued for your skills, or who you are. You’re just a potential date. I think we’ve really got to change the culture where women and people of color are treated as the professionals we are, rather than just women.
Mike [24:48]: I don’t necessarily think that that’s just a software industry thing though. Because there’s –
Brianna [24:51]: No.
Mike [24:52]: – that’s definitely a problem. Obviously, sexual assault is an issue regardless of what industry it is. But I’ve also talked to female founders who have just said, “Yeah. I don’t go to evening events, or after-conference activities, because I don’t want to put myself in a situation where people are drinking and going to get out of control, and I just don’t want to have to deal with that.” I guess it can effectively minimize their opportunities for networking just by virtue of them not being willing to put themselves in situations like that. Whether it happens or not, if they’re uncomfortable attending those networking events then it puts them at a disadvantage outright.
Brianna [25:28]: Yeah. That’s dead on. And I would say look at the outcomes, right? I hear this a lot. It’s not just software. My husband is in biotech, who is head of IP for a company that’s listed on the NASDAQ that just had their IPO. There are plenty of women that work at his company. So why is it so many other industries their rate of women might be lower, but it’s not as embarrassing as software is? Why is this? Well, it’s the culture, stupid. So I think we need to own these problems rather than minimizing them.
Mike [26:00]: What sorts of things can be done to help change the landscape, so to speak? How do we go through and start enacting some changes?
Brianna [26:08]: I would say, for me, I hire a lot of people. Something I make a lot of personal efforts to do in my career is to network with people of color, because I realize without effort on my part I’m going to only be talking to white people, which is unconscious racism. I would say to anyone out there, when you see a woman that seems smart and accomplished on Twitter, follow her so you’re getting that voice in their feed. Make a deliberate effort to go out there and network with people of color, so you’re hearing that perspective and adding it to your own. I never hire for any position without thinking about who my candidates are ,and asking myself if they’re diverse. That’s very much a constructive thing you can do. If you don’t hire, and you’re just on a team, I think you’ve really got to check your own unconscious double standards. What is beyond frustrating to me, as a woman engineer, is it doesn’t matter what I say, or what I do, or what I have a technical opinion on, it gets challenged and bullied and just really hyper-questioned in a way that my male colleagues do not. I was at WWDC a few years ago, and I was talking about Apple’s metal API’s that were announced at a party. I’m sitting there talking to a guy, and he was like, “I was giving opinions on it, I write Unreal for a living and this is literally my field of hyper-expertise.” And this man just starts talking over me, and lecturing me, and “mansplaining” things. I had to take a step back and say, “Hey, you know the article you’re talking about right now? I wrote that.” He just blinked at me twice and kept going. There’s this culture of – it seems like it’s just something in a dude’s mind where if a woman questions a guy on something it gets just doubled-down on, or there’s this defensiveness that comes up. So I would get on my knees and beg anyone out there to really think through those unconscious double standards you might be holding women and people of color in your life to.
Mike [28:16]: Could you talk a little bit more – because it’s the second time you’ve used that phrase “unconscious double standards”. I’d like to know what other ones are there that we might have?
Brianna [28:25]: Sure. I think you can look at the last election and see very clearly there were double standards that Hillary was held to, with her ethical behavior, versus the dudes. This is all the way. It’s with when you’re applying for positions, I think womens’ experience is judged in a different way than a man’s is. I think all too often female communication styles are discounted. A really good one is, I think, that often women’s voices – you know, some women have kind of a vocal fry, or a higher pitched voice, and I’ve seen the way that they’re not taken seriously. There are all these double standards in what women say and do in our careers where we’re really beaten up about it. There is a great cartoon that came out this year where it was talking about women leaders, and the communication style we have to adopt. For a man, he could say, “I need this done by Tuesday.” If a woman says that she’s going to be considered abrasive. We have to adopt communication styles like, “What do you think about having this done by Tuesday?” It’s all these things where we’re constantly dancing around male ego and it’s absolutely exhausting.
Mike [29:37]: Shouldn’t the question in general be, “What do you think about having this done by Tuesday?” I’m not saying that from a female perspective. I’m saying that from a general project management standpoint, because just because you think that it should be done by Tuesday doesn’t mean that the other person – especially if you’re working with a bunch of contractors, or even employees. It almost doesn’t matter, but there are a lot of things that go on that are not necessarily in your vision at the time when you ask that. There’s a difference between, “Hey, this is deadline. We really need to have it done.” There’s ways of phrasing that stuff anyway that are much more collaborative in nature. Because I’ve worked with contractors who you tell them, “Hey, I really need this done by Tuesday.” and they’ve got a holiday coming up and you don’t know it. For example, if you’ve got people who are working overseas, you’re not in that culture so it’s not on your calendar. It is on theirs. You have to be at least aware of what’s going on and, unless you ask the question, it’s very easy to get into a situation where you say something, say, “Hey, this needs to be done by Tuesday,” and you’re completely neglecting all the other things that that person has going on.
Brianna [30:38]: I would say this with all respect, Mike, but I think the exchange we just had here is a really good example of what can make women sometimes a little frustrated in our careers. I completely agree with you. That’s my management style. I work through consensus and collaboration, and I believe that if someone is good enough to be in the door that they’ve earned a little bit of leeway with that. So we do work that way. But I think we’re so quick in our field to minimize any point that a woman is making about this. I’m going to be really direct with you here, women are held to very harsh double standards whenever we show leadership, or try to draw boundaries, and the things that we talk about are negated, or minimized, or put aside. Ask any woman that is in a position of leadership out there if she has to alter her communication style to not threaten men. She will absolutely, 100%, tell you that she does. I just think that’s really important. These are the realities that we face.
Mike [31:43]: Yeah. I totally agree. I definitely think there is that double standard there, depending on how a woman would phrase that. What are the types of things that communities and community leaders can do to help enact some changes here? We’ve talked a little bit about the stuff, I’ll say, on more of an individual level. But what can communities, like MicroConf and Founder Café and Startups for the Rest of Us do to help with these types of situations?
Brianna [32:08]: Well, always make sure you’re having enough women come in the door. Network with women. Organizationally, you need to create a culture where women are not afraid to speak up. By the way, this is a trait for any good leader. In software development it’s just a reality. We have a lot of introvert engineers. I’ve worked with more than a few engineers who are on the autism spectrum. To me, good leadership is creating an environment where everyone gets a say, not just the loudest voices in the room. I think being very active about having a culture where maybe those people that speak a little too much – and I’m in that group – would kind of be checked a little bit, and you ask for consensus from other people. That’s incredibly important. I would also say when issues come up those need to be taken very seriously. Every woman I know is terrified of HR, because HR very generally speaking, exists to protect the company, not protect the woman. In my entire career I only know one or two women that have had sexual harassment incidents that have had a good outcome by HR. There are standards about that out there for that. Make sure you’re holding yourself to that. I would also say really think through your interviewing process. In the game industry I can’t tell you how many times I’ve heard a story about a woman going to interview for a job and it uses male pronouns, it assumes certain things, or she’s interviewed in a room with posters on the wall of half-naked women. You’ve really got to think about your culture and ask yourself what kind of messages you’re sending.
Mike [33:54]: What would be better ways to – for example, you said job listings or job interviews – what would be better ways of referring to that in a job post, for example. Do you say, “He/She?” Would you say, “He or she?”, or would you try and avoid gender in any way, shape or form?
Brianna [34:09]: I personally try to talk around gender issues. I’d be honest and say I – like a lot of other people – am still kind of trying to figure out how to speak in a way that doesn’t exclude non-binary people. It’s kind of something that only first came up two years ago really in the mainstream. I, myself, try to just leave gender out of it whenever I can. That’s a personal style thing, and I fail at it sometimes.
Mike [34:36]: Going back to the communities, do you have any other recommendations or thoughts on networking events that could be a little bit more collaborative in nature? As I said before, one of the issues that I’ve seen is that female founders tend to shy away from going to evening events, especially ones where there’s alcohol involved in any way, shape, or form. I have talked to people who have said, “I have been sexually harassed at such-and-such conferences. Is MicroConf safe for me to come to?”
Brianna [35:03]: I guarantee women are having a conversation back channel a lot more than to your face.
Mike [35:07]: What sorts of things would you recommend, or could we look at?
Brianna [35:12]: I would say this. I really doubt that my company will ever have events with alcohol at it. I realize that there are some people in our field that kind of need alcohol to feel comfortable, but from my perspective I’m always thinking about my safety, first and foremost, and I just can’t allow something that would compromise that. I think, just to really be honest with you here, the threat of sexual assault is something men don’t ever have to think about, and women think about all the time. I personally don’t do that. I’m also increasingly skeptical about the value of face-to-face networking. I think it definitely has its place. I do most of my networking on Twitter, and in private groups on Facebook, so I’m always looking for those kind of personal relationships. I think lunch networking events, and coffee, are hyper-productive, so I’m always looking for those kinds of places that are just a little bit more congenial.
Mike [36:10]: One of the other things I want to touch on was that I recently read that you’re running for Congress. What prompted that?
Brianna [36:16]: Just to be really open. I try to steer away from politics as much as I can in my technical career, but honestly, on election night I was 30-feet from where Hillary Clinton should have accepted the presidency, and she didn’t. And, like a lot of other marginalized people, I’m really scared about my rights under a Trump administration. It’s something I’ve been thinking about for a long time. There’s really this meta-question of: How can we go further than we are right now. I personally believe that we’ve reached a real asymptote with what writing about sexism, and talking about sexism, is going to accomplish in our field. The truth is I could come on a 1,000 podcasts this year, like this one, and talk about the same thing. I’m not sure it’s going to get us much further than where were are right now. I think the next step is to have women involved in the legislature. The guy I’m going to be running against has spent his entire career crusading against women’s rights. He’s pretty terrible on technology issues. Even stepping beyond being a woman in tech, I think there’s a much larger issue here. Our federal tech policy sucks, and it’s dumb.
Mike [37:30]: I think that’s an understatement, by any stretch of the imagination.
Brianna [37:35]: It really is. I have to say this. One of the women I’m hoping to serve on a technology subcommittee in the House when I run, you know when the Mirai Botnet came out a few months ago, and completely took out parts of the internet in the United States, this woman went on CNN and blamed a botnet, which is it happened because we don’t secure Internet of Things devices and allow them to be rewritten in a way that can attack our technology infrastructure, and she blamed it on freaking SOPA like, you know, pirating movies and software. It’s just like it’s a policy position that was literally written by Verizon. I am angry about that, and our poor technology policy. It’s not just stupid, it’s endangering our national security. So a lot of the reason I’m running is I want to be a voice in the Congress on privacy rights, on the EFF, on all of these policy issues where – with all respect to the politicians in the Baby Boomer generation – I absolutely respect your service, but I think as someone that is kind of native to this technology, I simply understand it better than most people do, and we need people in Congress fighting for privacy rights; people holding companies accountable when their data is breached in horrific ways, and endanger all of the people that have had their information stolen. It’s a very wide array of issues, why I’m running. It’s not just gender equality. To be honest, that SOPA thing really made me mad. I think there’s a certain point where every generation needs to step up and commit ourselves to public service. And again, there are a lot more Baby Boomers in the Congress than there are Gen-Xer’s, and I just think it’s time for us to serve.
Mike [39:24]: Well, again, Brianna, thank you very much for your time. I really appreciate you coming on the show. So this is episode 322, and if you have any comments or thoughts on the show, head over to the website startupsfortherestofus.com and you can leave some comments on the website and talk a little bit more about this episode. If you have a question for us, you can call our voicemail number at 1-888-801-9690 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 and we’ll see you next time.
Episode 255 | Moving on From AuditShark
In this episode of Startups For The Rest Of Us, Rob and Mike talk about Mike’s decision to move on from AuditShark. They discuss events and reasons leading up to Mike’s decision as well as lessons learned along the way.
Items mentioned in this episode:
Mike [00:00]: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about me moving on from AuditShark. This is Startups For the Rest of Us, episode 255.
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 [00:23]: And I’m Rob.
Mike [00:24]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:29]: Well, I’ve been diving pretty heavy into paid acquisition for the past few days. Just spending the money to look at different approaches to it, trying different images, headlines, optimizations, all kinds of stuff. And since I’m dipping my toe back in the water after having not done it for quite some time, there’s almost like infinite possibilities. So I feel like I have to rule them out one by one again because so many of the ad networks change over time. And so if you look at AdWords or Facebook, even from last year to this year, there are so many new options. And without knowing which one’s going to work, I just have to plug some money in, run some ads, figure out how it’s going to work and then switch the approach to see which works better. So that’s probably the next week or two of my workweek.
Mike [01:12]: Do you have a budget in mind for how much you’re spending?
Rob [01:14]: A lot.
Mike [01:18]: I always think the exact same thing when I look at paid advertising. It’s just like, I hate doing this.
Rob [01:23]: The optimization, especially, is painful because you don’t have the ROI yet. So last time I did this it took me about five grand to figure it out. And from then on, I had a positive ROI, I was with HitTail. This time, I don’t know how much it will take, but I spent between $1500 and $2000 yesterday testing things, and I’ll probably spend a similar amount today. The thing is as if you have a smaller budget, you can do this over a longer period of time. You don’t have to spend that much every day. But you learn so, so much faster if you have budget that you can work through because you learn very quickly what’s working and what’s not. And you’re able to leave it running for longer and get larger numbers, more impressions, more clicks, and it just gives you a more solid feeling for the data you have. It will definitely be a chunk of money but I absolutely look at it as an investment. Last time I was able to make it work. It [channeled that scales?] so well. It’s not cheap, but once it works, it’s pretty crazy how many trials you can drive using this approach.
Mike [02:26]: It’s basically printing money at that point, once you’ve got it working.
Rob [02:29]: Yeah, it really is. Yeah, it’s pretty insane.
Mike [02:31]: Cool.
Rob [02:33]: How about you? What’s going on?
Mike [02:34]: Well, a quick announcement to anyone who’s interested in going to, essentially [?] to a mastermind group and a ski vacation rolled into a business trip, you can head over to bigsnowtinyconf.com or to bigsnowtinyconfwest.com. The first one is going to be up in Vermont. It’s going to be in the winter sometime. I forget whether it’s January or February. But basically, they’re going to be selling tickets in the next couple of days and they have a mailing list put together. And then the other one is in Colorado, which is put together by a friend of MicroConf, Dave Rodenbaugh. The first one is put together by Brian Castle. He also has a hand in the bigsnowtinyconfwest with Dave.
Rob [03:09]: All right. So what are we talking about today?
Mike [03:12]: Well, I think today you’re going to be walking us through me moving on from AuditShark. So I’ll kind of let you drive the show today and we’ll see where it ends up.
Rob [03:21]: This is a big decision, man. I realize the magnitude and the gravity with which you’ve treated this decision. So there’s a lot to discuss, all the way from reasons to end results, to some of the marketing challenges you faced. I think I want to kick it off with giving some type of timeline. And it’s a pretty loose timeline that we tried to put together right before the show, to give folks an idea of what AuditShark is and where you’ve taken the turns over the past several years. So AuditShark is basically software, it’s a service and it is auditing software for servers and networks and client machines.
Mike [03:59]: Quick correction. It’s not actually software as a service. It was downloadable at the end of it. It started out as SaaS, but not –
Rob [04:05]: Okay. This is good to know. Yeah, you’re right. So it started out as Saas and then it was downloadable. You’re right. You started coding in 2010, you had a full-time consulting gig, and from what I recall, you had the idea and were starting to build it but it was a huge effort, like it was going to take a long time. And we, at some point, talked about how long you thought it was going to take and it was like a year or more of coding. I think you got kind of an alpha or enough to show your initial audience, which was banks, small banks. That was around 2011 at some point. And there was some mixed stuff that happened [right there?]. There was a mixed understanding. You had talked to a few banks and then when you actually revisited it there was like a misunderstanding in the discussion and, if I recall, some of the banks didn’t get back to you and then other ones said, “We didn’t really need this tool,” or there was a word that was defined differently, or something like that. That didn’t work. So then you started, in 2012, looking for other markets. You looked at SaaS. Eventually moved onto more looking at enterprise stuff. So it was 2012. And then in 2013 is when you were having the health issues and you had a big motivation block where you had months, if not quarters at a time, when you said you just weren’t really making progress. And in 2014 you finally quit consulting. You went full-time on AuditShark and you set yourself a deadline. You said by some point in 2015 you wanted to have revenue and you wanted this thing to be working, otherwise you were going to pull the plug. And obviously, that time has come.
Mike [05:33]: Yeah, that’s a pretty accurate depiction of what the timeline looked like. Early on I was actually, essentially taking the product and cloning existing functionality from other products that were out in the market. I’ll be honest, I feel like in some ways that held me back very early on because I was very scared or very hesitant to, essentially, show my work to other people or to go out and piggyback on those products. Even though they were being end-of-life, it didn’t matter to me. The reality is that I can be sued 10 years down the road and it doesn’t really matter whether those products were end-of-life or not. But there was that underlying fear in my head that I didn’t necessarily want to run into any sort of legal entanglements. I think that early on that affected me more. I think I kind of ignored it as time went on but it was definitely a factor early.
Rob [06:18]: Right. And my memory of the early days, again, this was like five years ago, was that you wanted to build it but that you didn’t have a lot of time. And I questioned how serious you were about it at that time. I didn’t feel like you were putting in 20, 25 hours a week at night, coding until two in the morning. It kind of seemed like you coded on it when you had time and that it was going to take a really long time at that pace.
Mike [06:43]: Yeah. That’s right. And I also hired some contractors to help me out with some of the coding. Some of them worked out and some of them didn’t. I think that the fact that there was a programming language built into it, that really threw some of the developers for a loop. They didn’t know what to make of it. They didn’t know how to use it. It was confusing to them because they had to not only know C# programming, but they also had to know how to deal with databases and they also had to know how to deal with a lot of the front end stuff and then the back end code. And in addition to all of that, they had to understand this programming language that was kind of like LISP. I think that that skill set was just really difficult to find and the people that I was finding couldn’t handle it. But I couldn’t necessarily afford to hire much more skilled people because of budgetary constraints.
Rob [07:31]: In retrospect, do you feel like you managed them well and delegated well or do you think you made mistakes there, too?
Mike [07:36]: Oh, I definitely made mistakes there. I’m probably not different than other people where you think that you’re good at most things. And I will kind of be blunt about it. I’m probably not the greatest manager in the world. I’d like to think that I am, and I’d like to think that I’m very well organized. But when it comes to assigning tasks, there are definitely places where I’ll write something down or tell somebody to do something and it’s difficult to get the idea across to somebody, especially if it’s a difficult concept. So that’s where things like the screencast and things like that come in. And they’re helpful, but I didn’t necessarily always do them either. And even sometimes when I did them, there were times when somebody would come back with something that was just blatantly incorrect and I was like, “I don’t understand how you could of misinterpreted this because I was very clear here.” So there were certainly cases where the fault was definitely on me and then there were cases where, for whatever reason, they just didn’t understand or didn’t figure out what it is that I wanted them to do.
Rob [08:30]: Let’s dive in here because we have a pretty extensive outline of kind of every angle of this decision to move on. And I think listeners will be interested to hear you’re reasoning, the roadblocks you hit along the way, who you’ve used as sounding boards, just all kinds of angles of this. Let’s start with the reasons that you’ve decided to move on from AuditShark. Obviously, it’s a huge decision. You have five years, on and off, invested in this as well as a chunk of money. This is not a decision that you’ve taken lightly. So talk us through what made you finally decide to move on?
Mike [09:03]: Well, last year, I kind of set a deadline for myself and I said, “Okay, in order for AuditShark to really do something substantial, I really need to dedicate more time to it.” Essentially, at that point, what I decided to do was, “Okay, if this is going to happen, I need to be able to just dedicate the time to it.” So I ended up quitting consulting and that was last June. So from June until now, I’ve basically been full-time on my own business and mostly working on AuditShark. Now one of the big problems that I was having while I was doing consulting, and essentially funding the development of the product, was that I couldn’t effectively do the sales and marketing. So like if I needed to be on a phone call, it was very difficult for me to arrange that because of my travel schedule. And I think that on our 200th episode, my wife had mentioned how there were some years where I was on the road 45 weeks a year. So that was definitely a problem for me in being able to carve out that time. Because if I’m on site with a customer, I can’t exactly step out to accept a phone call or step out every couple of hours to start making an hour’s worth of phone calls. It’s just not easy to do that. So quitting consulting allowed me to make those phone calls myself. I could have hired somebody, but at the same time, had I hired somebody, I wouldn’t necessarily have been the one learning how to do all that stuff or learning the subtle nuances of what people were saying. And that would have been difficult to get from a sales rep back to me. And in addition, I didn’t necessarily have the money to hire a full-time sales rep. And I’m really not comfortable hiring somebody on like a commission-based, especially for product that isn’t established and doesn’t have a solid revenue stream that’s coming in. I just don’t feel good about that.
Rob [10:43]: Right. I would agree. You never got to product market [?], so you as the founder/CEO really needs to be the first salesperson. So it was obvious that the sales approach wasn’t going to work. But at that point when you realized that, did you ever think, “Boy, this product is just not something that I can do as a single founder and I should pull the plug now?”
Mike [11:01]: The thought crossed my mind a bunch of times. It’s not to say that I didn’t think about it or it didn’t weigh on me but when you’re in the middle of it, it’s like what do you do? What are your options at that point? If you’re looking at that saying, well, this isn’t flying right now, it’s not going anywhere, what can I do about it? So I would say that it’s one of those situations where it’s the analysis paralysis, where you’ve got so many options you don’t necessarily know what to do so you don’t do anything. I’ll be honest, I just didn’t know what to do. So in many of those cases, I just didn’t do anything. I didn’t make a decision one way or the other, I just kind of let things ride the way the way that they were going and kept doing motion but not necessarily any forward progress.
Rob [11:39]: And I can imagine that with, essentially, the [?] costs that you had of a few years of work, because when you made this switch, and I think when you realized that it was going to be phone calls during the day and one-on-one sales, this might have been what 2012, 2013? So you were already two or three years into it. You were already tens of thousands of dollars into it. I imagine the sunk costs had to have entered your mind at that point, of like, I could just shut this thing down because this is going to be hard to sell or this is just a hurdle, a roadblock, and I can figure out how to get over it. Is that kind of your thought process?
Mike [12:12]: Yeah, but I mean, something else that factors into it is how do you know whether or not it’s going to be something you can get through unless you try it. If you look at the Dip from Seth Godin’s books, how do you know you’re there? Unless you try to push through it, I mean, if you give up right then, clearly you’ve failed it or whatever it is that you’re doing. But if you at least give it a shot and try and push through it, then you have a chance at making it through. And you won’t know until you try that. So it made it difficult to kind of make a decision one way or the other.
Rob [12:41]: Yeah. It’s hard because there’s the school of thought of you should get something out there in seven days and then let it fail really quickly. And there’s Lean Startup with just iterating and iterating and pivoting and pivoting. And then there’s the opposite school of thought that you need to sit there and hammer on things for six months or a year before you’re going to see if it works. And I think part of that is personality driven. Folks listening to this, I think if you tend to flit around and move from place to place, from project to project, you should probably stick with things longer than you feel comfortable with. And I think if you’re listening and you tend to be more bullheaded about it and you stick with things too long, then you should think about cutting your losses sooner. And having known you, Mike, for what- we’ve known each other for ten years, but known you pretty well for five or six, I would say you [?] on the side of pushing with things, of being more stubborn with it. And that is like a great strength in certain cases, but I feel like in AuditShark’s case it may not have been. It may have kept you doing it past the point where it made sense.
Mike [13:42]: I would definitely agree with that. And it’s hard to know, necessarily, in advance whether or not the stubbornness can be a pro or a con until it’s too late.
Rob [13:52]: That’s right. And if you’re company becomes a $100 million company and you were stubborn, then you’re a visionary and a genius. And if your company tanks, then you were an idiot. You know what I’m saying? It’s like it’s all in the outcome.
Mike [14:03]: Well, I appreciate that.
Rob [14:05]: Yeah. [?]
Mike [14:06]: That’s okay. No, I understand. I knew what you were saying. I knew what you were saying.
Rob [14:12]: So somewhere around late 2013, 2014, you kind of made the switch and moved into this enterprise market and you started talking to more enterprises and the sales cycle got long and challenging. So that was another factor, I think, in your decision to shut it down. Is that right?
Mike [14:26]:Yeah. The enterprise sales is just really hard. And I think that there are definitely cases where it could work and there are some people who are built for that kind of thing. I don’t know that I really am. I prefer things to move a little bit quicker. I’ve still got a customer in my sales pipeline who’s been there, going on 20 months now. And it’s an enterprise deal they’ve got between 35,000 and 70,000 end points. But the reality is that, even if that deal came in tomorrow, I don’t ultimately believe that it would change the long-term outlook or the sales cycles. So it would bring in probably $300,000 in revenue but I don’t necessarily have a good scalable way to get in front of a lot of other people like that. So that makes it difficult. And in addition, I had somebody who was basically asking me for information about AuditShark and we went back and forth a little bit and they’re like, “Check back with me in three months.” And then, “Check back with me in six months.” So I started doing some research, come to find out that this person was actually project manager for a product inside their company that basically does what AuditShark does. Of course that’s heavily depressing. It’s very demoralizing at that point. You feel like you’ve been strung along.
Rob [15:37]: Yeah, that’s tough. We had several offline conversations over the past kind of year, I think, as you’ve pushed into this enterprise market. And there have been stops and starts. There has been progress. There was a light at the end of the tunnel at a certain point where you thought that you were going to be able to make this work. To be honest, as an outsider looking in, the past 12 months has been your most focused and, I’d say, productive period of time, working on AuditShark, in my opinion. Because you actually sat down and you made the sales calls and you were doing demos and you were doing webinars and doing marketing and that stuff. It’s like the first three or four years you were working on the product and trying to figure out what to built and trying to- it was more product focused. A lot less marketing focused. But you really were dug in and executing this past nine to 12 months. But this enterprise sale cycle, and just enterprise sales in general, has really been an uphill battle, I think.
Mike [16:31]: Yeah, and just for some of the listeners who haven’t listened to some of the earlier podcast episodes or heard what AuditShark really was for or what it was built on, I was essentially taking an enterprise level product that had sold recently well in the market and creating a smaller version of it that would have a lower price point and would address the same types of needs but for smaller businesses. I wasn’t necessarily looking to go to the enterprise market. I was going to say, hey let me take this enterprise solution and re-work it a bit for small and medium sized businesses. And when the banks didn’t work out, and then as a SaaS offering for small businesses it didn’t work out, then I said, okay, well that worked before in the enterprise market. That’s probably where I should go with it. And ultimately, it seems like the enterprise market is just really not a good fit for me personally. And the last reason I have for walking away from this is that I feel that some of the people that I’ve been targeting and talking to, who are in positions where they are tasked with solving this problem, don’t necessarily care about the problem themselves. And that’s really hard to take. As a developer, as an entrepreneur, you’re trying to solve problems for people and make their lives better. But if they don’t care about the problem, then why should you? It makes it really hard to care about their outcomes when they don’t care about it either.
Rob [17:52]: And we’ll talk a little later about some lessons learned from that, right? Because I think trying to get more validation up front could have had you learn that before spending the time to build the product. Maybe it could have. I think it’s arguable. But it’s definitely possible. So what’s the end result really? What are your sunk costs?
Mike [18:13]: Neglecting the time that I’ve spent on it, and if you kind of add in profit versus the money that I spent, I’m probably down about $50,000 in sunk costs. There’s about a third of that that I paid to a contractor who kept promising to deliver and updated version of the product for, it was probably close to four months. And that was complete mismanagement on my part. And I talked to my mastermind group kind of at length about that because it had been going on and on. And finally, it just got to a point where I was like, look, I need something from you. I need to see something and what I got was not what I expected. And I was just like, all right, I’m done with this. This whole contract is done.
Rob [18:49]: Right. That’s a bummer.
Mike [18:51]: Yeah. Probably a third of that $50,000 was spent on that.
Rob [18:55]: Right. You mentioned your mastermind group. I know you’ve had a bunch of sounding boards, folks you’ve talked to about this. Especially over the past year or two as you’ve been trying to make a decision about it. Who are folks who you’ve relied on for that?
Mike [00:19:09]: Yeah, so Dave Rodenbaugh and [?] are in my mastermind group. So I talked to them pretty frequently about it every couple of weeks. And then at Microconf Europe, I had a number of conversations with different people. Like Steven [?] and Patrick McKenzie. Even as far back as Microconf in Vegas, I talked to Steli Efti for quite a while about it because, obviously, as CEO of Close.io, he has a lot of insight into sales cycles. So I felt like talking to him would, at least, help me understand whether or not I was going in the right direction or the things that I was doing or not doing that I should be. And the end result of that was that if you’ve lost motivation and the needle isn’t moving then it’s going to be an uphill slog. And somebody specifically said, “You’re a reasonably smart guy and there’s a near-infinite problems you could be solving. You should probably be working on something that you enjoy rather than something you don’t.” And it stung, but at the same time I needed to hear it.
Rob [20:04]: Yeah. It all depends on what state of mind you’re in. If you’re in the first couple months and you’re all fired up about something being a good business and someone tells you that, you’re going to tend to ignore it. All of us would tend to ignore that if you’re fired up about it. If you’re at the end of your rope and you’re frustrated and you’ve been working on it for multiple years and it’s not working, when you hear that it’s going to sting, but I think it’s good feedback to hear because it makes you reconsider continuing to invest in this product that just doesn’t have legs.
Mike [20:29]: Right. And obviously there’s all the mental challenges that go with it, but it’s something that I’ve talked about on this podcast before and there’s a certain amount of obligation to succeed, I’ll say. And not to say that everything I touch is going to turn to gold, because I certainly don’t expect that, but I really felt like I had the insight into this particular problem and how to solve it to be able to push my way through and solve the marketing challenges. And I felt like a lot of the marketing challenges that I ran into, especially in enterprise space. The enterprise space is really very much relationship driven. I do not like the mode of operation. I do not like that mode of sales.
Rob [21:10]: So with all the feedback in mind from folks you’ve spoken to and given your reasons above, I know that you had in essence, set a deadline for yourself at a certain point last year. Can you talk us through really the final straw or the final deadline and how that worked out? You gave yourself the freedom to really decide to move on. How did that all work?
Mike [21:29]: Yeah. I had this initial deadline that I had set up, which was a year from going full-time on it. And I got near the end of that deadline and I was kind of worried about it because obviously, things were still not going very well and I was trying different things. And one of the things that I had tried was the AuditShark lock down service. That allowed me to kind of push things out a little bit because as soon as I started doing that, I got some immediate sales from it and I was able and go out and do some security reviews for a couple of people. And I sold two of them very, very quickly, and then there was a third one that was supposed to come it and ultimately, they ended up backing out. But I sold several thousands of dollars of those services very, very quickly. So I looked at that and said, well, maybe this is the part that has legs. Maybe this is where the product is destined to go. So I gave myself a little bit of extra time. My mastermind group members were on board with that. They said, “Look, this got some revenue very, very quickly. You should probably spend a little bit more time on it, even it takes an extra month or too,” because a lot of the other things you haven’t tried so far have worked. And it’s like you’re at the end of that timeline and suddenly, boom, something changes. And it didn’t feel right to just pull the plug at that point. So I extended the deadline by a little bit. But ultimately, it didn’t seem like that really made much of a difference. And also, the initial traction that I got from that was from warm leads, not necessarily cold leads. And I don’t know how long it would take some of those people to invest in the lock down service. But at the end of the day, I don’t think that the lock down service is something that I would want to do long-term anyway.
Rob [23:00]: Right. Yeah. So the combination of it, it’s like if you go with enterprise you didn’t really have a passion for doing enterprise sales. And if you did the lock down, you could probably sell it to more smaller, medium sized businesses but didn’t turn into something that you wanted to do. And, like you said, you didn’t know how to repeat that and you didn’t want to spend another six months trying to find cold leads and convert them with lock down. Your time had come, your deadline had passed.
Mike [23:24]: Right. I mean, you can only pivot some many times before. You can technically pivot forever but at some point you got to call it quits.
Rob [23:32]: Yeah, there’s always more suggestions. We could sit here and say, “Okay, so lock down had a little bit of traction, Mike. How are we going to plan to get more people to the website? And then you can do webinars and you can do this and do that” but it’s like you’re done. When you’re done, you’re done. So what are your plans with AuditShark, what are you going to do with it?
Mike [23:46]: Well, I think, for the time being, I’m just going to leave the website up and leave things on “Autopilot.” I’ll probably add a pricing page in there with just some sort of [low ball?] price and some sort of upper limit on the number of machines that you can use it on. But the reality is I’m not going to do very much with it at all. I did talk to a broker who said that he thought that I could definitely find a buyer for it because there’s definitely people who would be interested in this type of product. But the other suggestion that I heard was that the site definitely gets reasonable traffic on some of the pages that are super competitive. So for example if you search Google for SOX Compliance, I actually rank higher than Wikipedia for SOX Compliance. And if you look in the Google keywords tool, it shows that it’s a highly competitive term. So I’m getting like more than half of all internet searches for SOX Compliance. And that page is generating between 15 and 20 leads a week right now, for me. So I think that there’s definitely value in terms of advertising. But again, it kind of goes back to this situation of like in a way I’m kind of done and I don’t want to put a lot of time of effort into it, so I’m going to leave the site up for the time being but I’m not going to do a whole heck of a lot with it at this point.
Rob [24:54]: Yeah. It’s tough, man, because, I think my opinion on this is that leaving it up, if you make one sale magically or two sales for a few hundred bucks, it’s probably not going to be worth your time to support them. And I think that if someone downloads it and uses it and runs into any bugs, then you’re now on the hook for fixing that. If they run into support issues getting set up, you’re going to have to help them. And since you’re not planning on building this business, I’d be kind of hesitant to keep it for sale, to be honest. Even if you leave the site up for now until you’re really done with it, you may just want to remove the buy it now button and either have just a “contact us” button or like no way to purchase on the site. Just to avoid having to get your code, which has not been heavily production tested on hundreds of installs. So it probably still has some bugs to avoid a customer buying that and putting it on their stuff and then having to support it. Because, you know, what’s worse than selling zero copies of a piece of software, selling two copies of a piece of software. Because then you’re on the hook to support it and it’s a lot harder to just shut it down and walk away at that point.
Mike [25:54]: Yeah. For me, I think, there’s this mental barrier to going into [IS?] and clicking stop on the website. I feel like that’s really what it is. There’s two sides of this. There’s the logical side which says, “Look, this is done. This isn’t going anywhere and all the paths that you have to success are paths that you don’t necessarily want to do.” So there’s really no point. But then there’s the emotional side of it which is like, “I’ve put all this time and effort into it and to go in and hit that stop button” so that website no longer shows up, it’s kind of painful.
Rob [00:26:26]: It’s too soon.
Mike [26:28]: Yeah, kind of too soon. Mentally, I feel like it’s there but at the same time, it’s hard to just do that.
Rob [26:35]: I think that will ease up over time. I think now that you’ve made this decision, it still hurts and then, in a few months, I bet it will be a lot easier to do that.
Mike [26:43]: Yeah. And that’s what I think as well. I’m just going to kind of let the website ride for the time being and for the most part ignore it.
Rob [26:50]: So let’s talk about lessons learned. I think you’ve learned a lot during this process. I think other folks listening to the podcast have too. There’s been a lot of heartfelt discussions and the comments over the past several of years as we’ve had episodes that have focused on your building and launching and decision points around AuditShark. Talk us through some of the things that you feel like you’ve taken away from this experience.
Mike [27:09]: Well, I think that I’ve definitely realized that there are certain cases where the answers are not so cut and dry. So, for example, when we talked before about the timeline a little bit, and in 2013 there were some heath issues that I ran into. But I almost feel like those obscured my motivation issues or maybe compounded them because I don’t think that, kind of looking back in retrospect, at the time I was like, oh yeah, my health issues. I’ve got these under control now and now I can get to work and I can actually get things done. And I feel like because of maybe underlying motivation issues were obscured by the health issues. I think that it was not necessarily as clear to me that there’s two different things going on here, not just one. And it’s not obvious until much later. I was talking to Patrick McKenzie and he said the exact same thing happened to him on Appointment Reminder, where the product wasn’t necessarily getting very much traction and he ran into health issues. And then even after some of those cleared up, it still took him a good year and a half or two years of a very difficult grind to get the product to where he wanted it to be. And he’s the one who actually told me that the heath issues very much obscure the motivation issues. I think at Microconf Europe he called this the [Peldi?] test.
Rob [28:22]: Right. Like do you really want to work on this thing?
Mike [28:24]: Right.
Rob [28:25]: Are you going to be happy working with this group of customers and working on this product for the next 10 years? That’s really his question. I think there’s also a big question around validation. You’ve made some calls and you had a couple of banks that you had spoken to, but talk us through something that you would do differently these days regarding the early validation of AuditShark’s need.
Mike [28:25]: I would talk to a lot more of them. I talked to five and I felt like because I walked in the door and sat right in front of the person who was running the IT and talked to them directly, that I had a good handle on it. And then in addition, all my background and experience at the startup a long time ago, building exactly this type of product. Because I knew all the subtle nuances and I did all the consulting around it, but at the end of the day, I did not understand the needs of the small banks. Because what I was trying to do was I was trying to take a large enterprise product and put it down into a very small niche market with banks. And I didn’t do enough validation around that piece of it. I still feel like the product itself and this particular problem needs to be solved in the enterprise space, but clearly, as I said, that’s not a place that I’m going to go or able to go. But I definitely could have done a much better job validating those banks before I went off and built code for 12 to 18 months. And I think that had I done a better job of that, I might have realized much sooner that the banks were not going to be a good fit for the product. And ultimately, I wouldn’t have had to pivot because I would have never built to begin with.
Rob [29:53]: Right. Yeah, and then something I’ll add, that we talked about offline is that, you took too long between the idea and talking to the banks and getting to beta, right? It was like 18 months or more and that’s a long time. There were reasons for it. You have contractors that fell through. You had traveling. And you had all of that stuff, but it just becomes too long and it makes the journey too long so that it’s not fun anymore. It’s hard to keep motivation up over the course of 18 months or two years working on a product with no real validation.
Mike [30:22]: Yeah. And it’s interesting. I’ve talked to some people where they’ve heard about some of the inter details and inter-workings of how everything has happened and they’re shocked that I was able to maintain, I guess, stay on course for as long as I have.
Rob [30:37]: Yeah. And that comes back to that strength of being stubborn. I think you have that strength of being able to continue plugging away at something for a very long time and I think that’s why you stuck with it, and it’s both a strength and a weakness depending on the context.
Mike [30:51]: Yeah, the other thing that I think really was a big deal was when the banks, I was initially targeting, did a 180 on me. That should have been a gigantic red flag for me to reevaluate the entire thing instead of just simply pivoting. Because I had this product that I had built, I took it to them and they said, “Oh yeah, we must have misunderstood” or there was miscommunication. This is how we’re solving that. We don’t really need this. It’s an interesting thing but we don’t need it. And I think at that point, I probably should have done a complete reevaluation rather than simply trying to pivot. And I think that was big mistake that I don’t think I realized until recently. I can’t really remember ever hearing that lesson from anyone else before, but I think if you get to the point where you need to pivot, you need to evaluate everything at that point instead of just is this going to work or what’s going to be the most likely place for this, because it’s entirely possible that all the research and everything else that you’ve done before that point is essentially irrelevant at that point.
Rob [31:48]: Right. And you were in problem solving mode of like, “I’ve run into a problem, the banks didn’t pan out. How do I fix this problem in the context of this product? So how do I find different customers? How do I find customers for this app?”Whereas, maybe you shouldn’t have been evaluating how do I fix the problem but should I fix the problem and should I even continue with this product at all?
Mike [32:09]: Yeah. That’s a very subtle distinction, but extremely important, too.
Rob [32:13]: Yeah.
Mike [32:14]: I think there was also a certain amount of obligation that I felt because I had talked about AuditShark on the podcast. I almost felt obligated to continue. And I feel like looking back on it, that was also a mistake that I made. Sometimes the right decision is to call it quits and move on.
Rob [32:28]: Right. And I think that obligation probably extended beyond that and maybe even tied into the amount of money you invested and certainly the amount of time you’d invested. It just comes back to the sunk cost.
Mike [32:40]: One other thing I want to bring up is that I think when you’re looking for a channel for your product, and I think that on this podcast we tend to err on the side of telling people go for SEO or paid advertising, all these online mechanisms, and I think that once it gets to offline stuff you have to do a little bit more research on it. Because what I didn’t realize in going after the enterprise market was that the enterprise market is much more relationship driven than it is anything else. And I didn’t realize that up front and I should have. Because I’ve done enterprise sales before but probably not to the extent that an enterprise sales rep would have. I’ve been in the capacity as like a sales engineer and working through problems with people and doing proof of concepts and things like that, but when it gets into the part where you’re actually selling the software and getting to the point of purchase orders and things like that, it’s very, very relationship driven. And sometimes people will just ask you for proof of concept or a demo for the sole reason that they want to pit you against another vendor. And I’ve run into that. It’s a hard position to be in but those relationships that those larger businesses have, they’re there for a reason. So when I big business runs into a problem, they’re going to call up their large value [added?] reseller and say, hey, we have this problem, what do you have for us? What tools do you know of that can solve this particular problem? And they’re going to rattle off two of three and usually the top one that they come out with is going to be the one that gives them the best margin that they’re reselling. And I don’t have those relationships and I don’t really want to sell a product that is more sold on relationships than it is sold on technical merit.
Rob [34:15]: I think there’s a roadblock or a pretty big uphill battle if you’re a single founder bootstrapping a company and you’re trying to enter this market. I don’t know of any single founders who are bootstrapping, selling into the enterprise. I’m sure there’s one or two. There’s probably a counter example. But for the most part, the folks we know are not doing that because of the amount of time investment that it takes, the amount of cost, the lead time, and the sales cycles. There’s just all these reasons. So, I think when you initially launched or were going to start building back in 2010, you weren’t planning on going after enterprise. But there was a point in 2013, 2014, when you said this is what I have to do, and I think that if you had known what you know now about the enterprise sale cycle, that would have probably caused you to, hopefully, rethink the decision.
Mike [35:02]: Well, that’s another pivot point where I should have reevaluated much more than just where is this going to work. When I pivoted from banks to small businesses I should have reevaluated a heck of a lot more than I did. And then when going from there to the enterprise, I should have evaluated whether the enterprise is a good place for me to be in. I didn’t do it in either of those cases. And I think both of those were mistakes.
Rob [35:02]: So what’s next for you? You’re moving on, but what are you moving on to?
Mike [35:28]: I’ve kind of talked about this offline, but there’s a ton of stuff that needs to be done on the Micropreneur Academy and Founder Cafe, so I think I’m going to take some time to revamp some of the guts of that stuff over the next couple of months. And then right now I’m also testing out a couple of different ideas to see if they have any legs. Two ideas I’m testing right now. One of them is more of a one-on-one email follow-up. Because one of the issues I ran into when I was trying to do the enterprise sales was there were people who I would email them or I would call them and they just would not get back to me. And it would take a number of emails or contact attempts to try and get them either on the phone or get some sort of response. There was one, I think I talked about it were it was eight emails over the course of 16 weeks, or 16 emails over 16 weeks or something like that. It was a very long period of time. It was a very high number of emails to me and phone calls. And finally I got a response on the 16th one. I forget the details of that but it was a lot. And it was all with no response of any kind and then suddenly, kind of out of the blue, they’re like, “Oh, yeah. By the way. We’d love to set up a meeting for Tuesday.” It was weird the way that that works. And I’ve talked to a couple of people about this. There’s definitely some opportunities there where they want some sort of automated sequence for people who, not fall off the bandwagon, but fall off the radar or kind of move away from the negotiating table, to just help bring them back. So I’ve got an idea that I’m testing for that and I’ve talked to a few people about it, but I’m not so sure I want to go in that direction. And then the other one, this one’s a little bit fuzzier. It’s sort of an idea around spreadsheet automation. So there’s lots of people out there who build reports from spreadsheets or take data from different sources, kind of aggregated together, or imported into databases. And I think that some sort of spreadsheet manipulation product or something that builds reports from multiple spreadsheets and splices things together, or even just something very, very dead simple that takes spreadsheets and imports them into a database might be something that people would be interested in. Again, I’m still working out details on those things. I haven’t started writing code or anything like that, beyond some very, very brief prototypes that’s about it. But I’m kind of sifting through about 5,000 keywords right now to see if there’s an SEO play for that and then talking to people about that. I’ve already had a few conversations. One of them didn’t. So, we’ll see how it goes. But I’m not going to do anything until I get to probably 20 or 30 people.
Rob [37:49]: Well it’s been a long journey, sir. I know this is a big decision for you. So it’s cool that you’re willing to come on the show and kind of detail all the decision points and what’s gone on over the past several years so folks can get a better idea of what was going on at what point. And frankly, so we can all learn from the mistakes that we’d made, like we say in out intro.
Mike [38:10]: Yeah, I’ll be honest. This is a fairly painful set of mistakes. It’s not even just one mistake, it’s a bunch of them, not necessarily sequential. There’s definitely some things that went well and there’s some things that didn’t. I learned a lot along the way. Ultimately, it didn’t necessarily turn out the way I wanted it to. But not everything does. But at the end of the day I want to be doing something that I enjoy and have fun doing and am helping people who legitimately want to be helped. And there were a lot of things that just didn’t necessarily fall into place along the way. So, as I said, it’s kind of painful. I know logically that it’s the right move, emotionally it’s still a little painful, but hopefully that will go away over time.
Rob [38:51]: I imagine there’s also a bit of a weight lifted off your shoulders.
Mike [38:55]: Yes and no. There is and there isn’t, I guess. I’ve got all the technical cruft left around that it’s going to be there for a while. It’s almost like you break up with somebody and their stuff is still in your house.
Rob [39:07]: Yeah. You just can’t get away from it.
Mike [39:10]: I don’t know how else to put it other than that.
Rob [39:12]: Yeah. Well, I think that probably wraps us up for today. So if you have a question for us, whether about this episode or another one, call our voicemail number at 888-801-9690. You can e-mail us at firstname.lastname@example.org. Our theme music is an excerpt from “We’re Out of Control,” by MoOt, used under Creative Commons. You can subscribe to us in 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.