In this episode of Startups For The Rest Of Us, Rob checks in with Mike Taber’s progress on Bluetick. They revisit some topics that were brought up from their last episode together including motivation, personal retreat, accountability, the Google audit and more.
Items mentioned in this episode:
In this episode of Startups For The Rest Of Us, Rob and co-host Tracy Osborn answer a number of listener questions on topics including funded competition, growing an email newsletter audience, white-labeling and more.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on the show, we cover topics relating to building and growing startups in an ambitious and repeatable fashion. These are not your typical Silicon Valley startups where fundraising can be a goal in itself and where people build slide decks instead of building businesses. The things we’ve espoused for the past 460 episodes, things like freedom, purpose, and relationships, much of being a founder is making decisions with incomplete information, where the right answer is impossible to find through math or data.
On the show we have several different formats. Oftentimes we have tactics we discuss, we do interviews, founder hot seats, and this week we have listener questions. Questions sent by you, the listeners, over the past couple of months. I’ve been mixing up the formats as you’ve noticed and the feedback I’ve heard is that the tactical interviews and the interviews of the agony of defeat have been really well-received in addition that the listener question episodes tend to be listener favorites.
I want to get back in the groove of doing those and today, I welcome a co-host, Tracy Osborn, to come back and answer questions again. She joined me about six or eight episodes ago answer a few questions. Before we dive into those, there’s been a few comments on startupsfortherestofus.com website. Go to startupsfortherestofus.com, we have a new design, you can check it out.
On episode 456, we had a comment from Karen that said, “Just popping in after listening to this episode to say how much I value your podcast. I’ve been listening for quite a few years. As other shows have come and gone, Startups for the Rest of Us continues to be a staple for me. I’ve really enjoyed the mixing up of the format lately. It’s been good to hear from different people. In saying that and as much as I’ve enjoyed and got something out of each episode, I would not really be keen on having the podcast moved to an interview format every week.” I actually agree with that.
“I always enjoy the listener question episodes and get a lot of value out of those. The episode that really left a lasting impression on me was the one with Mike just before he started his hiatus. The way you skillfully weaved your questions in and around Mike’s comments and your observations were very eye-opening and I’m sure it resonated with a lot of listeners, too. I would love to see more of that format, like a one-off mastermind session with the SaaS founder, where it explores a specific challenge that they are currently experiencing.
No matter the format of this podcast is, it continues to be a cut above the rest and a big thank you from this listener for everything.” Thank you so much, Karen, and another listener chimed in and said, “Plus one on that.” I appreciate the feedback on that. It’s super helpful just to help guide things, to look at doing some more hot seats in the future.
In episode 457, I answered a few questions. One was about starting a market place and TJ wrote in and asked about two-sided marketplaces and how he should start it. Shawn the Wolf chimed in and said, “Great show. For two-sided marketplaces, I would suggest, number one, populate the list with the basics for free to satisfy your consumer funnel. Number two, give all artisans a basic free listing with an option to be removed. Number three, find sweeteners to sell to the artisans, to give the individual listings a competitive edge.” The sweeteners he lists are enhanced listings, ads at the top of a given page in their category, subsites inside of your website, and prospect information volunteered from consumers can go the artist for a fee.
Thank you so much for that Shawn. TJ, thank you in the comments and I appreciate everybody coming in. As a community, we obviously have so much more brain power and experience than just a podcast host or two, sitting on the microphone each week.
Also, if you haven’t got your ticket to MicroConf Europe, it’s in late October this year, head to microconfeurope.com. We still have some tickets left. It’s in Croatia and it looks over the Adriatic Sea. Every hotel room has a view of the Adriatic, it’s very nice. Consider doing that, hanging out with 120 or 130 of your closest founder friends. If you didn’t hear the save the date, MicroConf US next year is in Minneapolis and it’s April 19th through the 23rd. We’re pulling it out of Las Vegas this year.
We’ve actually been trying to do that for the last several years, in the overwhelming feedback from both folks who attended folks who don’t, that they would prefer seeing it in a different city. It happens to be in Minneapolis, this year, April 19th through the 23rd, that’s growth and then starter. Check out microconf.com. Enter your email address to hear about when tickets go on sale. We do expect the conference is to sell out, so you want to get on the email list, if you’re at all interested in joining us. I believe we’re expecting to sell tickets here in September. With that let’s dive into some listener questions.
Tracy, thanks for being a glutton for punishment and joining me on the show again.
Tracy: Happy to be back.
Rob: I’m stoked to answer some listener questions with you again today. Our first question is a voicemail. As always voicemails go to the top of the stack. This question is from a founder who has an idea or is working on a product and a funded startup with the same idea shut down in 2016 and he’s curious how to process that.
Ryan: Okay, question about a strange experience and what you think would be a good way to go forward. I’ve been working on an app for about a year. It’s a search engine your personal computing history, it’s at apse.io. The acronym is short for A Personal Search Engine.
Last week I found out about another company building almost exactly what I’ve been working on. The thing is, it is a $20 million round at 2016 and also shut down later in 2016. If I were reading the press coverage of marketing materials, they might as well be talking about my app. I can’t find any reason for the shutdown, and attempts to contact people who worked on it have been unsuccessful.
I’ve been working on the project solo for about a year. I have no idea they have existed until a few days ago. I’m bootstrapped and never released a working product so I’m not at danger of going under myself. My focus right now is I’m growing the customer base. What do you think I should do now that I know all this? Any thoughts would be appreciated. Thanks, Ryan Fox.
Rob: Interesting question. What do you think, Tracy? What are your thoughts on this?
Tracy: Super interesting, especially since $20 million is not pocket change and the fact that it shut down within the same year. Then he said he tried to contact the people running it and hasn’t heard back. There’s a lot of very suspicious things going on that lead me to think that the company shutting down was not due to the product, but probably due to something internal. I don’t know if you have the same impression that I do.
Rob: I don’t. It does sound a little weird, but frankly, if you’re going to raise that much money, then you raise it at probably $100 million valuation. It tends to be $80 million or $100 million because you typically sell 15%-25% of your company. If it’s a standard round and they were definitely go big or go home, and go big or go home is basically spend all your money in 18 months.
The fact that they spend it all, they probably hired all the way up and try to do a big marketing push, so I don’t know that it sounds suspicious, but it definitely sounds like a typical Silicon Valley play, I guess.
Tracy: I wish that they were able to contact the founders. I’ve done that for my apps, where like my old WeddingLovely app, I was able to talk to a few other founders who did something very similar, but shut down the company. In those cases, I was lucky that I was able to get a hold of them and they’re excited to tell me all the things that went wrong because there are done and over it and moved on.
He said he only heard about it a few days ago, so maybe there could be some contact. There could be valuable information if he’s able to contact those founders and be like, “Hey, above board, what happened? Is there anything to be worried about?” If that doesn’t happen, in general, I feel like it’s not something that should stop the caller from starting a company.
Rob: No, not at all. I wouldn’t be discouraged in the least. Just because a venture-funded company couldn’t make it, that can almost be a good sign at times. If they were burning through $1 million a month, hired a team of 50 people or whatever it was they were doing, a lot of ideas don’t work that way. A lot of ideas maybe they take years to do or maybe it’ll never make more than $1 million a year, but that’s a great full-time living for an individual. I don’t want to speak to this particular idea. I haven’t looked into personal search engines or really what’s it about, but just the question is really about a venture-funded company went out of business, how should I feel about that? I wouldn’t feel bad about it all.
I would feel the exact same way I do today as I did yesterday before knowing it. The other thing I would say is I wholeheartedly agree with you that getting in contact with someone from that company no matter what, if it’s the founders or if it’s an old salesperson or whatever, I have done this multiple times. Oftentimes you need to send a lot of cold email, LinkedIn outreach, Twitter DM’s, all the things to get a hold of someone, but once you get a hold of one person, they will often refer you to other folks. I would spend more time on that than you probably think, a judicious use of your time.
If they raised that much money, they had to have had, at some point, quite a few employees. I would head to LinkedIn, Twitter, and Google and try to figure out, “Hey, who was a former employee of this company,” and reach out as like, “Hey, I’m a founder of this thing, you worked on it, and I wondered if 30 minutes your time just to talk to me about something.” It works pretty well. Again, I wouldn’t stick just to the founders, although that would be ideal, but that conversation could be super valuable.
Tracy: Yeah, very valuable. I’ve used in the past myself. It’s so great because there’s some things that you probably could learn that you didn’t know about just from looking at from the outside. Try to do the internal investigation, try to talk to someone in the company. Also, just investigate everything that’s public, see what they did, see the things that they released and see what you can learn from what they did that apparently didn’t work, to see what you can learn from that.
Rob: Thanks for the question. I hope that was helpful. Our next question is another voicemail. It’s about growing an email newsletter audience.
Ben: Hey Rob and Mike. My name is Ben DeFrancisco and I run a small consultancy here in Philadelphia doing mobile web and increasingly crypto- and Blockchain-related work. I fell down the crypto rabbit hole many years ago, so it’s been awhile for me to watch you enter the mainstream consciousness so much over the last couple of years.
About a year ago, I started running a weekly newsletter covering technical topics in the crypto world. It’s called The Blockchain and you can check it out by going to newsletter.buildblockchain.tech. I post about it on Twitter and sometimes on LinkedIn and it has grown steadily but slowly over the past year. I have excellent open rates at 50% and I often get people writing back to me with a positive feedback. I think generally I’m doing something right in terms of the content. Still, the list size itself is rather modest.
My question is, how do I grow a newsletter audience? I often hear about people talking about building a list, but there’s no viral component to a newsletter and at a certain point, it seems like posting to social media has diminishing returns. Are there some tactics and strategies that I could be employing?
For context, I don’t have anything I’m trying to sell to this list right now, though in the back of my head, I can imagine launching a book, a course, or even a software product down the road. For the moment, I’m just focused on finding and growing my audience. An audience that has interests and aspirations that align with my knowledge and skills. Thanks in advance for any insights you can offer on how to do this.
Rob: What are your thoughts on this Tracy?
Tracy: This is a really good question and it’s funny when watching the last few years as newsletters have become more and more of a thing as compared to blogs. It does have that difficulty in sharing something that’s over email, and after I read this question beforehand, I went through all of my favorite newsletters that I personally subscribe to and be like, “Okay, how do other people do it?”
I feel like number one, the way I’ve found newsletters and the way all the ones I’ve been reading or have been doing it, in the newsletters, they’ll have asks, saying, “Okay, if you want to support this newsletter, please share this newsletter on social media. You can sponsor the newsletter,” and the other ways of helping out. It’s just being really clear in the newsletter, may be at the top and maybe at the bottom. Just give people an opportunity and remind them that, “Hey, if you’re enjoying this content, here’s a way to share it.”
Rob: Yeah, that’s a good approach. There’s a lot you can do with this and it depends a lot on your constraints. Do you have more time or do you have more money? Something that I would think about if you have this newsletter, you’re providing valuable content and with 50% open rates, that tells me that you’re writing engaging content, people are getting value out of it because they’re continuing to open it. What I would look for is opportunities to get your newsletter or your brand out to a broader audience.
You’re right, sharing on social is getting it out to your audience and maybe get lucky and three people will retweet and then you get it out to their audience, but that is not a predictable way to grow a subscriber base. I would think about approaches like this to reach larger audiences or audiences you currently don’t have reach into.
One is you’re already creating content. Is there a way to either repurpose some of that or create new content as guest posts? Whether you approach Inc Magazine, Entrepreneur Magazine, any of the crypto, there’s tons of crypto sites, take the top five or the top 10 and pitch them on, “Hey, I’m a writer. Here’s the quality of my writing. I want to write for you,” and you get a byline or a mention of your site within the article itself. This is a tried and true tactic. It takes time, but that’s one way to get in front of 100,000 crypto enthusiast, by being on the number one crypto news site.
A second one would be to do a podcast tour. If you’re an expert and you have all this experience and you can say, “I’m an expert because of this,” or, “I’m an expert because I’ve interviewed a bunch of experts,” and going to a podcast tour and of course you mention your brand while you’re doing that, expose it to new people.
Doing interviews. It looks like you might already be doing some interviews. I’m wondering if you are gently asking for the interviewees to social share when the post goes live. That is something I would consider. I wouldn’t do it heavy handed, but if one out of three shares it, that exposes you to a new audience. People say, “Wow, this content was really good. I want to find more like that,” and on and on. It’s the same playbook that I would say for any startup.
You’re building the list to some end, what are the marketing approaches you could go down? SEO is another one if you have a larger footprint on your website, you ought to value it. Is SEO too hard in the crypto space? Do you have the time, the money to do it? Maybe or maybe not, but that’s something I would personally value as it has such a nice fly wheel of traffic if you’re giving something away like an open source library or something else that folks aren’t able to get anywhere else. Everybody links there, then you get the SEO juice and then suddenly you triple your newsletter subscribers.
Another way that I would think about and this comes back to that time versus money thing. If I had more money than time to devote to this, I would have absolutely seen people grow email newsletters with ads. With Facebook ads, Instagram ads, Google ads may be a stretch, but ads in other email newsletters.
That depends. If you’re not monetizing at all, then that’s probably a tough justification, but that would then lead me to think about longer term, “How am I going to monetize this?” whether it’s with affiliate stuff or ads or whatever. That allows you to then know, “Oh, per subscriber, I make X dollars per month or X cents per month, that means I can pay this much for a new subscriber.” That’s where you’re going to get to if you’re going to grow it in a sustainable fashion.
The last thing I’d say is you mentioned that your URL is newsletter.buildblockchain.tech to sign up, I would just move it to the homepage. You actually have it, you have a drip put just there on the homepage, it’s buildblockchain.tech. Go there to sign up and it’s just less for people to remember.
Tracy: Yeah, it all makes sense. It basically comes down to, make it easy for people to sign up, make it easy for people to share, and put yourself out there so that more people will know about you, so they have opportunities to share what you’re doing. If you can, then you can try using ads, that’s the step-by-step process.
Rob: That’s right. Using ads is dangerous to do early on. It’ll help you move faster, but you need some budget to do it and you can churn through money if you don’t have any way to monetize or any idea of how you’re monetizing. Again, if you know the lifetime value of a subscriber, then this becomes a no brainer.
This is how Noah Kagan built the AppSumo less up to three quarters to a million or a million people was by running ads because he knew what the value of a subscriber was. This is one way that Brennan Dunn grew his Double Your Freelancing list, was using ads. It’s doable, it’s just a matter of what are your constraints, do you have the time, do you have the interest, and how big do you want to grow it?
Tracy: Yeah. Try doing step one to three first and see what success you can do for these “free ways” of growing your list and then using that as a cherry on top.
Rob: I hope that was helpful Ben. Thanks for the question.
Tracy: Our next question, by James Barnhartus, says, “Hi Rob and Mike. Thanks for all the great insights you share on the podcast. I came across your podcast about a month ago after starting my own startup journey. I’ve already learned so much from you guys. The knowledge and experience you share is amazing and has really stoked my excitement for entrepreneurship.
My question has to do with the process of transitioning from a consulting-based model to a true SaaS model. My co-founder is a consultant who helps small businesses better manage their operations. One of the tools he uses in his consulting is an app that he put together in Microsoft Access to help his clients find and track their operations. I’ve been brought on as a technical co-founder to turn this Access app into a SaaS product.
The SaaS app would initially continue to be used as a tool for my co-founder’s consulting work with the goal of eventually moving towards offering it as a standalone product. I was wondering, what is your take on this approach? Are there any benefits we should be sure to take advantage of or pitfalls we should try to avoid?
On the one hand, I see a potential advantage in the fact that we already have an initial user base in his current customers, but on the other hand, I am wondering if the fact that our initial users are using the app and a consulting context might lead to unanticipated headaches when we try to scale. Thanks again for the great podcast, James Barnhartus.
Rob: That’s a good question. I’ve seen folks do this well and I’ve seen them do it poorly. The first thing that I would make sure is that you have the IP, that your partner owns the intellectual property to the thing and that the Access app was not built under a contract that if you forked a SaaS app out off of it, that somehow that comes back to bite you in the future. That is just something that you have to clear up and make sure you have. The pitfalls I would avoid or the big one is assuming that because he has had to build this for a number of clients, that everyone needs it, or that there is a market need for this.
I would validate that other people need it, that it is sellable at a purchase price that you want to sell it at, and that you can reach them somehow in some type of scalable fashion. Obviously, there are companies that want to pay for this, but if each sale cycle is 6-12 months long and people are only willing to pay $100 a month for it, it becomes a less viable business. I would be having a lot of conversations before I went off and build a SaaS app with his existing clients.
Also then, where is a list of another hundred clients that are your potential clients that are like these other ones? How do I get in conversation with them? It’s easy, you’re not selling anything. You say, “Hey, we are building this thing,” you just tell the story of what you’re doing, “Would you be willing to have a 30-minute phone call with me?”
If you send 100 emails, maybe get 10 yeses and that will be tremendously educational for you to ask the questions of, “What are you using today? How much would you be willing to pay for this?” You pitch it, “Hey, would you be willing to pay $1000 a month?” or whatever the numbers are. There’s a lot more that I would do before I wrote a line of code on that SaaS app.
I do think that there’s a big benefit to doing this and that your partner or co-founder obviously has a lot of knowledge, institutional knowledge in his head about how this works; that’s good. You guys have built-in testimonials from the start. You could even ask the consulting clients if you can use their logo from day one, even though you don’t technically have product customers, you do have consulting customers or clients and you have logos and testimonials which is a nice thing to have from the start. You can also get their input of course to help shape the direction of the product. That’s my hot take, my initial thoughts on it. What do you think Tracy?
Tracy: I love the fact that there are existing customers that you can ask for help for building this product. I agree with you. This is a place where you can get more information, talk to other customers, and make sure there’s a market before you do any writing of code. As you start building a product, you can go to these existing customers with the MVP and start getting that feedback with people who are already hopefully fans of your co-founder because they’re working with them in that consulting context, and these people can help inform how the standalone product can grow.
Having that little bit of help helps an app grow and help the app launch, especially if you can get to a point where it’s just good enough that then you can start taking that elsewhere. Not building a full-on product, but getting just to that MVP, so then you can start talking with other people outside of this consulting contact. I think it’s going to be a huge help and it’s a really good sign to have those extra customers, but I completely agree with you that there are some pitfalls, as you mentioned, and just to be aware of what you said.
Rob: Yeah, and I was trying to think of the dangers of it being consulting today and how that can impact your mindset. Let’s say you built 10 or 15 existing consulting clients. Is there a danger that they really have a lot of input on shaping the product and they do it in such a way that it makes it less useful to the rest of the industry, or do they want undue influence on it or whatever? These are things you have to navigate. I definitely think this is more of an advantage than a disadvantage for a lot of developers go and built products and then you can’t get anybody to buy and no one will tell you why they want it or won’t pay for it. You’re not going to be in that situation, but they are definitely some things I’d be thinking about as I build this out.
Tracy: This is a process that people have done before. A lot of SaaS apps have come from consultants who realize that there is a need and that they can build something off that need. Of course, there is probably a lot that have failed as well, but this has been done before and some people have had success in it.
Rob: Yeah, and I would consider tweeting out and saying, “Hey, we’re looking to do this. Has anyone done it before so I could ask you some questions?” My guess is typically when we get a question that is this specific, we often the next week get an email from someone saying, “Hey, I did that,” connect me with him.
Rob: Yeah, it’s been cool. It’s like the Startups for the Rest of Us community coming to the aid of one another, which is really, really cool.
Tracy: Yeah, using the community. One of the big secrets for this community is the fact that we can use each other, learn from each other, and help each other out.
All right. We’ll move on to the next one. This has been submitted by Casio. He says, “Hi Mike and Rob. Thanks for providing such a valuable podcast. We have a bootstrap SaaS making low seven figures and ARR. As the founder, I constantly get emails from people interested in white little partnerships. These emails typically come from bigger businesses that are in the industry but don’t offer the feature we are most known for. Other times they come from random people who want to build a similar product but don’t have anything to offer.
Our product is somewhat complex, not rocket science but large like an ERP, HER, et cetera, and we have a brand that is trying to get some recognition in the industry. White labeling on our product would be nontrivial from a technical perspective and I believe it would distract us from building our own brand. I want to know what your general thoughts are about white labeling. These emails are so frequent, I think I’m leaving money on the table. Thank you.”
Rob: This is a good one and it’s common. If you start something that gets traction you will get these emails. My default response to these is very much like the default response to the junior partner in a venture capital firm. You’ll get two or three of those a month as well asking if you want funding and in general the answer is, “Now is not a good time.” These white labeling in general is quite distracting. It is way more technically challenging than most developers or most people think it is. It’s not just tweaking a product and swapping out someone’s logo in the upper left. There’s billing and there is provisioning. I won’t even go into it.
We evaluated that at one point and it is months and months of development work. What’s cool is that if you’re getting these interests, it shows that this industry has interest in this tool. It’s almost like you’re going to get out ahead of these bigger players, they’re trying to hedge their bet, and they’re trying to have the features that you have. To me, white labeling basically devalues your brand and creates a brand for someone else. There are cases in which to do this, but I don’t think that’s a real, kind of MicroConf, Startups for the Rest of Us self-funded move. To me, you are trying to build a brand for the long-term. You’re an ambitious founder. You’re doing low seven figures, huge congrats on that. Most people do not make it that far.
If I were in your shoes, I would not be having these conversations. If you’re curious, maybe respond to one or two of them, and do a call or two, and cap your time at five hours of exploration for two different deals or for two different conversations and see where it goes. I’ve done that, I’ve gone down the road. This is with multiple products, not just Drip and HitTail, but back before there were DotNetInvoice and a couple of others. I would say, for me it was without fail. That doesn’t mean it’s without fail, but it’s going to be a waste of time because you are trying to build a brand that you want to last. To give someone else that brand equity and have to write a bunch of code on top of it, if you already have some figures, you feel like you’re growing, and things are doing relatively well for you, I don’t see why you would entertain this at all.
Tracy: I would agree with you and I’ve done the same thing with WeddingLovely. We had a bunch of white label requests from other companies and I didn’t do that process that you mentioned. I did a few calls with them, with the folks just to see what they wanted, what they are thinking, and what kind of money was involved. Every single time at the end I was like, “That was a waste of time.”
Again, I could be wrong. There’s probably instances out there where this is a good idea, but it’s one of those things, whereas in general, I guess for this audience, it’s going to be more pain than it’s worth, especially if you’re already doing that much in ARR.
Rob, I have a question for you. Is there any situation in which you would think that, that would make it worth it for you? Would it be an upfront contract? What would you think would be the only situation where it would be worth it?
Rob: I was just asking myself the same question in my head. It’s not a blanket “no,” it’s a 99% “no.” What is that 1% or the 5% time you should do it? I’ll go on a little tangent here. There’s a SaaS app that I know of that was in the ESP space. Originally, they were a downloadable software that you installed on your own server. They white labeled for years and no one knew who they were. They grew into the seven figures and then they had to pivot out of that. They decided to pivot out of that and build their own brand. Their software was mature, but they had to build brand equity from scratch. I sat and watched and I thought to myself, how would they have been because their competitors were doing so much better by that time. I thought to myself, how would they have been if they had never done that.
The thing that comes to mind, there was one time that I almost went forth with white labeling. It was in the very early days of Drip and it was with a colleague I knew or a guy I knew who was in a completely separate, very tight vertical. It was a vertical we were not going to sell into. It wasn’t a ton of dev work. It was weeks’ worth of dev work and he was willing to commit to—I don’t remember the numbers—a non-trivial amount of MRR. He had a big email list, it’s a prosumer niche, so it was a really large list and he had a large number of paying customers doing seven figures of ARR with a relatively low-priced product. He was going to email a list and promote it over the course of a year and do webinars.
He was going to really push it in and it seemed like it could add 5K, 10K, or 15K of MRR a few times throughout the year and that was back where that was a substantial amount of money to a company. That was one time where we needed the money. We almost went through with it. I honestly don’t remember. I think it petered off and we were going to do some research.
Eventually, we mutually decided this is not going to work and I don’t regret that. I actually think that would have been a burden. It would have been essentially legacy cruft that we would have had to maintain because within 6-12 months of that, we were growing by 10K MRR a month and it would have been this thing that we had committed to, that we have to maintain, and would have always been like, “What were we thinking?” but at that time, it may have made sense and helped us move faster. That’s the one time I can think of it perhaps working for more of the self-funded indie funded types.
Tracy: The only other thing I can think of—this might not be the self-funded, indie-funded type of people—was when I was evaluating white label partnerships, just one other variable was if that company that wanted me to white label was an acquisition possibility. I have heard stories and some friends where they’ve built a product, they white labeled it for that company, but in the process of white labeling and working with that company, it comes out that it’s just easier if they just get acquired. If you wanted to be acquired, it can be and this can be very risky. This is a very risky way of trying to get an acquisition because things could fall through the white labeling, it could just suck up all your time getting it to work. I have heard instances where people start working the company under a white label product and ended up acquired at the end. If that’s something you might be interested in, that could be a path.
Rob: That’s a good point. It’s with the words that is strategic partnership. You’ll see that with a strategic investment of like, “Hey, big competitor. Number three wants to invest by 10% of the company,” and maybe they’re an acquisition partner long-term. White labeling will be another one, a really tight integration where everything goes back and forth. Before white labeling I would almost vote for a really tight-coupled integration, but you’re right. It’s risky, but I could see that as a play or a reason to do it.
Tracy: All right. Moving on to question from Lee B. Lee says, “Hey Rob and Mike,” had some really nice things to say about you and the podcast. A couple of paragraphs. I’m going to skip that and jump over to the question. Lee, thanks for the wonderful compliments.
Lee says, “Here, to contribute my own question. Is it not uncommon for developers to start at a small company with a reduced salary in exchange for a share of the company? This is what I proposed to two founders of the company where I am now writing software and they’re onboard. They feel reassured I’m in it for the long haul and will feel more confident taking ownership and business decisions along the way. Now, I take it for granted that I will want a lawyer to review any offer before it signed. How does one go about selecting a lawyer who will represent me without being overly aggressive? Googling business lawyers near me is easy enough, but I would like some advice about what questions to ask and what to look for when dealing with a master of the dark arts of law. Thank you again for providing a back catalog of knowledge and advice.”
Rob: Dark arts of law. I like that phrase. That’s a good question and good on you for having a lawyer review it; that’s a good call. The blanket advice I have is upcounsel.com. You start there, you look at the reviews. It’s like Upwork for legal. I have had generally good luck when I try to find someone with an expertise there. The way about it is I don’t want a small-town lawyer who specializes in tax, accounting, to review my startup equity grants, my stock option offer, my employment letter offer. I want someone who is familiar with the startup space so that they know.
Any lawyer can read a document and say, “Yes, legally this is saying this and this means that,” but do they know what the standards are? Do they know how the Silicon Valley treats it? Do they know how people treat it outside of the Silicon Valley? Have they dealt with startups that may have raised funding? Have they dealt with equity grants before, stock options, vesting cliffs? All of this stuff is more than academic.
It’s something that the more experience you have with it, the more you know, “That’s a common clause to be in there,” or “That’s not a common clause and this is unusual where I would push back.” What I found is when you’re dealing with lawyers who are out of their depth or out of their expertise, that’s when they get overly aggressive because they’re uncertain and they’re trying to mitigate risk, but when they’re in their comfort zone of like, “Yeah, I’ve reviewed 10 of these in the past year,” they tend to feel much more comfortable with it.
The last thing I’ll say is I’ve dealt with a lot of lawyers, way too many, actually, just over the years of forming companies and doing all this stuff. It’s only been about 10% or 15% of them that I really enjoyed talking to and having conversations with, that I feel like actually have my business at heart, my well-being, and the company’s well-being at heart rather than just logging time, and that’s super unfortunate. That’s just my experience.
I’m not saying that’s how the whole industry is, but once I found a couple of attorneys with a couple of different areas of focus of expertise, I hold on to them for dear life. I refer people to them and I use them for everything. There’s one guy who doesn’t do anything with tax accounting, but I’ll even ask him tax accounting questions just because even his almost inexperienced answer is often better than the tax accounting attorney who is just stiff and giving me some boilerplate ECYA answer.
Now, it this attorney is just going to review one document, do you need a long-term relationship with them? Probably not, so you don’t need to take it so far. I bet if you go to UpCounsel and look for folks who are experts in startup loan and equity grants, I bet you’ll be fine with it. Those are my initial thoughts. What do you think Tracy?
Tracy: The best lawyers I’ve ever worked with have been referrals from friends. There’s so many out there. You don’t want to spend the time chatting with a bunch of different lawyers and then seeing if they’re the right one for you. That’s like Googling for random lawyers near you. You can follow this trap or it takes way too long and you’re talking to these lawyers and then you’re not getting your contract reviewed.
If it is at all possible, asking people near me, other startups, other friends, people or anything for a referral to their lawyers and getting their recommendations and their thoughts about how that lawyer works upfront saves a lot of time. I’ve worked with some, like you said, terrible lawyers that never respond, or respond cryptically, or respond with one liner and then charge me a lot of money for that one liner, and I’ve worked with some really amazing lawyers. The amazing lawyers have always come from referrals from other people who used them for the same situation that I did.
Rob: That’s great advice, and asking your personal network. Going to Twitter and asking other startup founders, if you’re in a founder Slack group, if you’re in the MicroConf crowd, if you’re in FounderCafe. There’s all these resources you can go in and say, “Hey, who knows a good lawyer,” and we don’t know the jurisdiction of your law so I don’t know if you’re in the UK or the US. If it is a law, that would be state-dependent. Or you can get a lawyer in any of the 50 states and employment law tends to be state whereas tax law is IRS and on and on. You ought to look at the nuances of that, but I wholeheartedly agree with you that the best attorneys you’re going to find are going to be referrals from other folks.
Tracy: That’s a good point about different states. I wasn’t thinking about that before. Probably about 90% of the lawyers I have worked with, I haven’t met in person. I’ve always just worked with them remotely. You don’t necessarily have to have someone who can go to the office and sit down and show them the contract. If you can find the right person to work with you where you can just send over that the contract over email and get their thoughts and pay without having to meet them.
Rob: For me, I prefer solo attorneys who work out of a home office, use Dropbox and DocuSign, aren’t working for some huge firm with a big office downtown and still using paper documents, that everything needs to be a phone call, and they won’t email. There’s this real dichotomy and the attorneys I enjoy working with the most are more like us. They’re more like startup founders. They’re agile, they use the tech, the cool hip stuff these days, and that’s what I personally would look for. Again, to review one stock option doc, you don’t need to look for all of this, but if you’re going to have an ongoing relationship, that’s what I would be looking for.
Cost is part of it. A solo attorney working out of a home office tend to be less expensive. They’re also not going to delegate a bunch of stuff. That’s what I hate when I work at big firms, you talk to the attorney, great. You charge $700 an hour and your law students, paralegals, and such are charging $350 an hour, but everything is delegated to them, and they don’t tend to know what they’re doing. They tend to have to loop the attorney in to make the hard decisions anyways and you’re the whole time dealing with a junior associate. I guess that’s where I get super frustrated.
It’s like, no. I want to work with someone super knowledgeable and I am willing to pay for it actually. I’m willing to pay the rate, but please answer my questions and don’t funnel me through an intermediary and when I have a solo attorney, they’re answering your questions and you know that they’re the expert in what they do.
Some good questions today. Thanks so much for coming on the show again with me, Tracy.
Tracy: Yeah. Again, super happy to be here. Thanks for having me on.
Rob: Absolutely. As a listener, if you have questions that you’d love to hear right on the show or you want to send us a voicemail, make it to the top of the stack, please email us email@example.com or you can always call our voicemail number if you’re on the road. It’s (888) 801-9690. Tracy, if folks want to keep up with you, they can go to tracyosborn.com or you are @tracymakes on Twitter.
Thanks again to Tracy for joining me on the show. I had a good time answering some listener questions. Seriously, send in your questions. We have bandwidth for even more listener questions over the course of the next few months. If you haven’t subscribed to this podcast, I encourage you to head to iTunes, Stitcher, Spotify or wherever greater podcasts are sold and enter Startups for the Rest of Us, subscribe, or head to our website, startupsfortherestofus.com.
We have an email list. We almost never talk about this, it’s a mistake. There are several thousand people on the list, but if you really want to be in the know, you want to hear about inside baseball, and hear about when formats change and new designs, we don’t email very much, but it’s being within the Startups for the Rest of Us community. Go there, enter your email. Again, we don’t have very many emails and you can unsubscribe at any time. Thanks again for listening and we’ll talk to you next time.
In this episode of Startups For The Rest Of Us, Rob interviews Craig Hewitt of Castos, about the unique set of challenges to starting and growing a SaaS product as a non-technical founder.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on the show, we cover topics relating to building and growing startups in an ambitious, but in a sustainable and repeatable fashion. These are not the typical Silicon Valley startups, where fundraising can be a goal in itself, and where people build slide decks instead of building businesses. We want to be meticulous, disciplined, and have a way to repeat our success instead of relying on so much luck and so many things to come together that it’s a one in a thousand chance. We want to build real businesses with real customers who pays real money.
In this week’s episode, I speak with Craig Hewitt about how he went from his day job, to running a product-type service, to running a fast growing SaaS application called Castos; all this as a non-technical founder. This is Startups for the Rest of Us episode 459.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups. Whether you’ve built your fifth start up or you’re working on your first. I’m Rob and today with Craig Hewitt, we’re going to share our experiences to help you avoid the mistakes we’ve made on our journeys.
Thanks for joining me this week. I’m excited to talk to Craig Hewitt. You may know him from his podcast, RogueStartups, where he has chronicled his journey over the past several years. If I recall correctly, that’s where I first heard about Craig. What I like about Craig is he has been doing this for years, 4½ years ago, he started a productized consulting service.
Two years later, he quit his day job. He acquired a WordPress plugin, he started Castos, which SaaS app for podcasts hosting. He’s built it up to the point where he has four full time employees, two part time employees and he’s part of our inaugural TinySeed batch.
You’re going to enjoy the conversation with Craig. We dive into a lot of stuff that he hasn’t talked about on his podcast and per the interviews I’ve been doing recently, I try to dig into some points in particular and not just cover a broad story, but really look at the important points along his journey, things he learned, advice that you can take away to help you build and grow your startup as well.
I want to do a little experiment this week, it’s something I haven’t done before. I talked to Craig offline and said, “You know? I bet folks will listen to this episode and they might have questions for you.” Whether it’s a question about how you did it, about your journey, about podcasting, about startups in general, just anything that you would like to hear Craig and I riff on and talk about, or frankly if it’s just for Craig, that’s okay too. I want to invite him back in probably two, maybe three weeks, and any questions that have been submitted, he and I can run through on the show. It’s a Q&A episode, but it’s a Q&A episode with a guest host and you have context about his experience.
As you listen to this episode, please try to think of a question or two for Craig and then email it to firstname.lastname@example.org and you can send that as a text question or attach it, Dropbox link to an MP3, or you can just call our voicemail number if you’re on your phone right now. It’s (888) 801-9690 and I’d love to have Craig back on the show, assuming we get questions, and we can run through those.
It could be an interesting and fun experiment to have these guests to come on the show, not just tell their story but also offer practical advice and tips. This is something I’ve been talking about for quite some time about how I’ve enjoyed a Q&A episodes because it allows all of us to be smarter.
The fact that I’m here on the microphone, talking in answering questions is good and I’ve been able to share knowledge along with Mike Taber for the past nine plus years. The community and everyone out there, collectively, we are all smarter if more of us can weigh in on these topics. I love to pull guests back on the show and do questions, so please do send any in, email@example.com, if you have any questions for Craig. Maybe put “Question for Craig” in the subject line, that’ll help me catalog them. Let’s dive into the interview with Craig, I hope you enjoy it as much as I did.
Craig: thanks so much for joining me on the podcast today.
Craig: My pleasure. Thanks from me on, Rob.
Rob: I bet a lot of folks know who you are from your RogueStartups podcast. You’ve been known for several years—congrats on that, by the way—so many podcasts don’t even make it 20 or 30 episodes and you guys are at 170 something?
Craig: Yeah we’ll be at 200 around the end of the year.
Rob: Good for you. On these milestone episodes, everyone always tries to do something cool and interesting and I always find it hard to come up with new things. Have you been given thought to what you might do on that episode?
Craig: We have thought about it. We did a really cool episode at 100. It was a mash up of a bunch of little interviews that Dave did at MicroConf two years ago. We might do something similar to that, just talking about a little bit of everything, founder stories, lessons learned, stuff like that. I think those are really neat.
Rob: That’s cool. I was asking you because our 500th episode is coming up and I wanted to steal your idea and do it before you even do it. Of course I wouldn’t do that.
Craig: You’re welcome.
Rob: Yeah, exactly. The reason I wanted to have you on the show today well, there are many reasons, but one is you’re a non-technical founder who has built a successful SaaS app. Successful to the point that you have four full-time employees, two part-time, TinySeed, we backed you, you’re part of our inaugural TinySeed batch. Stuff’s really been going up into the right for you for a couple years now with Castos.
I wanted to walk through that story because starting a SaaS app is hard enough. Starting a SaaS app as a non developer, there are unique challenges with it. I want to take people back to where you started.
Now, you live in Annecy, France with your family, but you’re from the States. You were living in New Orleans, if I recall, and you were working a day job as a sales guy. Is that right?
Craig: Yes. I’m the dreaded sales guy at heart, which is actually a really nice thing. If you’re not a developer, you have to be a salesperson or a marketer. That’s what I bring to the table I guess, but yeah, I was in enterprise-level medical sales, so selling stuff the hospitals and doctors.
I started the podcast, started RougeStartups just really as a fan of entrepreneurship, software, SaaS, and stuff like that, online business. Ironically, that’s what led to my first business that was any kind of success. It’s called PodcastMotor, we do podcast editing and production, we’re a productized service. That’s what led me to quit my day job. We traveled the world for a little bit and ended up living in France. Then all the opportunities with Castos came along as a result of that. Podcasting has been the door through which all of this stuff has opened up to me.
Rob: Podcasting has been a great thread for you. Obviously, you’ve listened to podcasts for years, then you started your own, then you started a productized service that does podcast editing, and you have a quite a client list. As you said, PodcastMotor allowed you to quit your day job. Then, you have acquired a WordPress plugin that will get to podcasting and then turn that into a SaaS. It’s not often you actually see a thread like that where there are 4-5 different levels in the same space.
I do think that’s been one of your super powers is you haven’t wandered all over the place. You had invoicing software, then an SEO tool, then email service provider, and started a conference. You’d be an idiot to do something like that and wander all over the place. You have just been focused, but you’ve been able to do it in a much more succinct timeline. When did PodcastMotor start?
Craig: PodcastMotor started 4½ years ago. The very beginning of 2015.
Rob: You were working at a day job and you’re good at sales, presumably, that’s what you’re doing at 40-50 hours a week. The PodcastMotor process involved that super power, I’m guessing. There was a lot of demos in sales because it’s several hundred dollars a month for you to produce episodes for folks. I’m imagining, everybody wanted to get on a phone call. Did you find that that asset of being a salesperson and being comfortable with demos helped you a lot getting PodcastMotor off the ground?
Craig: Absolutely. At first, I was doing the sales calls, doing the editing, doing the writing, publishing to the hosting platforms and stuff, and then we built a team around it. For a very long time, actually up until just about a month ago, I’ve been doing all the sales calls. Just because I’m really good at it, we close a lot of customers, and like you said, we’re really fortunate to be able to work with a lot of the podcast that people that listen to the show probably have heard of.
It’s really cool. It’s been a really nice experience to be able to have relationships with folks like that, too, that we’re on a first name basis and able to email up a whole lot of these power players especially in our space.
Rob: PodcastMotor grew to the point where you were able to quit your day job and then fund other stuff you’re doing. Was there a point in the first, let’s say, 12-18 months where you were like, “Oh, […]. This isn’t going to work,” or, “Man, this is really hard right now,” or was it one of those Cinderella stories that I often say don’t exist?
My famous quote is, “Even in the Cinderella stories, blah, blah, blah, and there are no Cinderella stories.” I’ve been saying that. I don’t recall PodcastMotor being that hard for you to get off the ground. I guess, to summarize, what was the hardest part or the lowest point as you were building that?
Craig: It was both. It was really successful really quickly, which in a service business is really hard, because in a SaaS business, if you make it and a bunch of people sign up, there’s no more work for you other than maybe support. PodcastMotor is a relatively complex one to scale the team up, create all these processes, documentation, workflows and stuff to be able to handle to go from 5 customers to 30 is really hard. It was not hard in the fact that the business floundered, but that the business was successful, which is its own problems. That was the challenge. For a long time, I loathe the business because it was just a constant game of catch-up.
Now, I have a lot more respect for it because productized service model is absolutely fantastic for folks who are out there and they’re consulting or they have a day job and they want to quit their day job and go out on their own. There’s no faster, more clear way to do it than a productized service. There are some downsides, like scalability is a lot harder, but for folks who just want to quit their day job, there’s nothing better because it’s pretty simple.
Rob: I’ve never run a productized consulting… actually that’s not true. CMSthemer was that and that was a constant pain in my ass. I had a bunch of other stuff for products and CMSthemer was bringing in more revenue than a lot of them, but it was this constant back-and-forth with clients and I didn’t have enough volume to hire the staff to do it, so I was doing it a lot of it myself. Were you working the day job, then you’d come home and then you just work four, five, or six hours at night to keep up before you had the bandwidth to hire someone to replace yourself?
Craig: Absolutely, and that’s the hardest part in any business. Whether it’s a productized service or it’s a SaaS business, that time when you’re making a few thousand bucks to even $10,000 MRR is just really hard because you don’t have the time or the money to really do anything. That’s why stuff like TinySeed is really cool because your sweet spot with TinySeed is to take these folks that are that $5000 or even $10,000 and say, “Okay, stop messing around with your day job, go all in on this, and really dedicate yourself to marketing, or hire someone from marketing, or hire a developer, so you can go do marketing or something.”
That is the point that probably a lot of folks get burnt out on is, “I have all of these demands on my time and my mental energy and my stress is through the roof,” because yeah, you’re working a day job and you have family or whatever, then you come home, work on this, and there’s a fire to put out every day. If there’s no light at the end of the tunnel in some way, then it’s just really depressing sometimes, which is weird because then, you have this growing business that is making you depressed. It’s a strange thing, but that’s how it was.
Rob: Yeah, there’s so much to be said for the power of focus. The ability to just focus on one thing and not have a day job and side projects in addition to whatever it is you’re doing, and to your point about folks who have $5000 MRR or sub-$10,000 MRR and are depressed, shutting business down. I’ve seen that over and over and I’ve seen folks trying to do it nights and weekends for years, unable to get it past that point where they are able to quit the day job. It’s a real shame.
There are businesses that could have succeeded or could succeed faster if they just had a little more time and a little more of their best energy, the good glucose. Not the, “I just worked in an eight- or nine-hour day from my day job. Now, I commute home and I have three or four hours.” Even if I’m a developer and I can write the code, you’re just so tired, you’re not as productive, and you don’t get in the flow. There’s a lot to be said there.
Can you give us an idea of how large PodcastMotor is? I know you don’t talk about your top line revenue. Have you ever talked about number of clients or any idea, maybe even employee headcount? Something to give us an idea of the scope of the business?
Craig: We do about $30,000 a month and most of it is recurring.
Rob: That’s cool. How long after you started PodcastMotor were you able to basically quit the day job?
Craig: About two years.
Rob: Did it take that long to get to the point where it could provide a full-time income for you or were you working a job and also banking extra money in preparation for that event?
Craig: It was a little bit of both, it was more that we had wished we had a day in mind. We had a day in mind for a really long time, almost a year. My wife and I agreed, with some stuff with the kids and them finishing preschool, we wanted to quit around the summer so we could travel to Europe for three months. We just had a day in mind and the day included some personal stuff. It included PodcastMotor getting to a certain size so it could provide for us. I was in sales, so you’re making pretty good money which was allowing us to save up for this transition time, too.
Rob: I know it grew pretty well from the start. I almost would have thought the productized consulting given how quickly it can scale up, would’ve allow you to quit your day job before two years. It sounds like it would have if you really were desperate.
Back in 2008, I was just clawing and scratching to get out of the day job. The moment that I was able to, I quit If you had done it at the moment, that you had enough income to do it, it sounds like it would have been a lot sooner.
Craig: Totally. I mean, I’m always been reinvesting more back into the business than maybe I have to, and it’s venture for both Castos and PodcastMotor where the businesses don’t throw off as much profit as they could certainly, but I’m just always oriented towards growth. We were hiring team members, getting people in place, and doing all these things to where I didn’t get as much money. When I had a day job, I didn’t “need it,” but if I had to quit my day job or if I’d gotten fired, we could have lived off PodcastMotor pretty early on.
Rob: The next thing I want to touch on is your acquisition of a WordPress plugin called Seriously Simple Podcasting. This is a plugin that folks who run WordPress or want to run a podcast, they install the plugin and then when they do a new post, it allows them to upload an MP3 file and have that go into an RSS feed in iTunes, settings and all that stuff.
To the listeners, we on Startups for the Rest of Us were on PodPress for ages and it was abandoned. It did the similar functionality and it was abandoned six years ago. We just never upgraded because you just don’t do these things. You came in and generously offered to migrate us to Seriously Simple Podcasting. We’ve been on it now for about a month or two and really enjoying the more modern interface, the maintained code base, and all the things that we were lacking with PodPress.
This very podcast that runs on that plugin, but you didn’t build that, you acquired it. I wanted to dig in a little bit on that story. Namely, when did it happen in this timeline? Right now, we’re at two years after starting PodcastMotor, you’ve quit your day job. Did the acquisition happen before or after that? How did it come about? Just talk us through that process.
Craig: I had already quit my day job, we’re already in France, and it came about just an email from actually one of our PodcastMotor customers who is also in the WordPress space, emailed me and said, “Hey, the guy who’s the original creator of this plugin is selling it because he’s going to work at Automatic, the parent company of WordPress. I think you should talk to him. This sounds like a pretty interesting fit for what you’re already doing with PodcastMotor.”
I talked to Hugh Lashbrooke, the guy that wrote the plugin. Pretty quickly he was like, “Yep, this is a good fit because you’re a reasonable person, already in the space, you’ll probably take good care of it,” and we saw it as a way to expand what we’re already doing with PodcastMotor as a service business getting into a product business and SaaS, and the idea was always to build a hosting platform to connect to the plugin. The plugin, like all plugins in the WordPress repository, is entirely free and will always be entirely free. Now, the Castos hosting platform is an optional add-on to the plugin and we use the traffic flow and the lead gen from WordPress like our main source of business.
Rob: Did you think from the start, when you are evaluating the purchase of the plugin, was it in the back of your mind like this is going to be good traffic and lead gen flow to a SaaS app someday?
Craig: No, it was dumb luck. Very fortunately, but it turns out to be one of the best decisions I’ve made in a long time.
Rob: That’s the thing. If I’ve learned anything doing all the entrepreneurship stuff, the podcasting, and being in public is doing things in public creates opportunity. I don’t care whether you’re blogging about things, whether you’re podcasting, whether you’re actually have a productized business, a productized consulting business like you do where you have a SaaS app, if you had not started a podcast then decided to do PodcastMotor, you would never have gotten that email. No one would pick you out of the blue and it happened to be, “Oh, this guy’s already in the podcast.” There was some warm relationships there, there was a recommendation by someone saying, “Hey, he’ll take good care of it because we already know he’s proven this and that.”
I often give this advice to folks who can’t ship, or who are either have been working on something for years, or thinking about it or, “I just don’t know what to do to start,” I often say, “Just start podcasting or start writing. Even if you want to ultimately do software products just get out in the world, build a small tool and ship it. Help bloggers, help podcasters, help developers, something that gets you out in the world and has your name in the footer.” You’ll be shocked at how many of these little things come along just from being out there.
Craig: One of the things we all discount too much is just the value of your relationships with human beings, talking to them on the phone, and meeting them in person and stuff. We go to conferences, like MicroConf, or like […] Conf, or whatever maybe once a year and you meet up with all of your online friends. That’s really great, but I think that, especially if you’re talking about developing business acumen and a real network, that we should all take this a lot more seriously than most of us do. I was definitely on that boat. I was like, “I have my computer and run a business.” Now, I could run a really good business without a computer and just talk to people and work it like a regular business, where it’s all the relationships and the people that operate in the business and that I know in the industry and stuff. It’s an interesting flip that that’s taken.
Rob: I’ve totally seen that in my career as well. A lot of it starts with nuts and bolts, providing a service in marketing in a funnel, split testing, and then at a certain point there’s a lower leverage activities for you now because now it’s working relationships, it’s building partnerships, it’s shaking hands, and like you said, at an event that can get you hundreds of customers right off the bat rather than grinding it out with AdWords as the case may be.
To give listeners an idea of maybe the magnitude of the plugin, I know you haven’t talked about purchase price, you don’t have to name an exact number but to give listeners just some context what realm of numbers did you pay for Seriously Simple Podcasting.
Craig: I paid mid-four figures for the plugin, and at the time it was an entirely free plugin with some add-on modules which are also free and had about between 10,000 and 20,000 active installs in WordPress.
Rob: That sounds like a good deal to me.
Craig: Yeah, it was a great deal.
Rob: Long term, knowing what it turned into, obviously was a genius maneuver that I know you architected from the start.
Craig: Oh yeah.
Rob: From day one, I knew it. But even then, it sounds like that was a good exchange. You acquire this plugin, this is your first exposure to WordPress. I know you’ve used it as a podcast host or whatever, but you first time owning and operating a plugin, how long after the acquisition did you think we should build a SaaS app to back this thing?
Craig: That was always the idea, was to buy the plugin, to build a hosting platform on top of it because the model had already been proven. There’s another player in the space that does a very similar thing. I think we do it better, but there’s someone else that already does the exact same thing, basically. Our idea was, “If there’s already a player doing this in a certain way, I think we can do it better, because there are some things about that tool that I don’t like and a lot of other people don’t like.” That was the idea from the beginning.
Rob: And the rest is history, to be honest. You build Castos, it’s a SaaS app, a big channel has been your WordPress stuff. I know you have a lot of other channels at this point growing the company. Castos is about 2½ years old, four full-time, two-part time folks. Successful SaaS app on all metrics and I know your MRR—we won’t announce it here on the show—but it’s successful by any measure.
I’m curious, there’s a couple questions I have for you. The first is, podcast hosting is a very competitive and almost I say quasi-commoditized space, there are a lot of them. It’s commoditized in the way that email service providers are. There’s differentiation. It’s not truly a commodity, but there are just so many that you could go out and throw a rock and hit three. What made you think that you could enter that space just 2½ years ago after there are already as many as there were and gain enough traction to build a real business on it?
Craig: Even now and for sure back then, the thing that sets us apart from most all other players is the plugin and our WordPress integration. It makes managing your podcast content just so easy. It is Seriously Simple Podcasting. All joking aside, you just go into WordPress, you create a post, you upload the file, and your podcast is live as opposed to, “I’m going to log into Libsyn, I’m going to go over here, upload the file, then I get this iframe code which is all janky, then take it back to my WordPress site, make sure the post is published at the same time and all this kind of stuff.” There’s none of that. You just manage all your content wherever you’re managing all of your content already, which for a lot of people is WordPress.
I still believe that if I wasn’t the owner of Castos, I would still use it because it’s the best tool for my workflow, because I use WordPress for all of my sites. I manage all of my content in WordPress, so it’s the obvious tool and I would tell anyone else that. If you have a site on WordPress and you want to start a podcast, it’s just the clear, easy, good way to go.
That’s our competitive advantage. I think we have a pretty good moat around that. It would be hard for somebody to create a plugin that does as much as we do, get the traction, the name recognition and everything. I’m sure somebody could and maybe somebody will after hearing this, and that’s cool. Competition is healthy, it validates the space a lot, but that at this point, we’re a long way down that road, so it’s a pretty defendable competitive advantage for us.
Rob: Early mover advantage with stuff like WordPress plugins, SEO. I often think of WordPress plugins just as another form of SEO. If you get a plugin with a bunch of five-star reviews in the WordPress plugin repository, then you appear at or near the top of the search results when people search for podcast plugin. It just dumps hundreds or thousands of people through your funnel. And it’s a free funnel, so it’s not like they’re eating your website, but they’re downloading the plugin and then from there, you nurture them. This is a playbook where we’re seeing folks do, whether they’re moving them towards the premium plugin add-ons to a free one or towards a SaaS app as you’ve done.
Craig: Free like a puppy Rob. WordPress and WordPress plugins are not free.
Craig: It’s an expensive channel to maintain, but a very high-quality one.
Rob: Yeah, no doubt. Again, coming back to non-technical founder, you don’t write code, but you’re a more technical person than most salespeople that I’ve met. It probably comes from you selling medical devices. You have that left-brain edge and I know that you’re savvy with some of the tech stuff, just not a coder yourself. I’m curious what the hardest thing has been for you as a non-technical founder building and maintaining a SaaS app?
Craig: I know that Jonathan, our early developer for Castos, listens to this podcast so he’s going to laugh when he hears this. At the beginning, it was just him and I. He’s been our developer since day one. He started about two weeks after we acquired the plugin. We have had quite the journey of how we communicate, how we plan, how we work together, and it’s just been really challenging. It’s not anything to do with him because he’s actually been really great and gracious and forgiving of me.
For most non-technical folks, learning how to communicate effectively, and maybe efficiently is the right word, with developers is the hardest part. They speak a different language, but just being really, really clear the first time about what you want to build and why, what the user experience is going to be and all of these things.
Even to a developer that is a western person, that native English is their first language—Jonathan is both of those, he’s from South Africa—even though I would consider him a really, really good senior developer, I would come and say, “Hey, I want to go build this thing,” and he would go build it. I would come back and say, “This is not what I meant,” and he would say, “Yeah, that’s what you said.” So, just some of those things. It’s not even just scoping a feature. It’s how we track, report, decide which bugs to fix, in what order, prioritize the workload and stuff. All of this project management stuff is just really challenging. At this point, we do a pretty good job of it, but for the first year at least, it was just fires every day.
Rob: Can you give me an example of one time that you remember where you feel like you really struggled and basically did an example of what you’re talking about?
Craig: I can’t think of an example, but the classic thing, actually I’ve heard Hiten Shah talk about this recently. He calls it dropping Hiten bombs. He’ll just come in and say, “Hey, we should do this thing sometime,” and then the person that “works” for you says “Wow, Hiten or Craig, thinks that’s a really important thing. I should go do that.” That’s the biggest specific challenge for me, is organizing my thoughts and my product road map into something that’s really predictable and clear, and that we can all follow in the same way, not just scattered message and Slack every day, and changing directions on a whim. That’s just an impossible way to work. Getting over that has been huge.
Rob: I can see that. It’s amazing that if you’re like me—you and I are similar in personality—you view yourself as a scrappy founder who just wants to get stuff done, worked a day job, you built something, you’re the same person you were 10 years ago, but you’re not viewed that way by the people you hire. When you have a team and whether it’s 4 or 40 people, you still feel like you can just brainstorm like you did back in the day with a co-founder or with a mastermind group, “Yeah, I’m thinking about doing this, this, and that.”
You’re right. The Hiten bomb concept, I’ve seen it over and over with founders of you throw out an idea and it just train wrecks everybody or your thought process is really anxiety-provoking. It can be really anxiety provoking. If you say something one day and then change your mind the next day and you’re like, “No, it was just a brainstorm. It was just something I was thinking.” Folks don’t know that, and they’re trying to get a job done. I wonder, is that just learning to be a manager? A boss? Or is it learning to be communicating with developers? Maybe both.
Craig: It’s definitely more of the former. Also being more mature. I hate to say that because I’m going to be 40 next year. I need to chill out a little bit about some of these stuff and say, “Okay, the house is not on fire. We have a really great product and plugin, and everything is super stable. If I can just keep my mouth shut for another two weeks until the sprint is over, then we can talk about this.” That’s where I am these days.
Rob: As we move towards wrapping up, it seems like a tangent question or whatever, but I know that especially folks who listen to RougeStartups or maybe who have their own podcast and are building their own product on the side might be wondering, do you feel RougeStartups as your podcast you’ve been hosting for many years, do you feel like that’s had an impact on your ability to launch and grow Castos.
Craig: Totally, and I think in two ways. One is that, it is what first got me into PodcastMotor which is the door that got me into running my own businesses and was the introduction that got us into Seriously Simple Podcasting. The other reason probably is the more applicable to everybody, is that it really is honed to my niche expertise. I am pretty knowledgeable about podcasting because I run a podcast and I run a productized service around podcasting where we help a lot of really good podcasters run their podcast. Now, I run a SaaS app and a WordPress plugin around podcasting.
I just have a lot of domain expertise around this. The show itself, probably like Startups for the Rest of Us, is a really good channel to get your name out and build brand equity and stuff like that directly. Our show has helped grow Castos directly some, but more so, it has allowed us to make a lot of really good product and marketing decisions. The vast majority of our thousands of customers, I don’t know and don’t come from our listener base. That tells me that the podcast probably has helped us a little bit, but more than anything, we’ve built something that people really like.
Rob: And I would guess that the podcast has helped you more with a couple things. One, knowing what to build and knowing how to support people who are editing and posting podcast because you run a company that does it, know how to help folks who are creating podcasts, because you create one. You do have an expertise that most people even building podcast hosting SaaS apps don’t have. You have the whole gambit of being a listener, creator, and running a company that edits and produces them.
That’s one thing, but the other thing is I’m guessing that RougeStartups probably helped you more with credibility, perhaps with potential affiliates or partners like in space in the MicroConf world, they’d probably know you from RougeStartups. I’m guessing even PodcastMotor clients.
Those would be the folks that would email. I’ll admit, I’ve received at least—just over the years—probably two or three emails asking about, “Do you know Craig? Do you know about PodcastMotor? Are they legit?” that kind of stuff.
Early on, the way I first heard about you was RougeStartups. You spoke at MicroConf Europe a couple of years ago, you’re speaking again in two months, and the first time I invited you was because I had listened to you talk on this podcast for months and I was like, “This guy is sharp. He knows what he’s talking about. I think he’ll do well on stage.”
You would come to MicroConf and I believe we had met, but I meet a lot of people at MicroConf. It’s like you were in my ear buds literally six months or nine months and that was a piece of it. I’m not saying you speaking at MicroConf Europe, but you and I knowing each other has changed the course of anything, but that’s probably one of 50 examples that’s come out of it.
Craig: Yeah. Podcasting even here, getting into the fourth quarter of 2019 is probably the best use of time that anybody can put into personal branding. It’s wonderful. It’s really efficient from a time perspective. You just spend 45 minutes recording a show, edit it a little bit, or send it to somebody like PodcastMotor, or find a guy on Upwork to edit it for you, and then you get 45 minutes and a bunch of people’s ears every week. It’s just really impactful as a medium for building brand awareness, and getting your name out there.
Rob: You’re not just saying that because you run an editing service.
Craig: I’m hugely biased. Yeah.
Rob: Totally. Take it from someone like me who doesn’t run an editing and hosting service. I’ve been talking about this for years. Mike and I show up every week. We shoot a show every week and I stopped blogging years ago. I really want to blog, I just don’t have/make the time to do it, but I do make the time to podcast because it is so much less of an effort.
We need to talk offline about getting Startups for the Rest of Us moved over to Castos in the next couple weeks. Let’s figure out a good time for that to happen. We’re already on Seriously Simple Podcasting and my understanding is the move to get all of our files. Right now, for listeners, we set it up in 2010, so we literally have flat files, MP3, flat files, just sitting on a shared hosting account and a CDN over that.
We could have done Libsyn in 2010, they were the only host that I know of and they were so janky, and a lot more expensive than what we have because I have somewhat a limited shared hosting account. We’ve done that for nine years and frankly, there’s just a lot of challenges with that approach, I’ll leave it at that, and we’ve been looking at getting a legit podcast host for several years for the metrics and all that stuff, but it’s probably time we do it.
Craig: We’d love to.
Rob: Sounds great. Thanks again for coming on the show. I know folks want to keep up with Castos, they can go to castos.com. If they want to follow you, if they’re into podcasts of course, check out RougeStartups on iTunes, Stitcher, and all the other places. Where else might they keep up with what you’re up to?
Craig: The best place is probably on Twitter. I’m @TheCraigHewitt on Twitter and I tweet less often than I should, but that’s probably the easiest place to reach out and say, “Hey.”
Rob: Sounds great man. Thanks again for coming on the show.
Craig: My pleasure. Thanks.
Rob: I hope you enjoyed my interview with Craig. Again, if you have any questions that you’d like to hear Craig and I talk through on the show, please email firstname.lastname@example.org or call our voicemail number at (888) 801-9690. Thanks for listening. We’ll see you next time.
In this episode of Startups For The Rest Of Us, Mike returns to the podcast to give updates on the fate of Bluetick as well as progress updates on his motivation and health.
Items mentioned in this episode:
Rob: In this Taberrific episode of Startups for the Rest of Us, Mike returns to the show. This is Startups for the Rest of Us episode 458.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth startup or you’re working on your first. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the mistakes we’ve made on our journeys. Mike, it’s been a long time.
Mike: Hi. Yeah, it has. What? 10 episodes?
Rob: Ten episodes. I don’t think either of us realized that it would be that long. Just so listeners know, you and I had literally not spoken verbally. We’ve texted since that episode, but we have not spoken since episode 448.
Mike: That’s true.
Rob: We’re not talking that much. We tend to text and email a lot.
Mike: I hear that from people when I talk to them at MicroConf. They have the expectation or the inclination to believe that you and I talk either everyday or at least a couple of times a week. That’s totally not true. We’ll email back and forth. We will sometimes go for a couple of weeks without talking at all.
Rob: Yeah, if we don’t record the podcast. Ten episodes. What have you been doing with the enormous amount of free time you had not had? Showing up every week to record this and all that.
Mike: I’ve come to the realization that I was probably recovering from a pretty massive dose of burnout. I feel like I’m at the tail end of getting over that. How do I put this? There were times where I would just take an entire day off just because I felt like I needed it. Then, there are other times where I would just sit at my desk. I really wouldn’t feel like I was getting any work done. I would say that was the early stage when I started to take the time off.
I got to the point where I realize just sitting at my desk wasn’t actually doing anything. If I wasn’t actually being productive in any ways to perform, I’ll just get up and go do something else. What’s the point of sitting there if it’s not doing me any good? Because then, I’m just going to feel bad about it later and that’s not good for me either. It was rough to get through, but it was probably necessary, too.
Rob: It’s nice to have the luxury to be able to take that time and did not have to show up everyday for a season. It’s like over the course of years, you need to show up everyday in general, but when you’re burned out, you have to take time off. There’s really no other way to get around that. You have to get away from it. It’s hard to show up even once a week and be like, “All right. I’ve got to sit there and talk on the mic about stuff that I don’t really feel great about.” I’ve gone through months of time when I felt that way. When I listen back to the show, I can hear that in either one of us at a given time when they’re burned out.
It’s great you have that time to step away. You just got to give yourself permission to do that. That’s the thing. I often feel guilty when I do it, but you come back the next day or the next week assuming it’s not a long term depression or a chemical imbalance, which is totally very valid and real thing. But assuming it’s not that and you are just burned out because of the work or whatever it is, it’s super valuable. Each of us should give ourselves permission to do that.
Mike: Yeah. That was a good realization for me is just giving myself permission to walk away then come back later either when I felt like it or maybe the next day if I didn’t feel like it. Sometimes, there were definitely a couple of periods where I would take two or three days just because I didn’t feel like doing anything and I wasn’t being productive. You can’t beat yourself up all the time because that’s really what was happening to me. I don’t know how long it was going on, either.
When you’re sitting there trying to get work done, it’s like you’re concentrating more on beating yourself up about why you’re not getting things done, not focused, and not moving at all forward. Then, you are about taking a larger view of things saying, “How long does this been going on?” I try to forgive myself, I guess, for those periods of not being able to get stuff done. Like I said, things just has gotten a lot better over the past month or so.
Rob: We’ll dive into that. That’s the whole point of this episode. I have a couple of questions for you before we get into what you’ve been thinking about, how things have been with your health, your progress, and what’s going on. Have you been listening to the podcast?
Mike: I’ve not. I’ve gone into hermit mode.
Rob: Yes. You haven’t been on Twitter at all, right?
Mike: Aside from logging in very briefly on Twitter and Facebook just for authentication purposes for a couple of different things, I haven’t gone on either one of them. Nothing. No social media. I don’t even really watch the news or anything like that. There’s stuff going on. I’m just like, “I have no idea what’s happening in the world.” It’s just hermit mode.
Rob: Mike, do you miss it desperately and feel like there’s a huge Twitter-shaped hole in your heart?
Mike: No, not really.
Rob: Not at all?
Mike: I do miss some of the playful interactions and stuff like that. At the same time, I know they’re also distracting for me. I miss reconnecting with people just to shoot them a message here and there, and just make a comment on different things that are going on. At the same time, a lot of those doesn’t necessarily add any real value for me. I guess there’s a social contact, but I’ve tried to find personal social contacts outside of the internet.
Rob: That makes a lot of sense. I find it fascinating you have been listening to the podcast at all. The listeners who’ve been listening, they know the format. I’ve changed the format. I’ve been doing a lot of interviews, really trying to dig in and not just do the same old. We never wanted an interview show. There were enough interview shows. I’ve been trying to dig into people’s stories and the struggles. Done several Q&A episodes. I did a Q&A episode where Tracy Osborn came on and co-hosted with me. Jordan Gal came on for one.
That’s been actually the cool part for me. It was almost an excuse/motivation/force to me to figure out how I run the show on my own. It forced me to innovate. It’s the mother of invention to sit here, stare at the mic, and be like, I don’t just want to do what a lot of solo hosts do which is interviews. I don’t just want to monologue on the mic. Heaven knows I can sit and talk for 30 minutes. How do I try to up the game?
I’ve been spending a lot more time on the podcast than I used to. Over the course of the last several years, we show up and we talked about on the mic, but I’ve been trying to be really deliberate about trying to craft stories, just experimenting with new ideas, and new formats. It’s been cool. You can go back and listen to them now, I think your hermit mode is great, and it’s probably what you needed at this point. Someday, go back and listen, and let me know what you think.
The response I have asked in some of the episodes for folks to write in, or write me personally, or tweet, or somehow give their thoughts on the new format are overwhelmingly positive. I probably got 20-25 responses saying, “Yup, this is great.” “Keep being creative.” “Keep changing it up.” Some folks have mentioned that they missed the Q&A episodes probably the most. We used to do it every other episode, this Q&A.
That’s easy enough. I did one that went live today when we’re recording this. It was just me doing Q&A. I listen through it and it’s good. I think that works. I also like bringing experienced folks like Jordan Gal or Tracy to co-host with me on the Q&A. I think I’m finding my groove here in a way to keep it going.
Mike: Yeah. It’s interesting that you bring up the forced innovation. There’s a couple of things that come to mind in terms of just the podcast in general. I call it a general success and general longevity. The fact that we show up all the time, I guess until 10 episodes, we show up every week. Then, the past 10 has just been you showing up every week. The fact that it’s there and people can rely on it is not just a testament to the show, but it’s one of the reasons why it has been successful.
The other thing that you look at is you can continue to do the same thing over and over again, but eventually, maybe it gets boring. Maybe you decided that there’s other things that you want to do or there’s other ways to innovate on this show or whatever it is you’re working on. Those things don’t get done sometimes unless you force it because you’re either afraid to make changes or you decide, “I’m comfortable now. I don’t want to go through the…” I don’t want to call it pain but the uncomfortable mess of trying to change something that is already working. That applies in not just the podcast but in a lot of other places, too.
Rob: I would agree. I actually have a snippet from one email that we received from […]. He had a couple of comments, but one thing he said, it was indicative of what a lot of folks said. He said, “You asked for feedback about the new format. I’m really enjoying the in-depth nitty-gritty interviews with entrepreneurs who are in the trenches and openly talk about their successes, failures, and what they’re currently working on. It’s so valuable to hear what people think through the challenges, problems, and decisions. You’re a great interviewer because it doesn’t feel like you’re an interviewer, if that makes sense.”
I really appreciate that piece because I’m trying to deliberately do that. I’m not trying to be an investigative journalist. I’m trying to be a founder who’s just having a conversation with another founder much likely we would have whatever, at a bar, or at a conference in hallway track or something.
Back to his email, he says, “I also appreciate how you introduce the guest’s background yourself so you can go right into the good stuff with your guest.” That’s been very deliberate. The first 2-3 minutes, I hammer through their history so that we don’t have to sit there for 20 minutes talking through, “So, when did you become an entrepreneur?” Nobody really cares about that, in general. We really want to know what’s this pivotal piece of your story and let’s dig into that; that element of it.
His emails continues. He says, “I’ve learned so much from the topic-focused/listener-questions episodes as well.” That’s some more of the older format. “There’s so many concepts I’ve incorporated into my own thinking that have made me vastly more productive and effective.” It’s cool he rattles up a bunch. He said off the top of my head, relentless execution, road blocks versus speed bumps, almost all decisions are reversible, good glucose, moving a business forward, I could go on. He says, “I like the new format. I like the new voices, I like the stories, but the previous format is also great and it has taught me a lot.”
I appreciate that email. That was in general, indicative of the feedback that I saw. There was one person who wrote in and said, “I like the old format better.” That’s not super helpful without more description, but yeah, in general, it’s been a fun adventure.
Mike: That was cool.
Rob: How about the website? Have you been to the website? I’m about to announce it today, but about a week-and-a-half ago, brand new, Startups for the Rest of Us website went live.
Mike: I did see that.
Rob: It’s a new WordPress design. I’m sorry that I had to deprecate our 9½ year old WooTheme that we customized. Oh Mike, the humanity.
Mike: That was so hard to work with.
Rob: It’s not because it’s a WooTheme, it’s because it’s 9 years old. It was so crafty. Everything was breaking. We have plugins that were deprecated six years ago. Thanks again to Rich Staats at the Secret Stache who jumped in. The podcast feed would have died three months ago. We weren’t able to get new episodes in. He jumped in a day’s notice and hacked something in a plugin to get that going. That was cool. It keeps us going.
I don’t know if you know, but we’re now on Seriously Simple Podcast hosting which is Craig Hewitt’s WordPress plugin. We were in ProdPress and it hadn’t been touched in six years. Craig did us a favor, jumped in, and spent several hours migrating us over. We were just bailing the water out of the boat, in essence, to keep the podcast going. That’s cool. Now, we have a new theme. My hope is that we’re in a much better situation now.
Mike: Yup. In 2027, we can update it again.
Rob: It’s the thing I was thinking. It was like, “Oh my. We need to do this a little more often.”
Mike: It might be a good idea, but I think we both just got busy doing other things. It’s still work and it’s functional, it’s a little along the priority list.
Rob: Yup, that’s right.
Mike: That happens.
Rob: I was motivated by the fact that the momentum carried through were I was like, “Okay, here I am doing this show on my own, setting up interviews.” I kept going to the site and being just like, “I’m so bothered by this website.” The copy’s out of date. The greatest hits ends at 220, it’s like half of our podcast feed had been analyzed for greatest hit, and just the design and everything. It’s never fun to redesign a site, but it’s fun to have redesigned it. Now that it’s done, I’m glad that it’s all taken care of.
Mike: Now that it’s over and it looks nice, then it’s much better off.
Rob: Yeah. Episode 448 really struck a nerve. We received north of three dozen comments on that episode, tweets, emails to myself, emails to email@example.com. It is the episode that received the most feedback, perhaps, of any episode in our 450 episode run.
Mike: Yeah. You can probably at least add 50%-75% to that. I’ve got a ton of things that came directly to me through email as well. I don’t know if anybody has tweeted at me. If they did, I apologize because I have not logged into Twitter since 2½ months ago. On top of that, I’ve got a ton of personal direct emails to me, as well.
Rob: That’s cool. Thank you to everyone who reached out, honestly. I’ve responded to a lot of them, but I read every single one of them. I know you did as well, the stuff that came to you, Mike. In general, it was just super encouraging. There was a voicemail last episode that I felt like it had a couple of questions. He had a piece that I felt summed it up nicely. He said, “I wanted to take Mike for his immense courage in being so open and vulnerable in sharing his Bluetick blues with the podcast community. As a fellow, still struggling in Boston area, B2B SaaS founder, I empathize with him in the challenge he’s facing and I deeply appreciate his willingness to share them in public. I wish him the best in deciding what’s next.”
I felt that was, in general, like, “Thanks for coming in the mic and doing this, both of you.” “Thanks for diving into this difficult topic in front of 20,000 listeners,” and, “This is helpful.” That’s what I keep hearing is, “This is helpful for me to hear as a founder to know that I’ve gone through this, I am going through this.” It really humanizes it and a lot resonated with a lot of people that we were able to dig into that for 40 minutes, 10 episodes ago.
Mike: Yeah. When that episode went live, I got inundated with a ton of emails upfront. Then, they just kept trickling in. They tapered off after three or four weeks. It was hard for me because I wanted to respond to every single one of them, but I just really wasn’t in a place where I could. I apologize to anyone who I didn’t respond to. I started replying to them and I got to a point where I just couldn’t. It was like I was seeing the same things over and over again to people which is continuing to beat me down, I guess. Apologies to anyone, but I do want to say, definitely, I want to thank anyone who did email me. I did appreciate it.
Rob: Mike, when we last left our hero, we were talking about […] of things. I have seven or eight bullet points here to cover and revisit. You don’t need an answer to all of them. Some of the answers maybe. I don’t know. I haven’t figured that out yet. To take 2½ months off and expect that everything is thought through, everything is fixed, I don’t think is realistic. I am curious and I’m sure the listeners are, too. Did you give this particular bullet a thought? What’s your conclusion? Where do you stand now? Where do you see it heading over the next months and years?
To start high level, a question I brought up a couple of times in that episode was, “Do you still want to be an entrepreneur?” and you said, “The answer is absolutely yes.” That’s cool. The other question towards the end, “Should you be an entrepreneur? Do you feel like this is what you should be doing? Or do you feel like you should—not want to, but should—take a step back? Do some consulting? Build up the bankroll? Take a salary job?” because healthcare is so expensive. I know salary jobs make both of us sad. They make me depressed, but they are so stable, they’re so much less stressful, and there’s less need for that intrinsic motivation. Did you have a chance to think through that stuff?
Mike: I did think about it. Coincidentally, it was maybe four or five days ago, I got an email from a recruiter who was asking me. He’s like, “Hey, I saw your job experiences and stuff on LinkedIn. There’s a position over here at Amazon that you’d be really good for.” I looked at it and I thought for eight or ten seconds, “Oh my God, No. I just can’t do that.” Not just the fact that it would be all the way up for in Summerville. It’s taken me an hour to get there, so no. Absolutely not. That’s part of why I went out on my own anyway.
The thought of going back to a full time employment, there is an attraction from just the healthcare standpoint, but at the same time the lack of flexibility. The past couple of months, we’ve been able to make things work because I’m working at home. My wife’s got her business. She’s in and out. We just tag team on all the stuff with the kids during the summer. It’ll be so much harder if I had a fulltime job. Yeah, I could probably make it work if I were working remotely, but it’s still just the hassle of working for somebody else.
I saw this Dilbert comic. My wife and I actually talked about this, me going back and working for somebody else. I remember coming across this Dilbert comic very recently that really summed it up. The boss comes in and he says to Dilbert, “Hey, good news. We just won this nationwide contracts to roll out a wireless network.” Dilbert says, “Newsflash: We don’t know how to roll out a wireless network nationwide.” The boss says, “How hard could it be to not roll out wires?” That completely sums up exactly why.
Don’t get me wrong. Not every company is like that. But there are some things that I see that companies done where you’re just like, “This is the dumbest thing ever.” Yet, it’s hard to say something in those situations. Then you come off as an adversarial employee, you’re not working with the team, it’s just like, “Come on. This is a dumb idea. I can’t believe you don’t see it.”
Rob: Did you just quote a Dilbert comic as a reason not to get a full-time job?
Mike: I think so.
Rob: I hear what you’re saying. Honestly, if you were to get a job, it should be for a startup. It should be for 10, 20, 30, person company. Probably, with funding so they have good benefits and it should be remote.
I get it. I’m not saying you should do this, but I think that not wanting to go back to the cubicle form or the hour commute, I get that. Neither of us should do that. But I don’t think you need to in this day and age.
Mike: Yeah, I totally agree. I could probably find something that’s remote. I thought a lot about it. Even if I had all the money in the world, I would still build stuff. The problem with that is that money isn’t necessarily a main driver for me. That’s the problem that I’ve run into. I have enough money in the bank and I have enough income coming in where I don’t have to work my ass off in order to have the things in life that make me happy. The problem is I’m not really making a ton of forward progress on a lot of things.
It really comes down to an existential question of, “What is it that actually drives me if it’s not money?” It used to be money because I was the only one in my household who was working and now I’m not. My wife is able to help out with the income side of things. It’s great because now I don’t have to push myself nearly as hard. But as a direct result of that, the question is, if I don’t have to work nearly as hard, why am I doing this? What’s the point?
It’s something I definitely struggled with, to be perfectly honest. I don’t have a great answer for it yet. I’m still working on that, but the reality is, that is what stopped me or prevented me for going full speed on a lot of stuff because I haven’t needed the money, so what’s the point?
Rob: That makes sense, although you’re not independently wealthy. You do have to work. If you stopped working altogether, it’s not like you can take five years off. When I was in your shoes, that was my motivation. It was to get to a point where I could take years off or the rest of my life to achieve financial freedom. It’s an overused term and it’s almost devoid of meaning at this point, but I wanted the ability to never have to work again. That was a big motivation for me. Does that not motivate you?
Mike: I feel like the runway’s long enough. It’s not like a hardcore motivator for me, if that makes sense. I’m not under the gun. I don’t have two months or whatever to make ends meet or I’m done and I have to go find a full time job because that’s not the position I’m in. I’m fine for probably several years. That’s not a big deal. The problem is that there are going to be points along the way.
Let’s say Bluetick completely went away, for example, I lose that income. Yeah, I would probably be in a little bit of trouble, but I would still have plenty of runway left to figure out what I was doing at that point. The question is how do I address that? What do I really want? What am I really looking for?
I don’t necessarily have specific answers for that. I’m still working on those. I agree that the financial freedom aspect of it is a good and worthy goal. The question is, what is it that I’m really looking for above and beyond that? If I have that, what am I going to do? What’s going to drive me and motivate me? Even if I achieved that, then what’s next? What’s going to prevent me from just saying, “Okay, now what?”
Rob: That’s so interesting. I hear you, but I would get to that point then say, now what? I have gotten to that point a number of times. For me, quitting a salary job was this huge goal of mine. I quit it and went full time contracting, remote, consulting, in, let’s say, 2002 or 2003. I remembered being like, “Oh my gosh! This is it. I’ve dreamed of this for 20 years since I was in high school. I wanted to have this remote job.” And I did. Six months later, I said, “Now what?”
You know what “now what?” for me was? It was, “Huh, I’m bored of working dollars for hours. I want a product. I want a product to support me.” Then, in 2008, I’ve got a full time income from products. I remember loving it for about a year. Then, I said, “Now what? I’m bored. I needed to do something bigger.” That was podcast, conference book, Micropreneur Academy. Then, it was HitTail. It was like, “I need to level up.” Then, after that it was Drip. After Drip, it was, “Now what?” Now, I spend more time in the podcast than I do in TinySeed.
Your and my motivations do not have to be the same thing. That’s not what I’m saying. I do think that the best entrepreneurs I know have a driving motivating factor. It is either to create—to build stuff that people use—or to achieve. There are a bunch of folks who just want to build a big company. They want to build the Amazon, or Google, or the Uber. That’s not my motivation. My motivation has always been to create interesting things that other people can use. I’m sure there are other motivations.
The thing that I’ve seen, if you ever heard of the Enneagram, it’s a personality test. It’s like the Myers-Briggs or whatever. It’ll tell you, “This is what motivates you and this is what doesn’t.” I’d be fascinated for you to take that. Whether you talk about it on the show or you just take it for yourself to get some insight into your likes, dislikes, your pros and cons, strengths and weaknesses, and your motivations.
I think that until you know that, it’s going to be a challenge for you to really be motivated to launch products because this […] is hard. That’s what we’ve experienced. It is hard to do this. Without a real drive of, “Man, I need financial freedom,” or, “I need to create stuff that a bunch of people can use,” or, “I just need to escape this inner voice in my head that probably my dad or my mom put in me.”
These are the motivations that I’ve seen drive entrepreneurs to do really interesting things. I don’t even mean great things, you don’t have to build a multimillion dollar business. That’s not what Startups for the Rest of Us is about. It can just be about shipping cool things into the world that people use and showing up everyday to do it.
Mike: Yeah. Part of my question that I’m kicking around in my head is, what is it that I want? All of the things you talked about are like, different people have different goals. Some may want to build the next Amazon and for you personally, that doesn’t resonate. It’s not what you want. But when you’re talking about your journey from going to self employment to building a product then to HitTail, Drip, and TinySeed, that whole journey is a series of challenges that you’re undertaking.
In my mind, what I’m really struggling with is what is the challenge that I actually want to tackle? What is it that I personally want to do. That’s not something that comes over night. Especially, if you have the time to figure out what it is you want to do rather to be in having some forcing function that makes you decide within a week. Within a week, that’s a time constraint. You have to deal with the constraints right there and then versus I’m in a position where I can take some time to figure out what it is I actually want, reflect on exactly why that is, and why it’s going to make me happy. If it’s not going to make me happy, I don’t want to do it.
Rob: You’re right. Until you’ve been there, it’s hard to understand how saying, “I can move and live anywhere,” actually makes it a lot harder. It’s tough to say, “I can build or do anything. I have a few years of runway,” makes the choice a lot harder because there is no forcing function for you to make a decision. There’s not a ton of things pressing on you to do it. I hear what you’re saying.
It sounds like, “Here’s what I’d like to do with this because this is really an interesting topic.” I noted, “What is the challenge that Mike wants to tackle? Why is he doing this?” I want to revisit this. I think that you should give a thought, do a retreat, do whatever it is that you’re going to do to figure that out. Take the Enneagram. I’ll just put the link. It’s not a silver bullet. Take it. Take some personality test and do some thinking and stuff. Think about what it is you want to do. This is a time to be deliberate about these things.
The mistakes that I’ve seen some founders make, it’s a founder I have in mind in particular, he sold a company and sold it for several hundred thousand dollars and didn’t have enough to retire, but he could take time off. He didn’t take time off. He made a quick decision that said, “I got to get right back on.” He launched this next thing within a few weeks. It was a mistake because it was almost like a rebound, like a rebound startup or like a rebound idea.
You’re not in a position to where you’re shutting Bluetick down and looking for another thing. You are in a place where you have the luxury of taking a month or two, set a timeline so you don’t take a year or two, but figure it out. That’d be my advice. What do you think? Do you think I’m full of BS?
Mike: Well yeah, but no. That’s a great way to phrase that question. I like that. An excellent point about the fact that when you got a blank slate, you can live anywhere, and you can do anything, what is it that you’re going to do? When you’re facing the problem, there’s all those constraints. It helps guide you in the right direction. But when you have no constraints or very, very few that makes it a lot harder. That’s the position I’m in. I have much fewer constraints on me now than I probably did five or six years ago.
Rob: The paradox of choice.
Mike: Yeah. I’m just trying to make sure that I make the right choice for myself, go in a direction that is going to make me happy, and that’s actually what I want to do. I remember a time when I was a kid. I was like, “I want to do this. I want to do this. I want to do this.”
Fast forward 30 years and you don’t have time in your life to do all of those things. The question I’m trying to answer for myself is, in 10 years, or 15, or 20 years, when I look back on my life, what is it that I want to have achieved? What would make me happy? Or what do I believe would make me happy? That’s what I’m trying to figure out right now.
Rob: And you’ve taken a couple of months off of the podcast. I know you took some time off of work to think about it and this is not something that could come overnight. Let’s revisit that in future episodes. I feel like you should come back in three or four episodes and cover all this stuff again—anything that is an open question.
Whether you have an answer then or not, I’d love to hear updates on your progress and I think the listeners would as well. It’s been an ongoing story for nine years and continuing that thread is going to be good for all of us to hear the decision you make.
If we come back in seven days and I ask you the same question, you don’t have progress because it’s like, “I can’t figure these things out in a week.” But if we give it time to breathe, I feel like we can potentially follow the story in a way that’s helpful and doesn’t put pressure on you to force you to have answers to things that you probably don’t have.
Mike: That’s a double edged sword because there are times where having a forcing function like that makes you make decisions. It is not to say that it makes the decisions for better or worse. It’s just that it forces you into making a decision.
It could go either way. I’m not saying it should. I’m just saying that it could go either way where it’s like if it’s seven days versus three or four weeks or whatever. Sometimes, having to make the decisions earlier is better. Sometimes it’s not. I don’t know if that’s a good answer either way. That’s why the classic answer from my consultant is, “Well, it depends.”
Rob: Yup. When we last left you, there were some speed bumps that we were talking about, like roadblocks. Then there were some health stuff, there were sleep stuff, there were coaching and failures, a bunch of stuff I have bullets about that I want to run through.
The first thing is there was Google drama. Google needing an inspection certification that could cost tens of thousands of dollars. Potentially, no one was getting back to you. That was two months ago. That was a weekly thing that was going on. Is Bluetick going to get shut down because of Google? What’s going to happen? Update us on that. What does it look like today?
Mike: I’m past 95%, it’s probably 80% because of the 80/20 rule. Then, I’ve got another 80% to go. Everything is done with Google except for the security review. Actually, I reached out to the companies that are doing the security reviews before and I dropped it. I didn’t get back to them because I was just not in a place where it was worth my mental energy to continue pursuing it.
I’ve gone back to them recently. One of them had a survey that I needed to fill out and give them a bunch of technical stuff. I gave that to them and scheduled a follow-up call with them. The other one I’m trying to get us a meeting schedule with them. I’m basically trying to get the price quotes hammering out and seeing how much is this going to cost me. In some way, that probably impacts what I’m going to do with Bluetick moving forward, but maybe not.
Maybe I just made a decision that’s like, this is going to be the path forward for me. Regardless of how much that cost, I’m just going to do it. Whereas before it was much more on the mindset of, “How much is this going to cost?” “What’s my growth trajectory?” “Is it even worth me going in that direction?” Part of the factor of that was how much is it going to cost to have that review done. Right now I’m just in the process of figuring out what the cost is.
It’s hard to say that I’m not less focused on the growth trajectory because I still think that that’s very important, but is it something I want to do? Probably the bigger question that I need to answer is do I want to continue working on Bluetick and moving it forward? I definitely think that some of the recent conversations I’ve had with existing customers has really added to my motivation to do that. I got away from talking to my customers nearly as much as I probably should’ve been. That has dramatically helped that motivation.
Rob: Fascinating. To summarize then, Google stuff is moving forward. You don’t have exact data yet, but you’re waiting to hear back. Bluetick shutdown is not imminent based on Google doing anything. You’re in the process of answering this question of, “Is this something I want to continue working on?” probably based on customer interactions.
Rob: Related to that, there was a technical issue that you brought up which was this sealed .NET component you’re using, untestatable because it’s hard to get into all of this stuff. Have you done anything with that? Have you made progress? Or are you just saying, “Forget it. I’m just going to deal with it the way it is”?
Mike: Do we have a 20 minute profanity filter or a beep that we can put in here?
Rob: We do.
Mike: I went back and forth with the support people on that. I’ve made the decision that I’m going to need to rip that out and replace it. I’ve already got something I could replace it with. I’ve already started going through the process of replacing it. Their support basically came back and said, “Yeah. This isn’t a priority for us. We’re not going to make any changes with that.” “Too bad,” is really what the bottom line was. That’s a nice way of phrasing what they said, but yeah, I’m really, terribly, unhappy with the response I got from them.
Rob: But it’s no longer a roadblock because you’re going to fix it and you can move on. It was something you brought up multiple shows in a row as well. It seemed to be really hanging you up. This was one of the options we threw out, remember? I was like, “You can shut down the whole company. You can write the component yourself.” You brought up, you could switch components or I said, “You could just deal with it and not have great test or whatever.” This is one of the options. At least it’s one of them and you’re moving forward with it.
Mike: Yup, and I’ve already started that process. The problem with ripping it out completely and switching over is that it’s a process is going to take probably several days for my servers to turn on. It’s a little terrifying to have to pull the trigger and actually make that complete switch. There’s the architectural changes that needed to be made as well. I’m trying to push it off or make it so that I can do one mailbox at a time or something like that. I haven’t dedicated a huge amount of time to that beyond the initial prototype and stuff.
Rob: Don’t let it hang around. If I have one piece of advice, it’s get past this. It’s easy to put this off and be like, “Oh, I don’t really want to. It is a headache,” or, “It’s hard to pull the bandaid off.” If you’re going to do it, do it, and get past it.
Mike: The question in my mind that I’m struggling a little with is, does this add anything for the customers?
Rob: No, of course not.
Mike: You’re right. It doesn’t, but at the same time, there are places where it’s a detriment to me to be working in that code because I have to be super careful about things breaking because of that code. My time is better spent on doing marketing stuff anyway. Should I be focusing my time on that even though this thing is hanging out around up there?
What I struggle with is the fact that it’s mental overhead. I know it’s there, I know that it’s a problem, I know it needs to be dealt with, but if it weren’t there, I wouldn’t think about it at all. I have a hard time just pushing it out of my mind because I know that it’s there, but at the same time, I need to be working on other things. I don’t have a great answer for that.
Rob: It sounds to me, you know that there are four or five options. We ran through those. Shut the business down, replace it, rewrite it, whatever. It sounds to me like you made a choice to replace it. If you’ve made that choice, just do it and get past it. What is it? A week’s worth of work? Two weeks’ worth of work? You have the luxury. If you haven’t made the decision, then that’s fine. If you made the decision but then are half doing the work on a decision because you feel like you need to do other stuff, then it sounds like you really haven’t made the decision.
Mike: No. I have made the decision. It’s just a question of trying to slot it in when I’ve got other things that are also relatively high priority to get done. I’ve got a challenge around prioritization as well because I’ve got so many things that need to get done. We can come back to that. There’s other stuff of it.
Rob: Exactly. We don’t want to run two hours. I have an open questions for future episode where we revisit all these. This is one of them.
Another thing was during the last episode, listeners know you’ve had issues with low testosterone and your doctor taking you off this patch. You felt like you’re unmotivated, that you are having trouble sleeping which is related, but not the same thing. You were not doing great in that last episode, to be honest. I could tell and we talked a little bit after we closed that episode. What has happened since then?
Mike: To be blunt about it, I was a total mess when we recorded that last episode. The very next day I went back on my medication which is just a dramatic difference between them. I basically told my doctor I was never going to do that again which he wasn’t happy about. I’m like, “I’m sorry you’re going to have to deal with this.” Things have been a lot better in that regard.
I’m actually off two other medications. That was really tough. That took probably six or eight weeks to get through and get over. There’s withdrawal effects and things like that. I had to deal with them. It was just low energy, low motivation, hard time sleeping. Things have gotten dramatically better in the past three or four weeks, I’d say. But it was hard getting through that period, to get off those medications.
It has done a lot of good for me. I’m no longer suffering from a lot of those side effects. That’s part of the reason why I was on some of those medications because I wasn’t sleeping very well. It created this vicious cycle. To be more specific, I was on Adderall because I couldn’t focus during the day. Then, I was on sleep meds at night to try and get me to sleep. It’s just like they’re basically fighting against each other. The reality is I couldn’t sleep at night because of the sleep apnea. I ended up on these other meds that have addictive qualities and things that go really sideways in your body when you’re trying to come off of them.
Those things are a lot better. I’ve noticed in the past few weeks that things have gotten dramatically better in terms of my energy, my ability to focus, and my ability to be productive. Productivity is, I don’t want to say it’s a choice, but you have to focus on being productive. If you don’t focus on that, then you’re just going to sit there and not get anything done. At least I found that way for me. I don’t want to overgeneralize that.
Rob: Yeah. That sounds like a rough couple of months. I’m glad to hear that you’re feeling better.
Mike: I’m only at one medication now. Well, actually two. It’s like for testosterone and I’m on blood pressure meds. My doctor’s done all kinds of test. I actually have a doctor’s appointment this afternoon. As far as I know, I also don’t have cancer. I guess that got back down going for me.
Rob: Yay, that’s good news. Great! That sounds like a tough couple of months. Taking time off was probably the right choice to deal with that because that’s not something you necessarily wanted to be working through. I’m glad to hear it and I really hope that that continues. You don’t know what you’ll feel like in three months, or six months, or nine months. Things come and go.
You sound more awake and alive than you have been for a long time. I don’t know if it’s just because you’re fresh, because you’re like, “Oh boy!” I don’t know if you ever lifted weights all the time, but if you lift seven days a week, your body gets tired. If you take two or three days off, you come back, you can just lift crazy amounts of weight. You just feel amazing because your body has had time to recover. I feel like there’s been a bit of that. You just sound better.
Mike: For sure. I’ve been doing a lot of little things. I’ve been tracking when I sleep well, when I don’t. What was I doing the day before. I’ve been tracking what I eat a lot. I’m trying to lose weight, but that’s only going marginally well. Coming off of the Adderall was really hard because I added 10 or 15 pounds really quick. I’m back down to only about five pounds over what I was, but still, I wanted to lose weight on that point anyway. There’s that.
Then, I found that there’s certain types of music that I can listen to. If I listen to it first thing in the morning versus I sit down and I start working without listening to music, then, I’m way less productive and I’m way less energetic. I’ve also realized that I need to have a routine as much as I hate it. I can’t stand going through the same routine all the time. It’s boring to me. My brain just doesn’t deal with it well. At the same time, I need that structure.
Those are the kinds of things that I’ve found to be very helpful over the past month or two. It’s been a learning process because I’ve been on my own. I’ve been able to do whatever I want and still make it through, still be productive, but things have changed. I don’t know if it’s just because of burnout or because I’ve gotten older and things like that. Drawing lines between work and playtime, the exercise has obviously made a little bit of a difference. I’ve gotten back to that.
Then other little stuff like getting rid of small annoyances. We were talking before the podcast started. You’re like, “Wow, your keyboard’s really loud.” I was like, “Yeah, I bought a new one.” It’s a total of really little thing, but it’s got a volume control built into it with little roll bar. I can put the volume up or down on my music while I’m sitting there as opposed to banging on a button or having to go use the mouse and change the song that are on. It’s all the little stuff, but I made a conscious effort to identify those little things that were annoyances that are now smoothed out. They’re no longer impact my day and they no longer cause me to either get out of a rhythm or get angry about stuff that’s going sideways.
Rob: Yeah, that’s good to do. that’s good to recognize. To summarize all that, it’s like you took a step back. You took a step back and you look at your life, your worklife, your day to day progress, and you got over some off medications which is always hard to do. You took a step back and you said, “Hey, what can I improve in my life?” At least one listener is thinking to himself, “Mike, welcome to 2015 with the volume control on you.” But I’m definitely not thinking that.
How was your sleep? We have a couple more bullets to cover. We’re just going to have run long today. How was your sleep? That has been such a big issue, frankly, for years.
Mike: It’s a lot better. I definitely noticed that there’s days of the week where that I don’t get as much sleep as I would like, but then, there’s other ones where I would just wake up feeling completely refreshed and ready to get to work. That’s what I was just talking about where I’m trying to be more deliberate about tracking what happened the day before, how the day went before, and what specific things may have caused that. I don’t have a lot of information on that yet, but I’m definitely keeping a close eye on that, being very deliberate about looking at that, and examining it because that’s going to be important for me.
Rob: I’m making a note here to check back on this as well just because it’s something that’s important and it’s important to be honest about it. Everytime doesn’t have to be, “Oh, everything’s great. My health and my sleep are great.” You got to be able to talk about when it’s impacting you, like in episode 448, talk about when it’s negatively impacting your progress. Something you mentioned on that episode and prior was like, “I think I need to be in a mastermind.” “I need more accountability.” “I’m thinking about hiring a coach.” There was stuff bubbling around that. What’s the update on that status?
Mike: I have a new mastermind group. We’ve been meeting at least once or twice a week, more on a Monday or a Friday, just because of the scheduling and stuff like that. That’s been going really, really well. I’m really glad that I picked that up and thanks to the listener. I won’t call out the specific name of who it is, but know that the person who introduced this probably listens to the podcast, so I just want to say thanks for that.
In terms of a coach, I’ll say a pseudo business coach, more or less who’s holding me accountable on a weekly basis saying, “What did you do these past weeks? What do you plan on doing this week?” Then, we’ve had a couple of calls here and there not just for accountability. We have a call just yesterday or within the past three days about going through my marketing plan, picking it apart, and saying, “Are these things really important? Are they not? How are these things ranked and weighted against each other? And what should you be focusing on next?” Those are the things that are going to end up on the shortlist of stuff that I implement moving forward. He’s just going to hold me accountable to it and get me a sanity check.
Rob: So far so good?
Mike: So far so good. Yeah.
Rob: I have a bullet here to ask about you. Your motivation, your effectiveness. Have you developed a system because we covered that as well. You already talked about that. It sounds like for the past three or four weeks, things have been feeling a lot better?
Mike: Yeah. I would say things started to turn a corner about three or four weeks ago. The past week-and-a-half to two weeks, things have really started amped up a little bit. It’s a combination of no longer really suffering from the withdrawal symptoms of the medication and then also getting to the tail end of burnout, which maybe I’m still working through that. I’m not really sure. It’s really important for me to figure out not just what it is that motivates me, but what it is that I want to achieve.
Rob: As we start to wrap up, something that we talked a lot about that I brought up multiple times in the prior episode is about making progress on Bluetick or making progress to your day to day work, figuring out how to differentiate Bluetick, how to make it different from the other offerings such that it’s a product that you can sell, and you’re not just picking up crumbs. Do you have clarity about how to do that? That’s the first part of the question, and have you started making progress towards that end?
Mike: I wouldn’t say that I have absolute clarity on it, but I would say that I have some ideas about what the direction of it it should be. It’s more or less, I believe, doubling down on the warm email follow ups because I’ve been talking to a couple of customers here and there about what it is that they used Bluetick for, why they use it, and asking questions to help me figure out what the direction for it is, what it should be, what are they unhappy about, what are they using it to begin with, and consolidate that information.
One of the customers that I talked to, interestingly enough, he said that he started out using it for cold email. Then, when he switched over and started using it for warm email for other things, he’s like, “Oh, I’ve got this tool. I might as well use it.” Then a lightbulb went on for him. I was just like, “Oh, that’s interesting. Why?” Then, he started talking about the fact that it’s really built well for those types of scenarios. He was talking about why he was using it and how if there were some minor changes to it, it would be more helpful to him and just easier to use.
It gave me some ideas about how to go in that direction a little bit more. The problem I see is that when I ask him if he were talking about it to somebody that he knew or another entrepreneur or something like that, how would he pitch it to them? He’s like, “I really don’t know.” That’s something I struggle with is how to present it to people that in a context outside of use cases, maybe I just have to go on to that direction, and talk about it in terms of specific use cases.
Rob: How would you summarize that?
Mike: How would I summarize what? How it’s used?
Rob: No. Just the whole thing. If I were to say, do you know how it should be differentiated? I think I do. It’s the warm email context. Then, making progress towards that, not yet? Still in the thinking phase? When I say progress, have you shipped code or marketing material or different copy? Updated the website? Anything to that, and yet.
Mike: Yeah, I haven’t done any of that stuff yet. I’ve just been consolidating the information, kind of thinking about it. I’m not sure what the best ways for me to present that to other people are. I’m not sure if that’s the absolute direction I should go. Should I niche it down a little bit so that it is much more like a pipe drive plugin or should I integrate with a bunch of different products that are similar to that?
I have some open questions about that stuff and I don’t have the answers yet, but they are things I’m trying to actually figure out. Like how should this be pitched to people? Who are the exact people that I should be solving this specific problem for? When I first started on Bluetick, it was much more open-ended. It still is open-ended and it can do a lot of things, but if I were to niche down and only solve a very small sub-segment of the bigger problems that it can solve, I feel like it could probably get a lot more traction, and the question is, what exactly are those?
One example might be to reschedule meetings that have been cancelled. Those people are probably high profile prospects or high value prospects. If somebody cancel the meeting they scheduled, that’s probably a good situation where Bluetick could help you get those people back to a meeting. But is that the place where I want to niche down into? I don’t know the answer to that yet.
Rob: How are you going to answer those questions? You said you had several open questions. Do you have a plan to figure out how to answer them?
Mike: I’m going to be going through in talking to the rest of the customers that I have and seeing if that is something that they generally use it for. If so, then, I can at least generally answer that. At least try it out as a direction. I don’t know. Let’s say I decided to do that today. It may take another month or two to figure out, is this a reasonable direction? Am I going to get any attraction with it? I don’t know that.
Even if I made the decision, I’m still going to have to test it out. I’m still going to have to try it, see if I can get enough customers, and get some sort of traction. If I’m not getting that, then I have to probably go back to the drawing board and try and figure it out.
There’s going to be a decision point activity and then wait to see what the results of the tests are. If I don’t go through all three of those things, I can decide what the direction that is all I want. It doesn’t mean it’s going to be successful and there’s no way to verify it.
Rob: Makes sense. To be continued in a future episode of Startups for the Rest of Us. Stay tuned to hear the stunning conclusion of Mike’s journey with Bluetick in a few episodes. Mike, I have the next three episodes mapped out or recorded already. What we’ll do is…
Mike: I’m totally screwing up your […] system.
Rob: Yeah, you are. No, this one slides perfectly in place. I have all that dialed in, but what I’d like to do in the interest of both keeping the story going is also giving you time to get stuff together and make progress on these things is record with you again in a few weeks. I don’t know if it’ll be 461 or 462, somewhere in that range, and to hear what else is going on, hear updates on your thinking.
There’s a lot of open questions. I have six or seven bullets here that I have taken about differentiation, accountability, health and sleep, to what challenge do you want to tackle, and what it is you really want to do. I’m glad that you’ve made the progress that you have. It sounds like you’re out of the fog. It seems to me like what you have been doing for the past two months is working. Keep doing that.
I feel good just talking to you about it. It makes me feel good to hear you, the old Mike. It’s the Mike that I remember. You and I have gone in and out of these things. There’s an old Rob and a new Rob where I was super depressed for six months doing stuff. It’s not just about you. It’s cool to hear that. Do you feel that in yourself as well?
Mike: I do. It’s hard for me to look back on it. It’s one of those painful things to look back on. It’s like, “Oh man, I wish I hadn’t felt that way,” but it is what it is. I’d rather take the time and do the right things for myself, what I want, what I’m trying to do, and make the right healthy choices, I’ll say, but it doesn’t necessarily mean that going through those periods is easy either. I definitely agree that I feel alot better today than I did two months ago, or three months ago, or even six or eight months ago. The word you used earlier, coming out of a fog, that was woefully accurate. It’s the way I’d put it.
Rob: Well, thanks for coming back on and digging into these stuff. If folks want to keep up with you—no, I’m just kidding. You know I always do at the end of the interview. “If folks want to keep up with you, Mike, where would they go?”
Mike: I would say Twitter, but I don’t use Twitter.
Rob: Very good. I feel that wraps us up for today.
Listener, if you have a question for us, call our voicemail number at (888) 801-9690 or email us at firstname.lastname@example.org. Our theme music is an excerpt of We’re Outta Control by MoOt, it’s used under Creative Commons. Subscribe to us on iTunes by searching for startups and visit stratupsfortherestofus.com for a sexy new website and the full transcript of each episode. Thanks for listening and we’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob answers a number of listener questions on topics including starting a marketplace, marketing channels, resellers and more.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. This week I’ll be covering a few listener questions about starting a marketplace, which marketing channels to pursue with the new app, evaluating re-sellers, and why the path from the agency work to SaaS is so hard. This is Startups for the Rest of Us episode 457.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth startup or you’re working on your first. I’m Rob and today I’m going to share my experiences to help you avoid the mistakes I’ve made in the past.
I’ve tweaked the intro a little bit today based on suggestion from my 13-year old. He said, “Built your first product or just thinking about it” is too narrow. He says, “Aren’t there people who’ve started their first, second, third, fourth that are still listening?” and I said, “Yeah.” So, tweaked it there. Each week on the show I talk about topics relating to building and growing startups, in order to better your life and improve the world in a small way.
In our world of startups, we strive to have a positive impact on other people, be it your customers, your team, your family, yourself. We are ambitious founders, but we’re not willing to sacrifice our life or our health to grow our company. We have many different show formats. Sometimes, we come on and we teach a tactic, talk about philosophies and thoughts of starting startups and growing them. Other times we do interviews, then several of those over the past weeks. We have listener questions which is what we’ll be doing today, founder hot seats, and other things like that.
My co-host Mike Taber is on a brief hiatus. I do think he’ll be back in the next few weeks, and we can catch up with him, find out what he’s been doing with the enormous amount of free time he’s had not doing this podcast. Listener questions have been piling up, including a couple of voicemails. Today, I’m going to run through a few of those and give you my thoughts and insights on them.
First one is a comment from Adrian Rose Brock, fan of the show a long time, many times a MicroConf attendee, and his comment is about our Gmail clients, and even paste and match style which I was complaining that Mailplane didn’t support.
He says, “In the last Startups for the Rest of Us, you were discussing Gmail clients two tips. Number one use Kiwi for your desktop client for Gmail. Amazing client, works really well, has good integration with other G products. Number two, if you need to paste and match style, you do Command+Shift+V on a Mac. It will work in the majority of applications and saves a right click.”
Good tips. Thank you, sir. I have not checked out Kiwi yet, but it is definitely on my list. I’ve actually ceased the exploration for a desktop Gmail client for now. I have enough going on and somehow flipping back to doing it in Chrome it’s not bothering me anymore. There was some real performances which I was experiencing and I’m not seeing those any longer.
Our next question involves starting a two-sided marketplace and TJ’s asking whether he should charge from day one.
TJ: Hey, guys. This is TJ Astro calling. I’m focusing on a startup for artisan makers to get them more exposure. You guys have been a tremendous help to me, and I’m just trying to figure out if I can launch with a charging right away or what I should be doing. My gut instinct is to onboard them for few months. It’s a double-sided marketplace, so the synergy of all of them together as a collective community is where the value will be coming from eventually.
My instinct is onboard them, show them I’m active in the pro-members chat only in those forums, and that I’m committed to helping get more exposure and sales by offering strategies, advice, and such, then maintaining transparency with my site analytics as it modestly grows. I’m hoping that I’ll be able to get it quite grassrootsy and the way that I’m providing them these services and such, and they’ll be able to share the site because I don’t really have a marketing budget. Let me know what your thoughts are. Thank you so much.
Rob: TJ also wrote in and he said, “Hey, I just recorded a voicemail, it wasn’t very clear or well-spoken.” TJ’s launching a two-sided marketplace, no marketing budget, and it is a membership site. Primary focus is to aggregate the Instagram post of artisan brands. He has an email list of 2000 artists who he’d like to curate on the site, but they’re mostly cold contacts.
He’s going to have both free and paid monthly memberships. He says he has no market validation, everything he’s heard or read says, “Charge. Don’t give away your product or you won’t know if you have real product market fit. But since it’s a double-sided marketplace, both shoppers and artisans, I need to be able to demonstrate value to the artisans by attracting shoppers to the site.”
TJ talks about the different pricing tiers. There will be a free plan for artisans and also a paid plan. He says, “My gut instinct is I should onboard the artisans for a few months, a free trial of the paid pro member level but not collect credit cards on sign up. Show them I’m active in the pro-member only chat forums, that I’m committed to helping them get more exposure in sales by offering strategies and advice, maintain transparency with my site analytics as they modestly grow, encourage them to share my site with their list as it play to help them and other members gets more exposure. See where the analytics are in a few months, emphasize to them a growth trajectory. I’m hoping I’ll see and try collecting a card to charge them to stay on as pro members.”
Obviously a complicated question TJ. There’s a lot here. We’ve talked about two-sided marketplaces before, and my advice tends to be for bootstrap or indie-funded companies, is to not do it because they’re just so hard to get started. You even heard Tracy Osborn a couple of weeks ago, talking about WeddingLovely.
While we didn’t delve into the difficulties of two-sided marketplaces, she definitely has had some thoughts on that. It’s very hard, it’s hard enough just to get one funnel working, but you literally have to get two separate funnels working, and you have to have them at scale before things will work. You are definitely pushing a boulder uphill with this one. The way I always think about this is thinking back to how Uber did it. With Uber they needed at least a couple drivers in the field before they could release the app and have it provide any value.
If my memory serves me correctly, Travis Kalanick and his co-founder literally were driving the black cars just as a test. Obviously this doesn’t scale, it’s not what you’re doing, you’re just testing. If people have this app, will they call a car in Downtown, San Francisco? That was the hypothesis.
Once they started getting people calling them, then they had some data, enough metrics that they could go to black car drivers either cold-call them, or just approach them at the airport, or whatever and say, “Hey we have this app. Do you want to be on the receiving side of it? Right now we’re getting two calls, three calls a day, but it basically takes you right to them, and then you get paid directly, and you have to go through your dispatch basically.” That’s how they built it up.
Now it’s an incredibly long and painful way to build an app until the two-sided marketplace has a network effect. Then it’s amazing and it grows super fast. But almost knowing gets there. That’s the hard part. The challenge is getting past those early days. In the early days that you’re in, with zero marketing budget, the odds are even less in your favor. They’re very very difficult what you’re trying to do, but granted that this is what you want to do, you have to be super scrappy and it sounds like you’re thinking in those terms.
All the stuff you’ve read about […] charge, don’t give away product, if you have a SaaS app that provides value, people only pay for something that is providing them value. If I build an email service provider, or a long-tail keyword tool, or invoicing app, or whatever, when someone puts a credit card in, they pay, the next day they can get value out of it, or that same day they can get value out of it. That’s not the case with the two-sided marketplace with a no consumer, no demand side so to speak.
Getting suppliers on to your marketplace without the supply side, you’re going to have to have it be free to some extent. Whether you just have the free plan the whole time, whether you tell them, “You’re on a paid plan, this is the difference and in three or four months, by the time we have demands, I will be charging you $49 a month, is this interesting?” That’s the conversation to have.
I don’t see major problems with the plan aside from two-sided marketplaces are really hard especially when you have no money. But aside from that, I don’t see how you can possibly charge suppliers when there is no value being provided. I don’t know anyone who would pay for that without that supply side. The one thing I would say is if you haven’t already started building up the supply side, because you have the artist list, is there a way to get an email list, a blog following, an Instagram following, a podcast following, just some demand side built up so that you’re not starting at a standing stop?
You said you’re relying on defenders or the suppliers to promote it and while that’s fine, it’s not going to be enough, I’m guessing. I think that you are doing some type of marketing, you’re going to have to get creative. It sounds like a pretty creative having again, no budget and you’ve thought through pretty well. I would be looking at ways to have enough interested consumers.
Think about it this way, Groupon is also a two-sided marketplace. When Groupon went to a new city, they would cold-call the stores, the retailers, the supply side, and then they would post a landing page for the demand side. Getting the demand side is the consumers, and that landing page would then, they would advertise it, they would promote it in any way they can.
Obviously you’re saying you have no budget, so it’s hard to do this, but that’s how I would approach it. I would have a landing page up of like, “We’re coming here soon,” or “This is something were going to have soon,” and then I would have whether it’s Facebook ads, Instagram ads, or if you need to do it for free, then you’re going to have to put it in sweat.
It’s going to be a blog post or many of them, it’s going to be interviews, it’s going to be viral content, whatever it is that you can get. Guerrilla marketing style essentially with no cost. That’s one way to build up that demand side, and then you can point to the artist and say, “Hey, I do have 5000 or 10,000 people on an email list that are interested in hearing about it.
I still think your approach of going with no credit card, not charging them but giving in the expectation upfront, is fine, but then you don’t have to start from a standing stop. That’s how I would think about it, I hope that’s helpful.
My next question is another voicemail. Voicemails always go to the top of the stack. This one’s a bit long, but I will have our editor clean it up a bit and it is from Keith Gillette with tasktrain.app.
Keith: Hi Rob, my name is Keith Gillette, My founder-funded B2B SaaS startup tasktrain.app is in private beta right now. TaskTrain is lightweight process management platform that allows service managers to integrate standard operating procedures, and just-in-time training into everyday workflow, enabling teams to deliver service quickly and correctly.
Based on our expertise and our early customer development feedback, we’re targeting IT operations directors and digital marketing agency COOs as our initial customer segment. Our launch plan has been to market and sell per user subscriptions directly to customers via the web. I have two questions. One, what marketing channels would you recommend pursuing? We have a PR plan when we’re ready for a full public launch, but are not sure how aggressively to invest in building a social media presence and/or in paid advertising, neither which we have yet tried as we’ve been too focused on getting a functional product.
Rob: We’re going to cut the voicemail there and I’ll answer this question and then we’ll roll in to his second question. Congrats Keith on getting to launch. It’s sounds like, you’ve been too focused. You’ve made a traditional mistake of heads down basement coating. I know you’ve been having customer development feedback, but you haven’t done any marketing. I guess the first thing I would say is go to robwalling.com and enter your email address and you’ll get a book that I wrote called Start Marketing the Day You Start Coding. Whether you read the book or not, just having the title is really what I would say.
It’s typically before I have anyone break ground, I will validate the idea and then put up a landing page, such that even if you only have 50 people on an email list at that point, that’s your starting ground. That’s where you begin when you launch. Talk about having a PR plan in place, which is fine. I haven’t seen PR work for apps like this that are just line of business apps. They aren’t that interesting and PR likes to tell a good story. If you happen to have a good story, that’s fine. I don’t think you need a social media presence at this point.
Reserve your twitter handle or whatever. That’s not going to bring you customers yet, especially if you don’t have an audience, if that’s not your thing. Obviously, if you have a podcast, or an audience, or a blog, or something and you are on Twitter talking to people, you’re taking the Ben Orenstein, the Derrick Reimer, the Brian Castle approach, then that would be one thing. But you’re not doing that yet, so I would not spend any time really in building that out.
What I would do is, there’s an endless number of traction channels you can go after. Obviously SEO and paid advertising are two nice ways to get traffic. But whether that traffic converts is a real question. An outbound sales is the third and those are the three avenues that really scale well.
Which of these do you have experience with? If the answer is none, pick one and dive in. That’s how it is when you’re starting out. One reason why I espouse the stair-step approach to bootstrapping is that which your first product from the standing stop, trying to manage all the complexities of building and launching a SaaS app and then looking at the massive array of marketing options available, it’s hard and it’s overwhelming. Without the experience, the confidence, the budget, it’s not an easy question to answer in essence.
I’d say, of all the episodes of Startups for the Rest of Us—what is this? 457?—more than half, I would guess 2/3 maybe ¾ deal with this question of how do I market? How do I get more customers? How do I get more leads? What do I do? Literally, books have been written on this topic. Two books I would recommend, number one is Traction by Gabriel Weinberg and Justin Mares, they go through 20–22 traction channels. You can look at those as starting point for zeroing on each of those areas. It includes paid acquisition and SEO, running events, and all kinds of stuff. The other book is SaaS Marketing Essentials by Ryan Battles. That’ll be a pretty good start for you because this question of, “What marketing channels would you recommend?” really depends. For me, just looking at it I would do some content and I would do some LinkedIn ads. That’s probably where I would start. That’s not to say they’re going to work. It’s just the two things I would start with—Facebook ads and Google AdWords—just to see, are they going to work? I don’t know.
Audience building, is that a skill of yours? If it is, build an audience. If it’s not, then don’t. There’s a lot of variables in terms of how much budget do you have, how quickly do you want to need to grow, what is you skill set? Do you have experience with any of these? Any desire to try any of them? It’s a pretty broad question, but that’s where it comes down to doing your own research, making that list. Basically, your marketing gameplan.
I’ve talked about them on the podcast in the past about how with each app I would build or acquire, I would make this marketing gameplan. The HitTail marketing gameplan, the Drip marketing gameplan, it was a huge bulleted list. That was seven pages, single spaced, bulleted list with some headings of, “These are the types of things we want to do right at launch,” and, “These are the people I’m going to talk to who’ve agreed to perhaps promote it.”
Then, I want to try Facebook Ads here in the market segments. I wanted to try AdWords in these segments. Then, you’re going to a spreadsheet and you put out the ones that you think are going to work at this stage. You take a guess at how much traffic you can generate, how much cost you think, time you think it’ll take, and figure out, do you do it yourself? Do you hire it out? Do you hire someone internally to do it? There’s so much to think about it here. You have a little bit of research and thinking to do. Good luck with that, Keith.
Now, let’s dive into Keith’s second question.
Keith: Second question, one of our beta users has expressed interest in becoming a reseller of our platform as a value-added offering in his virtual CIO consulting service portfolio. I had the potential for bars in mind when designing TaskTrain. I had not expected to pursue the channel until we were bit further along. Now, we have zero paying customers at this point, no data on margins, customer acquisition cost, or lifetime value of a customer, on which to base sales commission or revenue sharing. How would you recommend we think about structuring a potential reseller contract? Thanks for any guidance on those early stage marketing and sales questions.
Rob: Every product that I have launched typically gets interest from resellers and whitelabelers. This is very common for you to get reached out to by folks who want to resell or whitelabel your software. When we launched Drip even really early, we were getting two emails a week from people. “I want to do this but for realtors.” “I want to do this but for mortgage brokers,” “or for the hair salon,” or whatever. “Can I whitelabel it?” It’s just a totally different market. Whitelabelling is one.
I realized you’re asking about reselling here. Whitelabelling is one thing that I discourage people from exploring in the early days. It dilutes your brand equity to huge distraction. It’s almost a completely separate product. It’s very rare that people make it work. It, of course, can work, but it’s not something I would encourage you to do unless that’s really what your heart is set on. Don’t let it be a distraction.
Resellers are different because it’s not a product distraction. It’s going to be more of a, I would say, almost a founder distraction in terms of having to come up with the model, sign a contract, work with them to help promote, and make sure they’re not reselling it to people who don’t want to be part of your customer base, I guess. That’s the thing. With the SaaS app, are they just an affiliate? Are they reselling it? I guess the difference with affiliates is affiliate would just sell it based on your pricing and they would keep a commission to pay them 10%, 20%, or 30% of the recruitment revenue. Whereas a reseller, maybe they have an account that they can put a bunch of people in and they’ll pay you a certain amount. Then, they just sell it for more. That’s probably the difference I would think about.
I know in the IT, since you are targeting IT operations directors, marketing agencies, COOs, maybe resellers would be helpful. I would only consider it if this reseller already has a huge network, already has leads. If this person’s just going to go out, run ads, and do cold outbound, you can do that. You don’t need them. If they have a list, if they already have an audience that they essentially want to pitch it to or market to, it’s worth considering.
Personally, I don’t have enough experience with it to do it. I would get offers like these and I would basically say, “Nope, not right now,” or “Not until we know our customer acquisition costs, our margins, our LTV,” all those things that you’re saying you don’t have. My advice would be to kick it down the line a bit. Once you get some customers, you know what your churn is and your revenue share. You want to be in your sales commissions and all these stuff. It’ll be a lot easier to get something like these done. It’s just there’s so many things flying in so many directions right now that having yet another distraction is not something I’d be super stoked about unless this really is a golden opportunity.
In my experience, people who want to resell a product that has zero customers, it doesn’t tend to be a golden opportunity. I’d be pretty surprised if they did actually have an audience that they had a lot of reach into. I would kick it down the line, three months, six months, and just say, “Hey, we need to revisit this. There’s so much going on right now with the launch.” It’s easy to say that you’re busy because you are and you have competing priorities. I would try to revisit that later.
Keith: A final postscript. I want to take Mike for his immense courage in being so open and vulnerable in sharing his Bluetick blues with the Startups for the Rest of Us community. As a fellow still struggling in Boston area, B2B SaaS founder, I empathize with him in the challenges he’s facing and deeply appreciate his willingness to share them in public. I wish him the best in deciding what’s next. Gratitude for you both for your Startups for the Rest of Us work.
Rob: Thanks for that, Keith. I appreciate it. I hope my discussion was helpful.
My next question is from Ash and it’s about agency to product journey. He says, “Hi, Rob and Mike. I’m a big fan and listen to almost all episodes over the past five years. In the past episode, Rob mentioned the path from agency to product especially Saas, is a hard path which I understand. Could you please dive a bit deeper into why? If one is on that path, how to run that transformation successfully? Thanks a lot. Keep up the great podcasts.”
Good question, Ash. So many of us have done this. I didn’t run an agency per se, I’m more of a consultant. I did have some contractors working for me, so I was a micro agency. It was a handful of us. I was doing sales, doing some of the codings, and such. The reason it’s hard is because when you’re an agency or a consultant, you can bill $150 an hour. Whatever it is you’re billing, it’s really hard to not just book more hours and to make that $250,000 a year or $300,000 a year just by coding for someone else with frankly very little risk.
You have some headache dealing with clients, of course, but there’s not a ton of risk in it versus turning down work to block out a day or two, a week, to work less, to get paid less, to build something that you don’t know if it’s ever going to work. You don’t know if you’re ever going to get it launched, if it’s going to have a product market fit, if it’s going to make enough money to ever pay it back.
There was a good MicroConf talk a few years ago. It was one of our attendee talks and it was by Ted Pitts from Moraware software. He talked about how he and his co-founder launched good jobs and then they launched the software. When he traced it forward, they were doing millions a year and pulling out quite a bit of profit before he felt like they hit the breakeven line of how much money they could have made if they just kept working their jobs, if they have just stuck at day jobs with promotions and bonuses. Just a steady pitch the whole time versus the ups and downs of some years they make more and some years barely make any in their early days, and not paying much. But they wouldn’t have any other way. They didn’t do it for the money. That’s part of it, obviously, but they did it for the freedom and satisfaction. The freedom, the purpose, and the relationships.
It’s hard to see that. It’s hard to look ahead. It’s especially hard to convince a significant other that instead of making $300,000 a year like you could as a consultant, or $250,000, or whatever it is, I want to make $125,000 and I want to launch this app. It’s going to take me six months or a year to launch. Then, maybe two or three years to get to the point where it’s even making as much money as I could be making if I just work full-time on this consulting work, and then the payback period of the money I lost is even years out from there. That’s the hard part. That’s a big part of why moving from agency work which pays well to starting a SaaS app which doesn’t pay anything for a very long time, takes a really long time to get going, and here’s a bunch of risk that’s why most people don’t make the transformation.
If you were in college or if you were like me when I first started launching products, I was working construction. I was an electrician. There really wasn’t much downside to me. I did it all nights and weekends, obviously, because I was out on a construction site. I had learned to code when I was 8 years old. I’ve been coding for years, but I didn’t know a lot in the modern web languages. I literally went to the public library. I got books on PHP, HTML, a little bit of Perl—this was obviously years ago—and I started to hack in the way of stuff on nights and weekends. That’s how I learned.
I eventually did make the shift into full time employment as a developer. That helped increased my […] really fast. Then, when I went to build stuff on the site, I was way, way, faster at it. But it still was a 9-5 and it was helpful for me that I could go in 9-5 and when I left, my time as my own.
Once I transition to consultant and I was billing hourly, I was obviously making a lot more money, but it became hard for me not to just do consulting work all the time because to consult 50-60 hours a week, I can make more money than I had ever seen or ever heard of anyone making. It was crazy to bill $125 an hour and works 60 hour weeks. This is 15 or 20 years ago. That money really went a long way. It’s tough. It’s a long term view. It’s having a confidence in yourself. It’s being able to look in five years and say, “It’s going to hurt for now, but long term, I think this is the better path.”
In addition, this is why either stair stepping your way up is better because you can get some small wins along the way. It builds confidence in yourself, builds a little bit of recurring revenue, build confidence from your spouse or your significant other if you have one. But also, acquiring. Acquiring small products or even large products is a nice way to do it. If you are running an agency and you have money—you should be making a decent chunk of money—acquiring a product gets you past that product market fit, that wall. It puts you forward, hopefully, in 18 months, maybe 24 months depending on the space that you’re in. That’s one reason why I acquired products early on. I did have more money than I had time. Once I was at that level where I could build $125 an hour and stay busy full time.
Not everyone has that. Maybe you’re scraping by to get agency work. Maybe you do have downtime during the week or during the month. That’s nice because then, you can use that to focus on the product. I always felt guilty just focusing on the SaaS product, not going out and finding more work. I thought to myself, if I ran out of work and I don’t have any in three months, am I going to look back on this and regret it? You get over that guilt if you’re going to do it.
I’m guessing a lot of folks listening are experiencing this or thinking. It’s the conundrum of nights and weekends are hard. This is one reason why people raise funding so they don’t have to do that. It really is interesting to see someone raise around $150,000– $300,000, with the sole purpose of they don’t have to make this decision. They don’t have to scatter their focus. They don’t have to worry about agency work or doing it nights and weekends. They can just focus for a year or two on getting something to the point where it’s viable, where it’s making enough money, that it’s sustainable, that’s it’s default alive, as Paul Graham would say.
I’m not saying you should raise funding or shouldn’t. Obviously, I never did. Building my stuff up, it also took me a really long time to get there because I did it this way. It was nights and weekends for me. It was building an app, acquiring an app, parlaying one, stair-stepping from one to the next, and that’s why it took me so long to get to Drip. If I had raised funding 5–10 years earlier, I would have built a larger SaaS app like Drip. But I just didn’t have the resources, the experience, perhaps the confidence to do it at that point.
It’s a good question, Ash. I appreciate you asking that. That was helpful.
That about wraps us up for the day. If you have a question for the show, call our voicemail at (888) 801-9690. Voicemails go to the top of the stack. Or you can email us at email@example.com. Our theme music is an excerpt of We’re Outta Control by MoOt used under Creative Commons. Subscribe to us by searching for startups and visit stratupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob interviews Ruben Gamez of Bidsketch, about his 10 plus years of bootstrapping, lessons learned, improved decision making, and his new product.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups For the Rest of Us. I’m your host, Rob Walling. Each week on the show we cover topics relating to building and growing startups in a way that’s organic and sustainable and that works around your life. We’re ambitious founders, but we don’t sacrifice a life in order to build our startups. These are not the typical Silicon Valley Startups where fundraising can be a goal in itself and where people build slide decks instead of building businesses.
In this week’s episode, I have an in depth conversation with Ruben Gamez. We talk about the new app he’s building, Docsketch, in the electronic signature space. But more importantly, we look back at the 10 plus years that he’s been bootstrapping. We look at lessons learned, how he’s learned to make better decisions, how he’s meticulous and disciplined, and how that leads to him being able to make repeatable progress and being able to have repeatable successes. This is Startups For the Rest of Us Episode 456.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing startups, whether you’ve built your fifth startup or you’re working on your first. I’m Rob. I’m with Ruben Gamez. We’re here to share our experiences to help you avoid the same mistakes we’ve made.
The first email I received from Ruben was in January of 2009, which is more than 10 years ago, and he was asking about something I had written up, a few essays about acquiring software products. From there, he and I struck up a friendship. He had been reading my stuff for a while and wound up being one of the first four or five members of the membership website that I launched called The Micropreneur Academy that was teaching software developers, really teaching engineers how to market.
This is back in the day just as SaaS was starting to become a thing and Ruben was an early success story. He hustled and as I said in the intro, he was meticulous, disciplined, and just shipped stuff every week, even though he was working a full-time job in “managing managers who manage developers,” as he used to say. What I’ve always respected about Ruben is his analytical nature, but he has the gut instincts of a founder, and he’s someone who you know that no matter what the chips deal him, he is going to succeed at what he’s doing.
Today, in the interview, we talk about both his first product which is called Bidsketch and it started as proposal software made for designers, and he later expanded it to creating professional proposals as a horizontal play. We talk about trying to upgrade that from Rails 2.0 to Rails 3.0 and all the technical headaches that went with that in the six months of essentially wasted engineering time. And we talk about his new app that he’s running in tandem and building that in tandem with Bidsketch. It’s called Docsketch and it’s an electronic signature app. We talk about his AppSumo deal and why he decided to do that and his whole thought process of whether to do that or not. We dig into free plans at marketing first before building a whole bunch of stuff.
Ruben doesn’t do a ton of interviews. He doesn’t do conference talks, even though I ask him every year to speak at MicroConf. Every time you hear him talk, you will hear someone who’s been doing this a long time, someone who’s had substantial amount of success, and someone who’s really thought through these issues. I thoroughly enjoyed talking to Ruben today about the ups and the downs and the sidewayses of being a bootstrapper for more than 10 years, and I hope you enjoy this interview as much as I did. So, let’s dive in.
Thanks so much joining me on the show today, Ruben.
Ruben: Thanks for inviting me.
Rob: You and I talk every few weeks and have for several years, so it’s fun to get on the mic every once in a while. You have several popular Startups For the Rest of Us episodes, actually. You have the one about beating plateaus. There was one where you and I just talked about metrics. Remember where you’re doing trial-to-pay and all that? To the listener, if you go startupsfortherestofus.com, search for Ruben Gamez.
He has been on the show several times, but today I wanted to dig into stuff you’ve been working on for quite a while, Ruben, both in terms of your new app, Docsketch, but also the decision process. You run a bootstrap SaaS app for 10 years which very few people have done that. Most people sell, or they shut down, or they move on, or they find a CEO to run it or whatever, and you’ve been through a very long journey in it in a short amount of time. Ten years running a SaaS app is like 50 years in a lot of other business.
Ruben: Yeah. It’s funny you say 10 years. In some ways it doesn’t feel that way and in other ways it does.
Rob: I know because so much has changed when you think back to your very first homepage and what that looks like, or your early demo videos, or what pricing felt like back then. There’s so many things have changed and yet, you have Bidsketch. Folks who want to check it out, it’s bidsketch.com, and it’s a successful SaaS app that has employed you and your whole team. You have a team of four or five people?
Ruben: Yes. We’re hiring more people right now, so rebuilding in that process. We could talk about that a little bit later.
Rob: The first thing I want to ask you about that’s interesting is when you first launched Bidsketch, it was proposal software made for designers and you targeted the design space. It was a vertical proposal app and it caught on really well. Then a few years later, I don’t remember how long it was, you went horizontal. The headline stay as, “Create professional proposals in minutes.” You’re going after anyone who would send a proposal, any type of freelancer, contractor, agency or whatever. What led to that decision? You really did the land and expand which is a playbook in MBA speak or whatever, but you came across that organically and made that decision to expand.
Ruben: I’m trying to even think about why I chose designers to start with. I think it had to do with the amount of keywords for people searching for proposals related to web design or just graphic design. That helped me make that decision. Later on, we’re just getting customers that weren’t that, and we were getting people asking us, “Does it work for my business?” There was nothing in there that would prevent them from using it successfully for the business.
There were a lot of different signs that made it clear that we should move beyond designers. Plus, the market just for designers was too small. It was maybe a good starting point, still not sure about that. We could have just started where we ended up later, but I didn’t know back then if that was a good idea.
Rob: I was going to ask if there was any regret or if you feel like it was a mistake to start small and then go horizontal, or if you should have just started horizontal, or do you think really matters?
Ruben: At least for the app that I had at the time, there weren’t any proposal apps. So, we were creating that category. It probably didn’t matter as much for our product at that time.
Rob: Since you’ve built Bidsketch back in 2008–2009, it was written in Rails 2 and then you upgraded to 3 or you built it in 3, if I recall. You went through a painful year or so of trying to rewrite it in Rails 4. If I recall, you had a tough time finding Rails 3 developers and maybe patches weren’t coming out for it anymore. This was just 2–3 years ago, you were doing this. It’s a real struggle, I remember. Can you talk us through that? Why did you make the decision and what was the process there to try to get it rewritten?
Ruben: We actually started in Rails 2 and it’s still in Rails 2 now, which is crazy.
Rob: Oh, that’s what I forget. I say 3 because that sounds old enough, but you’re right.
Ruben: 3 is the thing we wanted. We were eventually trying to get to 4 at the time. We were like, “Okay. We can’t jump straight to 4. We need to go to 3.” From what I understand, going from 3 to 4 takes some work, but it’s not the end of the world. Going from 2 to 3 is, if you have a really mature app with a lot of code that’s been around for a while, that’s a beast and that’s what we were trying to do.
Rob: You had the bulk of your team working on that for, was it a year? Is my memory correct?
Ruben: It was maybe like eight months or so. A lot of developers working on just that and at the same time I was working on the design side. Just going back a little bit, the decision to upgrade had to do with us hitting plateaus and like you mentioned, there’s that episode that we did about plateaus and stuff. We hit three or four plateaus at different stages of growth. I don’t remember exactly what they were, but we did things like change pricing, 10X our content strategy, just different things to break out of each plateau at each time.
I got pretty good at breaking out of plateaus, but now what I know or what I feel is that if you’re hitting that many plateaus, fundamentally, there’s a problem there that needs to be fixed. We were hacking out of the plateaus for a year or two of more growth, but there was a bigger issue. Part of it was just going back and trying to figure out, “What’s going on here, how can we just stop doing this, and fundamentally fix what’s wrong?”
We did a lot of customer interviews, a lot of analysis of the data that we had, did over 100 jobs-to-be-done interviews and using the Switch framework. Switch framework has to do with when somebody switches away from a product to your product or when somebody switches away from your product to something else, during onboarding and people that canceled. You can imagine people getting people on the phone to do 30–45 minute interviews. Once they’ve canceled, it isn’t that easy, so we bribe them with Amazon gift cards, like $100. In theory, you don’t need that many, but we were interviewing a lot different segments and trying to find patterns and stuff.
After all that, we came up with three things that we could do. One of them was go upmarket enterprise, which the majority of the funded startups that were going into the proposal space were doing. They start off like we would and then just wasn’t big enough and they would go upmarket. The other one was just better served as a couple of specific segments within our market, build out better team features, agency features, go deeper in that direction. Then the third was just sell more to our existing customers. They were using products that were related. That’s why we built up Docsketch later.
The first thing that I decided to do was basically build out version 2 of Bidsketch and go with option one—better serve a segment of our market that would pay more money, that would stick around and all that stuff. But out existing product was lacking some features and to add these features and to change how it did the main thing that it did which is create proposals, we had to use new technology and hiring developers that could work with that was really hard.At the time also, Rails 2 was really old and everything was just hard because of that. We had a bunch of technical bet and we were in a bunch of code. If we were going to rebuild core parts of the application, that was a big project and we just needed to add a whole bunch of unit tests and all this stuff. We spent six months going in that direction, adding unit tests.
About that time, I saw a talk, it was DHH from Basecamp. This had already been out for a while, but I had just caught onto it, just watched it, and he was talking about how they made a mistake by trying to do the same thing that we were doing. It really gotten my interest. I watched the whole thing and basically what he was saying was that they had a very hard time. He spent six months to a year trying to make Basecamp into the next version of Basecamp. He just talked about it in terms of trying to make a chair into a desk or something like that. It was really hard. It just didn’t work and they abandoned it and started from scratch.
I watched that night and I thought, “Hmm, I think we can do it.” Of course. We kept going for a little bit longer, but I kept just thinking about that. So, I went back and I was looking at how much progress are we making. I started doing some forecasting and estimating, given our pace, that the entire team is working on this. It would have just taken way too long. We made very little progress, so then I just decided to abandon that effort.
Rob: How was that, when you decided to abandon? That must have been a really tough choice for you. What was your emotional state like once you made that decision or as you were making it?
Ruben: It’s always tough because you spend so much money with so many people working. It’s tough on several different levels. You don’t want to fail at something and just be like, “Oh, this was a really big mistake.” A couple hundred thousand dollars maybe in salaries. I didn’t calculate it out still to this day. It’s probably pretty expensive.
Rob: Too painful.
Ruben: Yes. Just a lot of developers working on it for eight months or whatever it was exactly. That’s a ton of money to just say, “Nope. This didn’t work out. Let’s do something else.” It’s tough from that perspective but also for the team. You have the team working on just this one thing and you really sell them on, “This is the direction. This is what we need to do.” Then, having to tell them, “No, this is not going to work. You should do something else.”
Rob: That’s got to be hard. When you talked to the team, did you do it on a group call? What was their reaction?
Ruben: It was on a group call. I don’t remember the specifics, but I remember that they took it much better that I thought they would. I think they were burnt out.
Rob: They were probably relieved.
Ruben: Yes. There was a little bit of relief, basically.
Rob: That’s crazy. Probably some relief for you, too, to make the decision as hard as it is. You let go of the sunk cost, right? The sunk cost was all the time, the money, and your ego of like, “Well, I made a bad call here.”
Ruben: Exactly. Before I actually had that call, it was tough just thinking about a lot. Then after the call, it was just a relief. It’s like, “Okay.” Once you make the decision, once you know you’re starting over, it’s different.”
Rob: Yeah. Wipe your hands together and say, “What’s next?” you turn your sights. That brings the question, now you are building Docsktech. Was it an immediate realization of, “I want to build an electronic signature app”? Or was it, “We’re going to build like how they do Basecamp, 1.0, 2.0, 3.0. They are all project management. They are all just approached differently. Did you think of doing Bidsketch 2.0 that would essentially be proposal software as well and complete with yourself in the sense that Basecamp did?
Ruben: Yeah. That was the next thing. It’s like, “Okay, maybe we should just build this from scratch.” We actually started doing that and spent about six months doing that and realizing that we had to make it backwards compatible and all the stuff. That’s years of work-arounds, codes and all these stuff. This is crazy. This is a lot of stuff.
Rob: So it’s a new code base, but what was the backwards compatibility? Was is like the data model or something? To import in one direction, you needed to adhere to certain standards?
Ruben: We have a feature that allows people to create proposals from scratch using HTML and CSS, so there was a lot of that, just making that old templating system work with whatever we were building, trying to make everything fit. There were just many, many examples of this. This one was a little bit shorter, it was maybe four to six months where it just felt like, “This was going to take years. I think we should go with option three,” which was basically sell more to our existing customers and better serve them.
This was the creation of the electronic signature tool, our new app, Docsketch. It felt like this one’s way easier, this one’s much smaller, doesn’t have that many features. We’re not doing a bunch of what-you-see-is-what-you-get design, development and all that stuff. You are uploading files, your over link fills, sending them out, getting documents signed. Let’s go in this direction.
We stopped again. There were a couple other reasons. Our progress was super slow with the new rebuild of Bitsketch because the team had a Rails background but not a React background. We decided to build this version 2 in React and we started to do that, but they we’re so inexperienced that as they we’re learning more, they were like, “Oh, let’s rewrite this or restart this. Oh, this is the wrong way to do that.” That was not good. They just slowed everything down even more.
Rob: Do you wish you hadn’t built in React or if you were going to do it, you need developers who were verse to it.
Ruben: Going back to that point, the better decision on my end would have been, we either build it with what we know and what we are good at, which was Rails, or we need a new team that is very experienced in React and what the direction that we’re going in.
Rob: That would be a really hard call to make, to fire most of your development team or I guess you would keep someone around maintain Bidsketch, but that would have been a tough call.
Ruben: It would have, but we wasted a lot of money because I didn’t make that call back at that point. Even when we started with Docsketch, it was also like, ” Okay, let’s do this in React. We know way more. We have six months of experience,” which is not a lot. Having a background and managing what development department a lot of developers. This is all the stuff that I’ve come across and had known. For some reason, I just made decisions that, now thinking about it, don’t really make a lot of sense.
I’ve gone back and really thought about that a lot and worked on improving both my decision-making and my ability to change and switch earlier once I recognize that we’re going in the wrong direction.
Rob: Here’s the thing that I have respected about this journey that you have taken, is that you shoot through let’s say 14 months, 16 months, 18 months, whatever of two false starts. It was to upgrade the app and then to rewrite it from scratch. It was super brutal, painful, irritating, but you did it anyway.
During that time, I remember asking you, “Are you impatient? Do you feel stressed?” And you kept saying, “No, I’m not stressed. I just want it to move faster.” But it didn’t seem to bother you the way it would bother me. I would have been super stressed and anxious. There’s just so much. I have such a tough time standing still like that. You’ve said you do, too, that you have a tough time standing still, but what does that feel to you and how did you deal with it? Most of us in our product ownership career, we’ll never stand still for 18 months or however long you did. It’s a real anomaly like how did you manage your own emotions around that?
Ruben: I think part of it has to do with me just being optimistic about my ability to do things successfully, number one. Number two, having spent so much time doing things like SEO, where you have to make these bets. It’s not like ads. You can run ads and immediately as soon as you put money into it you know that it’s working or not.
With SEO, you’re going months without any sign that it’s working a lot of times. Then eventually it starts working and I’ve done that so many times where I’m used to grinding for long periods of time. I was really thinking about this the other day, which is probably a bad thing where having grown up just feeling uncomfortable for a lot of my childhood because of being in bad situations, bad neighborhoods, bad everything, and just having this constant feeling like I’m working towards something and it’s really […] right now, but I know I’m going to eventually get out of it, so it makes it so I can deal with that a little bit better nowadays, but maybe it’s a bad thing.
Now I’m focusing on setting up these trip wires beforehand. Before a big effort, I set an expectation or a deadline or something that lets me know, “Okay, if we are not here at this stage, then either I’m going to take a really close look at stopping, or changing what we’re doing, or something, instead of enduring and grinding.”
You said many times that if I have a lot of patience and a lot of people say that about me, but I don’t feel that. I feel very impatient a lot of times and I don’t remember where I heard this, but that when there’s this mismatch of what you feel about yourself and what other people think about you, that has to do with the mismatch between your internal dialogue—which makes a lot of sense—and your actions.
Internally, I maybe saying something like, “We need to move faster. This sucks.” But externally, I’m projecting maybe something else and just continuing.
Rob: Show up everyday, shipping, getting it done.
Ruben: Right. Getting it done. There are a lot of things that just take a lot of time. I’m good with making progress when it comes to things like that.
Rob: Yeah, it makes sense. Folks want to hear more about your background. You mentioned it earlier, there’s a cluster of episodes that are really popular of the Zen founder popular podcast where Sherry interviewed several founders of their origin story. Yours is episode 25 and you go through a pretty in-depth story of your upbringing which is shocking to a lot of people and is just super interesting tale to hear, how you grew up, and how you came to start your own company.
I want to get into Docsketch, but I have one more question before we do that. Did it ever cross your mind to sell Bidsketch and just start fresh with a new app or was your plan C was to sell more things to the Bidsketch audience? Was that too compelling to make you consider selling it?
Ruben: I don’t think I ever seriously thought about selling Bidsketch because even if you think about how I started Bidsketch, I started Bidsketch when I had a full time job. I just like the approach a lot better of not starting from scratch like some people who quit their jobs and they do their new thing.
I think I would be stressed if I sold it and I had a bunch of money in the bank, but that money was going down and nothing was coming in. For me that’s different and I’m not sure why.
Rob: I’ve been there and I did the same thing. I had HitTail, I didn’t sell it, and then started Drip because I didn’t want the bank account going down every month. I was trying to run it on the side and have it throw off cash and […] the asset because then you can have your foot on two islands. You don’t have to swim to the other one and you can do it. That makes sense.
I’ve been impressed with how you approach the process of building Docsketch, not from a technical point of view, but just the thought process you went through. You started with the marketing and in this day and age, obviously you want distribution first and you want a channel, but you were way ahead of it. Before you had mock ups, before you guys had really started digging under the code, you had this whole plan of how you were going to build up this momentum and this marketing engine. Can you talk about how you were thinking that through?
I’m specifically thinking, obviously about the organic, like you are really good with SEO, but also there’s this whole thing about free plan and getting people to use something, any type of tool first and then turning that later into a Docsketch customer. I really think that, that would be interesting for folks to hear about.
Ruben: Building an electronic signature tool was basically starting from scratch. Before building it out, I just spent some time figuring it out how am I going to get customers because I’m not sure how much I’m going to be able to leverage the Bidsketch audience and I don’t want it to completely depend on that either. This is a much bigger market. Much bigger market like DocuSign is the biggest company in the market and they are at $600 million a year maybe more. They’re way more signature electronic apps in that category. There were a lot of things that appeal to me.
Freemium is being done by a couple of them, so I also wanted to play around with freemium and add some viral traffic and stuff. The first thing that I did was just look at, okay if we are starting from scratch, do some analysis in the organic traffic side, what are people searching for, what’s there?
Okay there’s a lot of traffic that we can get. A lot more than the proposal category. Then look at what the competitors are doing, not just look at what where they’re getting traffic, where’s it coming from, but I also did interviews with a bunch of DocuSign and HelloSign customers and this was targeting them with Twitter ads, sending them to a survey. If they were a recent paying customer, bribing them with an Amazon gift card.
Also, going to review sites and just analyzing everything that people liked and didn’t like about each of the competitors, creating a document with all that information, trying to figure out where are the gaps, what type of product would we need to build to position ourselves favorably in this market, and how can we do it in a way where some of the traffic that opportunities that I see, we can flow into a product. That was the high level of the whole process.
Rob: A couple things that you touched there. I find it fascinating that you’re going on a free plan especially with one of the very popular essays on my website from August 2010, was a guest post from you called Why Free Plans Don’t Work. I just think it’s hilarious that nine years later, you are actually going all in on a free plan. You want to talk about how your thinking changed?
Ruben: Back then, I did freemium with Bidsketch for about a month. It was a very short amount of time and with freemium, that’s just too short to know whether it’s working. It wasn’t until later that I realized a bunch of these things. Then, I didn’t know how freemium worked and what types of products would be best for freemium products.
Looking back, some of the reasons why it didn’t work for Bidsketch and for many of the proposal apps that I’ve tried—it hasn’t worked until this day—is because the markets is okay, but it’s not that big. The time-to-value is too long. People have to create documents, set them up, design them, and copying content. That just takes way too long. Ideally, you would have a much shorter time-to-value, like with Docsketch, you upload people’s documents, add some fills, send them off, that’s it, you’re done. Big difference.
The market is really big with Docsketch. It’s perfect for that. You did have a bit some of the viral stuff going on with the proposals, but given that the market is small, that you would need a lot more volume for it that work, it didn’t make sense.
But looking at Docsketch, the electronic signature space just has a lot of the things that will help a freemium approach work. In the early days, really you will make more money not doing freemium. That’s another thing about Freemium. It’s oftentimes a longer-term bet and like content marketing, a lot of things build that up.
Rob: That makes a lot of sense. It’s an advanced distribution tool. It’s not a pricing strategy, it’s a marketing strategy as people say. It’s something that, in your early days, when you’re trying to bootstrap and get to $8000–$10,000 a month, you can quit your job. I do think freemium is detrimental. It’s a long-term play and you have the luxury now with having this other app that is funding you and your whole team, that you have a long-term horizon to play with.
Ruben: That makes a big difference. The situation I was in was totally different. That time, I needed revenue as fast as possible. Now, the strategy that I ended up going with free trials or getting people to pay up front first is really good; worth well for that. Being in that situation is not […] for trying out freemium.
Rob: Yeah, and you spent quite a bit of time getting pages out there with organic traffic to it and the product is quasi-launched now. I feel like you’re soft-launched, but you’re not doing heavy marketing.
Ruben: Yeah. Officially, it’s open now. This was the deal, a couple months back we did an AppSumo deal. I wanted to leave it in early access when we did the deal, but they required that we open it up and let people sign-up and pay before we do the apps, which makes sense. They don’t want to be selling something that’s an early access. We did the deal. Lasted a long time, it was very different from when I’ve done it in the past. It was like three weeks.
Then I put it back into early access up until a couple of weeks ago to where I opened it back up. I felt like we have enough features at this point and we’re getting a lot more traffic. It’s just ridiculous to be an early access with the amount of traffic that we’re getting and not trying to take advantage of some of that. Last month, it’s getting more traffic than BitSketch. In a few more months, at that pace, it’ll double what we’re getting there. The strategy is different.
Rob: It’s such a larger market, right? That’s how I view it.
Ruben: It’s a much bigger market. There’s just a lot more opportunity there. I just know more now than I did back then. I’m having an easier time executing on that part.
Rob: Stair-step approach. Small SaaS up to a big one. I like it. Talk about the AppSumo deal. I actually get asked relatively frequently from folks who run a SaaS app and are considering an AppSumo deal but don’t know how to think about it and don’t know if they should do it or not. The revenue share is not huge. I believe it’s 70-30 or 80-20, where you as the founder get 30%; you get the smaller of the two. It’s really quite a cut that they take. How did you think through that because it sounds like from what you’ve told me it was the right choice for you. Why was that?
Ruben: I feel like it was a really good choice for me. Given my context of doing freemium right now and still being from a positioning standpoint, we’re not focusing on any one segment yet, even for marketing. Leaving it open, trying to learn, and see where are the most valuable customers, so that we can focus on that. The more volume we get, the more different types of companies we can get using the products, the more learning we can do the better. Then we’ll just figure out who the best types of customers we should go after are, and maybe chain positioning or maybe just put our marketing efforts in there.
AppSumo, I just saw it as a way to get a lot of different companies using the product and a lot of them that were using existing products, like DocuSign in getting a lot of feedback from them. There’s a tricky part to it when it comes to getting customers from these deal sites because a lot of the feedback that you get is just not good. You have to be very selective as far as who you’re listening to.
The framework that I use for this was anybody who’s seriously using another product and is paying a decent amount of money for the other product—they have a team of 10 people and they’re paying a couple of hundred dollars a month to use an existing product, and they’re very motivated to switch—those are the people that I’m going to listen to a lot more.
We found out that there’s some really very valuable segments that we hadn’t encountered yet through the deals. That was helpful. We got some very good feedback. Since they were highly motivated to switch because they got such a good deal and they were spending a lot of money with the existing tools, they were willing to tell us what’s really important to them before they switch, like, “Okay. We want this snap. This one thing as the thing that we really need to switch.” That helped.
Rob: Super important to have that. Those learnings are valuable and they’re hard to get in the early days of the product.
Ruben: They are very, very hard to get. Also, I almost think of them as freemium users because just looking at the stats for the amount of documents that they’re sending. They’re sending a lot of documents a month because people who get documents see that they’re sent through Docsketch, there’s some of that viral stuff going on that helps us. That helps us with word of mouth, that helps us in a lot of different ways.
It doesn’t work too well with companies that have really high support per customer. That was another thing. With Docsketch, it’s just a low support app. We can get a bunch of people here, that’s another reason why we could do freemium and it’s not that big of a deal. I know a lot of other SaaS founders that they’re in the hundreds of customers and they need a full team of support people. Between Docsketch and BitSketch, we’re serving thousands each. One person’s fine when support person, not a problem for everybody.
Rob: I’m envious of that. Certainly with Drip, we were one of those where we need a lot of support people because it’s a big complicated product. It can do a lot, but as a result, people have a lot of questions.
Ruben: Right, and Drip is a really good example. I’m not sure I would do an app […] for that. I would have to design it very carefully, but I probably wouldn’t do it because you have expenses of how much it costs each email to get sent out there. It’s just not the right type of product for that.
Rob: Yeah, and that’s the thing. Just like with freemium, AppSumo is something that can work for you, but you need to know the criteria and you need to be smarter about making the decision. It’s not an always yes or an always no. It sounds like you got a lot of learnings from it, you got good feedback, certainly there’s some SEO help there because you’re going to link to from some places.
Ruben: Yeah. You get branded searches, they shoot up a lot, and that helps on the SEO front.
Rob: And some cash out of it. Typically, if you have a successful AppSumo deal, you can make tens of thousands of dollars that comes to you and that can be a game changer that allows you to hire that next developer or put more money into some type of spend.
Ruben: The average they said was somewhere like 2500 buys. Given the average payments and all that stuff that they do, that’s more likely above $30,000–$35,000 somewhere in there.
Rob: Dollars for a company that’s running the deal.
Ruben: Yeah, after AppSumo gets their cut and all that stuff. So, that helps. You can’t count on that. It’s just a one time thing. In my mind, there has to be a lot of other benefits besides the cash.
Rob: That’s right. To start closing us out here, someone might be listening to this thinking, “Wow, you’re nuts to go after such a competitive space.” It’s huge, but in terms of a lot of potential customers, I can throw a rock in hit an electronic signature app. One of the advantages that you have is you’re good at organic. Frankly, you’re just good at marketing. You’re good at copywriting, you’re good at testing and looking at all the things.
Let’s assume you can out market some of them, or all of them to a certain extent in different areas. You know you can get channelling, get people in. But there’s this other thing that you really looked at pretty carefully and I feel like you’ve been very deliberate about it and it’s figuring out a point or two of differentiation.
It’s something I find a lot of founders don’t think about enough, they either want to build something completely novel, in a completely new category which is very, very hard or they will exactly replicate another tool. I find that both of those are very hard ways to go. And if I were a beginner, for SaaS app, I would try to build a tool and figure out one or two key points of differentiation. Bill in an existing category in a sense like email marketing software or electronic signature which is what you’ve done.
How did you think through the differentiation? What are your one or two points where you think you’re really differentiated from HelloSign, DocuSign, and all the other myriad of tools?
Ruben: This evolved over time. We had a couple of pretty good ideas and things that some people are excited about, but then either the technical side just wasn’t going to work out and wasn’t going to be as smooth as we thought it was going to be. I had to look at building out features that wouldn’t help us stand out and change that about three times for different reasons. But we didn’t go too far into it. It was just like, “Okay, I think I found something. Let me run some screenshots, get some feedback, or things like that and then see if this is something we want to move forward to.” And then after just getting some feedback, doing a little bit of testing, realizing that, “Hmm. This is probably not the way to go.”
One of the ideas had to do with giving better guidance to people who are filling out the documents on the other side. It was fresh, new, and people got excited about it. Everything looked good about that, but then, when it came down to the sender would have to do a little bit of extra work, nobody wanted to do a little bit of extra work. The thing was just not going to work, that type of positioning.
Really, it just came from looking at all the products that are out there, the ones that people most know about and then finding out what don’t people like about these products. Some of that research took place in T-2 Crowd and all the other review sites that are out there where you can find just tons and tons of reviews. This is going through hundreds of reviews, putting them all on the spreadsheet, categorizing them, figuring out what the patterns are there, and beyond that interviews with people that are paying for these products.
Like I said, there are a lot of different ways of doing that. We leveraged the BitSketch email list a little bit for that, but then we also just did add some call to people that we didn’t know, bribed them with some Amazon gift cards and all that stuff, and just finding out where the opportunities were.
We found a few areas and the next step was, “Okay, what could a few solutions that are positioned a little bit differently, what could they look like?” Nowadays, our positioning is more focused. We’re not completely there, but we continue to move in that direction. A lot of attention is paid on the uploading and setting up document side for these electronic signature tools. Our focus, and where we continue to add features and make it better is on the recipient side, on the people that are receiving the documents, making sure that they are able to fill them out faster, and making sure that they have a better experience that what’s out there.
Rob: Yeah. Your headline is ‘Sales documents signing that cuts turnaround time in half.’
Ruben: Right. From a position […] standpoint, the benefit going back to the user is that because we’re focusing more on the recipient side, they’re going to get their documents back faster.
Rob: That’s good. When people are zigging, everyone’s zigging, and you’re going to zag. That is such a nice differentiator where it’s just not a single feature. We have this one feature that […], our whole focus is this other thing and as long as that resonates with enough people, you’ll own that positioning, you chew away at that corner of the market.
Ruben: Yeah, but at the same time we may learn that there’s something that’s more valuable for us to focus on and build out and position ourselves in a different way and if we learn that, we’ll change again.
You did a really good job of this with Drip. I remember when you start off with little widgets and you changed from that to just marketing automation which was way more valuable. This is a mistake I see a lot of people make is that they’ll get stuck on their initial thing. Right now, we’re positioning that way, but we’re losing the position that way. We’re open to seeing what’s more valuable.
I feel like a lot of people just stop listening. They just feel like, “Okay, this is what we are, this is what we do, and that’s it. If it doesn’t work, what’s wrong?” and they don’t revisit some of that fundamental stuff, some of the core stuff.
Rob: Something I really like and I’m impressed with as I watched your entrepreneurial journey in the past 10 or 11 years is you’re super meticulous and you’re disciplined. That’s what this whole story as we talk through it with the transition to Docsketch. You made hard decisions, but you did them with a bunch of research and you’re meticulous in figuring out that it was the right choice. Then, when it was the right choice, you had the discipline to make the hard call.
This is the same thing, this positioning. You have been meticulous about figuring out this is the right way, you’re going to be disciplined to stick with it until you get another answer and when you make that choice to change it, it would be the right call, at least given the information you have.
What that all leads to is, there are certain founders that I’ve watched become successful, that I question if they could do it again. Maybe they got a little lucky with something. You’re not one of them. You’re going to do it twice and you could do it five times if you wanted.
You look at David […], Jason Cohen, Heathen Shaw, Dharma, we could list the people who have done it over and over again and there is something about them. Maybe they’re not specifically meticulous and disciplined—that happened to be your trait—but those are the traits that mean that you could do this at will, you just figure out the space, you would experiment, you put in the time, you don’t look for trails, whether […], you use the data to make the best decision you can, and then you push forward. It means it’s just repeatable and you could do it over and over.
That’s what I hope folks listening to this interview take away.
Ruben: Thanks. That’s a big compliment. I do respect people a lot, that are able to do it multiple times. That’s one of my goals, is just to basically learn how to do that for myself. It’s important, or maybe not. Maybe if you get lucky and it’s a really big hit, who cares? You can make a lot of money and sell it, it’s not that big of a deal.
Rob: Yeah. Funny, when I say getting lucky, I’m not thinking of anyone in particular, honestly. I just know that there are folks where it’s like, yeah, I got really early to a space and then they struggle after that or whatever. In any case, we’re at about time. If folks want to keep up with you, aside from hitting docsketch.com to check out what you’re up to today, where they can keep up with you online?
Ruben: Probably Twitter. I know you love Twitter.
Rob: That’s my favorite.
Ruben: @earthlingworks on Twitter, just Ruben Gamez. That’s probably the other place to keep up with me.
Rob: Sounds great, man. Thanks again for coming on the show.
Ruben: Thanks for the invite.
Rob: It’s always a pleasure to talk with Ruben. He’s been on the show a few times. If you Google his name at our website, you’ll find those episodes. If you have any feedback for me, I’d appreciate if you leave a comment, send an email, the firstname.lastname@example.org or tweet it out because I’m investing more time into the podcast at this point, and I’m being very deliberate about trying to change things up a bit while Mike is on hiatus. I’m just curious to know if it’s working, if it’s impacting you, if it matters, if it makes a difference, because obviously, we’ve had a format for 449-ish episodes and that is something that we can go back to really easily and it takes a lot less time, but I’m curious if there is more value in the new approach that I’ve been taking with it.
If you have a question for the show, 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 by searching for startups and visit stratupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob talks with Tracy Osborn about things she would of done differently during the 9 years she ran WeddingLovely.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, I talk with Tracy Osborn of WeddingLovely about things she would have done differently during the nine years she ran WeddingLovely. This is Startups for the Rest of Us Episode 455.
Welcome to Startups for the Rest of Us, a podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob, and today with Tracy Osborn, we’re going to share our experiences to help you avoid the same mistakes we’ve made.
Welcome to this week’s episode of Startups for the Rest of Us. On the show, we talk about building startups in an organic sustainable fashion and while we are ambitious founders who want to grow our companies, we don’t do it at the expense of our life.
We have many different show formats. Oftentimes, we will talk about tactics and teach things. We answer listener questions. We have some founder hot seats. Today, I’m doing an interview, but it’s more of a conversation with Tracy Osborn, founder of WeddingLovely which she ran from 2010 until late 2018. I believe she actually shut it down technically in early 2019.
Tracy and I now work together at TinySeed. She’s the program manager for the accelerator. We’ve known each other for several years now. She spoke at MicroConf in 2016, and I believe that was the first time we met in person. Obviously, we’ve gotten to know each other much better over the past three or four months as we’ve worked together on TinySeed.
What I like about Tracy’s story is that it really is a story of high highs and low lows, from teaching herself to code to bootstrapping the company in 2010 and then going through two accelerators—although one of them really didn’t put much money in—winding up going through 500 Startups. WeddingLovely was really hitting on all cylinders and then catastrophic stuff happens. It’s fascinating to hear her thought process of some regrets, things she would have done differently, and other things that didn’t turn out, but she made the best decision she could at the time.
I really appreciated Tracy’s honesty and transparency in the interview today. It makes for an interesting story, like several of the guests we’ve had on recently who were able to dig into decisions they made, things they might have done differently, as well as things that they did do right, and the learnings that they took away from running a startup.
As a quick background, WeddingLovely was a blog and a wedding marketplace that matched up wedding vendors with couples who were going to be married—the engaged couples. With that bit of background, we’ll take you right into the story. Thank you so much for listening. If you enjoy this interview, I’d really appreciate it if you’d reach out on Twitter. I’m @robwalling and Tracy is @tracymakes. Let’s dive in.
Tracy, thanks so much for joining me on the show this week.
Tracy: Thanks for having me.
Rob: Listeners already have some context about WeddingLovely and how you started it. I want to start by looking at the decision you made to move from bootstrapped to taking $50,000 in funding from 500 Startups. What led to that happening and how did you make that decision?
Tracy: That was a really tough decision because before 500 Startups happened, I was fully in the bootstrapped camp. This is 2011 so TinySeed didn’t exist. All these other alternate funding or different paths, they didn’t exist. It was like, “Are you going to do a full funding route or are you going to go bootstrapping?” That was it. There was no middle ground.
I was fully in the bootstrap camp. I was already following Patrick McKenzie’s (patio11) writings about this at the time. I joined the Designer Fund in San Francisco, which is totally different than how they are now, but at the time, it was a small accelerator-ish thing where we got a really small chunk of money and we just worked together for three months meeting up every week just to work on our projects together.
One of the Designer Fund founders was a mentor at 500 and he decided to set up interviews with 500 just in case for everyone who was in Designer Fund. For me, I was like, “Okay, this is a good practice. This is great for me to go in and practice pitching and whatnot.”
It was a really interesting experience because I met with Dave McClure and Paul Singh, who I don’t think is involved with 500 anymore, but I met with Paul first. Paul was like, “I’ve seen your articles. I’ve seen you talk about WeddingLovely and why you’re building. I think you’re awesome.” He called me a cockroach which I thought was awesome. He’s like, “You’ll never die, you’re persistent, you’re in there. You’re in.” I was like, “Wow, that was easy.”
Then I sat down with Dave McClure and I gave my presentation. He said, “All right, we’ll get back to you soon.” I was like, “Oh, Paul already said I’m in,” and that totally threw Dave McClure off because I didn’t talk about this. I totally threw everything off for Dave McClure and probably what they were planning.
At that time, I wasn’t sure I was going to take it yet, but it was a thing where it’s like, “Okay, cool. I have this opportunity to go through 500.” My husband had just gone through YC. I knew I was really into bootstrapping beforehand, but it was like, “Okay, I have this offer on the table. Let’s see what happens.” That was the thought process about it.
Not everyone gets this offer, this chunk of money. I wasn’t ready. Hindsight being 20/20, that’s where I hesitate right now because I look back at the decision and be like, “I should have thought more about this. I should know more about what goes into a funded company, the growth that’s required when you’re a funded company, when you have investors, what’s involved with raising a full series A,” that kind of stuff. But it was, “Okay, this is going to be a learning experience. I have this opportunity here. I watched my husband go through YC. Let’s do it.”
Rob: Yeah, the hard part that I see with the 500 Startups investment was that they only gave you $50,000, but it came with the expectation of, “Now, you’re on venture track.” It’s not enough money to act like a funded startup in my opinion, but it sounds like you wanted to, or felt the pressure to start acting like a funded startup.
Tracy: Yeah, for sure. There are so many other complicating factors. My time in 500 was I did not utilize it as well as I should have. I’m taking a lot of stuff I’ve learned, actually, from being in 500 to what we’re building at TinySeed. Some of it was, I was a solo founder and complicating factors, I funded another wedding company the same time in my batch. They also required you to get desks at their space and they’ve set us across from each other and we were not friends. I want to be friends with them, but the other people were very aggressive. That’s like a stereotypical startup, that bad stereotype you might think of a start-up founder. That’s how they were.
Rob: Something from HBO show Silicon Valley or something.
Tracy: Exactly. We are not friends. I just felt so awkward being there with a competitor and they actually pivoted more into my space during the batch. I didn’t show up to any of the networking stuff. I didn’t do anything like the evening stuff. I didn’t really connect with the other founders. I just decided to stay in my own little world, heads down, work on things, hired someone at that time, brought her on.
This is a time that I found a co-founder, which we can talk about later, but in terms of 500, I didn’t really involve myself in the program. I didn’t really utilize the mentors that were there. I didn’t use any of the help that 500 gave me and I look back at that time being like, “Wow, I wish I could redo that,” because my social anxiety just came into play there and I didn’t use it as well as I should have.
Rob: Right, because as we’ve heard from so many people in the TinySeed batch, the community and the mentorship is at least as valuable, if not more valuable than the money they invest. It sounds like you feel you squandered that opportunity a bit.
Tracy: Absolutely. That working is so important to one’s career and the connections I could’ve made during that time. Who knows where I could be right now? Maybe the same, but if I use those connections… There are some people in my batch that have gone up on to really big startups, really amazing things. Those are the kind of connections that would have been really awesome if I was trying to find a job somewhere, but I’ve completely lost contact with them. I wasn’t friends with them during the batch. Who knows what would have happened? I look back at that time. If I could have redone the accelerator program, absolutely being involved in using the opportunities that are available, it’s something I didn’t do and I regret that.
Rob: Do you regret the decision to take the funding?
Tracy: I would say no. We can do a whole podcast on how insane the wedding industry is. I talked to a lot of people who are jumping into the wedding industry because they look at it as this industry where a lot of people are spending a lot of money and therefore is going to be really easy for someone to build a startup and just take some of that money. If you’re spending $30,000 on a wedding, of course, they’ll pay $10 for an app. It gets way more complicated than that.
With wedding history, because there’s so much competition, there are so many startups, so many people are trying to compete for people’s attention, and you have a 100% churn after a year because all these people are dropping all of your platforms, it means that advertising is a really big thing. Advertising is really expensive and that chunk of money did help. I could apply it to things to help boost the business as absolutely necessary in the wedding industry if you’re targeting people who are getting married.
That money was used. I also used that to hire someone; that was great. I did learn a lot from being in the program. I look back on it being like, “Okay, that was a really good learning experience and I wish I could redo it, but I don’t wish I did something differently,” I guess is what I would say. It wasn’t perfect. It wasn’t a perfect experience, but I learned from it. For better or worse, that’s how I got to where I am right now.
Rob: At the end of the program, there’s a demo day and that’s where folks essentially raise their seed round or preseed round these days, I guess. You decided not to raise a round. I believe you had a co-founder by that point. Do you want to talk a little bit about the co-founder and then a decision you made to pause funding right as demo day approached?
Tracy: The roller coaster of WeddingLovely; this is the peak. I was in 500. Again, I wasn’t using the program as much as I could have, but at the time, I was like, “Cool, I’m doing everything right.” There’s this absolutely amazing awesome person, Julia Grace. I believe she’s the Director of Infrastructure at Slack now. She reached out to me asking me if she can become a co-founder. I was like, “This person is amazing. She’s an amazing engineer. She would be a great CTO,” I was like, “Absolutely, come join WeddingLovely.”
Julia joined, I was in 500, and at the time, I was traveling in New York and Kellan Elliott-McCrea was the CTO of Etsy and he invited me to come into Etsy for lunch. I was again, cloud nine. I’m kicking ass, everything’s going awesomely, CTOs of Etsy are inviting me to lunch. I go over to Etsy for lunch and he drops the bomb on me saying, “Hey, let’s talk about acquiring WeddingLovely,” and I was just like, again, cloud nine, “Oh, my God, I’m doing everything right.”
The demo day was right around the corner and Julia and I decided not to really pursue it because we wanted to focus on being acquired by Etsy because I loved Etsy. Etsy would be a great fit for WeddingLovely. What they were doing at the time were switching some focus into wedding so it would have been a really awesome fit for both of us.
I did do demo day through 500 and I got to say, I bombed the first two ones. I’m much better at presenting now, but I look back on my first two pitches at demo day. They gave us two minutes to be on stage. It’s really stressful, there’s an audience of people, and I did not do well for the first two. By the third one that we did in New York, I finally got my stride. But I was like, “Oh, it doesn’t matter because I’m going to get acquired by Etsy.” Long story short, that didn’t fall. That fell through, we can explore that in a second.
Rob: I was going to ask, you didn’t do well because you weren’t preparing, you weren’t focused on it because you were counting on Etsy acquiring you, is that right?
Rob: Do you have a regret around that of just knowing most acquisitions fall through? But it doesn’t feel like that when you’re in conversations with them. It feels like it’s going to happen. Do you feel like your judgment was clouded there or do you feel like you made the right call?
Tracy: Again, hindsight being 20/20, definitely judgment is clouded. I’m just not as good as a public speaker as I am now and I know that I didn’t prepare enough. It’s a silly thing to think about, but I was like, “Oh, just roll up,” and I just gave my little two-minute presentation.
Speaking of, two-minute presentations are the hardest thing in the world. It’s really hard to give a proper presentation in such a small amount of time. It’s really hard to hit all your marks and stress about making sure you remember every single moment in that presentation because you have such a small amount of time. There’s a lot of regrets for that.
Again, that’s also an opportunity. If I kicked it out of the park, even though I didn’t decide to raise money then, but the connections I could have made in that audience, of the VCs who were there, the people I could have met, the people I could have connected with is another thing that I regret not doing. I’m a huge fan of networking and meeting as many people as possible and becoming friends with as many people as possible because those are the things that are going to transform one’s career down the line.
A lot of the things that where I am right now is just because of connections I made beforehand. Like this TinySeed thing is probably because I met you at MicroConf and I spoke at MicroConf. Who knows what’s going to happen down the line? I regret not trying to pay attention during those demo days, making those friends, making those connections, and just being consumed by anxiety, making my presentation, and then running out.
Rob: I’ve done very similar things, especially early on. This is probably 10 years ago, but I would go to conferences. I’m an introvert and I don’t like meeting new people. I get stressed about it, I wouldn’t meet the other speakers, and I was anxious to go talk to people. I know how that feels.
I learned from that pretty quickly because I saw other people having those relationships and I saw what they did both for their sanity and well-being, but also for their businesses and just the opportunities that it affords. Saying yes to things that scare the […] out of you often will lead to things years down the line, as you’re saying, that you never could have predicted but that they changed the game for you.
I literally look back at my history. Not to go off on a tangent here, but I had a very similar experience where I had never met Jeff Atwood of Coding Horror. He and I blogged, we used to email back and forth, and we’d link to each other’s blog post. This was 2005–2007. I never met him in person.
He was running an event and I was super terrified, but I went up and I was just like, “Hey, man. I’m Rob Walling.” He’s like, “Hey, I love your blog,” and we were talking and he’s like, “You go into business of software?” I was like, “No, I’m not really good. It’s not my thing.” He’s like, “You should go. Let me just link you over to Joel Spolsky.” Just that step moving forward, these are the things of overcoming fears and taking risks is really what this is about, even though it’s hard.
Tracy: I have something similar. If we’re going to go even farther back in time, I feel like my career directly leads from my university graduation. I was graduating with an art degree, I was really into web design. All my classmates were into product design or physical mediums. Our keynote speaker at our commencement was a designer from Apple, came in and speak. I was like, “Whoa, a web person,” she’s talking about web and stuff. I talked to her afterwards—this was 2007—and she said, “If you want to get into the web industry, you need to go South by Southwest,” and again, I have so much anxiety. I could tell in our podcasts about how much social anxiety I have.
I did a keynote at DjangoCon US about it and it was the most terrifying thing. I took her advice and I booked myself a hotel room. I went to South by Southwest alone, didn’t know anyone there, and it’s so overwhelming. Most of the parties, I just walked in, panicked, and walked out, but on the flight back, I happened to be sitting near some attendees. Those people became my friends in the Bay Area, that introduced me to more people that I went to conferences with, and that’s a direct line to where I am right now.
Rob: There’s a concept that Jason Roberts on TekZing talks about what’s called your Luck Surface Area, increasing your luck surface area by doing a lot of things. I love the little quote from Thomas Jefferson, “The harder I work, the luckier I get,” but this is different. It’s not necessarily hard work unless you consider just getting over your own fears is hard work, which I guess I probably do, but it’s like taking risks often equates eventually. You take enough of them and it gets you to some “lucky outcomes” but they really aren’t luck.
Tracy: Right. On the anxiety topic, it still rears its head now, but 10 years of actively working on reducing it and making sure that I’m going out there and being open to these opportunities has been hard, but it’s been worth it. I’m glad that I’m a lot better now.
Rob: To resume this story, you were talking to Etsy. You weren’t putting much effort into the fundraising, into preparing for demo day, counting on that Etsy thing working out. They did ultimately make you an offer. What was that like when you received the offer? Was it via email? was it a phone conversation? Talk me through the emotion of that.
Tracy: They stepped back one step. It was funny because I had the final meeting in New York, and again, cloud nine, we’ve got flown into New York, put up in a really fancy hotel. I’d offered a non-fancy hotel and they’re like, “No, we’re going to put you up in a fancy hotel.” We had the whole day’s meetings, met with Chad Dickerson, went out to a fancy dinner afterwards with me and Julia and all the top level team. Again, I’m just like, “I am kicking butt.”
Throughout this time, I’m talking with 500, Dave McClure helped me out, getting me prepped for what happens in an acquisition, how to compose everything, and how to compose myself. I had other advisors in the Bay Area, they’re helping me figure out valuation, didn’t want to give the first number ourselves, but I wanted to have a good range of what a good valuation for my business would be so I don’t make bad decisions. I thought the prep work was great. I did everything right for that.
But it came in a call and it was the financial person. It’s not the CFO. It was actually a financial analyst or someone at Etsy. It was a call, sat down with me and Julia, and they gave us a number. The number was one-fourth of what the lowest valuation all of my advisors said that WeddingLovely was worth, especially considering that Etsy had told me that they were going to keep the website up. So, it wasn’t just going to be an acquire-hire or they were going to use the properties. I was like, “Okay, thank you.” Don’t say anything on the call, hung up. Julie and I are like, “Oh, crap.”
We went back and forth and like, “Okay, it’s a negotiation so we’ll just give another number and see if we can meet somewhere in the middle. We sent them back an email saying, “Thanks, that was not what we’re looking for. Here’s what we actually think the business is worth,” they responded with—completely unexpected; I did not expect this— “Okay, it does not look like a fit. Goodbye,” which is devastating because I expected this whole negotiation process and it was so weird. It’s so weird to me today that’s how it happened and all of my advisers in the Bay Area were like, “What is Etsy doing? This is not how an acquisition process is supposed to go.” We just went through all that effort and it just went away. It wasn’t my counter was outrageous.
So, that was weird and really devastating. Like I said, we didn’t do the full fundraising process when we had the best time for it, which was demo day, we didn’t follow up any of those meetings.
Now, this is two or three months afterwards. Our momentum has stalled. There’s no big 500 Startups demo day anymore. It was like, “Okay, what do we do? Do we launch a new product? At launch of that, do we then raise money?” Then it got really confusing, really weird, very depressing, and very crazy. That was around the time that Julia decided that she wanted to move on to other opportunities. This high that was on before just free-fell. It was horrible. It was the worst part of the business.
Rob: Just a couple months, it just went from the top top to the bottom bottom. Looking back, do you wish you’d taken Etsy’s offer? Have you ever thought about that? Even though it was low, it wouldn’t have made sense at the time. If you had, everyone would have been like, “You’re nuts.” But what if you had? Do you think that would have been a good thing?
Tracy: Oh, I go back and forth on that all the time. I can’t say numbers, it came out to being a hiring bonus essentially. If I’m going to be a proper startup founder, I’m glad I did not take it because that was a ridiculous number. Everyone agreed that was a ridiculous number and I shouldn’t take it. But having that stamp of approval, that, “Oh, I got acquired by Etsy,” on my resume, what doors would that have opened? Because people just look at those titles, that achievement, and then assume you’re so much more awesome than you actually are, which I wish I had that. I wish I had an acquisition on my record.
Working at Etsy probably would have been really great fun. I would have avoided that devastating drop of what happened afterwards with Julia leaving, I had to layoff someone. That’s when I switched the business back to bootstrapping because there was no way I was going to be fundraising at that point. I just gave up on it.
The way that WeddingLovely was built, I could just put it on autopilot. It’s at that point I was just like, “Okay, business, go do your thing and I’m just going to go over here in a corner, curl up, and be really sad.”
Rob: You’re at the highest point and within a couple of months, you have lost this acquisition offer that you really thought was going to come through. Etsy essentially walked away from the table which is surprising. In different acquisition talks that I’ve had, companies have walked away from the table, but they’ll come back a couple of weeks later. Did you expect them to do that or when they said they were gone, you were like, “This thing’s done”?
Tracy: It was a while ago. I’m trying to member exactly what happened, but I know that the feeling was this thing is done. We had an advocate at the company and we reached out to the advocate. He was like, “This is weird. I’ll get back to you.”
What happened in the end is it sounds like there was some weird miscommunication. Something happened on Etsy’s side that I am not privy to, but something happened on Etsy side where they’re like, “Wait, this is a bad decision. We’re not going to do it,” and it wasn’t how you do with WeddingLovely. Something with financials or something, but it’s just like, “No, we can’t do this right now.”
Rob: Wow. That falls apart and then Julia leaves shortly thereafter. What is that like? When Julia calls, or emails, or however that happened, how does that make you feel? Obviously, there’s got to be some despair and stress, but were you at that point thinking like, “This isn’t going to work, I should just shut this down, everything’s falling apart”?
Tracy: The day Julia sent me an email and saying, “I’m going to come to your house to work.” We didn’t have an office. We had an office for a little bit in Mountain View, but at the time, we shut it down also because everything was free-falling and she asked to come over to my house.
We sat down at my house and she was like, “Okay, I’m just going to open up with this.” I figured the exact words she said, but essentially it was like, “This has been a really interesting experience, but I’m going to move on to something else.” I was […] back, I did not expect that, and I think, “Okay, maybe you should go home now. I need time to process this. Thanks for driving all the way down to my house.” She left and I walked around the neighborhood with my dog just dying, just like, “Oh, my God, what just happened? I can’t believe this happened.”
I was really bad at Julia for a long time and I’m not mad at her now. But at the time, it felt very personal. It was very much she didn’t believe in me. A lot of it, a lot of the business, a lot of WeddingLovely, a lot of it’s my personal mistakes I’ve made as being the founder, the person who started as “CEO,” and that was never my title, which is weird. There’s a lot of mistakes I made, but I took it so personally and I did not like her, I was so mad at her for so long, but we’re friends now.
It was hard not to take it personally. It’s hard not to take the company failing personally. That’s a lot of the reason why I didn’t shut it down because I was clinging to this idea that I’m not a failure. If I shut down the business right now, then it’s me admitting that I’m a failure, that everything fell apart, and it’s all my fault. By keeping the business up, it was just like, “No, I’ll keep growing. I’ll keep building the business.” It’s still going on and it’s still making me money. I’m glad I built it in a way that I don’t have to continually spend marketing money on it because it was a marketplace. The marketplace part was pretty active at that point, so I had these businesses working with me. It was just me just trying to prove to the world that I can still make WeddingLovely a success.
Rob: I guess the question that comes to mind is, Julia was with you for eight months and she was a co-founder who came on two years after you started the company, It’s all hindsight again because you thought it would work out, but do you regret that decision of bringing a co-founder on? Not Julia. I mean, you’re friends with Julia, she’s a rock star so not for her in particular, but do you think this would have been better, easier, different if you had just not evaluated the idea of taking a co-founder on?
Tracy: Hindsight being 20/20, I wish that I was like, “Okay, I’m going to stay the founder, but you can be the CTO,” because that would have switched something in my brain. A lot of my being so offended about her quitting was like, “But you’re a founder. This is supposed to be your baby,” but no.
Because she started so late, it’s not her baby. It’s my baby. I built the first version of all the websites. I built everything from scratch myself. Of course, it’s my baby and she came in and she updated some things, she built some things herself, but she didn’t have that personal feeling like I did.
It was a disservice to everyone to call her a co-founder when it’s CTO or some of these other titles would have been a better fit. Then when she left, mentally, just like a weird logic thing, it would have felt a little better, I don’t know. That’s how I feel about it. You can’t bring a co-founder a couple years in. They’re no longer a “founder.”
Rob: I agree with that. The title is the issue here and I don’t think bringing Julia on was a mistake at all, especially at the time, it was a good move and even in retrospect, you made the best decision you could at the time. But it rings true to me that that title maybe wasn’t right because a co-founder wouldn’t have left. I shouldn’t say wouldn’t have, but there would have been more conversation and more consideration, because you’re right, having only been there eight months, she was less tied to it than you.
Tracy: Yeah. We didn’t have a lot of good conversations back and forth. I didn’t actually treat her like a co-founder and that’s my fault. I was running all the administration of the business. I was running all the vision for the business like where we’re going, what we’re doing, whatnot. I wasn’t really involving her in those conversations, which is absolutely a huge mistake because I wasn’t allowing her also to make it her baby as well.
When she left, I remember being gobsmacked. I had no idea she was unhappy, or that she wanted to leave, or if she was looking for other things. I had wished that she had told me that she was out there looking for another job because she told me she had another job lined up.
Years later, I looked back in that being like, I wasn’t involving her either and we should have had that personal connection if we’re going to be founders together of talking to each other, talking about things are going right or what’s wrong, involving her in how the business is going, and letting her be part of that planning. In those processes, I probably would’ve found out from her earlier on that she was unhappy, but I didn’t know that and that was a big failure on my part as being a founder of WeddingLovely.
Rob: You mentioned earlier that after Julia left, you went back to bootstrapping. Was that the point where you put it on autopilot? I have a blog post from you in 2016 where you talked about putting it on autopilot, but what was the timeline like there?
Tracy: This is where things get a little bit wavy. It was 2016 to now. There are points where I was like, “Okay, WeddingLovely’s running itself. I’m just going to spend a little bit of time on it.” I started working on my book business around then. It wasn’t really a business, it was like on my side, I’m going to start writing a book because I need something to bring me joy in my life and right now, WeddingLovely is not it.
Rob: This was 2016 or this was 2012?
Tracy: It’s been so long that some of these dates get mixed up, but after Julia left, I just started ignoring the business for a little bit, not really working on it. I don’t remember what I was doing, I spent a lot of time just in a depressed state.
Rob: How did that manifest itself with you? Were you just sitting at your computer, responding to email, and not actually working, but feeling like you were trying to work? Or were you just avoiding work altogether?
Tracy: I did the bare minimum to feel like, “Oh, I’m still running WeddingLovely.” I was still responding to support emails. I was still running the blog. That was a big part of WeddingLovely is that there was a weddings blog. A lot of WeddingLovely’s income came through that because we had affiliate revenue. I was so dedicated to at least doing a daily post everyday because one of my things I did well with WeddingLovely was by having this big group of businesses that WeddingLovely is representing and I tied them into our blogs. We got free content from them by sharing what the businesses were doing. It would be like photo post from our photographers, real wedding posts from our planners, or looking at invitation designs from our designers.
This allowed me to work with the companies that were on WeddingLovely and give them something of value and also encourage them to move to paid accounts by running this weddings blog. That was probably the largest piece of involvement I had was I continued to run this blog, grabbing the content from these people. I had a contractor I was working with so I didn’t actually have to move things to WordPress. I just took what the email said to her, she put onto WordPress for me, and then I came back in and set up on social media, set up the scheduled posts and stuff.
I ran all of that and it was like, “Oh, I’m still running a business.” I still told myself I was running a business, but I wasn’t looking at the numbers. I wasn’t looking at how many businesses were joining over time, was that number going up or down? What was my traffic like? It was complicated because I had 11 different properties I was running so looking at traffic for all 11 properties was terrible. That’s why I never looked at my analytics and I didn’t pay attention to any of the data that’s going on. I just ran the blog and accepted the money that came in that went straight to my bank account.
Rob: Ran it almost as a side business or like a true lifestyle business, that definition of it, it literally just is a salary and you weren’t more ambitious with it, it sounds like. At that point, you have a blog post from 2016 and I’ll quote yourself back to you, but you say, “The planning and marketplace sides of WeddingLovely would probably grow faster with dedicated marketing and sales work, but will grow naturally, slowly, but surely on their own. 2016 is already shaping up to be the biggest year yet even though I haven’t had much time to work on WeddingLovely. I’m not going to shut WeddingLovely down even though I’m looking for a full-time job since it does largely run and grow by itself. Ideally, I’ll be able to keep feature growth as well by eventually hiring a remote developer, that’s my baby WeddingLovely.” How does it feel to hear that?
Tracy: Oh, my God. I haven’t read those in a long time. I really should reread them because I have almost no memory of that. It’s so funny. Who is that person? WeddingLovely had this little peak. The marketplace was growing, like I said. It was growing and that was great because I didn’t have to worry about it.
Then the affiliate sales on the other side was growing pretty steadily. It’s one of those things I knew that would go away, but Google’s magic SEO turned in our favor and one of our blog posts got to the top of the results for a very big listing, and therefore there’s tons of money was coming in through affiliate revenue. At that time, I was like, “Oh, wow, I’m doing this lifestyle business right. Our income has doubled overnight. I can use this income.”
Around this time is when I decided to hire someone full-time to run everything for me, like a marketing person, but she also helped do emails. Ideally, it was supposed to be like she was going to help do vision and run the company and that ended up not happening which is fine. But I hired someone in Florida. I had a contractor, the same person doing WordPress, but she grew into more social media stuff in Washington, I also hired a full-time virtual assistant in the Philippines and she did all the nitty-gritty stuff. I was able to train her to help out with the social media stuff and do all the support emails and release me from doing a lot of those day-to-day things. So then I was only doing salary, taxes, bookkeeping, that kind of stuff.
That was like going back into, “Hey, I’m doing this right.” I’m doing it like a different way than when I was doing the whole Etsy stuff, but I was like, “Cool, I’m doing this lifestyle business the right way. I have people employed, the business is growing, I can start paying myself again at some point.” At that time I started paying myself, a $1000 a month was just peanuts, but it was cool to be able to employ all these people and pay myself.
Rob: Was that the right call?
Tracy: It was fun. I don’t know if it’s the right call. It’s so hard looking back on that, because…
Rob: You don’t know what’s going to happen, right?
Tracy: Yeah, but in terms of what I’ve learned in that time of having employees and running a remote business, I brought me so much joy, honestly, to have these employees and be able to, especially, Jenny, my marketing person, I reveled in being a good boss. I did everything correctly. She was engaged, she was working on things, I was hands-off, I directed her, I was able to pay for online classes to help improve what she was working on, and hopefully, now I hope she takes it to her current jobs. It was really fun.
I loved being like, “Okay, cool, I’m working on this book business that’s bringing enough money to run myself,” so I’m happy taking majority of the income of WeddingLovely and putting it towards these other people and giving them an okay lifestyle. They seem to be pretty happy. It was fun.
Rob: What happened between then and 2018? Because in October 2018, you wound up shutting it down.
Tracy: This whole time, for the last five or so years, it could be like, “I’d like to sell this business someday.” I’m just waiting for the right moment and that ended up not ever panning out and 2018 is when that Google magicalness just reversed itself. I knew that was going to happen. Google giveth, Google taketh away. One day you’re the number one on search results and then one day you’re not. I rescued this post a few times already by switching things around and returning the SEO juice back to where it was and this time, I wasn’t able to do it.
I knew that to fix the post or fix the affiliate income that was coming in, I would have to spend a lot of time on it, write a new post, or do something because instead of our income increasing by half overnight, it drops by two-thirds overnight and I was like the big panic moment. It was that moment where I was like, “Finally, I have to make a decision about this, because now it’s just not easy money anymore.”
Rob: It forced your hand. Was the majority of the income of the business coming from this one post?
Tracy: I leaned into it and that might be a regret. Because it started happening and I was like, “This is going really well. I’m going to start more posts. I’m going to do more things for affiliate revenue,” and that helped buffer everything and maybe worried less about the income that was coming on the business side, worried less about income that’s coming from other sources. When it dropped, I was not bad, I was just like, “Oh, look, it happened.” I was expecting this to happen someday.
If I wanted to continue working on WeddingLovely, at that point I could be like, “Okay, cool. Let’s switch our focus really quickly back over the business side,” because our metrics on the business was not great. The people we had almost 9000 businesses and maybe 100 paying customers—this is embarrassing to say—but I wasn’t really worried about it because I had those income coming from those sources and I wasn’t really looking for 10% month-over-month growth, I was just looking for just enough to keep things running and so when it drops, it’s like, “Okay, I can go back and spend time and work on the other side of this business or I can finally face the music and be like this is the time that it needs to go away.”
Rob: This is something that I hear people talk about and I don’t think that they totally understand how hard it is to “autopilot” a website, or a software company, or a start-up. I’ve heard people talk about a SaaS app should just be built to be profitable just like a dry cleaner or a car wash. The thing is, is (a) most dry cleaners and car washes don’t last 10, 20, 30 years, they do go out of business, and (b) it’s way more volatile with these types of businesses because as you said, Google can change overnight, another competitor can spring up.
Just the online marketing stuff changes so fast that truly having a business that is profitable and lasts for 10 years online without quite a bit of concerted effort every 12–18 months to just fight the fires, I’ve done it. I’ve owned at least 15 different software products and another probably 10–15 different websites that made money from every conceivable thing, from ecommerce to content, to Adwords, to selling software one time, to selling multiple software or subscription software, to info products. I’ve done them all and in the end, putting something on autopilot is so, so hard to actually last anything more than one, two, or three years.
That is why the multiples on a lot of these companies are so low. You’ll see a content site sell for two years of its net profit, it’s like, “That’s preposterous, that’s just crazy, that’s such a deal,” but then you get into it and you realize, “Oh, Google smacks it around every six months,” and you experience that in full force. It sounds like if you had been focused on WeddingLovely, you probably would have diversified the revenue streams, you would have had used the SEO because getting money from SEO is great from affiliate stuff. It’s a great way to do it, but to rely on it as a core focus and to build most of the company on it, it obviously isn’t going to last forever.
Tracy: Yeah, and ike I said, I was not mad when I went away. I knew that day was going to happen. It happened earlier than I thought it would. It’s funny listening to this time because I just like, “Ah, that was a lot of effort.” It was never like you said, it never was completely hands-off. My brain power, even when I hire people, I was playing so much brain power on it. After I shut it down, it was this whole process of laying off people I hired and shutting it down. After I shut down, any hackers article that I wrote at the peak which was great at the time, but now it’s like, “Oh, no,” because it’s talking about how amazing things are, like that blog post, it talked about how amazing things are and people are like, “Why don’t you just keep running it? Why don’t you just keep it off the background? Why don’t you put it back to its autopilot?”
I get this email pretty often and it’s because the brain power required just to even have something there and knowing it’s there, getting even a few emails every day or every week about it, having the deal when something changes in your server and you have to upgrade the server because everything broke or something like that, it takes a lot of time. It’s really hard to focus on doing something else appropriately when you’re split focus like that.
Rob: Yeah, focus. It’s such a huge thing and it’s undervalued in our space. In a blog post that you published in, I believe it was October 2018, about shutting it down, you look back and you talk about your decision to put it on autopilot and you said, “My passion has largely moved elsewhere to Hello Web Books, it’s been my focus for the last couple of years, but WeddingLovely largely ran itself and is making a good amount of revenue through affiliate and subscription accounts so I hired a team to keep it running a few years ago and stayed on as an advisor. It was the lazy way out. The business wasn’t evolving significantly, no new features were being launched, but the businesses and engaged couples that used our services seemed happy. I was able to employ a few folks who seemed happy as well so why not continue with it?”
It sounds like you still feel that putting it on autopilot probably wasn’t the best idea, but it was working for people. People were using it, you were employing people, and it was just the decision you made at the time.
Tracy: Yeah. The theme of this episode is always hindsight is 20/20, now that I’m working at TinySeed or just having a job. At the time, I was so hesitant to shut things down because I knew that I’d have to go in the process of actually finding something else. The book stuff wasn’t supporting me full-time and I had this decision whether I wanted to launch a new book, turn my book thing into a publishing platform, go all in on this other project that I was working on, or find an actual job. I was so scared of finding a job after working largely for myself for the last 10 years. The only other two places I’ve been employed were terrible, terrible experiences. I was dedicated working for myself because I thought that I could not have a boss.
Now that I have a job that I really enjoy, it could’ve been four years ago when I just run this business and I had employed people and it wasn’t really something I was interested in, but I was working on these other things. What if I made a decision four years ago to shut it down? Where would I be now? I don’t know what the answer is. I’m really happy again with the path that I had taken, but it is interesting to look back on that with the knowledge I have now and looking at my previous decisions and being like, “Oh, interesting.” It’s funny having those blog posts because I could see my thought process back then for better or for worse.
Rob: That’s the hard part. You said you had two jobs, you didn’t like them and therefore in your head jobs are bad. You’ll hear the same thing. You’ll hear people talk about venture capital, “Oh, I read two TechCrunch articles of a founder getting screwed by his VC, therefore venture capital is bad.” Or you’ll hear “Oh, a business built their revenue on organic search SEO and then Google smacked them around and now they went out of business.” It’s a common story. “I’ve had entire products just go under because of Google. Therefore, I’m never going to do organic search.” But no, these conclusions are too broad and they can shift, they frame your mindset in a way that you don’t even realize.
Often times, if you found the right job, then it would be good. If you find the right money under the right terms, it would be good. If you use Google for the right purposes, which is to get you enough money so that you can hire people to have other revenue streams so you’re diversified, then it’s a good thing. But it’s thinking about it in that way.
We’re all guilty of this and it’s not something that’s easy to do, but I think about some roles that I’ve hired for where I remember thinking there’s no way I can find someone to do this. We just can’t hire for this role, so I’m going to have to do it. Even program manager of TinySeed, it’s like, “This is my accelerator. Einar and I started this. Who can possibly run it in a way that it will work?”
I remember I kept telling myself, “But if we find the right person, then it’ll work.” That was what I had to tell myself to take that risk and of course, we found you and you’re the right person. It makes sense and I’m so glad that you have taken over so much of the role that I would be just bogged down with day-to-day and not able to do the other things that I need to do.
Tracy: Yeah. It’s funny about momentum, or maybe not momentum, but it’s just feeling I come on a certain path and it’s so hard to change that path. It’s so hard to consider the other paths that are available when you’re currently in a rut. I was in that rut for a really long time and it’s really hard for me to see over the edges of that rut to see what else was out there or to conceive of the work that would be required to jump out of the path I was on.
I just kept pushing it year over year over year and telling myself, “Okay, it’s great that I’m only making $30,000 or $40,000 a year because of this place that I’m working for myself. I got to travel a lot. I’ve got to work abroad for a long time. I got to do a lot of really great things. It allowed me to launch this book thing which also led to a whole other interesting set of experiences and learnings. But a lot of it is just I got into this rut and it was so hard to move myself out of it.
Now that I’m out of it, it’s interesting to look back on this experience. I’m glad I had that experience. I learned so much from it, I’ve done so much with it, but I wish that I shut down sooner. I wish I looked at the metrics. I wish I looked at how things were going. I wish that I considered that there are other things out there that could fulfill me the same way it would. I know that I’ll take those learnings to whatever I’m doing in the future. It’s all a really great learning experience. I learned so much from it. I wish I did some things differently, but I’m glad that I did it.
Rob: Final question as we wrap up. WeddingLovely could have worked. As an idea, it provided value and it could have provided you with a full-time income and employed people. Why didn’t it work?
Tracy: Wedding industry. I could talk for ages about this; I’ll try to keep it short. I actually don’t like the wedding industry myself, which is funny running a startup on the wedding industry, but I jumped into the wedding industry because I wanted to switch how it was done. I didn’t really like this focus on consumerism in the weddings and I wanted to have a place where instead of worrying about building this event where you have a to-do list of 500 to-dos long, what if you had a website that was more like a friend helping through the process, telling you the big things you have done like getting a photographer, why should you get a photographer, and what’s going on. I thought that was a good idea. I want to lead into this even better ideas.
In the wedding industry, I wish there was a place with an all-in-one booking platform like Airbnb. How great would it be if you’re getting married and you had this one platform to find people, read reviews, talk with them, do some messaging, and then do the payments and have everything under one area rather than juggling all these different vendors? That’s one of the reasons why weddings are really crazy. There’s such an opportunity here for that, but because it’s such an insanely high churn business where if you’re going to work with people who are getting married and these people are going to leave the platform in a year, you have to find a whole new set of customers that kills anyone jumping into this industry.
I did the best I could by working on the business side of things, but combining the fact that the wedding industry is really hard, it’s really hard to have repeat customers, it’s really hard to build a sustainable business on it, and then the fact that I am not interested in going to wedding fairs. I eloped in Vegas. I was not even going to touch a full wedding myself. It’s not something I’m really passionate about. I’m passionate about changing it and I always able to use that passion in that way. But a lot of that also went into why it was not good for me to run WeddingLovely as long as I did and also why WeddingLovely itself didn’t work.
Rob: Tough business, tough industry, and a little lack of product founder fit, it sounds like.
Tracy: Exactly. Again, fun process. I taught myself how to program. By building WeddingLovely, my design skills improved. I learned how to do all is crazy back-end stuff, build this crazy marketplace. I learned marketing and sales to an extent. It was a huge learning process and it was fun working in the industry. I made many amazing connections.
Would I ever do a wedding startup again? No. I liked advising wedding startups and telling them all the terrible stories I have. I won’t ever tell someone to change, but I try to tell all the problems that happens in the wedding industry when you’re building an app and why it’s not as easy as you might think. A lot of people I find think it’s easy, but I tried to be the person who is very clear about the problems I’ve had so other people can learn from it.
Rob: Thanks so much for coming on the show, Tracy. If folks want to keep up with you online, where would they do that?
Tracy: Personal website is tracyosborn.com. I’m also on Twitter as @tracymakes, Instagram, and other social media.
Rob: Sounds great. Thanks again.
Tracy: Thank you.
Rob: I want to thank Tracy again for coming on the show. I like her story because it’s not very often that someone runs a startup for nine years, puts it on autopilot, hires a team to run it, and just has these ups and downs. The experience she did and her willingness to relive that with me today is much appreciated.
That wraps us up for today. If you have a question for us, call our voicemail number at 888-801-9690 or email us at firstname.lastname@example.org. Our theme music is an excerpt from We’re Outta Control by MoOt. It’s 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. We’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob does a throwback episode. Almost 9 years to the day Rob and Mike published episode 14 about overcoming fear and taking risks which is a message that is still applicable today.
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. On this show, we talk about building startups in an organic, sustainable fashion, in a way that focuses more on your personal life and your lifestyle rather than focusing on building a billion dollar business.
We like to value freedom, purpose, and relationships on the show. You’ll notice that, while my co-host, Mike Taber, is on hiatus, I’ve been experimenting and dabbling in a few different show formats. If you’ve enjoyed the change-up and the focus on improving the podcast quality, including the recent interviews with Laura Roeder and Jeff Epstein, the Q&A sessions I’ve had with Tracy Osborn, Jordan Gal, as well as the hot seat with Matt Wensing, let me know. Reach out email@example.com or you can tweet it out. I appreciate any feedback you can provide. Of course, if you’re able to give a five-star rating in any of the podcast apps you use, it’s much appreciated.
Today on the show, I’m doing a different intro because I’m trying something I don’t know we’ve ever done before. It’s to do a throwback episode. What I did is I went back through the archive and I picked out one of the all-time most popular episodes of this podcast. It’s episode 14. It was published July 13th, 2010. It’s almost to the day. It was nine years ago. What’s also interesting is that when this episode went live, my second son was five days old. That’s just an interesting coincidence.
Now and again, I go back and listen to old shows. Typically, I don’t go back prior to where they are […] just because it’s so hard to do, but this episode sparked a lot of conversation when it happened and it’s one of those where the content itself holds up pretty well even nine years later.
Some funny things I’ve noticed relistening to this episode is we just sound so young and so naive. It’s so impressionable. The intro’s slightly different. I’m going to play the whole episode. There’s a Q&A section at the end. We did a whole episode of content and then two questions that I find are not that interesting, so I’m going to cut those out, but the intro and the outro is slightly different, which I think is funny.
The audio quality is not great, but for a 14th episode, for it being 2010, and for use just figuring this out, it’s not so bad, but it’s definitely a lot fuzzier than it is today. As well as the editing. You can hear the editing is really choppy because we didn’t really know what we were doing back then. Now we have a professional editor. And it’s hilarious. My book launch. I talk about my book about to come out. I think I threw out a URL, but this is pre-Start Small Stay Small.
Again, I wouldn’t go back to an episode if I didn’t really think the content is still so applicable. This is one of those evergreen timeless episodes that I listen to and still get something out of, and I think that you will, too, because this is about overcoming fear in your own head, whether it’s to launch that first blog post, launch that first podcast episode, launch an app, take a risk, and it just always applies. I find that the conversation is as applicable today as it was then. Even the examples we used are still strong even here in 2019. So, I hope you enjoy revisiting this topic, especially if you weren’t a listener back nine years ago.
This is Startups for the Rest of Us episode 14. Welcome to Startups for the Rest of Us, a podcast that helps developers be awesome at launching software products, whether you built your first product or just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experience to help you avoid the same mistakes we’ve made. What’s new this week, Mike?
Mike: I am having tons of fun getting a development box set up for a website. For those of you who don’t know, Rob and I run the Micropreneur Academy. It’s more or less to help developers learn how to do sales and marketing for their products. We’ve got tons and tons of content out there, but the problem that we have whenever we’re doing changes to the site, because it’s all built in WordPress, it’s very difficult.
One of the problems we have is being able to do development work on that box without bringing it down or crashing it because we’re making some changes and trying to see if they work. What I’ve been doing lately is we’re using a product called JumpBox to essentially bring up a development server very quickly so that I could dump all the content onto that JumpBox.
Essentially, what it is is if you go to jumpbox.com, they’ve got a couple of different pricing plans, but the one that I’m using is basically a LAMP stack. It allows you to download a virtual machine and it’s pre-configured with an OS and everything you need to just run a LAMP stack. All you do is you fire it up, it grabs an IP address, you specify a password for it, you can just log in, and you’re up and running in literally three minutes after you’ve downloaded this JumpBox. It’s really, really cool.
Rob: That’s awesome. How much time did you spend getting that going?
Mike: It probably took me more time to download it than anything else. The download really wasn’t very large. It was like 100–150 megs, something like that for the JumpBox itself that I downloaded. Like I said, they’ve got a couple of different pricing plans. The first one’s free, but then they’ve got a pro version and a business version. You can get a 15-day trial for free. It’s pretty cool.
Rob: It’s nice to have a dev environment. I know that’s something we’ve talked about for a long time. Good. Anything else?
Mike: No. That’s about it. What about you?
Rob: The hell I have been doing. Good grief.
Mike: Nothing. You slacker.
Rob: Yeah. I’ve been amazed at how much extra time this book has taken. The book’s done, the final proof arrived, I ordered copies, go to the printer, that whole thing. But like starting a company, you think that writing the actual code is going to be the bulk of that work? That’s 50%–60% tops.
The same thing with the book. I thought that putting together all the material and writing everything would be the bulk, but I had such a number of tasks to take care of, like building the website, getting the emails out to the list, and a number of other things. Getting an ISBN number and working with formatting. Of course, I’m not a designer, so it takes me a long time to do that stuff. It’s not as easy to outsource as, say, HTML work, or maybe it is. I just don’t have the right contacts. I’m out of my element with it. I chewed up a lot of time over the past week.
I actually made, what I consider in retrospect, an error in judgment. I basically had a four hour estimate to create the sales website, which is just a one-page thing—click here to buy the PDF, click here to buy the paperback. By the time I integrated with two payment processors, it took me 16 hours, which was just painful, and the integration is not an integration. It’s just a click an Amazon button and click a Google Pay button. That’s not even some fancy form that does it all. I was amazed at how long it took, so disappointed with it.
I wasn’t going to outsource it just because I literally thought it would take me two, I had estimated four just to be on the high side, and by the time I got everything the way I wanted, it was way high. In retrospect, definitely should have outsourced that.
Mike: I can think of two other mistakes off the top of my head that you have made. The first is, I don’t think we actually talked about the fact that you were writing a book on this podcast.
Rob: No, we did on episode 11.
Mike: Did we? All right.
Rob: Yeah. I edited it today.
Mike: My bad. All right. We’ll score that a point for you today, then. The other one, though, is that if you just asked me, my wife used to do print layout for a magazine.
Rob: That’s right. You’ve told me that like 10 times. How did I not do that. Yeah, it’s not going to look nearly as good if she give it 30 seconds of look, I’m sure. Well, that’s been my week. If you’re interested in the book, if you’re listening to this, startupbook.net. It will definitely be out and available in PDF and paperback format by the time this podcast goes live.
The other thing I wanted to mention this week is, I was talking to someone about a week ago and they listened to the podcast. I was like, “Yeah, you can stay up and tune in to what Mike and I do in our blogs.” He’s like, “Oh, you guys blog?” and I was like, “That’s it. We were doing this podcast for two months and we’ve been blogging for five years each.” I was like, “Oh, I thought the blog was our deal.”
Anyway, I realized we never mentioned our blog URLs, or maybe in passing we have, but if people are interested in hearing more about this type of micropreneur stuff, my blog is softwarebyrob.com and Mike’s blog is singlefounder.com. This is where we actually write original articles and new posts on starting a software company, launching products, being a micropreneur and such.
Mike: What are we discussing today? I think we actually had a listener comment from somebody on the startupsfortherestofus.com website, right?
Rob: That’s right. At startupsfortherestofus.com, that’s where you can download and listen to all of these episodes. In episode one, a guy named Scott Herbert made a text comment at the bottom and he said, “First, thanks for a podcast that doesn’t think I have $10 million of VC funding and want to tell me how to spend it. Secondly, I’d love to hear a cast on fear. Someone has offered to review my application for their blog—I’m scared by this—I said yes, of course, but does it get any easier?” That’s what we are going to be talking about today.
Mike: Cool. The short answer to that is you did the right thing and yes, it does get easier. The key to making it easier faster is to do it more often. We’ll obviously talk about that a little bit more. I think when it comes to fear, there are a couple of different options that you have and I boiled it down to four basic options.
When you’re faced with fear, these are your choices. You can either cave, which basically you give up. You can struggle with it and challenge it head on. Number three is you can accept it and do nothing about it, but you’ve accept it. You’re fearful of that and there’s just nothing you can do. The fourth one is you can try and work around the fear, try to avoid it. If you’re afraid of heights, you just never go into tall buildings or something like that. Some of those wok better than others, but obviously challenging your fear head on is going to help you get over those fears a lot quicker.
Rob, why don’t you talk a little bit about what sort of things people are typically afraid of? I think this pertains specifically to business. We could talk about arachnophobia and fear of all sorts of weird other things like short people, but I think this question relates more specifically to building your own business.
Rob: The things that I most commonly see software developers and people starting startups dealing with are thoughts like what if nobody likes my software? What if nobody buys my software? What if I fail and I invest all this time and it’s just wasted time? What if I can’t get any traffic to my site? What if I don’t get this right the first time? And what would other people think of me? Even if this does or doesn’t work out, what will people think of me while this is going on?
I think that’s a big part of fear is dealing with how other people view you. It almost takes me back to junior high in high school. I think it takes all of us back. Someone’s going to laugh at us or make fun of us or point something out publicly that is just going to really embarrass us. Those are the most common fears. I think everything stems from the fear of failure and the fear of other people seeing you fail.
Mike: I think that’s the biggest thing is people seem to think that whatever they do or say, people think of that as a reflection of themselves, especially when they’re writing software and they want to put it out there. I see people pushing off their software releases because they’re afraid of what people are going to think of their software. They always say, “I want to get it right. I want it to be perfect.” You know what? It’s not going to be perfect. You have to get over that.
Honestly, some people probably have a fear of launching a product. “What do I do when those support calls come in? What do I do when a customer’s irritated that this bug crashed and they lost all this data?” You know what? Those things can happen. Nobody’s perfect. That stuff is going to happen sooner or later and the only thing you can do is deal with it head on, accept that you made a mistake and move on.
If you sit there and try and live in the past or in the future, you’re not going to get anywhere. You can’t sit there and just worry all the time about, “What happens if this?” You know what? Why are you thinking about that now? Why don’t you continue living your life, moving on, doing your development, get past your launch? Then if that happens, then you worry about it.
I think maybe there’s a difference between doing that versus if you have critical bugs in your software that you know is going to cause somebody’s machine to crash and burn, yeah, you have to fix those before launch, but you can’t just let the fear of having bugs in your code or the fear of people running into problems with your code take that as a reflection upon you because it’s not a reflection on you.
Everybody is human, everybody makes mistakes, and when you create bugs in your software, those are mistakes and they’ve got to be fixed. Getting over those fears is just a matter of accepting that that’s going to happen and you can fix those bugs, you can move on, and version 2.0 is going to be better than version 1.0.
Rob: The two things that I think about when encountering fear like this is that the first time you do anything, you’re going to be scared. The first time you publish a single blog post, you’re going to be scared. The first time I did it, the first time I published an essay, a bunch of people read it, and people started ragging on it, I had anxiety about this. This is just natural. The first time you record a podcast, you’re going to have anxiety. The first time you speak at a user group, the first time you speak at a conference, anytime you do something publicly, you’re going to have some type of fear.
There’s some natural inclination in all of us that we feel like we’re going to be judged by everyone, and whether it’s realistic or not, knowing that the first time you do something, you are going to feel this anxiety and this fear, is really helpful because then you can identify very quickly and say, “Oh, this is that feeling again. It’s that same old thing that comes very naturally. I shouldn’t be scared of it and I shouldn’t let it talk me out of doing this thing.”
I’ve actually started following that fear, just a little bit like Seth Godin with a linchpin where he kept saying, “The lizard brain has its negative talk. If go towards the lizard brain, when the lizard brain talks to you and says, ‘Don’t do this thing,’ you typically stretching yourself and you’re actually doing something good. You’re actually moving in a direction that will grow who you are.”
The second thing is that as software developers, most of us have this natural anxiety of wanting to be perfectionists. I was talking to a developer today and he said, “I want my software to be perfect. I know it’s not going to be, but what if I launch it and there’s a bunch of bugs in it?”
There are two different types of people. There are the people who don’t care enough and those people don’t tend to be really good software developers they don’t tend to want to launch a software product. The ones who are doing this tend to be more of the perfectionists, tend to be more of the people who are stressing out about it, and that’s us. We have this anxiety that actually provides productivity.
If you’ve ever heard about Yerkes-Dodson curve, it’s a psychology theory that anxiety helps you—to a point—be productive. If you’re not anxious at all about a deadline, it’s very likely you’re going to miss that deadline and that you’re not going to be productive. Anxiety which translates into fear is actually a good thing to a certain extent and it actually will make you perform better and do more work quicker, to be more productive.
Mike: I know what you’re saying about being able to have a healthy dose of anxiety because I remember back in college, I used to feed off of deadlines. It was my job, it kind of just was. The fact is, if I had a deadline for a paper coming up or a project or something like that, as that deadline got closer and closer, I would just use it to energize myself and really focus in on what it was that I had to do and what I had to get done. Somehow it just helps me to meet a lot of the deadlines.
Don’t get me wrong. There was a certain amount of procrastination in there, but I’ve also seen studies where if you take three groups of people and you give one a deadline at the end of the quarter or semester, then you give another group of people regular deadlines throughout that time period, and then you tell the third group of people they can create any deadlines they want, people will tend to procrastinate until the end. I would just feed off that natural energy for those deadlines.
For me, the anxiety helped a little bit, but you also have to be a little bit realistic about in keeping in your head, “Am I actually going to meet this deadline or is it just a completely lost cause?”
Rob: That’s the thing with fear. I’m kind of equating fear with anxiety because when you say fear, you think a lion is attacking us. An anxiety is more of a realistic explanation or a realistic description of what we really feel when you’re going to go up and speak in front of people or we’re going to release a software product and maybe have someone say something bad about it or something. I think anxiety might be a better word for it.
There was a study—I wish I could quote it—done at UC Berkeley. It compared the anxiety levels, the stress levels of cops who were working in East Oakland versus students during finals week. The anxiety levels were actually higher in the students during finals week. What that shows is that anxiety, a lot of it if not all of it, is in your head. Some of it can be a chemical as well, it can be prone to be an anxious person, but a lot of it is in your head.
Ever since then, I have really learned to focus in on my anxiety and realize when it’s coming, identify it, then do something more productive with it, and allow it to motivate me rather than cause me to cave.
Mike: You bring up an interesting point about the difference in fear and anxiety, though. Personally, I have my own fears and my fears tend to be more long-term things that I’m afraid of happening. There are certain anxieties that I’ll go through. I’m a pretty good public speaker, but I think everybody gets at least a little bit nervous when they’re about to go up and do some big presentation.
In terms of fears and stuff, one of my own fears is, as the sole breadwinner of my family—my wife stays home with the kids so that I can go out and work—what if my income stream comes crashing to a halt and I’m not able to support my family? What if I’m on the road and something happens to me? Will my family be taken care of? How will that happen? How are they going to deal with that?
Honestly, I generally don’t worry about myself in terms of my health, but it doesn’t mean that I didn’t go out and buy a life insurance policy just to make sure that that sort of thing is taken cared of.
In terms of my income streams, I know that if it came down to it, I would do whatever needed to be done in order to make ends meet. If I had to go to Barnes & Noble and get a job stacking books or something like that, so be it. I’ll do what it takes to take care of my family. That’s one of the long-term fears that I have. I don’t really get anxious about those. I think about them, but I also think about how to deal with them and how to alleviate those things as concerns.
What about you?
Rob: The long-term fear that I have is the same thing. Being that we’re both self-employed, it’s a reality that our income could be majorly impacted very quickly. In fact, these last few months I talked about it, due to the recession there are several different income streams that I have that have substantially decreased 50% or more. I’ve been staring at it in the face, realizing if it continues like this, there’s going to be some issues down the line over the next few months. So, this is all happening. I’m about to have my second child. So, absolutely, any entrepreneur, the fear of just making ends meet and continuing to have a solvent business is a valid fear. It is for me as well.
Mike: That’s one of the things I’ve heard from people as well and I get to ask that question, “Aren’t you afraid of going out of business or this or that?” The way I see it, being self-employed actually gives me a certain amount of control over it because I am in control of my own destiny. I get to make the decisions that ultimately affect how I do in life. If I were working for some corporate employer someplace, they could decide to let everybody go on any given day and there’s literally nothing you can do about it.
You think about it in terms of job security, most people think of it that way, but you can also think of it in terms of financial security. You go to work for somebody, you’re complete at their mercy in terms of your income. Sure, they let you go and then you can go find another job, but right now, it’s hard to find jobs for most people. There’s tons of people out of work and the unemployment rate is really high.
I look at that and say, “Well, you know what? I could either work for somebody else where I’m completely at their mercy or I can work for myself where I’m at the mercy of my own bad decisions, so to speak.” Honestly, to make the choice between those two, I’d rather work for myself any day of the week. Now, granted that you have to be making money in order to be able to do that sort of thing, but it’s certainly an interesting way to look at it.
Rob: You make a good point there. No matter which avenue you choose, whether you work for an employer or start your own company, you’re going to have fear about something. You should have some fear that maybe you’ll get laid off, maybe the company will go out of business. You should have fear if you’re an entrepreneur that maybe you won’t make ends meet.
It’s not like you can escape it by choosing one route over the other. People can talk themselves into not having fear if they work for an employer. I think you’re kidding yourself by saying, “Oh, I’m not going to get laid off. This company’s never going out of business,” those kinds of things. There are fears in really any choice that you make. There’s no way to escape the realities of what might happen.
Mike: Right. One of the quotes that I keep, and it’s actually related to fear, this quote I keep actually on a Post-It note right next to my monitor and it reads, “It is possible to commit no mistakes and still lose.” It was actually in a Star Trek: The Next Generation episode from Patrick Stewart. It was in reference to Data was playing this game against somebody else and he ended up losing to this other person. He couldn’t figure it out how it was that he lost. That’s what Captain Picard told him. It’s like, “It’s possible to commit no mistakes and still lose.”
That true in life as well. You can do all the right things and still come out at the end of the pack. There are times when there’s absolutely nothing you can do and you’re going to lose. That’s just a fact.
I don’t want people to think that you’re going to lose every time, but there’s always a chance that you could lose and there’s always a chance that you could fail at whatever it is that you’re doing. But if you’re in control, you’re making those decisions.
Most people generally think they’re smart people. They’re going to make reasonably decent decisions and you have to keep that in mind when you’re going through those motions. You’re going to make the right decision with the information that you have at the time. If at the end of the day, you came out at the end of the pack, you have to accept that, move on, and say, “Okay, well that was a learning experience.” Take that forward and go on with the next task. You can’t let those things bother you.
I know people who let things bother them for years. I can think of one person in particular who let things bother him for years and years and years. And you know what? He’s never going to make it past it. It hasn’t happened yet. You can either let it get in your way of life or you can put it behind you and keep going.
Rob: The other thing I like about that quote is that it’s a good reminder that you have to take risks in order to do something worthwhile. You have to take risks in order to start a company or even to have a child or buy a house. Any of these things that I personally hold dear and that other people may as well. You can’t just stay in your safe zone all the time.
That’s what I really take away from that quote is you can make no mistakes and never do anything and still fail. If you decide, “Oh, I’ll never going to get married because I might get hurt, never going to have a child because it’s too hard, never going to buy a house because I don’t want to take on the risk, and never going to start a company.” In my life and my goals, I would consider myself that I would not have succeeded if I hadn’t done these things.
What I take away from that quote is that taking risks is a necessity if you are an ambitious person and if you have goals. You’re going to have to risk something to achieve those goals. And if you sit back and don’t do it, that I would consider that failure, not taking the risks.
Mike: And taking the risks doesn’t mean you’re guaranteed failure or success. It just means that you’re taking those risks. You’re gambling either way, but honestly, it’s not like the odds are in Vegas. I mean, your odds are a lot better when you’re putting that faith in yourself and your own decision-making powers as opposed to the dice or the roulette table in Vegas. It’s a completely different type of gambling, I’ll say. Calculated risk is what I’ll call it.
With that, why don’t we talk about six steps to dealing with that fear or anxiety?
Rob: Step number one is to take small steps. If you try to leap out too far, if you try to start a huge company or try to start two companies at once, it can be just too much and it can overwhelm you pretty easily. If you’re the type of person that fear tends to hold you back, take a small step.
Maybe instead of putting up a bunch of money or putting in a bunch of time in order to start a company, try to either start a smaller version of that or just do a little baby step of it, try to get that minimum viable product out, do some traffic testing, and see what’s going to happen. It’s a much smaller step but it can still help move you in the direction of, say, starting a company.
Mike: The other thing you can do is if you’re trying to get into, for example, product marketing. You don’t necessarily have a product yet. You can sign up for any number of affiliate programs. amazon.com’s got one where you can become an affiliate to sell their books and by referring traffic back to them, if those people buy things from Amazon, you get credits for those.
That’s a very small thing and I’ll be perfectly honest to say that I don’t think that you’re going to make a lot of money from it, but you will probably learn quite a bit from it. You can use that to help yourself as a baby step to become a better marketer, for example.
Step number two is to get some concrete motivation in the right direction. What this really means is that if you’re trying to do something, find somebody else who’s done that and pick their brain. Get some help from them. Ask them how they did it. Ask them how they dealt with their fear or their anxiety about it.
For example, public speaking, you can go talk to somebody who does public speaking for a living or join Toastmasters or something along those lines. You really need to find somebody else who can talk to you about it or you can talk to them about it, ask them questions, really get down to the bottom of what it is that you’re afraid of, and have them help motivate you in the right direction.
Rob: Step three is to look at failure and rejection in a new light. What we mean by that is instead of taking failure and rejection as a negative thing, realize that it does tend to be a valuable learning experience.
Mike and I already talked in a previous episode about whether failure is a learning experience or not, or you should only have successes, the whole discussion of that. Both of us believe pretty firmly that you will learn from your failures and that rejections will ultimately teach you to overcome these hurdles that you’re facing. I know that every time I faced rejection, it’s impacted me, but the more that I faced, the less each of them impact me.
Becoming aware of that, failure and rejection, are going to be inevitable as you do anything that has risk in it, but becoming aware of that is a big part of it because once it comes, you’re much less surprised by it.
Mike: And there’s obviously different levels of that failure and rejection. Rob and I have also talked about when we first started getting into AdWords and we blew an excess of $1000 apiece in the first month of doing our AdWords campaigns. Don’t get me wrong, $1000 is not pocket money or anything to be blowing out on AdWords, but I’ve made some much, much greater financial mistakes on that in the past. You just take them with a grain of salt and say, “Look. You know what? I understand what happened and it’s not something I would repeat,” but you learn from those things.
Number four is to not get too caught up in the past or in the future. You really need to keep your mind working in the here and now. What I mean by that is, if you’ve made mistakes in the past, don’t dwell on them because it’s certainly not going to help you. It’s just going to drag you down, it’s going to drag your morale down, and you’re going to be constantly thinking about them.
What that will do as a byproduct is basically distract you from the things that you have going on today. While you’re doing that, your basically dividing your mind with half of it saying, “Oh, my God. I can’t believe that thing that I did last Thursday or three years ago and it still haunts me to this day.” Everybody makes mistakes and how you deal with them is just as important as the things that you take from them.
Similarly, you can’t worry too much about what’s going on in the future. I’ll go back to the one I mentioned before. I travel a fair amount for my job. What happens if I’m on a flight and the plane goes down? Now, granted the chances of that happening is pretty slim to none, but it could happen. What do I do? I went out and I got a hefty life insurance policy. If something does happen to me, at least I know that my family is going to be taken care of. It’s all about mitigating those risks so that you can take your mind off of those fears, put them together, and focus on what it is that you’re doing today.
Rob: Step five is that things don’t happen overnight and that you need to keep working on it. The bottom line is that fear goes away the more times you do something. If you have a fear of public speaking, the more times you do it, it’s going to get better. If you have a fear of publishing a blog post, if it takes you 10 hours and 20 edits to get a 500-word post out, you need to do it more. You’ll get a little better at it, but you’ll get over the fear that it has to be perfect.
The bottom line is it’s not very complex. you’re going to be scared the first time you do something and you need to do it over and over if it’s worth it to you to actually get good at something.
Mike: And the sixth step to dealing with fear is to get a sanity check from someone else. Whenever you’re working on something, whether it’s software, a blog post, a piece of marketing collateral, or a press release, anything along those lines, anything related to your business, or even in your personal life, just get a sanity check from someone else. That can be a close friend, that can be someone who barely knows you.
I had somebody contact me who said, “Hey, I’d like to get your input on something because I don’t talk to you very much and you don’t know anybody that I know. It would be great to hear from you about what you think of this.” That’s a perfect scenario where you can get that sanity check from someone else with virtually no fear of anyone else being informed about what your fears are.
One of the things that Rob and I actually used to do probably 5–6 years ago, something like that, when we were first getting our blogs started, we actually started sending some of our blog post back and forth just to get a sanity check on it, to say, “Hey, what do you think of this article? What do you think of the wording of this? Does this strike a chord or is it just too bland?” et cetera.
We did that for—what was it—six months or something like that and we just went our separate ways. By that time, we have gotten over our fears about doing any sort of blog post and publicly voicin what our thoughts and opinions were.
Rob: I think we did it for a closer to a year, actually. It was certainly helpful for me. It improved the work that both of us produced as well as—at least from my perspective—reduced the anxiety I had when I went to publish something because I knew that someone had already looked at it pretty critically. If I sent over a new… kind of said, “No, this is not very good,” or there’s a big flaw in this logic, then I would rewrite that piece and then when I posted it, I knew that it essentially had a sanity check done to it and it really reduce the fear that I was going to get slammed online.
To recap, the six steps when dealing with fear are: (1) take small steps, (2) get some concrete motivation in the right direction, (3) see failure and rejection in a new light, (4) don’t get caught up in the past of the future; work in the here and now, (5) keep working at it; things don’t happen overnight, and (6) get a sanity check from someone else.
Mike: Thanks to both Jonna and Trey. If you have a question or comment, please call it in to our voicemail number at 1-888-801-9690 or you can email an MP3 or text format to firstname.lastname@example.org. If you enjoyed this podcast, please consider writing a review in iTunes by searching for startups. You can subscribe to this podcast in iTunes or via RSS at startupsfortherestofus.com. Our theme music is an excerpt of We’re Outta Control by MoOt used under Creative Commons. A full transcript to this podcast is available at our website at startupsfortherestofus.com. We’ll see you next time.
In this episode of Startups For The Rest Of US, Rob interview Laura Roeder, Founder and CEO of MeetEdgar. They talk about her fast success with growing MeetEdgar, dealing with platform risks, and the humbling experience with her second venture.
Items mentioned in this episode:
Rob: In this episode of Startups For The Rest Of Us, I talked with Laura Roeder about here uncanny ability to power through roadblocks. This is Startups for the Rest of Us Episode 451.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob and today with Laura Roeder, I’m here to share our experiences to help you avoid the same mistakes we’ve made.
On this show, we talk about building startups in an organic, sustainable fashion that allows you to build a better life for yourself. Every once in a while, we’ll sit down with an experienced, knowledgeable, founder who has overcome seemingly insurmountable odds, and we learn from that founder. We learn from their experience of growing their startup, of facing the roadblocks and turning them into speedbumps. Today is no exception.
I’ve been a longtime fan of Laura Roeder since she started Edgar several years ago. That’s at meetedgar.com. It’s social media management software. Laura grew Edgar to seven figures of annual revenue within the first 12 months. It was one of the fastest bootstrap SaaS growth trajectories I had ever heard of.
But in 2017, 2018, Facebook and Twitter, some of the underlying platforms that Edgar relies on really started to pull some shenanigans with their APIs. Edgar ran into some pretty intense turbulence. We dig into that. I had not heard her talk about this experience on a podcast before. Frankly, I wanted to hear what it was like in the inside and how that felt. She talks about the ups and downs of it in a very honest, raw, and transparent way. I really appreciate that about the interview today.
The other thing we dig into is she went and started another SaaS app, raised an angel round, and rented some pretty major roadblocks with that early on. It’s fascinating to hear, essentially a third time founder, looking around and realizing, “Wow, this may not work like my other companies did. This may not go as well as my prior startups.” You can hear her thought process in what it was like to experience that in today’s interview. With that, let’s dive in.
Laura, thank you so much for joining me on the show today.
Laura: Thank you. I’m excited to be here even though we’re going to talk about some tough topics. I’m a little nervous.
Rob: I know. We were talking before we got on this call that just like entrepreneurship, is about bumps and bruises; sometimes it’s a speedbump, sometimes it’s a roadblock, sometimes it’s hard to tell the difference. You’ve certainly had your share with the past few years.
Laura: Yes. I’ve had speedbumps and roadblocks.
Rob: Yeah, that’s tough. I wanted to start by talking a little bit about Edgar, which is frankly, a widely successful app. I remember that when you launched, I believe, you made it to seven figures within 12 months of launch. It was ridiculous in a great way. I don’t know that I had ever seen a bootstrapped SaaS app hit that level of success that quickly. What do you attribute much of that to?
Laura: So much of it is just right place, right time, right brand. When we launched, we were really innovative in the market. Social media, scheduling tools, had been created, but they were literally just like, “Type your tweet in this tool and then hit send.” That was kind of all they did. The innovations that we created within the Edgar when we launched, it was just very noteworthy, like, “Wow, this is a tool that can do a lot more than any of the other tools can.”
Rob: Yup. That makes sense. You had this amazing success early on. You say, “Right place at the right time,” but I remember you also had worked your ass off to build an audience in that space. You would set yourself up for success. You weren’t just blindly going in and doing this. I think there’s a little bit of nature and some nurture in that one. Two factors came in—multiple factors. I think the thing that I want to chat with you today about is over the years that you’ve been running Edgar, there have been just crazy API changes and partner changes—Facebook and Twitter. I don’t know if other APIs have changed as well. I got the impression from the outside that has to be tough on your business. Has it? Talk me through that.
Laura: Yeah, 2018 has been our toughest year at MeetEdgar. We’ve got hit with a lot of changes at once. Some of them were in 2017 as well. The biggest one was Twitter not allowing repeating content. A big angle of what we do differently at Edgar is we allow you to keep a library of your content that gets repurposed. That’s a big reason why a lot of people use Edgar. All of a sudden, Twitter came out with this rule that said, “If you have the exact same tweet, if you sent it out more than once, that is against our terms of service.” There was no nuance to this rule. If you send out something that says, “Good morning.” Then you sent out something else that’s just says, “Good morning,” four years later, that’s technically against their terms of service.
Things like these are especially frustrating when you’re a tool. Obviously, people aren’t getting their accounts shutdown for sending out “Good morning” twice within 10 years. But as a tool, you have to make sure that you are in 100% compliance with the APIs, with the policies, and the terms of service because we’re putting our customers at risk if we’re not following Twitter’s terms. It would really suck for someone to sign up for Edgar, the tool is doing something knowingly against Twitter’s terms and conditions, well, now we’ve put our customers at risk for getting their accounts shut down.
There have been many tools out there that did that especially for Instagram. There used to be a lot of tools that went against Instagram’s terms and they all got shut down. No big surprise there. We did talk about, “How do we want to handle this. Is there anyway that we want to try to fudge this?” We’re like, “No, we can’t put our customers accounts at risk.” We are going to stop repeating content on Twitter. That was the biggest one.
Around the same time, Facebook stopped the ability for third party tools to post to Facebook personal profiles so you can still post to Facebook pages and groups but not personal profiles. We just got our access cutoff to Facebook groups for a while just from bad luck. All the social media tools are doing a lot more invitations and manual approvals, and that kind of thing as opposed to just open API. We just hit some bad luck for we got stuck in the approval queue. They didn’t have any problem with what we’re doing or anything like that, we just got to the bottom of the list somehow. It ended up being two or three months where our customers couldn’t post to their Facebook groups where a lot of our competitors didn’t have any downtime or had a week of downtime for groups.
Rob: Wow. That is brutal. What a tough space. Take me to that moment. Let’s start with the Twitter stuff because that, I imagine, was just like a punch in the stomach when you read that. That moment where you read the email or whatever it is from Twitter—the press release—what were you thinking?
Laura: You know, I’m such an optimist. I actually didn’t even realized how bad it would be. Because I was thinking, okay, the good part about this is that all the tools are in the same boat. We’re not going to be able to repeat content on Twitter, but no one else either. It’s not like they have nowhere to go. It’s not like our customers can leave us and choose a different tool. I’m like, “This is really frustrating, but maybe it won’t be that bad.”
It did help that I understood why Twitter was doing this. Obviously, why Twitter’s doing this is to prevent spam. They don’t want people setting up Twitter bot accounts repeating the same message over and over. It’s just frustrating that they did it in such a way where they made this just extremely broad stroke that in addition to eliminating spam, is also eliminating just some really standard usage of the tool.
Rob: Yeah, the collateral damage of the Google, Facebook, Twitter, when they change their APIs or change policies, I don’t think that they fully understand what they’re about to destroy. Oftentimes, they are doing it, I think, in a way to take out spam or for the better of their platform or for the better of the internet. I think internally they do believe that. It’s kind of like, “Are you questioning that?” Totally. Maybe not. Are they just doing it to grab more market shares? Is that what you think for their clients? That could be, I guess, a negative motivation.
Laura: Yeah. I think in this case, Twitter was, I do think that they were just trying to cut down on spam. They just didn’t think of it much beyond that. That was kind of it. I don’t think they’ve given out much thought since. It wasn’t something that they announced very widely. I find that most small businesses still don’t know about this, which makes it even more frustrating for us because it kind of makes it seem like we’re the ones enforcing this rule because people have never even heard of this Twitter rule. They try to use our tool, we say, “You can’t use it that way on Twitter.” It can be a frustrating experience for the end user.
Rob: Yeah, I’d imagine. You just talked about three kinds of breakages of your built-on platforms, these platforms can make a change and can really have a serious impact on your business. Of those three kind of, I would say, semi-catastrophic events, did you see an increase in churn? Did you see reduction in topline revenue? How did it impact your company?
Laura: Yes. We saw just a certain percentage of our customer base. Here’s what we discovered. I thought, when they made this announcement, some people are going to leave because some people are going to say, “Well, I use you guys for Twitter. I’m repeating on Twitter and I can’t do that anymore.” What I didn’t anticipate was that a certain percentage of our customers were just like, “This was the only thing I used you for.” I didn’t realize that a percentage of our customers were, “I used you guys for repeating on Twitter. You don’t do that anymore. I’m out. I’m not going to another tool. I’m just not going to use Twitter anymore.” That’s actually a big thing that we heard. There are other social platforms out there like, “This doesn’t go with my strategy. Maybe I’ll post to Twitter manually every so often but I’m out.” That was a surprise.
I thought, “We’ll have an announcement. It’ll change then we’ll see who leaves.” The first month we had to make the change, people left, and it feels like, “Okay. You never want customers leaving, but this feels manageable.” The nature of our tool, like I said, you have a library that at some point, if you’re only sending things once, obviously, that library is going to run out similar to the way Buffer is. It’s like a one time queue. When you get to the bottom of the queue, it’s gone. For Twitter, our tool became that way.
The thing is people load a lot of content into our tool. People had sometimes content for a month, three months, or six months, before their Twitter content ran out. The good part was we had an extra four months or whatever it was, obviously, a revenue from them. But that part, it just kept going. We’re like, “Okay. The people who don’t like the Twitter changes left.” Every month, more and more people would figure it out because obviously people don’t read every message that you send. People will just be like, “What happened? I’m not sending out content anymore on Twitter. Is the tool broken? What’s wrong?” We’re like, “Oh, no. You’re not sending out content anymore on Twitter because you used up all your content. You need to create new content now.” They’re like, “That sucks. I’m leaving.”
Rob: Geez. That was such a big selling point of Edgar above other tools. As you said, like Buffer, you create a content, you schedule it, and you post it and such. I can imagine that hit really hard. Churn went up, which obviously means you’re growth either stalls or flatline, whatever that does.
Laura: Declines, yeah. For us, we had a decline in our user base. It ended up with these three changes together. We lost a significant amount of our customer base; maybe we lost a quarter or a third of our customer base.
Rob: Oh my god.
Laura: It was really big. I don’t want to make it sound like it’s only external things. We made mistakes, we could have responded faster and better. The positive thing is that it forced us to innovate. One example of that, now we have a feature we call autovariations where you put in your blog post and we automatically pull five poll quotes from that post to serve as your status updates. That’s just one way to paste it in the URL and get five status updates to Twitter and all the other social networks, but we didn’t have that ready when Twitter shut down. We didn’t introduce that until nine months later, something like that.
You have to roll with the times when these things happen. But yeah, it was a significant loss for us. We had to make some layoffs in our company which we never had to do before, but we did remain profitable and survived through the whole thing which I’m really proud of.
Rob: Yeah. I would be as well. Honestly, it could’ve been business ending to lose 25% or 30%, whatever the number of customers would end a lot of companies. In fact, the interesting thing is, I don’t hear many bootstrapper who have to do layoffs because it tends to be this very slow growth over time. You build up as higher as your revenue. With SaaS, unless you have an odd event like this, almost like a black swan thing that comes and gets you, your growth is just going to keep steady or whatever. I think you’re in a unique situation that you had to deal with. Have you ever had to lay people off before?
Laura: No. I’ve let people go, but I had never had to do layoffs before. I’m very thankful that we had a really great team backing us up especially our head of finance, Tanya Crino. She was very cautious about seeing this coming. Like I said, we saw the initial way, but then we kept having more and more customer loss. If you Google, “How to do layoffs?” The first thing you see is only do one round. Whatever happens only do one round. Tanya and Sara Park—who’s our head of operations at that time and is now the president of the company—they were really looking at, “What do we need to do so that we can only do one round and so that we can offer some kind of severance?” We were able to offer two months severance to every person who was laid off and help them find other positions at companies we were friends with and things like that.
Another thing that was so fascinating from the layoffs is we have full financial transparency within our company. We don’t share individual salaries, but we share everything else. We do financial reviews with the whole company every month. Everyone can look through all of our expenses and income. People saw the writing on the wall, you know what I mean? These are obviously, very intelligent people working at MeetEdgar. You can’t say, “Hey, we might have layoff soon. Don’t worry. We’ll let you know.” You can’t really say that until it’s a done deal. But people are smart. They see us losing customer base. They’re like, “Okay. This is a bootstrap company. It has to remain profitable.” The only way that’s going to happen is lowering expenses. We found that while, of course, it is a terrible, heartbreaking, and incredibly stressful thing to be laid off from a job, we also were able to maintain positive relationships with everyone who was laid off. Everyone understood that it was something that needed to happen for the company to survive.
Rob: Yeah, which is a big deal. It shows that you handled it with care, thought, and deliberate action. It’s impressive. It’s easy to flab that, I think. It’s easy to accidentally screw that up.
Laura: Yeah, it is. Especially because it’s often something you haven’t done before. We were able to do it in just one go. We didn’t have to do anymore after that. It was hard because the way that you do it in just one go is you have to make deeper cuts than you think you need to. When you first look at this problem, obviously, you’re hoping to just let one or two people go. We had some people that were laid off and then some people, just because it was just a tumultuous time at the company, some people ended up leaving on their own kind of before or after, just along with the tide. I think we had eight people that left. The other, maybe, six layoffs and two people leaving, or something like that.
Rob: Yeah. How big of a morale blow is that to the rest of the team? Do you feel like they recovered quickly or were they pretty devastated?
Laura: It’s interesting because I think it was kind of an emotional rollercoaster for everyone. It’s devastating, and at the same time this means, “Oh, the company’s going to make it.” They have the same numbers. They’re like, “Oh, this is the choice that the company needs to make in order for me to still have a job and the company to still survive.” Obviously, it’s always really hard when that happens, but we were really focused on rebuilding with the team that remained.
Rob: Yeah. I think I’ve been at companies, either worked for them or had colleagues at companies who’ve been laid off, and I think such a big piece of the reaction and the morale comes down to the trust of the leadership. Do they trust the CEO? Do they trust you, Laura, when you’re saying, “This is why. This is what we’ve done. Now, we’re going to move forward and we’re going to survive.” Do they think that somehow you manufactured it? Or made it up? That you haven’t cut deep enough or that you cut too deep or whatever. That’s when there’s this big toxicity comes about. It’s definitely going to be an emotional rollercoaster if they recovered. It shows that you had a good relationship with your team.
Laura: Yeah, I think so. We were able to still have a few people in each department. It didn’t feel like, “And I’m the only engineer now. This is not going to work out.” I think it felt to people like, “Okay, I can see how the company can continue to survive and grow with the team we have left.” Luckily, it wasn’t so dire that it felt ridiculous.
Rob: Yeah. Was that in 2018?
Laura: Yes. In early 2018, yes, that we made the layoffs.
Rob: Okay. You were still acting CEO at that point?
Laura: Yes, although I was actually on maternity leave. Now, I’m remembering the timing. I guess my daughter had just been born when we actually did the actual cut. We have been doing the math and planning up to that. I was actually technically on maternity leave when we had to do the layoffs. I just hopped on and wrote everyone personal emails because the actual conversation happened with our hiring manager anyway. There was only one person who’s a leadership level that we had to layoff, so I had a conversation with them. Weirdly, I didn’t do a lot of the actual conversations.
Rob: Sure. That’s still baller for having a baby and two days later, being involved. It’s tough when the timing works at that way.
Laura: It’s not ideal.
Rob: Yeah, not at all. It’s got to be stressful. Did it take a toll on you personally? Like your psyche and such?
Laura: It was a relief because it made it clear that the company was going to make it. I don’t mean to say that disrespectfully to anyone who’s listening who is working on ur team. It was a very hard decision, but the day that it actually happened, it was a relief to get it over with, get it done, and be like, “Okay. Now, I can move forward.”
Rob: Yeah. Some time after this, you decided to start another company called Ropig. When was that? That was probably mid-2018, I’m guessing.
Laura: I’ve never put the timelines of these things side by side in this way. I think there’s sort of separate compartments in my head, but now that we’re going to put them side by side, that sounds crazy. It’s a lot of tumultuous things happened all in the same year. Ropig launched in March 2018.
Rob: Got it, okay. Launched, meaning, the website went live, product was live, people could use it?
Laura: Launched, meaning the product started taking customers. We’ve actually been working on it for about a year prior to that.
Rob: Okay. You were doing both of these then?
Rob: You were working on both. Ropig was alert management for dev teams. Is that right?
Laura: Yes, exactly.
Rob: Obviously, the punchline—the jump to it—is that you decided to shut it down pretty quickly after launching. Let’s talk through that a bit. I know that you actually raised funds for this. Was that a first? Had you raised an angel round before?
Laura: That was a first. I had never raised money before Ropig.
Rob: Okay. How did you go about that? Did you have a network of people? Did you have to go to […] road and hit the angle groups?
Laura: We raised money in January of 2018. My daughter was born in June of 2018. I was being visibly pregnant when we were raising money. I was like, “I’m pregnant. I don’t want to travel. I don’t want to do it.” I decided that I’m going to get this done my way. By this point, I’ve been an entrepreneur for, I guess, 11 or 12 years now. I’ve built up a pretty strong network. I felt pretty confident that I can raise a small round with my own network. I’m like, “I’m not going to travel. I’m not going to go to San Francisco. I am just going to ask people that I know if they would like to invest in my company.” I looked up the numbers in preparing for this.
I think I contacted about 300 people. These were all people that I have personal relationships with. Some were just acquaintances, but people that I actually knew, not professional investors, people that are either just entrepreneurs, or people who work in tech, or people that maybe did some investing on the side. 300 people just got emailed or texted or Facebook messaged or whatever by me saying, “Here’s what I’m doing. Do you want to invest?”
Rob: Right. You ended up raising $320,000 on a safe? The audience knows, you emailed me. You and I actually had an email thread about Ropig. The only reason that I didn’t invest was because, well, I guess there were two, one was because your pre revenue. I don’t, in general, tend to invest in pre revenue companies just because there’s so much risk. But the second was that it was such a new space. I have confidence in you as the founder that you’re going to execute on it but my gut said it was going to be this very long, very arduous, very painful journey. You would get there eventually, but you didn’t have an audience in the space. I didn’t feel like you had […]. That’s what you and I talked about it in the email. Was that on your radar? Obviously, I must not have been the only person that mentioned that.
Laura: Yeah. A big advantage that I had in MeetEdgar is it’s a social media tool. I had already been in the social media space for years prior doing courses and consulting. I’d already built an audience in that space. With Ropig, the tool was systems admin, people, and developers. It’s not me. I’m not a developer. I’m not in that space. I’m not in that world. Not only do I have no lists built up but I can’t speak at that conference. I can’t go to those meetups. It’s not my thing, it’s not my langauge.
I do think that a big reason why Ropig didn’t work out is that I underestimated how much value I had and continue to give to Edgar in that way. Because with Ropig, I just thought, “Okay, I know I can’t do that but I can just hire people who can,” which is totally a viable strategy and a lot of people do that, but I didn’t raised enough money to do that. The problem was the strategy that I had in my head was really a much better fit for a company that was going to raise a lot of money. Even though I was raising this $300K—that ended up being $320K—I did not want to raise more money after that. I did not want to do big fundraising, I did not want to do VC, I did not want to do any of it. In retrospect, the game plan that Ropig needed to succeed was just not a match for only having a small amount of fundraising.
Rob: Yeah. You didn’t want to do the Series A, the shuffle, and you kind of just want to do this single seed round. I think call-in from customer.io calls it’s fundstrapping, is raising this single round to hit escape velocity. That makes sense. That actually fits my perspective of who you are as an entrepreneur. You are much more a bootstrapper than someone who raises. But raising that one round, really these days, it’s not against bootstrapping ethos anymore. You know what I mean? In some spaces like this one, the alert management tool. It competed with PagerDuty. Is that a good comparison? It’s a very crowded space with a lot of funding in it. It’s competitive. You’re going to need some superpower to get in there. You were saying that you didn’t raised enough money to hire someone to be an influencer. Is that what you were saying?
Laura: Yeah. That’s part of it. I just didn’t raised enough money for any of it. You mentioned that it’s a very competitive space, but it’s also a really expensive tool to build. My husband Chris is a developer. He’s the cofounder of the tool. He also, for MeetEdgar, built the initial version of the tool. He could not build alone, Ropig. It’s not a tool that you can just sit-down-in-your-free time-in-some-weekends-build. We had already spent, we decided to invest our own money, $500,000 of our own money into this project.
By the time we raised the money, we already had a fulltime team of developers just to get the initial product out. It’s alert management. You can’t be like, “It’ll probably work sometimes. It will get most of your alerts.” It’s just not the type of thing that you can have sort of shoddy, half-baked. Also, a lot of the advice is like, “Just ship people a minimum version.” No one really wants a minimum to manage some of their alerts. It just doesn’t make sense. You can’t really just test out some sort of halfway done thing. Like all the advice, “Pretend you have software, but then just do it yourself behind the scenes.”
Rob: You can’t do that with this. This breaks a lot of those rules. One of the reasons is because it’s so competitive in the market. It’s fair. It’s somewhat mature, I would say. An MVP in this market, very very different than an MVP in whatever—the VR space or something that’s still a nascent market. That makes a lot of sense.
Laura: Yeah. I think, that was another thing I underestimated because when we launched MeetEdgar, we had funded competitors. HootSuite had raised a ton of money. We’ve still been able to be a successful company in spite of that. I think I was kind of, “Oh, funded competitors. I can do that. I’ve done that before.” But MeetEdgar is also something that Chris could build on his own. The first version, he just built on his own in his spare time. If we don’t send out a tweet, it’s okay. No one’s business falls apart. It’s just a very different space.
Basically, what happened is once we raised that $320K, so we raised the money in January, we had our launch in March. The launch was just like a dud. We put it out there. We opened the doors and not a single person paid for it. Some people had free accounts, but not a single human paid for it which is a very bad outcome—in case anyone’s unclear—not what you’re looking for a launch. We’re going to have to make some big changes if this is going to work.
Rob: How does that feel? You’re a successful founder. You’re a serial entrepreneur. You’ve built up wildly successful online training course and business around training folks for social media. Then you launch MeetEdgar to one of the bootstrapping Cinderella stories, in my opinion, of getting some figures in a year, and then you launch this third app. At this point, you know what you’re doing. How did that feel when it just went completely sideways?
Laura: I was just like, “We picked the wrong market.” That was something we had been worried about when we were developing it. Basically, the whole idea with Ropig is that there are a lot of smaller companies like us with MeetEdgar where we were using PagerDuty but it really wasn’t designed for us at all. Then we saw a lot of other smaller companies on our space that just didn’t use an alert management tool and sort of dug through the logs manually when they had time.
If you look at the Ropig website or look, I don’t know if it’ll be up when people are listening to this, but we had a whole page. The whole point with the page, it said on the headline, “Why would I need an alert management tool?” I look at that now and I’m like, “Duh!” The fact that I had to build that page should have been a really bad sign. Why would I need an alert management tool? Why are you looking in this website. You’re clearly not going to find anything.
I think it’s possible. Obviously, there’s companies that have done it to introduce people to a new idea, a new concept. Again, maybe none would fit with bootstrapping. A fit with bootstrapping is, “You’re already using a competitor, let me show you how we do something different that makes us so much better fit for you.” I think this hurdle of, “You don’t think you need an alert management tool, but we’re going to show you why we do.” It was a failed experiment.
Rob: Yeah, that makes a lot of sense. That’s the thing with mature markets. You know that PagerDuty wants to expand that market, so they’re probably already putting a bunch of time, effort, and money into trying to convert everyone they can away from digging through logs. I’m just imagining, there is only so much blood that you can squeeze out of that turnip. They’ve already done most of that, probably.
Laura: Again. It’s just expensive. PagerDuty is geared more towards enterprise. Maybe there’s a spot in the market here. Maybe if we have spent another year going to every meetup around the world, and tweaking our product to get a better product market fit, maybe it could’ve happened. It was like that small fundraised combined with a dud launch was like, “This is bad.” Because all of our financial projections were like, “We’re going to be at 1 million revenue in the first year because that’s what happened with Edgar. Isn’t that how all businesses go?”
Rob: Yeah, oh man. You launched in March. You basically stopped operations a couple months later. It was a very quick decision that this wasn’t going to work.
Laura: Yeah. In May, we hadn’t told our investors we are shutting down. Basically, what happened is we launched. It kept going badly obviously because no major changes happened. Again, this coincides with my maternity leave because my daughter was born in June. My cofounder was my husband, also a parent to this baby who’s going to be born. It is not a time where we’re like, “We’re going to work 80-hour weeks now to try to make this work by ourselves.” All the factors in this equation do not add up. I’m just going to shut the machine down so that we can take our expenses to zero. Like I said, we had full time developers on the team. Some of them we were able to move back to Edgar.
It’s funny, you asked me if I’ve done layoffs, I was like, “No, but actually I had.” It’s funny because I didn’t even think of that that was a layoff. It was only one person because the other two we could move over to Edgar. Anyway, I actually had done layoff before. We let the development team go. We shutdown the tools. We kicked off our free users so our costs for running the tool would go to zero. I’m just like, “I’m going to take a few months of maternity leave. Then I’m just going to figure out what to do when I come back.” I don’t know what to do with this. I know we need to stop hemorrhaging money for our no customers and no time to work on this. I’m just going to stop it.
Rob: Put the breaks on. 2018 was not a good year for you. It was great because you had a baby but all the other stuff it sounds like, “Oh, good Lord.” Then you go on maternity leave, you must have been thinking about it for solid two months stressing about it, I imagined. Was it pretty stressful?
Laura: It was stressful. This is what’s interesting about the fundraising. If I hadn’t raised money, it would not have been stressful. For me, that was the element that made it stressful because I was so worried about letting other people down. When you raise money, you paint this picture of how successful it’s going to be which obviously, you believe, especially because all of my investors were friends. I had this dream of writing huge checks to my friends. What would be more fun than that?
If I didn’t have investors, I think, I would have been just like, “This sucks. I don’t want to do this. I’m just shutting it down.” After the launch that didn’t go well, I realized that I just did not have the same passion for this product. This product was much more, “Okay, we see a problem and we think we have the solution for that problem. Maybe there could be a business here.” Our audience with MeetEdgar, “I love entrepreneurs. I love entrepreneurs. That is my world. I love listening to podcasts like this one. I talk about entrepreneurs. I love reading books about it.” That’s our customers that we support at MeetEdgar, so I can live in that world. I have no interest in living in systems administration world. It’s just really not interesting to me at all. If I didn’t have the investors I think I would’ve just been like, “Yeah, this is really not for me.” But because I had the investors, I felt this pressure, “How can I make this work? I need to make this work?”
Rob: Yeah, I totally get that. Had you burned through all of the investor money by that point? Or there’s just some left?
Laura: That was the good news. We had not burned through much of it at all. The launch, we didn’t do paid advertising or anything. The only cost that we had incurred was just paying the developers for that few more months. When we put the breaks on everything, we had the 75% of the investors’ money still in the bank.
Rob: Yeah, okay. That’s a good thing then. How did you finally make the decision? Obviously, you shut it down. I’m assuming you returned the money to investors. How did you come to that? Was it really just like, “It’s going to take too long. I’m not interested in this space.” Talking to system administrators don’t have the influence, was it just all those factors that eventually led to that?
Laura: Yes. I was thinking, “What’s going to happen with this? How can I make it work?” Any path to make it work clearly involved raising more money—a lot more money. At this point, you can’t just keep hitting people up for another $200K or $300K. I would really need to do institutional fundraising. I had got a glimpse of institutional fundraising doing my friends and family fundraising. By the way, not family in my case, just friends. I don’t have any family with money. Friends and friends fundraising. There’s no rich uncle, unfortunately. I wish.
I had met with some institutional people in Austin and San Francisco, had phone calls. I think as bootstrappers, we have this really negative view of institutional money. It was all true with the conversations that I had. Every horrible stereotype I had about traditional VC was just 100% confirmed. They would ask me how big the business was going to be. They were not interested unless it was an ubersize situation. They were not interested in anything less than like, “I’m going to keep raising money, as much money as I possibly can, as fast as I possibly can.” That was the path that they wanted to see. They’re not interested in profitability, just interested in growth. Because I have seen that little glimpse, I was like, “No, this is not for me. No way.”
The thing that finally convinced me to make the decision, I was talking to a friend of mine, and I’m like, “I really think it’s going to be really hard. I don’t know what to do, but I have this duty to my investors.” He said, “You have a fiduciary responsibility to your investors, to return as much of their money as possible. Knowing everything that you know, if you were an investor, would you ask to just get your money back and get out? Or would you want to continue?” I said, “If I were an investor and I knew everything that I know from the inside, I would want to get out.” I would say, “Thanks, give me my money back. I don’t think this is going to work. I’m out.'” That conversation just absolved me of all of my guilt and stress because it made me see that shutting down was being responsible to my investors.
Rob: Yeah. It’s crazy how a conversation or a single question can get your whole mindset to shift and make a decision. It sounds like you knew the right answer too, but you’re burdened by this other piece, and it was the fact that you felt an obligation to your investors. Suddenly it was, “Wait, the obligation actually goes better.” You actually serve them better if you make the decision you already know you want to make.
Rob: That’s fascinating. That’s a good friend. He’s a good friend to keep around. He’s a keeper.
Laura: He is. It was November—I looked up the timeline—it was November 9th that I sent the email to investors saying, “I decided to shutdown and here’s why. You will be getting 75% of your money back.” That felt really good too.
Rob: How did the investors react? Were they supportive? These are folks that you knew, they were at least acquaintances or friends, was there any negative reaction to it or was it mostly like, “Sorry, this sucks. Thanks for the money,” type of thing?
Laura: It was very positive. People said, “It’s very unusual to be able to make this call and return the money. I really respect you doing that instead of just trying to burden through every last dollar.” People were very kind and very supportive which I’m very grateful for.
Rob: Yeah, that’s cool. I’ve found that with angels—angels are investing their own money—they just tend to be more relaxed. I’ve done about dozens of angel investments. I’m nowhere near the VC level institutional money manager in terms of how they view these stuff. I think it’s an interesting callback because you were saying the VC stuff you heard about is true, like the stereotypes you’ve heard are true. That’s why I believe that this world needs funds like Indie.vc and TinySeed to be that in between where we can write checks.
Now, maybe we could’ve written a check as much as you needed. You really did need a legit Series A to compete in the space, but there is an option for people to take money where it doesn’t come with that same stereotypical stigma of, “No, you have to be $100 million. How are you going to get there in three years or less? How are you going to hire 20 people a month?” All this stuff. You and I both know that we can build businesses and help those eyerollable constraints that venture capitalists are going to put on it.
Laura: Yeah. All the investors knew what they were in for. I hadn’t tricked anyone into thinking this was a get-rich-quick scheme. Anyone can afford to lose the money. It was just one of those lessons of always how important it is to be in integrity. I felt like I’ve been in integrity throughout the whole process. I’m still in integrity when I ended the process.
Rob: Yeah, for sure. Laura, we’ve covered quite a bit in this interview. I really appreciate you taking this walkdown bad memory lane of 2018. The positive end of the story is Edgar is doing really well after all the tumult that you went through with it.
Laura: Yeah. We are growing again. We’ve had growth every month in 2019 which has felt amazing. It’s just so good for the team after having such a hard time for such a longtime. I mentioned that it has forced us to be more innovative. I feel like it’s made me a new entrepreneur because I had never been through anything really hard before as an entrepreneur in retrospect. I thought I had, I had little ups and downs, but I had never had, “Okay, we have to do layoffs. We’ve lost a huge amount of our customer base. I’m shutting down this other company,” all happening at the same time.
It’s true that it makes you a lot smarter because you no longer have these false assumption that everything would always go up. You know that if you’re in this for the long haul, you’ll have ups and downs, and that’s okay. It’s not a disaster when something goes wrong. It doesn’t mean that nothing will ever get better and that your company is over forever. I’m really glad that I’ve had this experience of proving that to myself.
Rob: You took several things that looked like absolute roadblocks and turn them into speedbumps that you drove over and to come out to the other side of that successful with the company that’s continuing to grow after all these years. It’s quite a testament to your chops as a founder.
Laura: Thank you.
Rob: Well, we’re going to wrap up today. If folks want to catch up with you, I see your website at lauraroeder.com. Obviously, if folks are looking to manage their social media, they can go to meetedgar.com to see what you’re up to there.
Laura: Yes. I’ll do a MeetEdgar plug. They can enter the coupon code PODCAST and get a free month of Edgar.
Rob: That sounds great. Thanks again, Laura. Thank you so much for coming on the show.
Laura: Thank you.
Rob: I hope you enjoyed my conversation with Laura Roeder. I was truly impressed and impacted by her ability to turn roadblocks into speedbumps, and just her fortitude and perseverance in getting through hard things. These are hard things that we face as founders. She really stepped up, made it happened, kept her company alive, and made hard decisions about the next companies. Really impressive.
With that, we’ll wrap for the day. If you have a question for this show, call our voicemail number at 888-801-9690 or email us at email@example.com. Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
In this episode of Startups For The Rest Of US, Rob does a Founder Hotseat interview with Matt Wensing of SimSaaS. They talk about how to develop a strong cadence of work as a one person company.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups For The Rest Of Us. I’m your host Rob Walling. On the show, we talk about building startups in an organic, sustainable fashion, in a way that allows you to build yourself a better life. I think that startup should provide you with freedom, and purpose, and help you maintain healthy relationships. That’s what we talk about on Startups For The Rest Of Us, that’s why we call it, “For the rest of us.” It’s not the traditional Silicon Valley venture-backed startup path. We have several different formats for our shows. Sometimes we do a lot of tactics, and we teach ideas and thoughts that we’re thinking about; sometimes we interview interesting founders, we answer a lot of listener questions.
One format that we’ve only done a handful of times, and it’s been a few years since we have, is one called the founder hot seat. The founder hot seat is where we bring a founder, live on the show, and we talk through an issue that they’re thinking about or that they’re facing in their business. Sometimes, this is a marketing approach. It’s something they’re wondering, whether they should do this approach or that, whether they should hire this person, this role, or whether they shouldn’t, and to just keep going on their way. There tend to be no easy answers to these questions, and that’s why we can spend 20, 30, 35 minutes talking through the pros and cons of it. Hopefully, the founder leaves with food for thought and perhaps an answer to what they’re looking for; hopefully, you as a listener, just hear two smart people trying to talk through an issue, and troubleshoot it, and think about the best way to proceed.
I’ve long said that being a founder is more than 50% mental. It’s managing your own psychology, and much of this is about making decisions with incomplete information. Today is episode 450 of the podcast. I’m doing a founder hot seat with Matt Wensing of SimSaaS. We’re going to be talking through how to make consistent, needle-moving progress on your startup. Welcome to the show, Matt.
Matt: Thanks, Rob. Great to be here.
Rob: Matt is the founder and former CEO of Riskpulse. Matt, this has the sexiest tagline I think I’ve ever heard for startup, “Multi factor, prescriptive analytics for supply chain performance.” Did you come up with that yourself?
Matt: I did not.
Rob: Some copywriter? No. It totally describes exactly what it does. Anyone who knows that they need it, I bet is like, “Yes, have some.” For someone like me, when I read it, I’m like, “I’m not sure what that actually means.”
Matt: You’re going to qualify out.
Rob: Yeah, no, that’s exactly right, that’s what you want in your subtitle, especially when you’re focused on such a tight niche. In plain English, do you want to describe what Riskpulse does?
Matt: Riskpulse really started out as a forecasting company focused on weather, and really over the last five or six years developed expertise in how trucks, and trains, and even ships, get products from manufacturing sites to market, so supply chain, broadly speaking, but transportation, and logistics more specifically. What we created—right about the same time as data science and machine learning were coming in vogue in the enterprise space—is a way for companies like Unilever, Anheuser-Busch, especially food and beverage, to essentially predict and decide much farther in advance than they used to be able to, how and when they want to ship their products.
If you can imagine manufacturing Hellmann’s Mayonnaise literally by the truckload, then asking yourself the question of, “What’s the best way to ship this from Chicago to Los Angeles?” That’s what Riskpulse helps those companies do now. It’s serving hundreds of companies like that, and actually doing that kind of forecasting days in advance for millions of shipments per year.
Rob: Does it use machine learning, artificial intelligence, whatever the buzz words are these days, you were kind of doing it before was in vogue, it sounded like.
Matt: Yeah, we were doing it before it was in vogue and really didn’t call it those things; we just called it forecasting, and in some cases just bringing two things together. But yes, it does use machine learning. Think of it like, if I go on Google Maps right now as a consumer, and I’m about to actually have a pretty long road trip this summer, if I punched in right now, “How long is it going to take me to get from here to Yellowstone National Park?” It’ll give me a time to get there, but it’s assuming that I never stop, that’s also assuming that it doesn’t really know what the traffic is going to be like a day from now, two days from now.
What Riskpulse does for those companies is that it lets them put in, “I’m shipping Chicago to Los Angeles next week.” It does try to look at all of the external factors like stops, and traffic, and weather, and congestion, and all those things that are outside of people’s control and give them a realistic estimate of when they’re going to arrive.
Rob: Love it. I love these vertical plays where—I guess you’re a horizontal, across industries—but I mean it’s very tight knit shift, it’s a successful SaaS app, and employs, how many folks work there?
Matt: 15 full-time.
Rob: I mean it’s non-trivial, it’s a full-on company at this point, and you actually don’t work there anymore, you found a CEO to take over your duties, is that right?
Matt: I did. I certainly have been thinking about—as I call it succession planning, the grandiose description—had been thinking about that. I have a family, enterprise SaaS is a pretty difficult lifestyle, and I’ve done it for five or six years at that point.
I was looking for a sales leader, ended up being introduced to a very experienced enterprise sales executive, who also had built and scaled companies from kind of the 10-50 headcount range, so very much the same year that we were about to hit. He worked as chief strategy officer with me for almost a year and a half, and then I realized, “This would make a really great opportunity to transition.” I told the board, the board was happy that I had come to that conclusion on my own.
There was no pressure or reason for them to tell me to do anything other than me just saying, “From a lifestyle standpoint, I think this would be best and frankly, for the business.” I really think of myself—in all the businesses that I’ve been a part of—as an owner first, as a shareholder first, and not as a, “I’m the CEO or I’m the CTO,” whatever the role is. That’s not actually what’s going to make you rich, and successful, or whatever your goals are; it’s making sure the right people are in the right places. As a shareholder, I just thought to myself, “Wow. I could have this person take over the CEO role.” I can take more of a sidecar seat which is what I did for about six months, and then ultimately, transitioned out to a board member and adviser at this point.
Rob: Yeah. That’s a mature viewpoint that I think a lot of founders don’t necessarily have naturally. It’s nice that you are able to think about it in that respect and to realize that if your lifestyle goals weren’t meeting up with your company that there’s—I’ve said on the podcast in the past—it’s like, “We started our own company so that we can be in control of that, and so that we can help ensure that we are enjoying what we do on a long term basis.” It’s cool that you’re able to transition away from that, and you started your next effort, which is a SaaS app called SimSaaS, and that’s really what we’re here to talk about today. You and I have gotten to know each other because you’re part of the Tiny Seed batch—the first Tiny Seed batch.
Something that really attracted us to what you were doing is the fact that you’re a repeat founder, that you’ve had success already, that you are a developer so you can build your own software early on; you’re good at product, you are really good at partnerships apparently which is what I discovered recently. Your business development skills, your sales skills, and even copy and positioning, you’re like that triple or quadruple threat, and that’s what attracted us to SimSaaS. SimSaaS, for those who don’t know, again, I just pulled your tagline off your side, but your headline says, “Great teams forecast early and often. Upgrade your gut feelings to forward-looking metrics,” and that is for folks running SaaS apps.
Matt: Yeah, that’s right. SimSaaS is an app that’s built for SaaS founders. What it’s really helping them do is take a forward-looking view of their business. Obviously, there are a lot of tools that are available, ProfitWell, ChartMogul, Baremetrics, etc. A lot of people just use Google Sheets to tally up their Stripe account data and figure out what their current MRR, RPU, and LTV, and all those metrics are.
What SimSaaS does is it takes those historical metrics, also puts them into a simulator, and then generates forward-looking trend of what all those numbers are going to be in the future. I built it, originally, as just a python script prototype a couple of years ago while I was running Riskpulse because I had investors asking me questions that were pretty difficult to answer just using Excel. Things like, “I see your MRR now. I see what your pipeline is but what if your sale cycles get longer? What if your receivables don’t come in when you think they’re going to come in? What if your pricing goes down? What if it goes up? How does your business look then?” Those are very fair questions when you’re going out to raise money, especially or even when you’re making decisions like hiring. It was very difficult to answer those just going back to Excel and saying, “Okay, I’m going to delay our revenue by three months because our sales cycles are longer.” It doesn’t really just work that way. It’s a lot more complicated.
Everything’s connected. We all know all these interdependencies in your business are just very complex. I realized that this is something where software could actually help us, “If I could just punch in six months instead of three months on my sales cycles and have it auto-generate a new forecast, that would be really handy,” that’s what it does. It’s connected to those data sets that the founders have. If you have a Baremetrics account, for example, you can connect that in, and it gives you a fresh and live forecast for all of your metrics as often as you need it.
Rob: Very cool. It sounds like you’re taking a machine learning AI stuff that you did and predictive analytics with Riskpulse and applied it to SaaS metrics. Is that a reasonable summary?
Matt: That is a reasonable summary. I have a friend of mine that’s at Riskpulse that teases me that I’m kind of a one trick pony. You take things, and you forecast. You rinse, wash, and repeat. It was amazing to me when I went out there and looked at the landscape, and I looked at the forecasting components because each of those tools that I mentioned does have some forecasting component to it, but they’re all really simple linear extrapolations of where you’re going to be next month based on this month.
I was kind of surprised that there was nothing more sophisticated than that and just as a quick beside my background, pretty deep involvement with weather forecasting. I actually gave a lightning talk at Business of Software last year, and one of the examples I used was hurricane forecasting. There is a forecast that says, “If the hurricane keeps moving exactly this much North and exactly this much West each day, this is where it will be,” but we all know now based on physics that the real world doesn’t work that way. I think SaaS companies also don’t work that way. There’s all kinds of chaos, and complexities, and sudden changes, that is why so oftentimes, our forecast end-up being wrong which is really frustrating for a founder, that’s what I’m addressing, and you’re right, I took a lot of my domain expertise, and I was able to apply it here.
Rob: Very cool. Today, we’re talking in the Tiny Seed Slack. I was asking, “Are you interested in coming on the show? Is there anything you’re kind of struggling with or really thinking about top-of-mind that we could try to think through to give you some clarity?” In your message, you said, “One thing I could talk about,” with some real conviction, “is how to develop a strong cadence of work as a company of one person managing a huge amount of context switching required to make consistent and needle moving progress on every front over a 12-month period.” In other words, the length of the Tiny Seed Accelerator. “How can I find that groove and sustain it?”
I like a couple of phrases in there, “Consistent needle moving progress,” I think that’s a powerful kind of statement. “On every front,” because we know there’s product, there’s marketing, and there’s sales, and there’s support, and there’s all these things over a 12-month period which is an extended period of time. Do you want to talk a little more about that? That was your summary of it, but what are you thinking about?
Matt: Going back to what you said earlier, which I’m very flattered that I’m capable of making some progress on a lot of different areas whether it’s business development, or marketing, or coding. The double-edged sword of that is that you can end up feeling like, “Am I supposed to just take it as it comes?” Meaning, “This week, these are the urgent and important things. Clearly, that’s the most important box to focus on, and I’m just going to tackle one item from each of those categories of work each week.”
What I’d like to do—I’m leading myself into this—but what I’d love to discover is, “You know what, I’m going to treat weeks or two weeks or months as my unit of work.” I hesitate to say sprint but if you want to think of it that way we can. I’m going to be a little bit more disciplined about, not just my daily routine but maybe even a week over week routine, or maybe even within a month that I set aside a week to work on a product that’s meeting-free because I can’t have that luxury. If I have a week where I know I’m going to have a bunch of meetings anyway, that’s my week to do sales, and business development, or partnerships.
It’s an awesome opportunity to have a year of a fun way to work on your startup, thanks to the Tiny Seed program. Just thinking about as a company of one especially—I can’t parallelize very well, there’s only one of me—How do I sort of acknowledge my own natural rhythms, my own lifestyle, but then also, just kind of the nature of each of these kinds of work and start trying some structures that could help me maybe on a one month view?
Rob: I think that’s important. I like that you’re asking the question of yourself. It shows that you have like an insight into how you work. Obviously, each of us has strengths and weaknesses, and until you identify those strengths, especially when you’re a company of one, I think that you’re at a disadvantage until you know yourself pretty well, until you know yourself as someone who either is that, I’d say, the more impulsive context switching founder who likes to bounce around and get a lot of work and a lot of things all at once.
I’ve worked with founders who do that. I’ve worked with founders who tend to focus too hard on one thing and get stuck on it. Whether it’s a mental perseveration or whether it’s, “I am going to work on this email. I’m going to work on this code until it’s done,” and then like 12 hours later they’re done and they’re like, “That was the whole work day,” and they got stuck on it. You strike me more as someone who moves around a lot; works on a lot of different things as they come up. Do you think that’s an accurate assessment?
Matt: I think that is. I think that’s probably what’s natural for me. People that know me from the Tiny Seed context are probably—I’m in the Slack a lot asking questions. I’m just naturally, a very curious person. I get a lot of enjoyment out of just knowledge; sometimes for knowledge’s sake, sometimes I just want to store it away and say, “That might come in handy later.” I do have a habit—I was about to qualify it as a bad habit—I’m just going to call it a habit for now. A natural habit to want to bounce around, look at a lot of things, have a lot of tabs open at the same time.
I’ve got to write real code. I’ve also got to think deeply about copying it. I think one thing that’s caused me to think about this more is just the deep work, I was going to say mantra, but that theme that’s come up quite a bit lately in the circles. I listen to podcasts, a lot, etc. where it was hard to actually get deep work done in a company of 15 people that were all on Slack at Riskpulse sometimes. Now, I can have this luxury of saying, “Okay, how would I do it differently knowing what I know now? How can I get myself into those groups without ignoring anything that might catch on fire.”
Rob: Yeah, totally. I think you have the luxury right now of, not only being a team of one, but you are still early enough that you don’t have 1000 customers all asking for things, things that are on fire per se. I think there’s a couple of things that come to mind right away. As much as I like Slack for the community, I’m only in may be in two or three Slack groups including that the Tiny Seed one that you and I are in together. I do not disturb Slack multiple times during the day kind of almost premeditated.
I know that my best times of day to work tend to be in the morning until about 11:00 AM or 11:30 PM, then I get really hungry because I don’t tend to eat breakfast. I eat and then I get a little sleepy, so then I will tend to do Slack in the early afternoon, and then I get this second wind. I either do not disturb Slack or I use email a lot more than I think some other people do these days because Slack has given us that. It gives us the instant communication and feedback. I think you could certainly have a team. We had a team at Drip with Slack and it wasn’t super noisy because we only used it for things that needed realtime.
If you didn’t need it realtime, as new people would start I would tell them “Hey, we value maker time,” like that’s a big thing. We’re a software company with three or four engineers out of this full-time team of eight, and then we have a couple of contractors. We were engineer-heavy because the product was such a focus. The way I communicated it was like, “Look, if you need to interrupt a developer, that’s fine. If you need to interrupt someone, that’s okay. But if you don’t need to, if you don’t need an answer within 20 or 30 minutes, send an email.” That was like an intro thing and that was the culture that I had set up at the company. How does that resonate with you? Does that seem crazy or does that seem like something that would be interesting?
Matt: Definitely interesting. I probably over estimate. I’m probably bad at judging whether or not things need to be real time just because of some of those habits. We signed up for HipChat first before Slack was a thing at Riskpulse. It was basically pretty noisy and pretty engaged. We, as a company, culturally had to try to enforce those maker times. Now, I’m self managing. Does that make sense? One crazy admission here is, I don’t think I’ve ever used Do Not Disturb on Slack. I think you’re probably just thinking I’m probably just a bad citizen where I’m ignoring people’s messages and they’re wondering, “You’ve got the green dot.” But certainly, that’s a great little tip.
One thing I wanted to jump off of as well is, I have a similar kind of natural rhythm in terms of my work. I am a very early riser. It’s been tough this Summer since the kids are out of school, everyone is staying up late. Typically, I get up at 4:45 AM or 4:55 AM and I’m at my desk with a cup of coffee after drinking some water by 5:00 AM or 5:15 AM. I have found that my coding abilities and my deep analytical work abilities are really that 5:00-10:00 AM period, which is five hours. It sounds like not much of a work day, but that is one thing I’ve noticed too. I can probably do myself a favor and hide from Slack during those times.
Rob: Yeah, I mean, I can see that five hours of straight work, that sounds like a tremendous amount of time. Think of all the people working at startups or companies, for that matter, that are running Slack and how often developers get interrupted. To have four or five hours of uninterrupted focus time to me, you can get two days of development done in that. Two days compared to just being part of a 20-person development team where stuff is flying all over the place, every minute you’re getting interrupted.
I think that’s plenty of time to get almost a full day’s worth of deep work done from 5:00-10:00 AM. If I were in your shoes, the fact that you’re online at 5:00 AM is awesome. I would say I’m the opposite. I wake up later and I’m tired when I wake up. I’m groggy for 30-40 minutes. I’m typically, at my computer by nine if I’m lucky. This isn’t about my habits, but it’s definitely not—I think you have a distinct advantage is what I’m saying.
One of the things I was going to talk about or wanted to bring up is, when you’re a single-person company or a very small team, I mentioned it earlier, but it’s so important to know your strengths, and to know your weaknesses. One of your strengths is deep work. It sounds like it or being able to write your own code I think is a big deal. Another one is that you’re online at five in the morning. That is a strength whether you realize it or not because I couldn’t do that. I would be trucked, I would get no work done, I would be worthless, I’d just be too tired.
Obviously, I think when you’re this small, you got to focus on strengths and you need to really forget your weaknesses or work around them. Ultimately, you can hire people to take over those or to cover those areas. Again, to come back to me, I don’t enjoy doing demos, I don’t enjoy sales like enterprise sales and all that stuff. It just doesn’t resonate with me and my personality, but it does with you. I would say the fact that you’re a developer who knows how to do sales and how to do these partnerships is another big strength and something that you can leverage over the course of this year.
Matt: Yeah. Two thoughts came to mind. Mikey Trafton, for those who don’t know, he’s one of the founders of Capital Factory here in Austin and he’s a frequent speaker at Business of Software that I’ve gotten to know fairly well. He has these categories of work or strengths and he talks about how you have a super power that is something that you’re insanely good at and for you, it’s kind of effortless. There’s this category of things that everyone has where they are really good at them, but they find it draining. You do it and every else looks at you and says, “Wow, you’re really good at that.” But at the end of the day, or if you do a lot of that, or right after you do that, you’re just kind of exhausted or maybe just worn down.
For me, interestingly enough, I do find that the deep work is that the coding, the design and some of the things I do in isolation are the first kind. They’re the things that I really feel energized afterwards. Enterprise sales, although I’ve done it and I’ve closed 6-figure deals consistently in the past, they are really draining I find. The demos, I can totally relate to that. It’s kind of funny, it’s like one of those things where, “Yes, I can do it, but I do find it to be difficult.” I’ve learned in the past, the one thing I can’t do is I can’t do one of those and then get into any kind of deep work. After I do that, I’m ready to be done.
Rob: That’s really good to know, right? All your demo should be after 10 or 11 in the morning. That’s something so good to know about your daily cadence. That’s what we’re talking about here right? It’s is to bring it back, how do you make consistent needle moving progress on your business, and it’s showing up every day, and having a schedule that is as ideal for you as possible. I feel like if you could not check email—this is very hard to do—but if you could not check email or Slack before you start your 5:00 AM sprint in essence, I’ve never been able to do that I will admit. I always check email first thing in the morning. I always have. I don’t know if I will break that habit.
I think, in a perfect world, you wouldn’t have the distraction, but sometimes you just need to feel—I need to feel okay that nothing’s on fire, or if there’s somebody who needs a quick answer—if they’re relying on me that I get it out to them quickly. But sometimes of course, it takes you off track, you want to do 15-20 minutes of email instead of your deep work. That’s kind of the sacrifice that you have to make if you do that.
Matt: Yeah. I think I’m the same way. I’ll check it first, but I have an incredible ability to unless it’s actually on fire, to just kind of ignore it and wait, but then I get that closure that, “Nah, everything is good.” I think what I would say next is, if we can zoom up one level or going up one level and looking at a week or a month and asking—I’ve got in a program let’s say a 10 months remaining not that anything magical necessarily happens at that time. We’re not working towards a demo day per se, but if those are actually my units, so a daily routine sounds pretty solid. How do you think about juggling or moving between marketing, sales, product development, design, and I can think of one example. You really shouldn’t be building things before you design them. Jumping and writing a bunch of code might not be the best thing to do. If you look at it a week or even a month context, what does that look like?
Rob: Yeah, how do we think through that? It’s fascinating because so many founders at your stage don’t even think about that. I feel like it’s the fact that you have already grown a company to the level of Riskpulse that lead you to think about the longer time frame. I honestly, think it’s less important in these early days, but it will quickly become more important as you get even a couple months down.
Because right now you could literally think just a couple days out or a week out tops and be like, “What are my goals this week? It’s to ship this feature and to get another customer, another five customers,” or whatever the number is, but you’re going to hit a point in the next you know 12 months where you do have to start thinking just a little further. At first, you think two weeks out and then you think four weeks out. Then of course, as you get bigger, you have to think two months out because you have all these people working on things and they need to know where they’re going. When you have 15, 20 people, your horizon has to go out further.
At your stage, I don’t know how much time I would spend thinking about a month out, because it really does feel like a long time given how quickly things are changing right now. I feel like there’s all these friends you can be fighting on, or all these friends you can be switching to and from, there’s development, and there’s design as you said, there’s sales, there’s marketing, there’s kind of internal operations, there’s processes, there’s all this stuff, I feel like right now, just moving the product forward, and doing sales, and/or business development. I almost kind of count that as sales, but I guess technically, it’s more marketing because it’s generating leads that you would sell.
Almost all the other fronts can go by the wayside for the next few months, which is hard to do, but that’s how I would mentally prioritize them right now. Because if you’re not building features, or getting new people using the product, everything else is substantially less important. Does it feel that way?
Matt: It does. If I look back the last few months, in the way that I started SimSaaS, is I really did the new classics soft launch on Twitter, sharing it with all my followers, and it got a good amount of interest. What I ended up doing was having this kind of open season where anybody could sign up, and I learned a lot, and then I essentially shut it back down into a private beta where now I have a handful of folks that I really care what their experiences, they’re definitely my target market, and I’m trying to get them signed up, willingness to pay, that’s the focus.
The lead gen part is kind of just doing its own thing right now, people are opening their email address saying, “I’m interested early access,” sometimes filling out a survey. That feels really good to just be automated. I don’t know if those folks are going to get bored of waiting around for me to get back to them, but I agree, for the next few months, I should just be focusing on a bottoms up acquisition of happiness of these handful of people.
If I do put my second time founder hat back on though, I do have an end-in-view, which is half by the end of third quarter of this year, which is I think a quarter, because of the company enterprise faced. By the end of September, I do want to launch self-service, and I’m not self-service now, so I do think about what do I need to do to get to that point. That is an interesting blend of products, and sales.
Rob: Yeah, for sure. I think to touch on SimSaaS, specifically, you’re in a unique position where you just have incoming interest, and you’re in a unique position that—fairly unique—where you don’t have to do a bunch of marketing right now. Because typically, the advice that I would give right now is, you have to be focused on marketing, and product, those to be the two.
The level of inbound interest you have, and how quickly it spreads, because it is this insular SaaS community, it’s like we all talk to one another, and you appear on one podcasts, and then everybody has heard of you, and then you apply it so well to so many of these companies that I do think, I mean, that’s what I was specifically saying its product, because you’re trying to push more features to keep the customers you have a happy, and its sales to land your inbound prospects as folks who are going to use it. But marketing for now is taking care of itself.
You obviously will hit a point where that changes, but I wouldn’t be thinking out that far right now, because I think that’s 6-2 months out. By the time you get there, you’ll be at such a different place product-wise, and revenue-wise, that you can either decide if you want to go attack marketing, you’d do it if you want to hire it out, you’ll do it because you’ll have the budget. But that’s something as you get closer, I think, you’re going to now. I don’t think you need to be preparing for that yet because it’s a way out.
I even think, what month is it, it’s June, and you want self-serve by September, which is three-ish, three-and-half months out. I mean, I would ask two questions about that, one, why do you want to go self-serve by then? And two, what level of planning does that take, given the fact that you had all the code, and do the design, could you hammer that out, literally in the last two weeks of September. If that still the right decision when you get there? It’s like just in time decision making. It sounds a little flippant, again, if you’ve worked at a 60-person company, it’s like, “You can’t possibly make a decision that close to the wire, because you got to get product marketing on board,” you don’t need to do any of that. I would almost push that absolute decision off until the last moment where it’s like, “Yes, now that’s what I have to do. Now, I’m going to build this.” But tell me if that resonates or if that sounds like, “Nope, I think that’s a bad call and here’s why.”
Matt: This is interesting. I have used SimSaaS to forecast SimSaaS. Self-service, what is it? It’s a way to get more, because I’m going to go with trials with credit cards, and if you think about self-service, it’s really just a way to remove all the friction because I’d love to think it’ll be zero percent friction, but it will remove me as a gatekeeper for people to get on board. Interestingly enough, do I need it by then or is that just kind of artificial? That’s a great question, or am I imposing that on myself, because I think I need it.
One thing that is interesting, I’ll say, is that out of the early adopters I already have, there is a fair amount of investors, or mentors, or even just experienced founders who are already referring other folks to it. Lead volume, again, getting back to marketing is not a problem, do I need to undo myself as gatekeeper? Maybe, what I should be thinking is also taking a bottoms up approach to that and saying, “I am on boarding folks manually right now.” Every time I do that, I just get more efficient at it somehow, and let my own sort of irritation with having to do things manually drive me to make it ultimately self-service, but it doesn’t have to be necessarily.
Rob: There are a number of products now, Superhuman is the example everybody brings up, but there aren’t many products of stay invite only for a very long time. Some do it intentionally for the scarcity, but others don’t. I think, as a single founder, you have a pretty good, almost excuse or a reason to. As long as you’re not finding that more of these leads are waiting so long that they’re degrading, and they’re not converting, because they’ve been set in the queue for too long. I think setting in an arbitrary date for it that’s three and a half months out might be premature.
If you get to the point where it’s like, “No, this is just too much volume,” and you need to automate, then you can do it earlier, or you could do it later. But I don’t feel so strongly about having to have it done by the end of September. I was thinking about it as we’re talking about how the onboarding is somewhat manual, I love the idea of trying to automate a little more each time. Also, hiring a customer success person, if it literally is just light sales, like it’s inbound warm leads who need you to walk them through the product a little bit, give them a little bit of a demo, show them how to use it, get them set up, that’s a customer success role, and that is not that hard to fill, and it’s not that expensive either.
Could that be something that’s a better option, even if it’s a part-time person, you give them 10 or 20 hours a week, starting at a month from now? Does that shape how things happen because now you have someone who’s on your team learning the product, and you’re not in as much of a hurry now to do self-service especially if they’re converting, right?
Matt: Yeah, that’s interesting. I think there’s an open question of how zero-touch any of the stuff can be these days. I mean, I know that there’s 1% say any amount of human touch sales involvement, lifts your ACVs, lift your attention, it’s just a good thing if people want to have a relationship with your company, and that would feed that. I’ve been there, that’s the playbook I’ve run before. I think the other one, which is the company of one, maybe, let’s say to a fault, but even more strict is, now that’s all going to be automated in the product. I don’t know which one’s the right approach.
Rob: I was going to ask you, which one do you want to do? Because the right approach, given that you’re building a company for you, and you want to grow and stuff, but that’s going to come. You have an opportunity here. Does bringing in customer success person on feel like, “No. I’m not interested in it. I’ve already run that playbook. I really do want to try to give it a first crack at spending timing, getting on boarding up, and making it truly self-service.” Is that more interesting to you? Because that certainly could be your first crack at that, and then if it isn’t working out the way you want, you can always backfill it.
Matt: Yeah, I think it’s probably the more, to me, it feels like the more ambitious one. I don’t know that I would say it’s the right one though; I do have my doubts as to whether or not that’s really the right way to do it. I mean, especially when you’re dealing with a financial app, and it’s pretty complex. Having a human there to set you up, and to take you through that, that’s a pretty well-worn path, and we know it works. Maybe that is what I do is, I push as far as I can, and then see if I basically, hit a wall where, “No, there’s that 5% more, but then I can scope that down to exactly what I need.”
Rob: Right, that’s what I was thinking. Because in the early days of Drip, I really want everything to be self-service, and that’s just a lot of apps I had; pretty much all the apps I had before that were almost all self-service, and we built a lot of onboarding, and it worked well, and we had good growth. But I definitely found the people who are willing to pay us more money—the several hundred dollars a month clients—which obviously isn’t even that big. They really wanted to talk to somebody, and that was where I eventually got to a breaking point because I was doing demos, and talking with them.
As I said, I don’t enjoy it, not much like you. I’m good at it, but it wasn’t a thing that gave me life. We eventually did hire someone, and it was the right decision, but I had to give it a shot as the self-service first because we wanted to see if we could truly make that work. Again, it did work, it’s just the larger customers benefited a lot more from having that high touch.
Matt: I think that maybe the reality. I could see self-service, it does work for so many apps, and instances where the product’s a little bit more, category especially, I think that’s actually something I keep coming back to, and that might be just the reality is that this is a new product, metrics is the category. But the idea that you’re connecting all the state, and you’re doing all these forecastings, not having a human at all to explain what this is, how it works, and when to use it, it might not be realistic, and actually might create some glue and loyalty to have that involvement, which is what I’m providing right now. I think this is a good kind of re-scoping of where I want to be by the end of September.
Rob: Yeah, and it’s good to have goals. I know you’re driven and trying to think out a few months because you’re thinking where you want to be, and you don’t want to stand still. Some folks are super goal-oriented and motivated, and then for others, I think it de-motivates them. It sounds like you want to know where the puck is going, and where you’re headed, at your stage, I feel like dates might not be helpful. Unless it really is motivating to you. I should probably state that differently, for me one, when I’m that early in an app, or that early in the company’s development, there are too many variables for me to possibly throw a day out of when something should happen.
Matt: There’s kind of two ways to get to that date: you either change the definition of success or you move the dates, and you know you can timebox things. I’ll change the definition of self-service, not to the point of cheating, but I’ll change it to mean, “They can sell service, but that’s not what I want them to do, maybe there’s a way around that.” But yeah, I think I am pretty driven from the standpoint of reverse engineering, kind of where I want to be.
I think that you’re right. It’s like I’m trying to connect lightning from two sides here, I mean, that’s where I’m at. I think it creates a mental frame for me to just go, “Okay, it’s bottoms up, bottoms up. It’s the people I’m working with right now.” That’s why I knew last week was going to be sales and marketing heavy week. I scheduled a lot of meetings for that, and essentially, knew that I wasn’t going to get a lot of deep work done. But I kept the slate clean for this week and knowing that I needed to shift gears. Then that’s the other skill I want to develop is just getting myself in a mode, and being able to say no to things that are going to knock me off.
Rob: Yeah, I was going to bring that up, maybe as a last point a conversation because we’re running long on time, but I was coming back to cadence, which I believe you mentioned or at least—in your Slack, I was thinking cadence, and I was going to ask, “Do you do better with a one day on one day off cadence?” Or, “Would a one week on, one week off cadence work?” It sounds like that’s what you tried recently is kind of like the BD sales a week, and then a development week. Because I feel like most of us tend to bounce around, and handle whatever is the next thing that we think is most important.
But if you are able to say no, whether it’s just for that one work day, like I’m going to say no to everything that is not pushing the product forward in some form or fashion, and then the next day, “I’m going to push it—I didn’t say no to everything that’s not pushing the sales, like revenue forward in some form or fashion,” whether that’s one day or one week, I think that most of us are helped by that.
I’m surprised that you did it for a whole week, or I’m impressed, I should say, that you were able to do that for a whole week because that would be hard for me to do. Do you feel like that was successful, and that’s something you want to continue to do? Or was it like, “It was too long. I should probably only do three-day sprint,” so to speak?
Matt: Yeah, I think it will shorten naturally to three or four days a week to focus on something, and then you’ve got your bonus day to catch all the stuff where somebody just says, “Look, I can’t meet with you next week.” I think I’d like to keep trying that. That would be a good way to kind of follow up here and see, “This is the product development week for me then I’m going on vacation.” That’ll naturally lend itself to maybe just checking email, and following up on sales related things, and then we’ll have to see which mode I fall into when I get back, or maybe I shouldn’t fall into one, I should pick one.
Rob: YYeah, that’s right. You sent me a tweet from James Clear, and many people may know James Clear as an author, and blogger about kind of forming good habits, and motivation, and stuff. His tweet said, “Most people need consistency more than they need intensity,” and he says, “Intensity is running a marathon, writing a book in 30 days, or a silent meditation retreat. Consistency is not missing workout for two years, writing every week, or daily silence. Intensity makes a good story; consistency makes progress.” I really like that tweet, and I’m glad you sent over.
It reminds me of a quote that I’ve used over and over, I’ve written a blog post on it, there’s an episode of this podcast titled this, but it’s a quote from Steve Martin. He wrote it in his autobiography. The quote is, “It’s easy to be great, it’s hard to be consistent.” He’s a standup comedian, and he said, he would come to the shows, and he would watch a comedian just kill it one night, just blow the doors off, but that comedian couldn’t do it every night and that was the challenge. He said, “It is easy to be good once in awhile,” and that’s what James Clear is talk about with intensity, it’s easy to be great, but how do you show every day, how do not have the splashy tech-crunch launch or this big one time hit, where it’s not a sustainable thing.
We see a lot in the startup space, we see it in pop culture, where things come and go quickly in this place of glory, that’s not what we’re here to build. We’re here to build these longer-term, these sustainable, these 5-year, 10-year, 20-year companies, and whether we run them for 20 years or not, it doesn’t matter. But is it this something that can be around for the long term? I believe that the way that happens is—with what we’re talking about today—it’s this consistent needle moving progress, that you show up every day, or you show up every week for years, and that’s the thing that most people have the hardest time doing. I think it was helpful for me. I hope it was helpful for you to know you as a listener. Thanks so much, Matt, for agreeing to come on the show.
Matt: Thanks a lot, Rob.
Rob: Again, if you want to catch up with what Matt is doing, you can head to simsaas.co. If you have a question for the podcast, call our voice mail number at 888-880-19690, or email us at firstname.lastname@example.org. We’re in iTunes, and all the other places you would imagine, just search for startups. We’ll have a full transcript of this episode on our website startupsfortherestofus.com. Thank you for listening. We’ll see you next time.