In this episode of Startups For The Rest Of Us, Rob and Mike take some listener questions about hiring VA’s, struggling with engineering, and bootstrapping versus raising funding.
Items mentioned in this episode:
- Dear FCC
- Fearless Salary Negotiation
- Virtual Staff Finder
- Scaling SaaS
- Meet Edgar
Rob: In this episode of Startups For the Rest of Us, Mike and I discussed hiring VAs, struggling with engineering, bootstrapping versus raising funding, and more listener questions. This is Startups For the Rest of Us episode 340.
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.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike: I have a website for you. It is called gofccyourself.com.
Rob: Really, I’m clicking on it right now. That sounds dubious. Is this safe for work, as they say?
Mike: It is safe for work. This is actually created by the Last Week Tonight show with John Oliver. The idea behind them putting together this website was that there’s some pending discussions inside the FCC about whether to deregulate certain parts of the internet specifically as it relates to internet service providers. It allows them to essentially self police themselves in a way that they decide whether or not what they’re doing is morally correct and net neutral, which is obviously not a good thing for net neutrality in general.
The FCC has made it very difficult to get to the page where you can actually leave comments in support or against this particular piece of decision making in the process. John Oliver and his team put together this website. It’s essentially just a redirect that takes you directly to the place where you can fill out the form and leave a comment.
If you’re interested in contributing your voice to that net neutrality legislation, then go over to gofccyourself.com. I’ve already done it. It does take a few minutes. I thought it would take two minutes so I’m hesitant to say that because it took me like 10 but I think that it’s well worth putting your voice into for them to hear it.
Rob: It looks like there’s another URL, dearfcc.org.
Mike: It’s the same type of thing except that, I believe, it sends a physical letter as opposed to just commenting directly on the FCC’s website.
Rob: Got it, very cool. Hey, we had a comment on last week’s episode. I thought it was a pretty thoughtful comment. I appreciate it. It was from a guy named [00:02:17]. He said, “Hey, first time commentary. Congrats Mike on reaching your MRR milestone. What makes it more impressive is you did it in spite of all the armchair criticism. All the more power to you.” I didn’t even read that part. That’s funny. He said, “I did want to say that hearing Rob talk about hiring an in house nanny and how everyone should get hired help was a little bit perhaps insensitive. Not sure if that’s right word but Mike’s response pretty much sums it up. Similar to a guy who could afford to fly first class and tells everyone they can’t imagine flying economy again and that everyone should fly first class.”
I appreciated his comment. A couple of things, first of all, I felt like the first class analogy was a little, maybe didn’t translate to what I was saying because flying first class is like 5 times, 10 times more than normal flights and the only value is comfort and perhaps snobbery whereas I was genuinely saying outsourcing stuff. It’s not about having a live in nanny. It’s about not mowing your lawn. That’s really what I was talking about.
I had switched topics by this point to if you’re a founder and you’re still mowing your lawn, and you’re pressed for time, and you don’t have time to spend with your kids or work in your company, and you’re still mowing your lawn, or shoveling you snow, or cleaning your own house, that’s not a money decision at that point if you’ve got any type of success.
I used to pay $55 every 2 or 3 weeks for a house cleaner. Most of us can swing that. None of this is stuff that I started doing after I sold my company. I started hiring small amounts of outsourcing over 10 years ago when I was literally making just a normal salary gig but I was trying to do stuff on the side. I wanted to clarify that and also say I apologize if I came off insensitive. Did you feel like I did?
Mike: I don’t think so. I actually thought it was kinda funny when you said I’m not advocating outsourcing your parenting of your kids and I was like, “Why not?” Isn’t that the point?
Rob: Mike’s like, “I am advocating outsourcing raising your kids.”
Mike: I was like, “When did we decide to go against that idea?”
Mike: I could definitely see what you decide could be misconstrued. I don’t think that that was your intent. As you said, the conversation had shifted from one topic to another in the middle of it.
Rob: Right. I don’t think everyone by any stretch should have some type of live in nanny. Sherry and I have been talking about that for five or six years. We haven’t been able to do it. We just didn’t have the house that it worked for back in Fresno. It really doesn’t have anything to do with suddenly having more money. I’m not advocating everyone should get a live in nanny. It’s game changing for us but that’s a personal choice.
The part that I am saying entrepreneurs and founders should do if you’re strapped for time, and all of us are, is that you should be outsourcing more of your day to day groundwork. That’s a decision you’re going to have to make early on. It’s like hiring a VA, I’m going to pound that drum forever, but if you’re still answering your own email support and you’re more than about 3 or 4 months into your product, you’re making a bad choice.
You can try to tell me it’s not a bad choice but I’m going to tell you over and over based on my experience and the experience of everyone who I’ve told this to, who haven’t hired someone says, “Oh my God, why didn’t I do this years ago,” that you should be doing it. It’s a different thing but hopefully that clears it up and is a little more helpful who think I’m some type of pretentious d-bag.
Rob: I’ve always tried to be on this side of that argument.
Mike: I do think that there are certain cases to be made where you don’t outsource that stuff. For example, like mowing the lawn. I find that sort of therapeutic because I listen to my headphones and podcast and stuff like that while I do it. That’s a regularly scheduled thing that comes up versus something like snowblowing the driveway and taking care of that where you’re much less in control of the weather and those things pop up and it needs to be taken care of. That is easier to make that decision on than something like mowing the lawn where it’s predictable, I’ll say.
Rob: Yeah. If you’re saying it’s relaxing for you, that actually is a good argument for it. I would say alright then, that’s not a bad choice. I actually cook quite a bit because cooking is not a chore to me. It’s actually something that I enjoy. I do outsource part of it. A lot of the prep, I use Hello Fresh or Blue Apron so I’m not going out shopping. It’s more expensive for sure but it saves me time.
Cooking itself, the act is similar to what you’re saying. I typically have a glass of wine and I have podcast playing and so it is actually relaxing. That’s a good point too to bring up. It’s only if this is something that’s detracting from your life.
Mike: I think that’s the point. If there are certain things that you can outsource because they are detracting from your life or they’re inconvenient, that was really I think the point that you were trying to make with the nanny. There are times where it’s inconvenient to drop what you’re doing to do something like picking up the kids at a specific time. You don’t have to be the one that does that. Again, that’s very different than being the person that are parenting your kids. Those are just two very, very different things. I think the distinction got muddled in a conversation, that’s all.
I just want to bring up a comment that we got. This one came from Josh Doody. Josh gave an attendee talk at MicroConf. One of the things that he talked about in his attendee talk was about SEO. This relates back to episode 338. He just said, “Hi, I just listened to episode 338. Summary of the Moz case study on ranking number one for competitive head terms. Really good stuff. I heard a couple of things that I’m going to try to keep improving the SEO on fearlesssalarynegotiation.com. I added the episode link in the case study that linked my MicroConf summary page. I think my talk in some of the links on that page could help people get started with SEO. My talk was a one on one level talk where I would say the Moz case study is 201 plus.”
He gives a website URL. It’s joshdoody.com/microconf. We’ll link that up in the show notes. Anyone who wants to go take a look at that, it’s a really good overview of what his talk was and it is some practical strategies if you’re not quite to the level of where that Moz episode that we did and all the different things that they did for SEO. If you’re not quite there yet, head over to this link. Again, it will be on the show notes. It gives a lot of the basic tactics and stuff that you can use to help your website rank in the search engines.
Last before we get started. I did not know this but apparently, for the past two or three years, there has been a Viking combat training facility here in my hometown.
Rob: Do they teach you to fight with the axes?
Mike: I think that they put stuff over the ends of them. I saw them training one day out in a parking lot. They have these giant bo staffs, they almost look like giant erasers or q tips or something like that. They are like padded on ends and they look like they’re ready to beat the snot out of each other in the parking lot.
Rob: That’s awesome. Your town is not that big so it’s kind of odd that you wouldn’t have known that.
Mike: I know. That was the part that struck me as odd. It’s literally called the Viking combat training center.
Rob: That’s fun. Last time we were in Italy, my son and I did gladiator training in Rome. It was like a one or two hour little adventure where we had foam swords and you wore the helmet. The stuff is bulky and heavy. It was super fun to learn kind of the different approaches to combat though.
Mike: What’s on the agenda for today?
Rob: Today, we are answering listener questions, trying to play catch up. I think we have one voice mail and a few written questions. Our first question is from Richard Gorbet. He says, “Hey Rob and Mike, love the podcast. Only one I have to auto download when a new one appears. A couple of years ago, there was a lot of chat about virtual assistants. Is it worth a new topic in one episode as I suspect the dynamics may have changed. I’m thinking from a help desk perspective but many, many uses for a VA. It’s come to my thoughts as my latest ideas about MVP in the next few weeks. Thanks.”
What do you think about this? I don’t know that it’s so much different than the previous thoughts we’ve had. Maybe the specifics of hiring have changed slightly but I think we talked about 15 ways to use a virtual assistant. I think all of that is still the same. That stuff hasn’t changed. What do you think?
Mike: I would agree. I think the specifics of how to go out and find somebody and vet somebody to do those things has definitely changed over the years but I don’t think that the types of stuff that you would have them do is going to change all that much. It’s probably going to be more of an evergreen topic to be honest. It’s just there’s always ways to save yourself time.
The one thing that I think that might change over time is that as the level of skills of people that are available at a certain hourly rate, that dynamic shifts over time. You might be able to find people who are more qualified to do things that are probably further along than what you would think that a typical VA would be capable of. Again, that’s going to be shifting the global economy in terms of who is available at what hourly rate and stuff like that. It’s not really a dramatic shift in what you would have them do. It’s just a matter of what people are skilled at, at a particular hourly rate.
Rob: I actually think the hiring process, at least the one I outlined most recently was through oDesk. That’s still where I would go today. I would use that or I would use Chris Ducker’s service, virtualstafffinder.com. It’s Virtual Staff Finder, that’s the URL. If I recall it was like $300 or $400 to pay them and they basically vet a bunch of candidates and then they give you the top three. They guarantee them, that if they don’t work out in the first whatever days, they’ll replace them and stuff.
If you have the funds, I would do that if you’re in a hurry. If you have less funds and more time, then the oDesk approach that we’ve outlined, I guess it’s Upwork now, the Upwork approach that we’ve outlined in the past is what I would go back to at this point. Thanks for the question.
Our next one is an anonymous question that he actually sent to me directly. He say, “Hi Rob, I’m in the process of creating a B2B SaaS app for universities but I’m struggling with the engineering of the application. What resources such as books, tutorials would you recommend for developing a SaaS app on the web? I’m a huge fan of the podcast and of your book. Thanks for all your help.” What do you think, Mike?
Mike: It’s funny, as I’ve been developing Bluetick, I‘ve come across various topics where this type of thing would be very highly relevant. I’ve looked around and depending on what you’re doing, it can be very difficult to find this type of stuff. It kind of actually spoke the idea of writing the technical side of developing a SaaS application, a book that basically covers that topic. The problem obviously, I just don’t have the time to do that kind of thing.
There’s also just a wide variety of topics that as a SaaS founder, you may run into them and you may not. It depends on the type of SaaS that you’re building and how data intensive it is, how much search you have to do, if you have to do data indexing. A lot of times, you can get away with just very basic stuff and then when it breaks, then you fix it.
I think it’s very easy to go down the path of trying to engineer something to work for the largest case that you could possibly envision your app doing and then get into it and realize that you’re not going to hit that for six months, or a year, or three years. You’ve over engineered the early stage stuff. There are certainly things in Bluetick where we’ve had to rewrite them two, three, there’s sections of the code where I’ve rewritten it four or five times just because the backend stuff has scaled to that point.
Had I sat down and just designed it on day one to try and reach that scale, it would have taken me so much longer to get something out there. I think you really have to just weigh what it is that you’re trying to accomplish and what those short term goals are which your primary ones should be get something working in front of people versus how do I make this thing survive in the long term.
Unfortunately, that’s something that’s sort of diametrically opposed to each other. You don’t want to have to rewrite code more than once or twice if you don’t have to but at the same time, in order to take those shortcuts, you almost need to build those sections of code as prototypes just to get to where you need to be and get that revenue in the door.
In terms of looking around and trying to find specific resources, I’ll be honest, I looked around and I could not find very many. There’s all the generic stuff on how do I build an application or how do I use this particular type of technology, and those are great and helpful but they don’t give you a much broader picture of how do I handle authentication or how do I handle permissions inside of a system.
There are different areas you can go into like claim space authorization and all these different things. At the end of the day, you got to pick what is right for your application and what is going to get you as far along as possible with the least amount of effort.
Rob: The hard part of this is if you get into like how should I do authentication, it’s going to depend from language to language. You should use the built in .NET stuff for .NET but in Rails, you should use the built in Rails stuff. You almost have to go one level higher and talk about concept.
I agree with you. I don’t know of a single good book or tutorial course about really the high level engineering side that’s not language specific. I went to Google and typed in how to build a SaaS application. There’s actually some decent stuff. There’s a good conversation on Quora. There’s a good article on Glenn Stovall’s blog. He’s a MicroConf attendee. He talks about all the technology he would use and it’s like 19 apps in a row. He made the list. Thanks Glenn. I haven’t even noticed that. That’s kind of funny.
That’s where I would start. Again, I don’t know of any tomes, any books, any dead tree of things that are out there. It’s much more going to be about blogs, article here and there. I do know that there are people out there like Derrick, my co founder, has a blog called Scaling SaaS. It’s at scalingsaas.com. He talks about challenges that he’s run into and how he’s fixed them but it’s not a step by step tutorial or a really deep dive into engineering a SaaS app. Perhaps, there is a gap in the market here that someone would be interested in filling.
Or if you have heard of some good resources for stuff like this, feel free to write in questions at Startups for the Rest of Us and we’ll be happy to mention them in a future episode.
Laura: Hi, this is Laura Roeder from Meet Edgar. Hey guys. I was wondering about Rob’s perspective on bootstrapping versus fundraising now that you are operating inside of Leadpages, a funded company. I’m a bootstrapper, I know you guys have been big proponents of bootstrapping over the years. What have you learned being inside of Leadpages about bootstrapped versus funded companies and has it changed your point of view at all about what you might like to do in the future? Thanks.
Rob: This is a really interesting question. The hard part is think about how I run a bootstrap company versus maybe how you run one versus Reuben Gomes versus Josh Pigford. I don’t know if you can say there’s one way to run a bootstrap company and so I can only compare the way I run them with the way that the Leadpages team runs them.
If you think about a funded company in Minneapolis run by Clay Collins and his two co founders, started as a distributed company and then raised funding and grew to 170, 180 employees at this point, it’s probably a different trajectory. They’ve always been profitable. Different trajectory than a funded company in the bay area that maybe B2C, has never been profitable and is hiring a boiler room of bros to make the phone calls.
There are a lot of different ways and thoughts around raising funding and different ways to run a company. I guess I want to couch that in advance by saying it’s only one person’s experience. It’s with basically two companies, comparing them to one another.
The base thing I’ve learned moving to a funded company is that it’s so freeing and amazing to not have to worry about resources, to not have to be concerned with adding a $200 a month server or upgrading the database over to a $2,000 a month box. You know it’s going to fix your problems but you just don’t know if you have the money to do it.
That is gone. I’m not saying money is infinite but compared to the bucket we were in a year ago, before the acquisition, money is essentially as close to that as you can get. Anytime we bring up a problem and we’ll say, “Here’s how to fix it but it’s going to cost this.” The cost is actually the afterthought in the conversation. That’s very freeing and it allows us to operate quickly. We can hire. We can pay market rates. It’s like having the resources, it’s crazy.
Especially because we’re not doing the crazy I’m going to raise $20 million and do the B2C shuffle where we just hire way out ahead of sanity. You hire 20 people before you hit product market fit. We’re not doing that. We’re literally hiring to scale. This is the perfect time at which I would have raised funding if we were going to. It’s a point at which you have product market fit, you’re growing quickly and you’re just pouring money into either scale the marketing or scale the engineering. That’s been cool.
The other thing I’ve learned is that specialization is amazing. The fact that they don’t have people who do support and customer success and marketing, we used to have a Drip when there were five of us. There was one person doing support. To be honest, there’s like eight people doing support for Drip. Marketing is divided into like some people just write blog posts. That’s all they do all day. And then there’s this person and all they do is all the social paid acquisition. There’s this other person and all they do is the search paid acquisition because they have the staff to do that.
Specialization is extremely powerful because you can get so good at stuff. This is when we see these case studies like we talked about last week. It was two weeks ago, about the SEO stuff, the reason those people are so good at that and can write that incredible case study is because that’s all they did. That’s all they did for 90 days straight, was work on that one problem and you can accomplish a lot doing that.
I think another difference and I don’t think it’s not a fun diverse thing but like Drip was an engineering driven culture because I’m an engineer and so is Derrick. Leadpages and marketing is different culture so it’s a different way to look at it, a different way to run a company but that’s not because they’re funded. It’s because they’ve always been that way. Clay, Tracy, and Simon bootstrapped Leadpages to, I don’t even remember what the number was, but it was several million dollars in annual revenue. They kind of are a bootstrapped company that then raised funding.
I think those are some cursory thoughts. I could probably do about a 20 minute rant, not even a rant, just a conversation of me talking about the differences but I think those are probably the most pronounced.
Mike: I think the only thing I’d add to that is that there’s this I’ll say sort of a pervading fallacy that when you start talking to not self proclaimed experts but the people who are leading the masses when it comes to startups, you look at them and your immediate thought is, “Oh, they know what they’re talking about and that’s the way to build a business.”
The reality is that that is true to an extent, however, there are lots of ways to be successful and there’s more than one path to do it. There’s no one true path. There’s no one silver bullet. There’s no one way to do things. There’s lots of ways to do it and be successful. Just because it worked for somebody else, it doesn’t mean it’s always going to work for you and that when you’re looking at those types of examples, that’s one path. There are lots of others that may or may not work for you. It’s about finding what will work for you.
Rob: It’s interesting. There’s always these big things about don’t raise funding because you’ll lose control, or you’re going to make bad decisions because you have too much money, or you’ll feel all this pressure from investors. I’m not the founder or the CEO of Leadpages but I don’t feel like I’ve lost control like we’re being pushed to make bad decisions because we have “too much money,” or that there’s all this pressure from investors. Perhaps the board or the CEO, Clay feels different than that.
It’s not this black and white dichotomy that so many people make it out to be. You and I have never done that. We’ve never been anti funding. We’ve always been anti the dumb B2C startups that have no product trying to raise all this money and go viral. It’s the stupid Silicon Valley stuff.
For 10 years, I’ve been saying there’s a right time and a right place to raise funding. I think it’s post product market fit. You bootstrap to that and then you add the fire to grow the company. Typically, it’s going to be more B2B although if you had a B2C that had hit, I think there’s a good time to raise it as well.
It’s really interesting. There’s a lot more to talk about. Maybe we’ll record an episode in the future and revisit that whole topic.
Mike: Yeah. I think you and I are more anti pipe dream where you have something that you’re putting out there but you’re not charging for it and you don’t have any way of making money. The reason you need funding is in order to increase your reach and get it in front of more people. And then, at some point down the road, you’ll figure out how to make money from it. If you can’t do that very early, then it makes it difficult to build a business out of it.
Rob: Right. We’re anti billing slide decks and asking for permission instead of actually building a company. You should be able to build your company to the point where people want to invest without any funding. It’s very, very rare exceptions. Maybe hardware, although even these days I would say do a kickstarter. Maybe there’s something with incredible computing power, something that you can’t have access to and I would say build something simpler first.
For the most part, most of what we all do, you can bootstrap that to the point where it becomes very interesting to investors.
Mike: I think that about wraps us up for today. If you have a question for us, you can call it into our voicemail number 1-888-801-9690 or you can email it to us at email@example.com.
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