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Hi there,

We just released this week''s podcast episode: 515: Finding a Co-Founder, Getting Better at Sales, and More Listener Questions.

Rob is joined by Anthony Eden from DNSimple as they answer your listener questions.

They cover topics ranging from tax liabilities with contractors, getting feedback on a prototype, and finding a technical cofounder.

If you have questions about starting or scaling a SaaS that you'd like for us to cover, please?submit your question?for the next episode. We'd love to hear from you!

The topics we cover

[01:26] Tax liabilities and managing international contractors

• You have to consider your local laws and how those are impacted by the foreign laws from wherever this person lives
• If you have a developer or a contributor who''s outside of your country, or even inside of your country, and they''re actually writing code for you, the thing you really need to do is make sure that you get an IP assignment
• If you don''t do that, you put yourself at risk in the future
• You want to protect yourself by having clear agreements in advance for things like intellectual property and mechanism for payments.
• If you ever want to raise investment, when they get into due diligence, they''re going to ask you for an IP agreement
• This is not just for international, this is for local, contractors and full-time employees
• If at all possible don''t have international employees hire them as contractors
• If your goal is to make your product work or your business grow, ultimately you''re going to have to decide to invest in some of these legal matters.

[10:45] Starting when stair-stepping isn''t feasible

• You might have things around your SaaS that are informational, that you could start with by creating a product around that.
• In a lot of ways, SaaS is taking some concept that is kind of manual today and putting it together into something that works very smoothly for individuals and businesses who don''t want to take all this time to kind of put everything together themselves.
• I think building some kind of audience around it, whether it''s through a podcast or a blog or wherever you want to do it, there are ways to do work that doesn''t carry a bunch of risk and kind of.
• How can you validate this idea without writing any code again?
• How can you prove or disprove it?
• Can you build an MVP then as the next step with Excel spreadsheets or with human-automation?
• One piece at a time, it gives you a little bit of confidence and it makes it easier for you to find a cofounder
• How can you get further down this process of launching this thing into the wild and validating it without spending hundreds of hours to actually code the thing up.

[16:38] Getting better at sales as a solo founder

• Building an audience is less about cold-selling and more about becoming part of a community
• How can you become part of that community and give them the things that they need to get them into a sort of into your lead pipeline so that then they get to learn about your product because there''s a genuine need there?
• The real thing is to talk to people
• Ultimately it is hard. It''s very hard to, it takes a lot to sort of put yourself out there and sell your product.
• Think of yourself as a high priced consultant who isn''t charging any money
• Building up that inbound pipeline, the investment that you need to make is really writing good material that gets out there and that you can publish

[24:00] Finding a sales/marketing cofounder

• It''s hard to put somebody into sales,?unless they too are very passionate about that product.
• The first suggestion?is maybe to check your assumptions on whether you need a cofounder right now.
• Oftentimes people will complain about investors investing in taking a portion of their equity, but really the most equity you''ll ever give up is to a co-founder or to your other cofounders.
• Another thing to look at is MicroConf Connect where we have like around 1500 founders and aspiring founders talking about this type of stuff.

[30:28] Getting feedback on a prototype, finding the right developer co-founder, and protecting your startup idea

• A prototype is something that actually works to some extent and that somebody could, could use it. Whereas a mockup is going to be a, non-working sort of just the images of what things are going to look like when the product is built
• You should absolutely be showing this prototype and getting feedback on it
• When talking to customers, ask, "does this solve your problem? Does this help you accomplish the job that you want to be done?"
• CTOs do a very specific job... they run technical organizations.
• The skills required for a CTO are very different than somebody that''s building out the first version of it. And so you want the person that''s going to be like, I''m going to put together this first version of this app and I''m going to do it quick and it''s going to be awesome and it''s just gonna work and it''s going to be tested and you guys are going to be so thrilled about it that you, you won''t think twice about giving me half of the company, because we''re going to make so much together.
• There are tons of developers out there that will work on contract. So consider also that maybe what you really need is you need somebody to, to, you need to hire an independent who can take your little prototype to a first real, like minimum viable product
• Maybe it''s a contract to hire a co-founder
• If there''s no moat, there''s nothing that you have that''s special about this, then chances are somebody already has probably built that idea.

[40:11] Considering a technical cofounder vs hiring a developer

• If you had a developer or a company that?helped build the revised version of this app, and it''s working, then stick with them
• It doesn''t seem like you need necessarily need a technical cofounder yet because you seem to have a pretty solid base of knowledge and you''ve already made some mistakes on your own.

Links from the show

• Episode 509 | Revisiting the Six Stages of SaaS Growth with DNSimple
• Intellectual Property Agreement
• W-8BEN
• Episode 498 | Selling During a Pandemic with Steli Efti
• The Startup Chat with Steli & Hiten
• Episode 507 | Making Cold Email Work in B2B SaaS
• Indie Hackers
• Activity Messenger
• Jobs to be Done
• DNSimple | Twitter
• DNSimple | Website
• Anthony Eden | Twitter

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a SaaS that you''d like for us to cover, please submit your question for an upcoming episode. We''d love to hear from you!

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Listen to Episode 515

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When just one podcast isn''t enough, we''re bringing you the?MicroConf On Air Podcast.

We listened.?Now, you can too!

MicroConf On Air w/ Rand Fishkin

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Hi there,

We just released this week''s podcast episode:?521: A Roundtable Discussion about a Potential Recession, Working from Home, Google Anti-trust, and More.

Episode 521 is a roundtable episode where Rob brings on a couple of guests to talk through topics today that relate to bootstrapped and mostly bootstrapped startup founders. Today, we have Tracy Osborn and Einar Vollset joining us, as we talk through a potential impending recession, the Google anti-trust suit, Dropbox moving to permanent work from home, as well as a handful of other topics.

The topics we cover

[04:03] What do the revenue trends look like in 6-7 months from now?

• Not quite in the same deep freeze as it was back in March, April
• Growth has slowed down a little. We''re starting to see a more normalization for growth rate.
• Worrying about a drop in growth while also going into the holidays. Is it just seasonal?
• Counted as lucky if December grew at all.
• Is it too early to say about the recession is that other things are going on?
• Not hearing that companies slowing down or plateaus across the board.
• If you''re in the software you''ve had tailwinds for at least the last few months.
• Would be slightly cautious right now because of how much uncertainty there is. And none of us can predict a recession, but there are a lot of things that can go wrong in the next six months.

[13:36] Google antitrust suit

• There is a sentiment in kind of early-stage startups that certainly. Google''s doing stuff that may not be fair or encouraging of the ecosystem.
• Some way of breaking it up and allowing for more innovation from people, where would tech be if Google wasn''t the behemoth that it is right now?
• One of those really big market-moving things directly, the impact on the sort of bootstrap software entrepreneurs, I think is more TBD.

[19:23] Dropbox remote offices

• Bootstrappers know that you can get just as good work done remotely, but all these companies were facing this pervasive norm.
• I''m looking forward to seeing how this plays out in the next year.
• There might be a backlash once the vaccines in place.
• There''ll be a fundamental shift in sort of the expectation.
• We haven''t experimented with companies that have maybe didn''t hire specifically for remote workers or have more extroverts.
• It will hurt commercial real estate.

[27:29] SPACs and why it''s so hard to go public in the US

• In other countries, there are dedicated exchanges.
• One of these things should exist in the US.
• It gives access to retail investors who don''t have access to private markets.
• The fact that things take longer to go public means that the average investors who don''t have inside access don''t get to participate in the value creation there.
• SPACs are a symptom of this problem.
• SPACs are a loophole or a workaround to an overly complicated system.
• Do believe this is hurting innovation much like the high cost of healthcare in the United States.

[39:35] A warning about Glassdoor

• Much like Yelp and much like Amazon reviews, these things do get gamed eventually.
• Companies are going to be very concerned about their reviews because it''s going to vastly affect the amount of the quality of the employees they get and savvy employees are going to read bad reviews and they''re going to stay away.
• Wonder if this opens up the door or the opportunity for a new Glassdoor competitor to come in and have a better algorithm from the start or some other way of validating this stuff that then becomes reliable for a few years and then the same thing happens.

Links from the show

• The 99 Investor Problem
• The U.S. Accuses Google of Illegally Protecting Monopoly
• Dropbox will let all employees work from home permanently as it turns its offices into WeWork-like ''collaborative spaces''
• The TinySeed Investment Thesis
• A Warning About Glassdoor
• Tracy Osborn?| Twitter
• Einar Vollset?| Twitter

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you''d like for us to cover, please?submit your question?for an upcoming episode. We''d love to hear from you!

Subscribe & Review:?iTunes?|?Spotify?|?Stitcher

Listen to Episode 521

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Hi there,

We just released this week''s podcast episode: 512: The Power of Options. Detailed show notes below.

1:27 The story of Gary Gygax and Tactical Studies Rules (TSR)

• TSR was the company behind Dungeons and Dragons (DnD)
• Gary started TSR to publish DnD because no one else would
• As it became more popular, TSR got into financial trouble. Huge upfront capital required to run business
• Eventually sold for bankruptcy. A contributing factor was they reduced their options dramatically
• Instead of raising capital, their go-to-market strategy was to have all retailers pre-purchase agreements to purchase products upfront. They would then take these pre-sells and turn around sell them at a discount through a process called Factoring
• Factoring meant they couldn''t handle refunds well, couldn''t adapt to the competition. They reduced their options.
• This story is such a parable on how reducing your options further can force you to make bad decisions.
• The superpower of a startup is our optionality.
• We need to realize the power of, of having options and keeping our options open

6:56 The Entrepreneurmobile

• The Entrepreneurmobile is the car you drive as you are starting your companies (before you get rich). You buy a cheap car and take the money to build your business.
• For Rob, instead of going out and buying a brand new car, they went and bought a salvaged title used car, which lasted a decade. Instead, all that money was invested in growing Rob''s net worth and investing in his businesses.
• When you have that drag, you reduce your options to spend $500 on Facebook advertising, for example.
• Debt reduces optionality.
• Debt is the consumption of your future earnings, but you''re consuming them now before you make them
• Debt can happen your future and your ability to grow a company
• The same goes for having an office vs running a remote company.
• For TinySeed, Rob was writing angel checks to startup founders who didn''t want to take on venture capital that reduced their options. Instead, Rob wrote checks that had great success for TinySeed while also not reducing options for founders.

13:00 How to keep your options open

• Option 1: Keep your personal spending low. If you''re not there yet, you have to be willing to do the things that no one else will, so you can live like no one else can.
• Option 2: Keep your day job while building an app on the side, unless you have the luxury of having a large savings.
• Option 3: Until you have enough personal wealth, invest in liquid investments that you can buy and sell quickly (assuming 3-6 months of savings). When building wealth, Rob would not be investing in things that are illiquid (like startups where returns can take 5-10 years).
• Option 4: If taking funding, consider if it will reduce optionality. Think about which decisions you make are undoable. Some decisions are hard to take back. Buying a car is undoable (at certain times of life)
• Part of the freedom that Rob talks about when he talks about how startups can bring you freedom, purpose, and healthy relationships is having a net worth where you have that life-changing money.

17:33 DotNetInvoice and fake reduction of options

• Rob bought DotNetInvoice for $11k, and it changed his perception of what is possible.
• By buying the business, there was a forcing function to it. He had reduced his options and it forced him to make it work. His back was against the wall and he had to make it work.
• Realistically, however, his back wasn''t against the wall. He hadn''t reduced his options to the point where he''d have to sell his assets for parts.
• It''s important to think if there is a way you can mentally force yourself to think like you have fewer options. Often that can motivate you to go the extra mile and build something that will have a bigger ROI and give you even more options.

Listen to Episode 512

Hi there,

We just released this week''s podcast episode: 506: Shutting Down and Starting Up with Derrick Reimer

• 2:49 Shutting down a Slack competitor
  • The premise of Levels was to strike a better balance, a healthier balance between chat and email
  • Levels had similar concepts to the new Hey Basecamp app with the feed and screening out emails.
  • There was a wide chasm between people''s recognition that their communication patterns are not healthy, that a product could help, and their willing willingness and ability to get organizational support behind moving off of Slack.
  • Reimer learned how to ask better questions upfront, became acquainted with the Mom Test methodology
• 6:32 Building StaticKit to get something in the market
  • Reimer developed StackKit to get something in the world to start tooling around with
  • There was a lot of momentum happening in the static site ecosystem. A lot of folks leaving WordPress and adopting static sites instead. Reimer noticed that there were emerging trends around that move away from WordPress.
  • As bootstrappers, some times it takes some iteration and different attempts and different angles to arrive at the thing that''s going to be successful and resonate with the market.
  • The decisions are never clear cut and there there are always some gray areas. You have to trust your own gut feel. It also helps to sanity check that with other people.
• 13:16 Developing the next idea
  • Reimer is not one to say as an absolute that you should always scratch your own itch. While there are opportunities to find business ideas in other ways, he believes that a leg up that you can give yourself is to have some direct experience and recognition or understanding of what the problem is and what the market looks like.
  • One exercise Reimer would do in his notebook was to list all the tools used while building Drip, including uptime monitoring, exception tracking, hosting, calendaring, email, scheduling, etc. Reimer ran all of these products against a rubric before landing on Mighty Cal.
• 17:03 Validating the Mighty Cal idea
  • Reimer solicited 10 different conversations and a handful of them said they used Calendly and that it works fine.
  • Reimer asked what each customer''s day looks like. He tries to understand the person and understand what their cadence looks like. What does their flow look like? And with everyone he talked to, there were elements of calendar management and schedule management that were a pain for them.
  • A good chunk of the people Reimer interviewed were within the scope of the broader vision that he had for Mighty Cal.
  • It''s really hard to interpret user interview conversations because you don''t have a product to attempt to sell to somebody. You have to hold things loosely.
  • Reimer did feel like he got a good indication that there''s pain around this issue and that there are fairly low switching costs.
• 19:07 Potential dangers of going into a big, competitive space
  • Reimer feels that there is a big risk of getting the positioning right with people like unlocking the positioning of people who really care about a more powerful, better-curated experience.
  • He believes he has some compelling product innovations on presenting things as a calendar instead of a list of times and giving people kind of a richer view.
  • He thinks this is the classic kind of app where he''s picking a specific wedge. There is a specific experience of one person getting on another person''s calendar, but that''s just one small piece of scheduling.
• 23:38 Choosing the specific customer/s to target for Mighty Cal
  • Reimer is targetting founders and people like himself and also using his audience as kindling. The business should expand organically from there.
  • There is a viral loop component to this too; every time someone shares a booking link, it''s exposed to whoever they''re sharing it.
  • There''s an opportunity to speak a little more directly to some specific pains and be the de facto tool for that audience.
• 25:45 Built-in viral loops
  • For Mighty Cal, in addition to low switching costs and the big market potential for innovation, there is that built-in virality
  • With the pandemic, Reimer has been doing more ordering food through a mobile browser and noticed that some of the apps that really have it nailed where the interface feels so intuitive. That''s the experience he is striving for with Mighty Cal.
  • When people book with Mighty Cal, he wants them to come away from the experience saying, "that was amazing, how can I do the same thing?"

Listen to Full Episode

Until next week,

Hi there,

We just released this week''s podcast! Beginning this week, we''re sending in-depth podcast episode takeaways available only to Startups for the Rest of Us list subscribers like you. If you would prefer infrequent updates instead, you can update your preferences here.

Episode 503 | Idea Validation, Expanding Internationally, Affiliate Programs, and More Listener Questions

1:39 [Arturo Ceballos] What''s the best way to validate an idea and pre-launch without an audience?

• To validate Drip, Rob used his network, talked to 17 founders and had eleven people say they were willing to pay.
• Selling SaaS/Recurring software to your audience is much harder than online courses and books.
• Once validated with eleven willing-to-pay customers, Rob then tried to build an email list and using Facebook ads (the outer circle the from the Concentric Circle marketing concept).
  • Concentric circle marketing
    • Circle 1: Your audience (email list, etc)
    • Circle 2: Your network
    • Circle 3: Your network''s audiences (podcast, newsletter, social)
    • Circle 4: Cold outreach
• Rob recommends trying cold outbound outreach to talk to customers and help validate the idea. Or, if you have some budget start some Facebook ads, but keep it personal and relatable.
• Go to industry forums, Facebook groups, or private Slack groups that talk about your competitors. Position yourself as, "I have a problem, do you also have it?". Don''t try to sell.

13:33 [Ger Apeldoorn] When a product has product-market fit and existing customers, how would you grow internationally?

• Find bordering countries where you may have more insight into. However, it likely won''t be a bigger market.
• Another approach would be to look at the biggest western markets and figure out how to start building word of mouth there. Check if there are influencers in markets where you want to expand? Find podcasts, blogs, publications, where getting a mention would make a difference. Participate in the community but don''t be overt that you have a product you are trying to sell.
• When users are not online, call them, go to local trade shows, in-person, or other offline events.
• Potential challenges with expanding to distant markets are that you''ll have to find support on different timezones, manage currency conversion. By going after smaller, bordering markets near you, you won''t have to change much about what you are doing today.

20:31 [Davis] Do you have any experience running an affiliate program. I''m worried about people that sign up for affiliate would be people that would signup anyways?

• If people are asking for an affiliate program and are already willing to share, then set up an affiliate program. If not, the chances are low that people will come in and want to share your product organically.
• There are some dangers with affiliate programs to keep an eye one
  • You could invest in a program and no one uses it.
  • High commissions can significantly impact profit.
• It''s important to find the right commission rate. If you are setting a high rate, be sure to set a time limit fo that rate so you''re not paying a high commission forever.
• Overall, there are ways to be creative with affiliates and in the right circumstances, it can be a viable growth channel

26:40 [Jacob Warren] Should launching a startup in the service/hospitality industry during COVID-19?

• For this industry, Rob recommends not launching until things start easing up.
• Founders need to be agile and able to make last-minute decisions with incomplete information. However, in this case, there is sufficient enough information to wait to launch.

28:21 [Casey Collins] Following the Stairstep approach, what''s the best marketplace to use?

• Whether a WordPress plugin, Shopify add-on, ThemeForest theme, or something else, the commonality here is that there is marketplace where you can easily get discovered and can use distribution without having to build a brand from scratch.
• You likely won''t build a million-dollar software company but you very likely can build a $1-2k per month business. You''ll do it with training wheels while learning how to build, ship, and support code as well as how to write compelling copy and interacting with customers.

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Until next week,

Hi there,

We just released this week''s podcast episode: 507: Making Cold Email Work in B2B SaaS

• 5:43 Should a bootstrapper hire a Sales Development Rep (SDR)?
  • You can, it comes down to where are you going to spend your money?
  • With outbound sales, you''re in control. If you can define the target market is then you can actually go to your customers.
  • If you define that persona, then your customers share the same problems. You can solve the problem once, and solve it for many users.
  • As bootstrappers, we look for the cheap ways out. We''ll spend hours to try to save $10 on a monthly subscription
  • It can work, but there are caveats. It''s not about the mechanisms. You have to cut through the noise, and the way you do that is to get straight to the point about what matters to them. It''s not about who you are or your company.
• 9:16 Assuming you understand your market, what kind of cold emails work today?
  • One important thing to note: It''s not a foregone conclusion that if you have some success that you''re going to know your market that well.
  • You need to know how your customers are talking about the problems you solve, and that lever has to be pulled somehow in your sales conversations and your marketing materials and everything
  • These days, it''s about omni-channel; multiple touches in multiple areas.
  • The more you understand your customers, the more you get to sell them what they want.
• 12:56 The forumula to use for B2B cold email
  • Figure out the two problems you solve for your customer. The first email is a no-fluff email that asks if their problem is A or B. You probably won''t get a huge response from this email. In the second email, you send them resources for problem A. The third email, you send them valuable resources for problem B. In the final email, you say, maybe we can help you to try and solve the problem. These sequence works gangbusters, if you have the right customer and audience.
• 14:37 Risks of bootstrappers hiring sales reps too quickly
  • Technical founders want to get sales off their plates quickly, without building a sales process
  • So in almost all cases and in the same way when you write the code or you''re doing your content marketing, or you''re doing sales, the founders should drive at first and they should figure it out. You should have a clear understanding of a framework. Here''s what''s working, here''s what''s not working. Here''s what resonates with our customers, here''s what doesn''t resonate. Now let''s get better at it
  • Commonly with founders that are having some success, they get away from the things that made them successful. They''re not talking to the customers as much anymore. They don''t really have these understandings of who they''re talking to and how they''re talking to them
• 17:19 Rule of thumb for hiring sales reps in 2020
  • Generally, it depends. Ballpark, it''s an annual contract value of $3-5k
  • Founders think they''re going to get sales off their plate by hiring a team, but really all they''re doing is just transferring it from sales work to sales management.
  • If you have BDRS or SDRS come in and you don''t have a lot of the answers, they''re not going to have success.
• 21:29 Defining SDR (Sales Development Rep) and BDR (Business Development Rep)
  • SDR and BDR are really the same things: It''s someone who is in charge of doing outbound outreach to generate leads to then hand to an account executive
  • Aaron Ross'' sales method worked really well a decade ago at Salesforce but it''s not a great model for bootstrapped startups
  • If you''re hiring a sales rep, hire two at the same time. If they both fail, it''s not them, it''s your process. If they both succeed, you have a good process. If one fails, but one succeeds, it''s most likely a personnel problem.
• 24:47 What''s the bare minimum for a sales stack
  • Hubspot, while expensive, does handle everything and has it all in one place.
  • On the cheaper side, Pipedrive is good.
  • For lead generation: Mailshake or Prospect.io are good
  • For customer support: Helpscout or Freshdesk
  • For marketing automation, Mailchimp has been building some great automation lately.
  • What matters for email is deliverability and integration.
  • At the high level, you want an email marketing automation tool, a customer support tool, and a CRM. Ideally, they all integrate really well together.
• 36:42 The real challenge with outbound sales
  • The real work is in the list building. It''s what takes the longest. It''s actually what makes the biggest difference.
  • The clearer you can get with that persona, the better you''re going to be, which takes effort and time.

Listen to Full Episode

Until next week,

Hi there,

We just released this week''s podcast episode:?523: Breaking Through Plateaus, Entrepreneurship for Kids, Common Bootstrapper Mistakes, and More Listener Questions

In episode 523, Rob hosts a rapid-fire lightning round of listener questions ranging from whether to focus on one or multiple businesses, finding the right amount of customer research, breaking through slow growth, and teaching entrepreneurship to kids.

The topics we cover

[4:38] If you were starting a business today and you were earlier on in your career, would you try multiple business ideas at once or go all-in on one?

• All-in is a deceptive phrase
• I would focus on launching and validating one idea at a time personally
• I have a huge belief in focus
• I didn''t launch and grow 10 at once I launched or acquired and grew one at a time.

[8:11] If building your first tiny product, like a WordPress plugin, what level of customer research should you do?

• I would tend to act pretty quickly
• Find a small niche or you find even not a small niche, but with an under-served corner that you can somehow measure the interest.
• Validate just using free or lightly paid keyword tools and trying to find gaps in these markets or places where people have launched and abandoned, or they''re not doing a good job and you see an angle.
• If it is a micro idea, I would lean towards action more than trying to validate for months and months.

[10:56] What advice would you give to someone entering a somewhat competitive market?

• I would not try to outmuscle the competition. If I did not have a lot of money or social capital or social proof.
• Use my opponent''s strengths against them
• Companies that get to a million dollars in ARR 10 million in ARR, tend to be leaving out sections of the market that they just have to ignore.
• How do you find that subset, if you have all this competition that is being left out?
• I would look for a hated competitor
• I would look for areas where that competitor is dropping the ball
• I would look to position myself uniquely
• I would look for a unique traffic channel

[15:55] What questions would you be asking yourself if you had a slow-growing 12k MRR B2B SaaS?

• If my retention was not high, I have a problem - product-market fit.
• If you''re churning out 10, 12, 15% a month, that''s the number one problem.
• How much traffic? What is your visitor -o-trial rate? It should be about 1% If I''m asking for a credit card I''d like about 15% give or take. If I''m substantially below those, then of course you have a trial conversion problem.

[18:22] How would you go about offloading tier-one customer support?

• Every founder thinks they are the only ones who can give good support.
• You find someone who''s really good.

[20:28] How do you feel about entrepreneurship being taught to children?

• I think all of us in high school/college should learn something about personal finance & entrepreneurship

[22:24] What are things you noticed that bootstrappers commonly overlooked that are preventing them from achieving their goals?

• The fact that you have to market that it''s not about building products.
• Bootstrappers don''t pay enough attention to their metrics or their analytics
• Word of mouth is usually the wrong answer
• Building before finding a customer base
• Building before validating
• People give up too easily

[23:18] What are some of the biggest takeaways you can see across your portfolio of early-stage SaaS companies?

• I don''t think it''s going to be winner take all
• If you do look at returns, it was not winner take all, but it was definitely a power law and power law just means there are a small amount who get ten or a hundred times larger than the others.
• I want to raise the tide so all the boats go up

[25:01] Have you ever built a business that got a fairly large portion of its revenue from services instead of products, but not just you consulting?

• Yes,?CMSThemer.com. It was a productized service before that term existed. I knew how to rank it in Google. I got it to the top first page of Google for WordPress theming
• Productized services are a great way to get started quickly these days, especially subscription services

[26:56] How do you prepare financially or otherwise for your retirement?

• Before I had sold Drip, I was contributing to retirement for most years
• At the worst times of Drip when it was growing fast and we had cash crunches, I stopped contributing to retirement. My bet was that Drip would make enough money in the end, whether through an acquisition or whether through throwing off cash, that it would make up for that. The bet worked out for me, It''s not gonna work out for everyone.

Links from the show

• MicroConf Connect
• SavvyCal
• Stay on Top of Your SaaS Metrics: Know What to Measure to Maintain Sustainable Growth - Craig Hewitt
• The 2020 State of Independent SaaS
• ZenFounder
• Indie Founder Bootcamp
• AudienceOps
• Castos Production (formerly Podcast Motor)

Hi there,

We just released this week''s podcast episode: 513: SaaS Valuations + Dos and Don''ts When Selling A SaaS. Detailed show notes below.

4:12 Running your business as if it were a sellable asset.

• Everything you do to make the business ready for sale tends to improve the business operationally.
• It''s an important philosophy and mindset to build in from the beginning.
• Whether a seller or buyer, thinking like a buyer can improve your business operationally
• Chances are high that you will sell your SaaS, but even if you do understanding how SaaS acquisitions happen can improve your business.

5:15 Quiet Light Brokerage deal count and other stats

• 10 internal advisors
• Deal count varies by year, ranges between 75-100 closed transactions
• The floor Quiet Light Brokerage is $100,000 seller''s discretionary earnings (SDE).
• SDE is earnings before interest, taxes, depreciation, and amortization (EBIDTA) but with certain expenses added back to it. So, operating profit plus three big categories of expenses: all of your owner compensation, including health insurance, dividends, and anything else attached to compensate yourself. Then, personal expenses like travel, meals, accommodation Finally, one-time sunk expenses like a trademark, intellectual properties, etc.

8:53 SaaS valuations today and how SDE valuations work

• Selling based on SDE vs selling on a revenue multiple
• If you have a strategic buyer, only sell for a revenue multiple
• There are private equity firms that pay revenue multiple for 7 figure SaaS businesses
• Selling on net-profit multiple, tend to be the smaller deals.
• SaaS is the only business model that straddles two different valuations
• Important to think about the lifecycle of the app. The revenue multiple starts to kick in at about $1MM in MRR because the business has started to operate at a scale where it makes sense to apply that valuation approach.
• Some caveats to that approach, as it has to have reduced churn, have a solid customer support team, and have strong revenue growth and marketing.
• For SDE, now the typical range is between 3-5 with the median at about 3.9.
• The big variables are age, growth, churn, and owner time.
• Rules of thumbs for SaaS valuation are helpful for the industry
• A lot of improvement in SaaS valuations has come from professionalization at the secondary market, from a lot of advisors working hard to present deals better, get better metrics, do a lot of buyer and seller education. and make the whole ecosystem a lot more transparent and robust today

17:50 How revenue valuations work

• As a seller, always do forward-looking ARR
• Revenue valuations are difficult because there is a distortion factor between where strategic can come in and where private equity can come in and set a stable approach to evaluating deals.
• David Newell uses the rule of 40: if revenue growth + EBITDA margin for that year is at or about 40%, then it starts to command around 3.5-4x revenue. Every meaningful step above that (e.g. 50%, 60%) the revenue multiple then goes up from there.
• The higher the revenue, the multiple tends to edge up as well (if you''re at $2 million ARR versus $8 million ARR, it''s a different conversation). It''s much harder to grow faster at scale.

21:19 David Newell shares stories of dos and donts of valuations

• If you want the best value in the market you have to have transparency, which means two components: metrics & financials.
• The biggest challenge with many SaaS businesses is that they often have many projects going on at the same time with shared resources across all of the different apps that at sale time becomes very difficult to articulate to buyers how much expenses are contributed to a certain business.
• The more detail and documentation and clean metrics and financials you can present to the seller the better.
• Metrics tools like ProfitWell, ChartMogul, and Baremetrics are practically de-facto nowadays.
• Also, a tool called Summit can help with forward-looking metrics.

29:52 What do the best buyers do?

• The best buyers take a very collaborative approach from the outset, and will immediately take a partnership stance.
• The best buyers have an intent to create a deep relationship
• They also get deep into their due diligence to understand if they can run the business post-sale (talking to developers to understand the codebase, etc)

Listen to Episode 513

?

Startups for the Rest of Us Celebrates 500 Episodes!

Add MicroConf On Air to your Calendar:
Reflecting on 500 Episodes of
Startups for the Rest of Us
Wednesday June 10 @ 1:00 PM EST

Hi?there,

As a member of the Startups for the Rest of Us mailing list, I wanted to give you exclusive access to two new (unreleased) podcast episodes and PDF guides I recently put together.

I think you'll get a ton of value out of these, as they cover timeless takeaways I''ve learned from 20 years in the entrepreneurial trenches. Click below to check them out:
?

Also, if you enjoy the guides, mind?retweeting this tweet to help spread the word??
?

Onward!

MicroConf Remote
September 1st, 2020
11:00 AM - 4:00 PM ET
Ticket Price: $50*

Hi there,

We just released this week's podcast episode:?525: A Bootstrapping Artifact from 2005

This episode is a walk down memory lane as Rob shares the story of acquiring his first product 15 years ago. We hear how Rob navigated the purchase of the product, a potential partnership with a trusted friend, and pushing through when his back was against the wall.

Hopefully, this episode will inspire you to take action and keep shipping.

The topics we cover

[5:03] Three levels to making money online

[6:36] Discovering the original version of DotNetInvoice

[11:34] The business proposition

[15:10] The counteroffer from Rob''s trusted friend

[18:41] Business plan vs boots on the ground

[20:49] Buying DotNetInvoice

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you'd like for us to cover, please?submit your question?for an upcoming episode. We'd love to hear from you!

Subscribe & Review:?iTunes?|?Spotify?|?Stitcher

Listen to Episode 525

Hi there,

After a successful first season, we''re excited to introduce Season 2 of TinySeed Tales, where we follow the founders of one SaaS startup week by week through their struggles, victories, and failures.

On the first episode of this series, Rob introduces us to Brian & Scottie Elliott from?Gather, an interior design project management app.

New episodes of TinySeed Tales Season 2 will appear in the Startups For the Rest of Us podcast feed every Thursday morning.???

Listen to the episode?and check out the detailed?show notes below.

• 1:30 Meet the Co-Founders of Gather, Brian Elliott, and Scottie Elliott
  • Brian and Scottie have been working on Gather since late 2014
  • Scottie has 20+ years in the interior design industry
  • Brian was looking for software to build and continued to hear Scottie''s frustrations with current software in the interior design industry
• 6:02 Gather''s current Monthly Recurring Revenue (MRR) and why Brian & Scottie decided to join TinySeed
  • MRR is $5,600 with 8% growth
  • They were compelled by the three components of TinySeed (funding, mentorship, community)
  • As opposed to mastermind groups, everyone in TinySeed is serious about their business
  • They hadn''t considered angel funding -- never felt like the right move. They wanted to continue to have control over their lifestyle.
  • Meeting with venture capitalists tends to make you want to raise venture capital
  • Bootstrapping doesn''t have to be binary: either lifestyle or a moonshot startup.
  • There is a third option between bootstrapping and moonshots, but the third option doesn''t preclude taking funding.
• 13:36 Do Brian & Scottie still feel like they are bootstrappers after taking funding?
  • All decisions are prioritized and based on being cost-effective
  • They''re still protecting the downside risk
  • Going to continue to geo-arbitrage, and hire developers from developing countries
• 15:44 Biggest win of the week
  • Last week nearly doubled prices and had 2-3 new signups at that level. Good validation.
  • Raising prices is always a scary thing because you don''t know what it''s going to break
  • When they raised their prices, they grandfathered existing customers.
  • They want to reward their first customers for being early adopters
  • Churn can often, over time, take care of grandfathered customers
  • They over-index on relationships with users
• 19:54 Setback from the week
  • A majority of the trial signups would disappear without much activity on the product
  • Considering picking up the phone to call users to see why they didn''t do anything on the product, but they also want to be respectful of the user''s time.
  • Improve the quality of leads at top of the funnel to possibly help with trial signup engagement with the product
  • Often times, under the water for most startups, founders are kicking like a duck.
  • Brian is the optimist & Scottie balances things out.
  • So far, they''ve learned so much from building Gather that they will be happy with the outcome, whatever it is.

Listen to Episode S2E1

Hi there,

We just released this week''s podcast episode: Raising Prices & Re-writing Your Codebase

• 2:35 How Mike Ritchie and his co-founder, Thabo Fisher of Seekwell discovered the need for their product.
  • Raised a little bit of money in order to go full-time, no one was convinced it was a billion-dollar product, despite people getting value.
  • Then realized that maybe funding wasn''t the right direction. They had a product that people loved already, so why not double down on that?
• 5:57 Deciding to not go down the venture capital path
  • They became laser-focused on profitability, and consequently also become a lot less stressed.
  • Startup founders don''t need permission to start a startup.
• 8:08 Seekwell''s typical customer profile
  • First: technical product managers or technical business people. They''re not developers, but they know SQL and they love getting their hands dirty. The product instantly clicks with them.
  • The second is the data person within the company. Once you get to 200-500 person company level with a data analyst and head of data. Especially companies that don''t have sophisticated data models.
  • Third, when a company goes past the point where they have sophisticated data models, there is still a lot of educational aspects that BI tools do not do well.
  • One of the core value-props of Seekwell is the ability to store, tag and serve SQL within a company.
• 10:01 Getting the first paying customer within 30 days
  • Mike & Thabo built a solution for a problem they had themselves.
  • They knew exactly the product they needed to build. Started by launching a google apps script.
  • There is a danger in building just for yourself in that you may have a problem that is so unique and specific to your own problems that no-one else shares.
  • Mike knew there were companies that had similar issues that he had, but was unsure if people would be willing to pay for a solution. So, they put together a solution on G Suite Marketplace to determine if there was a viable solution.
  • Most of the traffic has been from content/blog posts but also being helpful online via Quora and other online forums.
• 14:26 Rewriting Seekwell''s codebase and doubling down on what customer''s love.
  • Seekwell was adding features that customers didn''t necessarily love and was making the product bloated.
  • Instead, focused on making the product very fast and focusing on the smaller set of features that the customers loved.
  • Mike''s background is not in Computer Science, so the first version of the application had some major flaws in it''s architecture. The rewritten version had a frontend framework and rapidly decreased the development time.
• 16:40 Applying for TinySeed
  • They were looking for community (things get lonely as a founder).
  • Not a lot of great active communities.
  • Seekwell also raised a very small initial round, but the additional funding from TinySeed was a good buffer.
  • The first 1-2 months of TinySeed goes through the TinySeed playbook which distills a decade or so of SaaS knowledge, digging into things like properly pricing, sales, lead generation, and hiring. The outcome of this is typical to see companies change their pricing and value metric.
• 20:03 Raising prices and adjusting Seekwell''s value metric
  • Seekwell was completely misaligned with their value metric initially. Ended up meaning that users get a tremendous amount of value out of the product with only 1 user.
  • The strategy to update their pricing was to better align the value with the cost.
  • Difficult to find the balance of updating pricing and keeping existing customers happy.
  • Once updated pricing, customers that would have been paying $49/month were now in the $150/month plan, and they were all happy. Plus, users that were limited per users and now have unlimited users, no longer have angst about adding users.
  • Updating pricing is always stressful, whether you remove credit card upfront, to launch a freemium plan, to launch a lower-priced plan, to remove your low price plan, to increase prices, to change your value metric.
  • The number one level in any business, especially SaaS, is your pricing. Instead of having to go and find more customers and focus on new channels, you just update a number.
  • For per user/seat pricing, the rule of the thumb is that if two people log into your account and see different accounts, you can charge different prices. Otherwise, users will just share logins.
• 25:53 Examples of creative use cases for Seekwell
  • Internally, Seekwell has a DevOps dashboard that has buttons and forms that allow staff to update user data.
  • Many companies frequently have many operations that require DevOps to handle updating user data, Seekwell allows DevOps to write SQL once and expose it to the rest of their team.
  • Another aspect is push-first philosophy which allows you to get notified about important user data only when you need to know about it (as opposed to tracking something is not always relevant).
• 29:02 Since Seekwell launched, have there been any low points?
  • Mid-2019 there were some low points. Had issues with servers, scaling, running out of cash. What really saved the company was listening to the customers and their feedback. Building what they were asking to build.
  • WIthout customers giving positive feedback and saying they are getting value can do so much to motivate and keep a team going.
  • It''s easy to feel on top of the world before you get your first customer. Everything will run smoothly until you get your first customer.
  • If you''re building something, get it out there as quickly as you can to get feedback and make sure you''re headed in the right direction before you waste a ton of time.

Listen to Full Episode

Until next week,

Hi there,

We just released this week''s podcast episode: The Story of Startups.com

• 2:43 How soon after first acquisition did Will Schroter, CEO and founder of Startups.com, want?to start next thing?
  • Life-changing for Will was the first time he made over a hundred thousand dollars
  • If you can take a $250,000 check off the table, it will be maybe the most life-changing money you''ll ever have, because it''s all the money that you need to do all the things that you haven''t been able to do for a very long time.
  • Being able to have a little bit of cash that can reset the baseline is extraordinary.
  • If you think about it, most people spend most of their lives just trying to get through a handful of milestones that are not massive cost milestones:
    • the purchase of a car
    • paying off college debt
    • getting married
  • Those are often tens of thousands of dollars problems. They''re never million-dollar problems. Most of the things that we spend the first 20 years of our career trying to overcome all fall within $250,000.
• 5:42 Will on building an incubator in the early days
  • Why keep going to clients? Why not just build the stuff for yourself?and get your own output.
  • A lot of people came into their careers when this was all well-established, whether it''s SEO, PPC, affiliate, marketing, et cetera, but right around the turn of the century, all of those things were just getting invented ironically from Bill Gross.
  • If all you''re doing is charging for your time, you''re going to always be on a treadmill because the time is the treadmill.
  • Charge for your output, not your time
• 8:55 History behind Swapalease.com
  • Swapalease.com had an idea and a prototype but they hadn''t really scaled it. Will used his incubator model to scale to 3 million in revenue within the first few years.
  • Will realized you could build these small businesses that could start small and either succeed or fail small, which again at the time was not the case.
• 11:22 On choosing if/when to take on venture funding and the origins for Startups.com
  • While in Los Angeles, He started to meet other local entrepreneurs. Mark Suster and Mike Jones offered to invest personal money in one of the projects He was working on.
  • Will realized that for every one of these companies, as they grow, they''re just gonna need exponentially more money. For every dollar that invested in growing one, there is another dollar that could be invested in starting another.
  • Will had an unusual life experience where he was running five companies at exactly the same time. While one company was practically going bankrupt, the next company was getting an amazing term sheet. While one company was losing its biggest customer. The next company was winning it''s biggest customer.
  • Will started to spend a lot of time with a lot of founders, coaching them through the process. He realized that what he was particularly good at was teaching people how to build startups. And so he said, "why don''t I figure out how to do that for a living?" That''s where to Startups.com came from.
• 14:19 What is Startups.com and how much revenue does it generate?
  • Startups.com teaches people how to get ideas out of their heads and into a launch mode.
  • It''s a simple place where people could get the education they needed, a community of 20,000 people that could actually help them, and the tools they need to get through the hard parts, like raising money or finding first customers.
  • Where Startups.com hits the sweet spot is when founders are right at the point where they have an idea or they''re just about to launch or have just barely launched.
  • Once a startup is in the market, it becomes a different path and it becomes highly segmented depending on what business you''re in.
  • 8 figures, debt-free and profitable.
  • Will''s goal was to become debt-free and profitable. When he formed the company, he had two very specific goals:
    • Don''t have a boss (no debt)
    • Give ourselves unlimited runway (no rush)
  • Startups.com did a lot of things that are nontraditional. For example, when they were building the first parts of the business, they built a professional services business that helped people write business plans or go through capital-raising processes, et cetera. They did that because that revenue would scale faster in order to get to profitability. There were lots of decisions based on the question, "will this get us to profitability faster?"
• 19:41 Why Will manages so many aspects of the business
  • Will is available for about 50 hours a week but has about 3 hours per day of core focus hours where he gets productive things done.
  • Will spent most of my career working 80-100 hour weeks for decades and it had huge impacts on his health. He worked all those hours because he could not because he should. He''s a huge proponent of focusing more on output than hours.
  • If you have the experience, you can work a little bit less because you know what''s around the corner, whereas you didn''t before.
  • Also, when you''re young if you have the hours available you''ll just use them. They don''t cost you anything later on in life. As you, as you get older and as your priorities change, there''s a real cost to it.
• 23:41 The hardest part of building Startups.com
  • It was right before Startups.com started. Will was driving home from work and his heart stopped for a fraction of a second from a massive anxiety attack.
  • That was one of the toughest parts of his life because he had no idea what to do next. He just knew that the pace he was running at and the things that he was doing just couldn''t work anymore.
  • He made a list of all the things that he doesn''t ever want to do again, which wound up being the most life-changing thing that he ever did.
  • What Will tells founders, especially young founders, is to make that list first.
  • As you get further in your career, you start to understand the cost of those compromises and you start to truly understand the benefit of not compromising.
• 29:58 Will''s thought process on acquiring companies
  • The first year to two years of spending with a VC money is so wildly inefficient by definition because you''re experimenting like crazy.
  • If Will could spend $250,000 to build his own product or $250,000 to acquire somebody else''s product that probably spent, even more, trying to get into it, most cases he''d take the latter every single time because the one thing that that money doesn''t account for is all the time and effort it took to get to that point of the product.

Listen to Full Episode

Until next week,

Hi there,

We just released this week's podcast episode:?526: Launching, Learning, and Teaching with Justin Vincent

In episode 526 of Startups For the Rest of Us, Rob chats with a long-time friend, Justin Vincent about his startup successes and failures and the importance of taking small steps when starting as a founder. They also talk about Justin''s latest project, Nugget, a startup bootcamp and academy.

The topics we cover

[4:04] Building?Plugg.io

• If you look at the buffer story, Joel basically built a very small app and then spent the rest of his time marketing. Justin built a very big app and spent most of his time dealing with customer support and a very small amount of time marketing
• The thing that I think we should also call out is building a small product and going and marketing. It wouldn''t work. If you were trying to build an email service provider or CRM, because it''s too competitive
• If your revenue goals are small, let''s say it''s just a couple of thousand a month, even 5,000 a month. If you go into a huge market, There''s nothing to say that you can''t take out a tiny part of that market
• Building a product can have an enthusiasm half-life

[10:30] Enthusiasm half-life

• We got Light to the point where it was making money. But then, something happened. Justin discovered he didn''t actually like it.
• Pick something small and to sort of work in very small iterative steps and chunks, and just keep getting that sense of just wanting to do right
• The biggest problem comes when you''re trying to take a step that''s too big
• Hyper-iterating: Paul MacCready was testing out an idea every couple of days, over six months to try to find the best model for human-powered flight.

[16:03] Nugget Startup Academy

• The people who are pre-revenue pre-product the most common question is always, how do you come up with ideas and how do you vet them?
• What I truly learned is that ideas are both the most important thing and also the least important thing
• Founders didn''t really need ideas they needed education.
• 50% completion rate for the course (industry standard is 5%)

[25:54] Founder context

• I think that one of the main things that I''ve really learned is that at least 50% of this whole thing is about you.
• The first problem that I''ve seen with most founders is that they''re working way ahead of where they should be.
• The further away you work from what you already know how to do. The less predictable the results.
• A lot of zero to one Founders go straight for a SaaS app
• It''s again, the reason why it''s so good, in my opinion, to start at level one, really understanding, okay, how do I generate traffic?

Links from the show

• Techzing
• Nugget
• Plugg.io
• Is it Keto?
• Michael Lynch
• Justin Vincent

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you'd like for us to cover, please?submit your question?for an upcoming episode. We'd love to hear from you!

Subscribe & Review:?iTunes?|?Spotify?|?Stitcher

Listen to Episode 526

?

Hi there,

We just released this week''s podcast episode:?522: Revisiting Castos, One Year Later

Rob welcomes back to the show a frequent guest, Craig Hewitt for a "Where Are They Now?" syle episode. Craig is the founder of Castos and has appeared many times on Startups For the Rest of Us. In this episode, they reconnect and talk about the latest with Castos, from hiring a growth marketer, merging brands, private podcasting, and so much more.

The topics we cover

[3:54] Reflections on hiring a growth marketer 1 year later

• A year later it was a fantastic decision.
• It allows you to kind of move your energy and focuses up in the echelon.
• Puts you on a different trajectory than if you do it all yourself.
• The more that we can let someone focus on doing a single thing.
• Task mindset, project mindset, owner mindset.
• Who can really own this whole area and maybe even delegates and projects.
• Not about equity in a business, but I think it''s about owning the results.

[6:92] How did the free trial without asking for a credit card experiment work out?

• I think that it has been a good thing.
• Compatibility with the user behavior perspective, not asking for a credit card up front is definitely the way to go.
• Freemium doesn''t convert in 30 days or 60 days so if you have other things going on that are working, it can be a tough sell to justify that.

[8:92] Merging brands and moving into enterprise offers

• The metric around us that has been the worst that that''s kind of tough to affect is like our average revenue per user.
• Everybody who''s running a business should say how can you double your business tomorrow and just come up with crazy ways to do it.
• Merging Podcast Motor into Costos.
• In Spring of 2020, introduced Castos Productions
• That went over well, and we had a good reception from clients
• Managing just one brand generally is a lot easier from an SEO perspective
• It''s been the right choice and has moved the needle. All of our revenue goes into one place. That''s just easier to keep track of and everything. It simplifies our messaging.
• The dual funnel (free trial, lower-cost + enterprise-level) SaaS businesses are the ones that typically grow the fastest

[19:91] Private podcasting

• It''s anything you can imagine. we have mental health professionals having private podcasts for each of their patients.
• I feel like we''re at the right place at the right time with this because it''s a huge opportunity.

[23:44] What''s new and exciting at Castos

• Doing everything we can to be the obvious choice for people who want to create a podcast and use WordPress as their website.
• Offering good free tools for people in WordPress to make that experience even better.
• The other one is, is private podcasting. we''ve taken the approach so far of let''s help people that already have a significant following and integrating with their course platform or their membership site or their community.

Links from the show

• Episode 466 | Answering Listener Questions With Craig Hewitt
• Episode 493 | A Roundtable Discussion about COVID-19, Working From Home, Payroll Protection and More
• TinySeed Tales - Season 1
• Castos Productions (formerly Podcast Motor)
• Rogue Startups
• The SaaS Podcast Award

Hi there,

We just released this week''s podcast episode:?519: Profit Sharing, Stock Options, and Equity (A Rob Solo Adventure).

On this episode, Rob talks through profit sharing, stock options, and equity and makes a comparison between these various approaches.

If you are thinking of ways to incentivize team members as a bootstrapper, this episode is for you.

The topics we cover

[04:34] Bonuses

• Align incentives
• Some people look at it as a retention incentive
• Others look at it as a way to make people just enjoy their jobs more
• I do personally feel like if your team is cohesive and is working hard to get to the same end goal and you are creating profit or you''re creating value, it does feel right to in some way to, share that with your team members
• Downsides of bonus programs are that they are arbitrary
• You don''t want to have to reevaluate every year who gets how much bonus and why
• In addition, there have been lawsuits from employees of companies where they''re given a bonus every year and they''ve come to count on that bonus as part of their income
• Bonuses can be dangerous longterm
• Bonuses are tough because incentives aren''t exactly aligned

[07:52] Equity Grants

• For equity grants, if you give someone equity, they now get a K-1 at the end of each year, which makes their taxes more complicated
• Whether you''re an LLC or a Corp, you need to have restricted units that vest over time
• The interesting part about equity is it does make profit-sharing easy because if someone owns 5% equity and you take out a distribution, then they get 5% of that distribution.
• Equity makes things complicated
• For employee incentives and aligning incentives, I don''t think personally that Equity incentives are the best way to go.

[11:47] Stock Options

• The standard Silicon Valley way to motivate folks
• A stock option is just an option to purchase stock in the company
• A lot of folks don''t exercise their options
• The good news about stock options is there are no capital gains to worry about and they don''t receive a K-1 that complicates their taxes
• The other interesting thing about options is there''s usually this exercise and window where if you leave the company and you haven''t exercised any of your options, you usually have about three months, and if you don''t buy the options, they just revert back to the company and you get nothing
• Most venture-funded stock options really aren''t worth it. That''s the reality of kind of gambling on startups
• So I think stock options are a reasonable choice. think they''re a longer-term play because they do require that liquidity to be worth anything versus profit sharing, which is more short-term cash out of the business type approach

[20:09] Profit Sharing

• What''s nice about profit sharing is if you don''t ever plan on selling or having liquidity events, then money in profit distribution kind of makes sense
• One drawback to profit-sharing that you don''t see with the other approaches is that if an employee leaves, they don''t take the profit-sharing with them
• Maybe not as ideal for employees who want to leave,
• One thing I would think about if I were structuring profit sharing is to make it a pool, not a committed percentage to an individual.
• If you''re going to do profit sharing, probably want to stay away from being a C Corp because that''s going to give you double taxation, right? So you''re gonna want to be in a pass-through entity.
• Do quarterly distributions. Monthly is too often. Yearly is too long
• Using performance evaluations as some type of thing that affects sharing can be dangerous
• One drawback of profit sharing is that it''s really always taxed as income

[26:09] Which is best for your SaaS?

• I would think about whether I was going to be able to run it profitably, and then profit sharing would be a good fit.
• I would think about whether I was going to grow this and sell it or have a liquidity event at some point, and then obviously stock options might be a better opportunity.
• I think bonuses can be useful in the early days, but personally, they''re a little too arbitrary and can create a little bit too much chaos.
• Equity is the founder level focused. There are a lot of complexities there, taxable events, and K-1''s. Doesn''t scale to a full workforce

Links from the show

• Trends.vc
• Peldi Guilizzoni''s Profit-Sharing Plan
• Rob Walling?| Twitter

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you''d like for us to cover, please?submit your question?for an upcoming episode. We''d love to hear from you!

Subscribe & Review:?iTunes?|?Spotify?|?Stitcher

Listen to Episode 519

?

Hi there,

We just released this week''s podcast episode: 524: Bootstrapping a Commodity SaaS.

In this episode, Rob chats with Michele and Mathias Hansen, the married co-founders of Geocodio.

We talk about bootstrapping into a commoditized space and how they''ve grown their SaaS app from a side project to full-time over the past 6.5 years.

The topics we cover

[01:38] What is Geocodio?

• A computer doesn''t understand an address. It only understands the coordinates or geocodes. What we do at a very basic level is Convert an address into coordinates and visa versa.
• There''s a lot of data that is only unlocked by having the coordinates.
• Launched it six and a half years ago in January of 2014 as a side-project on Hacker News.
• We got so much feedback from people about everything, from things they wish we did to complaints about our competitors and how they were so glad to see something like this.
• The accuracy of the locations is important, but what differentiates us from many other services is that people can use the data without restrictions they''re allowed to store in their database. There aren''t these overly cumbersome caching limitations.

[10:29] Innovating in a commoditized market

• Geo-coding is sort of like selling wood into the software market as just everybody needs it.
• So where we have kind of carved out our space is focusing on making it easy for people. That''s where the data integrations come into play.
• Where we have found our success is in trying to eliminate steps in the process for people and making it easy to get lots of related data.
• We don''t want to be standing over our customer''s shoulders, telling them how they can and can''t use the data.

[16:07] How they defined their product roadmap

• We talked to our customers. When our customers came to us early on with asks, we would always ask them, "Oh, why do you need that? " Because we genuinely didn''t know.

[18:06] Launching a HIPAA compliant enterprise pricing tier

• Mothballed it for a while and then suddenly a bunch of people out of nowhere wanted to use it.
• The number one rule of bootstrapping is to always make money.
• We learned the hard way that the sales cycle is so much longer when you''re dealing with companies that have robust legal departments.
• Having a point of contact at those companies that have already been using our product is already totally sold on it and is a huge advocate for the product within the company can make those conversations with, with legal or with compliance a lot easier because they are doing some of that negotiation for us and they''re advocating for us.

Links from the show

• Show HN: Ridiculously cheap bulk geocoding
• Geocodio | Website
• Michele Hansen | Twitter
• Mathias Hansen | Twitter

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you''d like for us to cover, please submit your question for an upcoming episode. We''d love to hear from you!

Subscribe & Review: iTunes | Spotify | Stitcher

Listen to Episode 524

Hi there,

We just released this week''s podcast episode: 516: When to Re-write Your SaaS Codebase.

Matt Wensing returns for his third appearance on the podcast. He is the founder of Summit and was in TinySeed Batch 1.

We dive into Matt''s decision making process for rewriting the entire codebase. We talk about choosing the right features to build, talking to your customers, starting with a blank slate vs templates, and much more.

The topics we cover

[06:48] How to handle customers that are not engaging

• It didn''t feel like a pain when I was there because. Some things were good,?and I was getting feedback from people that really frankly loved the app, but there just weren''t enough of them.
• The initial vision for Summit was to help early-stage founders figure out how to do a forecast without the use of something like Google sheets.
• It delivered on that promise and for the users The problem was their businesses mature and their needs evolve. Also, if they are happy with the product, they want more.
• Why is it increasingly hard to build the next thing that somebody asks me for? And what does that mean for my business?

[11:35] Figuring out the right features to build

• We''re always looking as founders for validation.
• There''s a bit of a bias towards evidence that you''re on the right track
• Start piecing together the consistent story that I''m hearing from the users that I really want.
• What product do these people actually need?
• It''s just being very deliberate about who I wanted to please
• The hypothesis was the job of the summit was to create a forecast for people.
• What Matt found were the things they wanted to have nothing in common. What they had in common was they all wanted something else.
• The North star became flexible.

[19:24] Making the decision to rewrite the codebase

• It was a sales and marketing driven decision
• I''m doing this so that when I do a demo with somebody, it blows them away and they buy the thing
• You gotta be really honest with yourself, right? About where your, where your motivation is coming from to do something like that
• If you''re a single founder or two founder team, and you are thinking about rewriting your codebase, put on your sales and marketing hat and not your CTO or developer hat.
• Matt wanted to build this in a way where if it is successful, he can hire developers to help him get it to the next level and the next level, because the first version, it was one of those things where he got to build this thing by hook or crook.
• There''s a group of users of the first product that I essentially alienated.?That was pretty painful to hear.

[31:27] The value of forecasting

• For fundraising to see when your money''s gonna run out.
• Hiring, ad budgets, any big decision that could put you in a cash crunch
• Versus a spreadsheet, a model looks at your business. Tell me what your revenue plans are. Tell me what your acquisition channels are. Tell me what your team looks like. The hope is that it''s really a more natural way to capture a business

[33:18] Designing a sparse SaaS homepage

• I have not prioritized updating the homepage for a couple of reasons. One is I''m still figuring out what summit is. Second, I have a little bit of a concern that if I flush that out with a lot of words, its going to become a liability to maintain.
• I don''t feel ready to convince more people. People that are on the fence where they''re like, I don''t know if I need to tell my forecasting spreadsheet, goodbye.
• But for now I kind of like knowing that the people that get into the product are there because they''re motivated.
• I see it as an opportunity. I just haven''t prioritized widening the top of the funnel yet.

Links from the show

• Out of Beta
• Things You Should Never Do, Part I
• Episode 450 | Founder Hotseat: Matt Wensing of SimSaaS on Making Consistent, Needle-Moving Progress
• Episode 491 | Hard Lessons Learned, Reaching High-Touch Prospects, Finding Advisors, and More Listener Questions
• Episode 489 | 15 Years to a SaaS Exit (Plus Why Forecasting is Crucial)
• Summit | Twitter
• Summit | Website
• Matt Wensing | Twitter

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you''d like for us to cover, please submit your question for an upcoming episode. We''d love to hear from you!

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Listen to Episode 516

Hi there,

We just released this week''s podcast episode:?517: Married Co-founders Who Turned a Free Tool Into a Fast-Growing SaaS Product?with the founding team of Scatterspoke, John Samuelson and Colleen Johnson.

What started as a lark to learn new technology has now turned into a successful business with more than $12k MRR. In this episode, we learn how they turned a side project into a successful full-time business.

The topics we cover

[02:09] The launch story behind Scatterspoke

• John built it to learn new technologies
• Built this tool because Colleen is well known in the Agile Methodology space and is considered an influencer.
• Helped me fill an immediate need
• Combined John''s interest in learning some new technology with an immediate need Colleen had
• This truly is a maker story
• Project-Product confusion. Some projects are fun to work on but don''t make a good business.

[10:02] Shifting to enterprise customers

• They were focused on small, all agile teams, but then enterprises would come and they would ask for features that they necessarily, thinking about building.
• Out of nowhere, a giant enterprise deal showed up, and they were very interested in it with some contingencies. They wanted 10 new features before signing a deal.
• That''s kind of when the light bulb went off
• Dual Funnel: high enterprise deals and smaller deals. Eyeopening in the sense that there''s value in both
• They built a bunch of custom features for that big enterprise client. Those features now work for all of our small teams, just as well.
• That''s an elegant balance to strike because oftentimes enterprises want really large clunky things.

[16:17] The toll of working fulltime while trying to bootstrap Scatterspoke

• I feel like the deck stacked against you, you feel guilty no matter what you do.
• So that''s by far, in my opinion, the worst part of it, it''s not working long hours. We can get through that. It''s guilt.
• I think we are always trained to teach our kids, work hard, play hard mentality too, but it''s that making space for making space for the play hard, right?

[18:01] Hiring out for development

• Made a mistake of hiring friends
• When you hire friends you have a dual-relationship
• I''ve changed that to hiring people and specifically hiring people, not in the US
• You gotta let go at some point. You cannot hold everybody to these standards

[26:00] Free plan and raising prices

• So we redid our pricing tiers first and kind of gave everybody some grandfathered users, an option with those new pricing tiers. And we''re about to roll out what will essentially kill the free tier.
• Raising prices is scary. Killing free plans is scary adding or removing credit card before a free trial is really scary
• It''s pretty easy to roll back that this was not an undoable decision.
• Given how large of a lever, like I keep saying pricing is the number one lever in any business, but especially in SAS where it''s recurring pricing is your number one lever. It''s the easiest thing to change and to double growth overnight.
• The value is still there. You''re just asking them to pay, to get that value.

Links from the show

• Scatterspoke?| Twitter
• Scatterspoke?| Website
• Colleen Johnson?| Twitter
  ?

Listen to Episode 517

?

Hi there,

We just released this week''s podcast episode: 514: An Inside Look at MicroConf Remote.

Producer Xander has been working on MicroConf since 2014 and is a long-time listener of the show, but this is his first time on the podcast.

On this episode, we take an inside look at MicroConf Remote from a few weeks ago and discuss what worked well, what we''ll do differently next time and the difficulties of translating events from in-person to remote.

The topics we cover

[03:26] Turning to virtual events

• MicroConf planned over a year ago to do two virtual events in 2020
• The fact that COVID-19 happened really didn''t change those plans
• Wanted to create something that was more accessible to a mass audience
• If it hadn''t been for COVID-19, MicroConf Remote would have been even more unique than it was because there wouldn''t have been other virtual events around it
• person to person interaction was the most important aspect of past events
• we weren''t trying to replicate what you''re trying to translate, from in-person to online

[07:38] Stats & production technicalities for MicroConf Remote

• We sold just about almost 700 tickets
• Some parts were pre-recorded
• 5-hour live stream
• 8 people on technical production
• Tracy on technical support
• The goal was to create something that was bingeable
• 575 attendees on at peak
• Typically expect a 50-60% dropoff from ticket purchases to actually attendance
• Recorded almost everything in advance for backup in case of an emergency
• It''s difficult to translate from in-person to live, given that you''re missing that energizing element
• Rob has had to learn to talk to a camera
• There''s a lot of acting when it comes to presenting to a camera

[17:12] What worked well: pricing, timezones, and programming

• Spent a lot of time thinking about optimal timezones
• For ticket pricing, had to go back and forth between making it premium vs low-cost or free. Landed on $50 with easy opportunities to get discounts
• Xander believes remote events should not be the same price as live events
• Margins on events, in general, are so low
• Rob & Xander thought programming & transitions worked well
• They experimented quite a bit with different formats, from teaching sessions, keynotes, Q&A, interview, AMA, and Founders in Cars
• Audience Engagement worked well for Q&A, during event surveys
• Diversity of speaker lineup was really important, but difficult to ensure for an event

[30:27] Things we learned from our first MicroConf Remote

• Shindig didn''t live up to what we needed. Xander evaluated 6-8 different tools during the research process. Difficult to properly test software platforms at scale. We chose Shindig because of the implementation of networking elements like guests sitting at tables. Those were elements that were hard to test at scale ahead of time.
• Another thing we could have done is better set expectations that this was not the same as MicroConf in-person events.

Links from the show

• MicroConf Remote
• Xander Castro | Twitter

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you''d like for us to cover, please submit your question for an upcoming episode. We''d love to hear from you!

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Listen to Episode 514

Hey?there!

We are excited to announce the first ever SaaS Podcast Awards. We want to celebrate the hard work that dozens of podcast hosts, production teams, and founders are putting in to help bolster the bootstrapped and mostly bootstrapped SaaS community around the globe.

Nominate Your Favorite Podcasts

We will be collecting nominations for 4 different categories:

• Best Podcast for SaaS Founders
• Best SaaS Podcast Host(s)
• Best SaaS Podcast Episode
• Best SaaS Podcast Founder Story

After a 2 week nomination window, we will put the top 5 nominees per category to a vote. ?

Submit Your Nominations

Brought To You By MicroConf

The SaaS Podcast Awards are being presented by MicroConf, the world''s most trusted community for non-venture track SaaS founders, in partnership with Hey and Stripe, sponsored by Castos.
To make sure that the process is fair, Startups for the Rest of Us, MicroConf On Air, and TinySeed Tales will not be eligible for the SaaS Podcast Awards. BUT! You can let us know your favorite episodes of those shows in the nomination form!

Spread the Word!?

The more nominations, the better! ?We want to promote these shows like crazy over the next few months, so help us get them on our radar by tweeting this out and encouraging your bootstrapping peers to vote.?

Send Tweet
?

Hey?there!

We are excited to announce the first ever SaaS Podcast Awards. We want to celebrate the hard work that dozens of podcast hosts, production teams, and founders are putting in to help bolster the bootstrapped and mostly bootstrapped SaaS community around the globe.

Nominate Your Favorite Podcasts

We will be collecting nominations for 4 different categories:

• Best Podcast for SaaS Founders
• Best SaaS Podcast Host(s)
• Best SaaS Podcast Episode
• Best SaaS Podcast Founder Story

After a 2 week nomination window, we will put the top 5 nominees per category to a vote. ?

Submit Your Nominations

Brought To You By MicroConf

The SaaS Podcast Awards are being presented by MicroConf, the world''s most trusted community for non-venture track SaaS founders, in partnership with Hey and Stripe, sponsored by Castos.
To make sure that the process is fair, Startups for the Rest of Us, MicroConf On Air, and TinySeed Tales will not be eligible for the SaaS Podcast Awards. BUT! You can let us know your favorite episodes of those shows in the nomination form!

Spread the Word!?

The more nominations, the better! ?We want to promote these shows like crazy over the next few months, so help us get them on our radar by tweeting this out and encouraging your bootstrapping peers to vote.?

Send Tweet
?

Hi there,

We just released this week's podcast episode:?527: From Agency to SaaS, Equity Splits, and More Listener Questions with Courtland Allen

In today''s episode, Rob is joined by Courtland Allen as they answer listener questions. They talk about equity splits, the best cities for bootstrappers, splitting brands, and where to look for business ideas.

The topics we cover

[2:03] Splitting brands between agency and SaaS

• Courtland?Thinks there are ways to preserve your reputation while creating a new Identity
• Rob?Compares it to 37signals and Basecamp
• Rob?Personally thinks the SaaS branding should be different than TownWeb. Could do something very exciting.
• Courtland?Another example is WildBit
• SaaS should be a separate entity from the Agency to avoid the mess and hassle down the road -Rob?"It''s actually easier to merge things than it is to pull them apart."

[10:55] What percent equity split when co-founding an app

• Courtland?has had some bad co-founder fights in the past over equity.
• Courtland?"I think really a lot of it comes down to not exactly the number that you named, but the process that you use to get to that number."
• Courtland?"I would say the way you split your equity should be based less on a quality and everybody getting the same and more on contribution."
• Rob?Recommends vesting schedule from the start
• Courtland?Having this conversation upfront and early can be a good test for the co-founder relationship

[18:52] Where to look for ideas

• Rob?"I don''t think every niche is saturated. I do think the smaller and smaller you go, there are opportunities."
• The first step is the smallest step.
• Courtland?"What is the smallest thing that I can do to kind of get started, to get my momentum, going to get a couple of wins under my belt?"
• Courtland?Favors the approach of looking intersection of things you are interested in and problems people have evidenced by a lot of people spending money there."
• Pick a problem first, then doing something info/content related, where it doesn''t matter what competitors are doing.
• Rob?Recommends one-time sale products with built-in marketplaces like WordPress, Shopify, etc.
• Rob?Cut your teeth in small, underserved niches
• Rob?A lot of people make the mistake of trying to build a SaaS app first.
• Tara Reed is in the education space and started teaching founders to build businesses without code
• Kristy Lawrence spent 8-9 months developing relationships with Instagram influencers, talking about their problems. She ended up making ~10-20 grand the first week of launching their SaaS app.
• Rob?There''s no blueprint for generating ideas. However, once you find a product-market fit, that process can be extremely repeatable.
• Courtland?Is a big fan of deliberate ideation.
• Courtland?No tried and true blueprint or roadmap, but there are a lot of things you can do to massively increase your chances of having a good idea to start with.
• Rob?Has a 48 hour cooling off period on registering domain names

[31:02] Best city for bootstrappers

• Courtland?"It does matter where you live, but in terms of business, It matters less and less, especially as the world becomes more remote."
• Courtland?Choosing a city based on business advantage matters less and less. Choose a place that will align with your personal happiness and health.
• Rob?Check out Tropical MBA podcast, Indie Hacker Meetup locations, MicroConf locations
• Courtland?"We''re very tribal creatures and every city has its own tribe. I think even if you are a sort of a contrarian person, like a lot of your energy comes internally, but a lot of your energy as a human being comes from your tribe and your surroundings."
• Venture-funded companies typically packed in a small number of different cities.

Links from the show

• From $0 to $5M Without Writing Any Code with Tara Reed of Apps Without Code
• Bootstrapping to $1 Million in Two Years as a Non-Technical Founder with Christy Laurence of Plann
• Cities and Ambition
• Tropical MBA podcast

If you enjoyed this episode, let us know by clicking the link and sharing what you learned.

Click here to share your number one takeaway from the episode.

If you have questions about starting or scaling a software business that you'd like for us to cover, please?submit your question?for an upcoming episode. We'd love to hear from you!

Subscribe & Review:?iTunes?|?Spotify?|?Stitcher

Listen to Episode 527

MicroConf Remote
September 1st, 2020
11:00 AM - 4:00 PM ET
Ticket Price: $50*

Hi there,

We just released this week''s podcast episode: 508: Finding Marketing Channels, Seat-Limited Trials, Building a Brand, and More Listener Questions

• 3:13 Mike Lollar - How to find the right marketing channel
  • First answer: "who is the person who is ultimately going to live a better life because the product exists?"
  • If this is enough of pain or a problem, someone is probably searching it somewhere.
  • If the search results are relevant to what you guys ultimately do, then that actually might be a very valid channel.
  • Quora, Stack Overflow, even LinkedIn, Facebook groups, Twitter. Chime in on these conversations and set up an alert.
  • A good SEO approach is a Drip vs. all email providers as a big grid type of article. Now it''s Drip versus MailChimp, Drip versus AWeber, with each of these as individual long-form pages.
  • If you don''t have a blog with domain authority and you write 10 articles today, they probably will not rank anytime soon.
  • Go to where people talk about the problem & pain. Join that conversation
  • Test Quora for advertising as a test-channel.
  • Intent driven ads vs demographical ads
• 10:47 Cole Hooey - Feedback on freemium pricing model for an HR app
  • So much depends on positioning in the market and how white glove the product is
  • If more time to ah-ha moment for the product is it possible to speed that up. With no time-limit on the freemium model, it may end up meaning that potential customers just end up getting distracted without the pressure
  • Consider time-pressure or white-glove onboarding to help convert users.
  • No drawbacks to single free trial, but upfront it should be demo only. This will allow you to learn 10x more than you will from users tooling around on their own
  • Price it such that you can do high-touch sales
  • Most HR platforms are not self-serve.
• 16:18 Robert Brandl - Should I invest in branding?
  • There is branding (colors, fonts, logos), and then there is building a brand (core values)
  • Building a brand from a process perspective is a very long term endeavor
  • If looking to expand and diversify, look at Wirecutter as a good proxy. They''ve built a high-quality brand. Their brand was not by accident. Look at how they built their brand
  • As the founder, seek to become an expert on the subject. Get interviews on podcasts.
  • Start a website review youtube channel or podcast.
  • The brand is not what you do it''s who you are
  • The brand is not how you see your company, it''s how your customers see it
  • You can build a business brand without becoming a personal brand.
• 26:25 Etan Efrati - Decision framework for choosing whether to start or join a startup
  • No guarantee to success for any options
  • Job security doesn''t exist in the same way that it did 10 years ago
  • Dig deep into understanding what about starting your own thing gives you fulfillment.
  • What do you want to accomplish before you exit the world?
  • Which option would you regret not doing?
  • Which option could you do without?
  • What''s the minimum viable side project that will give you the most happiness
  • Regret Minimization Framework
  • Depending on your skillsets, the odds of you being out of work are pretty low which probably means you should not take the low-risk option, given this is a turning point in your life.
  • A great book about making choices is called?Decisive: How to Make Better Choices in Life and Work?by Chip Heath & Dan Heath. They have a 4 part framework that helps work through the biases we have (emotional, pattern-matching) in our thinking.
  • What is the opportunity cost of Option 1 vs Option 2? Think about the opportunity cost of what you are leaving on the table.

Listen to Full Episode

Until next week,

Hi there,

We just released this week''s podcast episode!?Last week?we began?sending in-depth podcast episode takeaways available only to Startups for the Rest of Us list subscribers like you. If you would prefer less frequent updates, you can update your preferences here.

Episode 504 | 15 Tools We Use to Run Our Business

• 6:04 #1 Calendly vs YouCanBook.me
  • The only reason that we don''t use YouCanBook.me is they didn''t have a tight integration with Zoom.
• 7:45 #2 Slack: how and why we use it
  • We considered Discord, Discourse, Basecamp (briefly).
  • A lot of communication tools work well for companies, but not communities.
  • We''re not a huge fan of the interruptive nature of Slack. We tend to go offline quite a bit. Tinyseed has this in the handbook; we expect you to pause notifications as much as possible. However, there aren''t a lot of great alternatives to slack.
  • We use slack for social non-important conversations. For example, our coffee channel is one of the most popular.
• 12:20 #3 How we use Notion for permanent documentation
  • Notion is like Google Docs combined with Google Sheets combined with Trello combined with left-hand navigation.
  • It''s great for batch documentation and communication for permanent things like handbooks, playbooks, CRM data.
  • We use the KANBAN board for Startups For the Rest of Us production.
  • Drawbacks are that it can''t track changes collaboratively and each line is its own object so keyboard shortcuts don''t work the way you want them to.
  • We use Goole Docs and Google Sheets for temporary content and collaboration, to track changes, and for more long-form copy where Notion doesn''t really hold up.
• 16:21 #4 Dropbox for Business instead of Google Drive
  • Google Drive may have better or similar features to Dropbox, but Dropbox has felt more intuitive with its folder structure, has easier search, and the scanning documents functionality is great.
• 18:42 #5 LastPass for Business
  • Lastpass works fine. It does some have bugs, but works well enough where switch cost is not worth it. Once you start putting passwords somewhere, it gets hard to switch.
• 20:05 #6 Dasharoo
  • Our dashboard has web traffic, email subscriber counts, social metrics, YouTube views, and subscribers.
  • It''s been less valuable for the first 2-4 weeks, but as we''re building a history in data it becomes more valuable.
  • Evaluated Sunrise KPI, but it did not have Youtube stats.
• 21:57 #7 Squadcast.fm & Castos?to run this podcast
  • We found Zencaster to have audio quality issues and outages, so we switched to Squadcast.
  • We use Castos?for podcast hosting and analytics.
• 23.57 #8 Drip & RightMessage for email marketing
  • We use Drip for all email marketing. RightMessage has been rolled out across all of our websites and it has been a solid tool that helps us get more information about people so we can make better recommendations and customize the content.
• 25:15 #9 Trello for personal business (vs other task management tools)
  • Rob uses Trello for personal task management, he loves the tactile feeling of paper, but it''s just so impractical, especially when reprioritizing tasks or capturing items when he doesn''t have a notebook.
  • Tracy uses a very simple Google Doc with a bullet point list for tasks. She talks about her task management system in depth on this episode of MicroConf On Air.
• 26:57 #10 Squarespace for websites
  • All of our websites used to be on WordPress. We found a Squarespace design agency that was able to build a very well designed website in a week. Tinyseed, Microconf, Start Small, Stay Small all are all now on Squarespace.
  • The Startups For the Rest of Us website is still on WordPress as it seems to have better functionality for podcasts, especially considering the serialized nature of podcasts. WordPress also has a vast plugin ecosystem to further enable podcast functionality.
  • There are design constraints with Squarespace. ^^ It''s a good lesson for founders because they often want to build something the right way from the start. Many times there are tradeoffs and sometimes you have to use the tool that has constraints so that you can work faster. It might not be perfect, but it gets the job done. ^^
• 30:35 #11 Voxer push to talk audio vs text messaging
  • Voxer has been useful as a tool instead of text messaging, especially for getting something out quickly. You can better convey the tone of the message and it allows you ramble to flesh the thought more than you would be able to do via text messaging.
  • We''ll also use Loom if we need to convey something with a lot of nuances. That way, the recipient can play it back at 1.7x, It''s particularly useful for information-dense content.
• 32:52 #12 Keynote for conference talks and eBook PDFs
  • We use keynote to create a multi-page PDF, in addition to conference talk slides.
  • Keynote can be much easier and faster than using something like InDesign. The simplicity of it compared to some of these other tools makes it easy for someone who''s not a designer to build presentations, eBooks, and other long-form pieces of content.
• 36:02 #13 Tweetbot vs Twitter.com
  • Primarily use Tweetbot to avoid the new Twitter engagement functionality (tweet recommendations, for example). Legacy tools like Tweetbot don''t have this content surfaced and tend to be less distracting.
• 38:08 #14 Buffer
  • Primarily use the Free plan of Buffer to schedule tweets. Twitter now has the schedule post functionality, so may check?that out soon.
  • We schedule posts in batches to be more efficient.
• 39:29 #15 Submittable and Pipedrive
  • We only use these tools during the open application periods for Tiny Seed.
  • Similar to Notion, we liked Submittable because it was generic and allowed us to tailor the form to exactly what we needed. We then use Pipedrive to fill some of the gaps that Submittable could not cover.
  • The Accelerator specific tools required a specific workflow that didn''t match ours.
• 42:20?BONUS: FrontApp for email collaboration
  • FrontApp has allowed us to collaborate more easily across the team. We can assign emails, add notes, schedule & snooze messages, etc.
  • We tried using Gmail and Boomerang, but prefer Front as it has everything under one tool.
  • Also considered Helpscout and, despite it being a lightweight tool, it felt a little bit heavier than using FrontApp.

Listen to the Full Episode

Until next week,

Hi there,

We just released this week''s podcast episode: Episode 509: Revisiting the Six Stages of SaaS Growth

• 5:10 Stage 1 - Prelaunch
  • Anthony started in 2006 with his brother. Took 3 months to go from nothing to a working product.
  • Anthony had a limited network to so didn''t have a huge audience to market to
  • Existing tooling was bad. Great opportunity to improve the process around registering domains.
  • Also, a major differentiator was an API
  • Easier to compete when your competitors are widely despised
  • A marketing angle is to pick a fight a la David v. Goliath
  • The initial launch was minimal. Then, users started sending feature requests
• 10:08 Stage 2: Pre Product-Market Fit
  • You''ve launched, now you''re trying to figure out what people want
  • Typically 12-18 months
  • For DNSimple, was already doing 10k MRR by end of the first year
  • Anthony going to conferences, talking to customers, learning about feature requests, and adding functionality
  • 2011 hit the stride and found a good PMF
• 12:52 What did Product Market Fit look like for DNSimple
  • Started to get customers that Anthony did not know
  • When people started sharing out loud on twitter
• 13:40 Stage 3: Product Market Fit
  • You''ve found something people want and are willing to pay for, but don''t yet have a repeatable marketing channel
  • By year-end, 150k for the entire year, with 200% in growth
  • At the time, there were negative ads for GoDaddy that helped trigger the next stage for DNSimple
  • A lot of luck in terms of timing, but also skill to be able to handle the traffic and take advantage of the marketing opportunities revolving around the negative press for a competitor
  • You don''t get struck by luck, you put yourself in as many opportunities to get lucky as possible.
• 16:38 Stage 4: Escape Velocity
  • 2011-2012 stayed about 3 people. By 2013 started growing fastly.
  • You can ride escape velocity a while before building the team
  • Anthony planned on staying in escape velocity for as long as possible
  • Some triggers move you from one stage to the next. For DNSimple that was a year from hell when Anthony''s brother decided to leave the company and left a big hole in the company. His departure triggered a better understanding of how to grow the team.
  • Started 2014 at Escape Velocity, then quickly moved into scale.
  • There is a limit to revenue per person because so much is happening in the company.
  • By the end of 2014, added more people to the team and reduced the revenue per person
  • Anthony thinks a healthy revenue per person is 250-300k per employee
  • When over 300k range, it gets hard.
  • Makes Anthony appreciate companies like Basecamp, Apple, Mailchimp who have huge revenue but small teams.
  • The slower you grow, the less customer support you need
  • Many of the things that Basecamp does is unattainable for most startups. Hard to model your startups after these fringe cases
• 21:08 Stage 5: Scale
  • Stayed in scale phase for 4 years, up until 2018
  • Decided to build a customer success team as an independent thing. that moved from the scale stage to the building a company stage
  • Started to document roles and where they were missing experts in that role.
  • Because open forums and active discussions within the team, they were able to identify the missing roles within the company, which helped them better transition into the next stage.
  • Anthony tries to be a leader in the company that listens well to the people, team, customers, advisors
• 33:48 Stage 6: Company Building (and Beyond)
  • Anthony is seeing that companies hit the 7 figure mark. Huge differences between 1 million to 10 million a year.
  • You start to think of the company as an umbrella for accomplishing things that that work well together, but maybe aren''t in the original line of the product.
  • Another line of revenue that works well with what we have, but is entirely independent
  • Anthony will continue to invest in the main product but also looking for gaps in the marketplace.
  • One path into empire building is through acquisitions. Another path is through independent product development Or, partner with other companies.
• 38:13 DNSimple and Acquisition Offers
  • They have received offers, but nothing has gone further than initial conversations.
  • Anthony still has a lot of energy to put into the company and long-term visions for where the company can go.
  • Important to take the calls, be honest, but also not get distracted by the offers.
  • Anthony says an acquisition hasn''t yet felt right for this type of steady-growth business.

Full Episode

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Hi there,

We just released this week's podcast episode:?528: 2021 Predictions from Rob and Mike Taber

In today''s episode, Rob and Mike Taber review and rank their past yearly predictions and then make big, bold projections for 2021 with bets ranging from extraterrestrial life, VR becoming mainstream, the end of commercial real estate, and more.

The topics we cover

[2:45] Reviewing our predictions for 2019

• Mike?Predicted a global downturn will be in full swing, a significant loss from either Tesla/SpaceX, and amazon will overtake Apple in terms of market cap.
• Rob?Predicted no major boom for cryptocurrencies, would be the year for AR, there would be a Facebook antitrust suit, and that Twitter would be acquired.

[7:42] Predictions for 2021

• Mike?Commercial office space will never recover.
• Rob?Privacy concerns will become more important and will impact email marketing in a big way.
• Mike?There will be an over an attempt by a government to break up at least one tech company (Facebook, or Amazon, Apple, Google).
• Mike?The government will crack down on the gig economy
• Rob?In 2021, in-person events will happen but adjustments will be put into place.
• Mike?There will be a major innovation in nanotechnology
• Rob?Funding will experience a de-stigmatization as more founder-friendly options start opening up. Founders will have a lot more optionality.
• Rob?The Marvel cinematic universe will fall off the cliff.
• Rob?VR will become mainstream.
• Mike?We will discover definitive proof of extraterrestrial life.
• Rob?We''ll get back to normal a lot faster than we think and there is pent-up demand.

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