The Wisdom Wall, every show

“don't grow an audience if you want to build a SaaS. Grow an audience if you want to do books and courses and sell events and do all the stuff I do. But if you're going to do a SaaS, there's so many better ways to spend your time, so many better marketing approaches than audience building.”

“Like, the real SaaS-pocalypse is the big companies, the big incumbents. They're the ones who have raised their prices so much, maybe a little too much, Because they have to grow every quarter for Wall Street, right? So they have bloat, they have legacy, they have a customer base that's probably quietly resentful about…”

“If you're profitable, you're not investing in growth. You're putting cash in the bank, and so you're not going to be growing as fast, almost inevitably. And so to take two businesses at the same ARR and say they're going to be growing the same amount, while one is more profitable, the one that's more profitable could…”

“it is an exception that I'm seeing when a horizontal, mostly bootstrapped company is able to continue growth and not plateau in that, the ranges depend on the size of the market and all this, but it's half a million, a 1,000,002 million, and they plateau hard, and then they, they just can't, they can't get through it.”

“I call that false demand the curse of the audience. And if there's two curses to it, one, you tweet it out or you email your list and everyone's like, oh, I kind of want to check out what they're doing and everybody's really interested. And then they're not actually that interested to solve a problem, but they just,…”

“I talk about my one nine 90 rule where I say around one percent of startups should go after venture, about 90% should bootstrap, and I think about nine percent should raise probably some type of funding. Maybe that's tiny seed, maybe it's angels, but it's like not venture track.”

“I would not want to build a ten-year business on any of these platforms, because they do not give a about you, and they will sooner cut off your API access accidentally, say oops, Killed your business. They will build the feature directly into their platform.”

“Not only, should not everyone raise it, but I only think about one percent of venture-eligible tech startups should raise venture. I think one percent, approximately, should consider raising venture. I think nine percent should consider raising some type of funding, whether that's angel investment, something…”

“So the reason I have this as number six is that if bubble 10 X their pricing or had a big outage, you could rebuild that. And if you're hosted on AWS or using SendGrid or using WordPress, you can rebuild it. The risks are there, but they're lower than if you lose Google where there is no replacement and you lose all…”

“Ruben Gomez has these four markers that I often quote, I actually put them in my book, of when freemium can work, and if you don't have all four of them, you probably shouldn't try freemium.”

“maybe it's like an 80% don't do is don't start a SaaS without a technical co-founder. And the reason that I say that is Most of the companies that I see, the bootstrapped and mostly bootstrap companies... The vast majority of folks I see trying to do this without a technical co-founder really struggle.”

“The higher price, typically the lower the churn, the faster the growth. Like we see this in the state of independent SaaS when we ask about churn and lifetime value and ticket price, and, and then we compare it to growth. It's obvious that the higher lifetime value, lower the churn, higher the ticket price. The math…”

“The way it works is net profit up to about a million and a half ARR. And above that, if you're dealing with the right buyers, so it'd be strategics or The big, bigger private equity who are not value buyers, they're gonna look at you at a revenue multiple based on growth, and if you're looking at value buyers or you're…”

“Who hires a dev or has kind of a minority technical co-founder and they drive them and push them to write code faster and faster and faster and the code is and then they get to a 1,000,003 1,000,005 million in ARR and they, they stop. They lock up. You can't build features because nothing is maintainable. You, you…”

“if you're, if you truly want a lifestyle bootstrap, go do that, but know that your co-founder should be on the same page and don't take investment. If you're going to do that, just don't take it. There is no, the numbers don't work.”

“Private equity and strategic acquirers, they don't care very much at all about profitability. Now, if you lose, if you're losing buckets of money, of course, but if you're running at break even and you're doubling every year and you're in the millions, people will take a look like you will have buyers champing at the…”

“the moment someone approaches you, a potential customer, and says, Cool. We like your software. We need to redline your terms of service, or we need, uh, to invoice with POs, or we need single sign-on, or we need a Salesforce integration, or we need, there's, there's this whole list of things that instantly should…”

“don't, don't sell lifetime deals if you're in SAS. I mean, AppSumo is probably the one exception I would say. And if you're gonna sell, then you disclose when you exit that, Hey, we do have these users and you can, Give reports of this is how much they, they use on a whatever basis. So, and also know that if you do an…”

“if you have an audience and you've been selling them books and courses and stuff, and you think that you can sell them software in the same way, almost without exception, it doesn't work out that way. It is much, much, much, much harder to sell a SaaS or software of any kind, but especially a recurring subscription,…”

“SAS net margins kind of at scale are, let's say 30, they're 20 to 50%, 30 to 50%. I mean, if you build a SAS company that's doing ten million bucks a year and it has a 50% net margin, like you are doing very, very, very well in terms of profitability. And if you're giving away 30% or 30 plus percent of your MRR to your…”

“Don't take business advice from people who have crappy personal lives, and my addition is, or who treat people in a way you don't want to treat people. And the reason I've added that is because, from what I've seen, you can be successful in business and treat people right, Or you can be successful in business and treat…”

“I haven't seen a company be started by a founder and then part-time focused and just have it magically find product market fit. Team members, employees are not founders unless they are founder level, right? They're, if they're founder level thinker and they are willing, they need the motivation. This is just, it's…”

“well then go get a day job. Like, don't make the excuse that you haven't gone and put in the work to get some industry experience, and to get some exposure to problems day to day so that you know how a company works, and that you will inevitably see problems that you run into at the day job, and you will inevitably see…”

“don't try to build 10 things and see what sticks, because none of them are going to stick. Surprise! None of them are going to magically take off, and you're not going to learn anything if one of them does.”

“I don't know of any successful founders who are on their second, third, fourth Effort that build 10 things and see what sticks. I know literally zero. That is an approach for someone who I would say just doesn't know any better.”

“The challenges with these startup programs, Is they want companies that have, ultimately have a lot of money to spend, and it is giving away the razor to sell the blades type thing, or giving, you know, the first piece of candy is free, and they want you to start using GCP, but they want to know that you have money to…”

“What I've noticed is that I believe, mostly without exception, every second or third time entrepreneur that I've seen that's doing it, Does some validation, has some conversations, does that research, and, and digs in”

“there are only two legitimate reasons to build your own versions of an app, like to vibe code it. One is to save money, And that's only if it's really expensive. Like, let's say something is 10,000 dollars a year, 20 grand a year, and you think you can cut that by 90% or 95%. The second one is customization, right? No…”

“Building to save money is a rounding error. It's a bad decision next to just building your actual business.”

“A clone with little or no distribution is a folder on someone's laptop. It always was. The moat was never the code. It was everything you added to the code.”

“my rule of thumb is about 300 a month is the minimum for a one call close, and somewhere around, what is it, about It's about 800 a month. It's about 10 K ACV is my minimum for thinking about cold and warm outreach.”

“I actually don't think Google traffic is too expensive. I think if Facebook or Instagram traffic isn't converting, I would probably spend more time trying to optimize those. I don't need to make money on the Google traffic. Even if I'm overpaying, I mean, unless it's some outrageous amount of paying a thousand dollars…”

“The seven, and only seven ways, that a SaaS app can plateau.”

“pricing is the biggest lever in SaaS. And I think positioning is number two.”

“Development, sales, and marketing, if you want to learn them, like, I think there's curriculum out there, there's people, there's, you just go and dive in, you, whatever. I think they, In my opinion, are a little, there's intuition in all of them, but there's certainly more, a lot more intuition and gut feel in…”

“if you give a developer who's not a product person a feature, and you say, build content snippets that people can insert into their emails, you know, if your, if your app sends emails for people, they will build it very literally, and it will not be very elegant nor intuitive. And you will need tool tips, And…”

“AI is the average of the internet. It's the average of everything, and so if you're not a good copywriter, if you're a two out of 10, And you have AI write copy, it's gonna write a five out of 10, let's just say. And you're gonna be like, man, AI is so great. Guess what? If you're a six out of 10, seven, eight, nine,…”

“So someone who works 10% harder than you do does not produce 10% more over a career. They produce twice as much. The gap doesn't add, it multiplies, and it compounds silently for years before anyone notices.”

“if you set up an LLC, it reduces your liability, but loose guidance, you don't need one when you have a landing page. You don't really even need one when you have some revenue.”

“So actually in this case, I think either a network or an audience would work, but I think it's easier and quicker to build a network. It's a lot less work than building an audience.”

“my default is always to charge something. Even if you give them a significant discount, you want them to have some skin in the game, and you want to know that this is something that they are willing to pay for.”

“if I were building a SaaS today, I would try to avoid it. I would want a full-time person dedicated to, you know, whether that's me or whether that is someone that I hire. There's a certain amount of ownership of the code base And technical debt will screw you.”

“the big trap I see some other people falling into is it's like, cool, I'm going to be all freelancers because I don't want any employees. Or I'm going to have like five or 10 different freelancers all doing different things. And it's like, now you're a project manager. And you are a traffic cop, and your entire job is…”

“If you want to build a three million dollar SaaS company, That's growing fast and could sell for 20 or 30 or more million dollars. You don't need to be so worried about timing.”

“If you need to do a demo, like at least one call to close, probably need to charge about 300 dollars a month for it to make it worth, worth it. But if it's no demo, you can charge less than that. 50 or a hundred dollars if people, you know, even the B to B side is able to, ah, basically self-serve.”

“The idea, I don't really weigh it that much. I don't think any idea is really worth equity, but what if someone brings a significant audience, or they bring significant financial assets, some cash, or they have an amazing network, or they have, you know, something else that they, they've pre-sold it”

“I find that the people who have only written code, have never worked on a team, have never had to get into a code base that they've never seen before. It's like they're code blind, and they've only experienced the way they do it, and they have these really strong opinions about How it should be done. And this code base…”

“there are a lot of people making excuses for being distracted and for engaging and feeding their entrepreneurial ADHD or their shiny object syndrome or their I need to be diversified or it's all a matter of luck so I need to make a hundred bets because one might pay off, et cetera, et cetera. I don't believe that. I…”

“the fun work is launching 20 projects. The fun work is building a bunch of projects. I love building, creating, that's what we are, we're makers. The hard work is focusing on one, And focusing on it long enough to see it through, and to put in the marketing and, and the sales, and doing the stuff you don't want to do,…”

“firing is actually really tough. It's tough to make that decision because it's always muddier than you think it's going to be. It's never as clear as you want it to be, and usually it's the really nice, but less than, slightly less than competent person, who you're like, well, I keep them around because they're really…”

“And it's okay to use AI to code as long as a, like an engineer is supervising slash running that process, because we know That you can have AI build you something, and we know that in six, 1218 months it will become very, very hard to maintain. Feature velocity will shut down. You'll have regression, massive regression…”

“horizontal B to B SaaS is very hard. And at a certain point, a lot of competitors are in your space, and It becomes hard to grow. And so vertical and orthogonal SaaS, we've seen stronger exits, we've seen folks able to get further and have lower churn and all kinds of things in terms of, you know, niching down”

“The earliest I've seen any of them really bring someone in to collaborate on strategy, and I'll say they didn't hand it off completely, but it's probably about, certainly above a million ARR. I would lean towards 1.5 to maybe two million ARR, and this depends on a lot of things, but I'm giving you loose ranges.”

“I think you're probably, it's definitely one to two million is the earliest. I would consider bringing someone else in to start making product decisions, what you build, in what order, getting customer feedback, understanding your space, deciding how things are built, you know, really having product management or, or…”

“autopilot doesn't actually exist. If you put something on autopilot in any space that we deal in, it will decline over six to 18 months tops. Even if you have all this automated SEO, blah, blah, blah, like you'll just slide, and it will, you, the business will just slowly melt like an iceberg, or an ice cube in this…”

“if you really execute on the core four, product, dev, sales, and marketing, you can still build an incredible business with, unfortunately, it's not a path I would take, but with crappy support, with crappy customer success, with crappy internal operations, and messy finances, and blah blah blah.”

“You don't have to tell them upfront that you are the solo co-founder and the solo decision maker. You can be vague about it when you get into these deals and you can play the same game of like, well, my, no, my co-founder didn't agree.”

“We've been told that ideas are worthless and it's all about execution. And we know that's not true. We know there are some ideas that are just better than others.”

“My thing is, if you don't have millions of dollars and three to five years, To, to build a category, to start one, don't do it, right? And that's why most of us say it, because we have seen more, a lot more folks fail at it than not.”

“There are spaces that are eight percent, eight to 10% churn, and it's consumers, prosumers, indie hackers, hobbyists, And other folks who think like consumers, and those are not great SaaS businesses. They can be okay SaaS businesses, but they will plateau. Those are step one and step two businesses if your churn is…”

“Don't build a media company if you're building a SaaS unless you're HubSpot or Zapier. Or one of these massive, massive, when you're doing nine figures of ARR or you've raised nine figures of, of funding, go ahead and build a media business. Until then, don't.”

“Anytime you repurpose A single piece of content into a bunch of pieces, most of them do not work. We have tried this over and over and over in different iterations, and what I have found in my fifth, well, I've been blogging since oh five, so in my 20 years of content creation, but realistically, let's say 15 years of,…”

“there really needs to be a balance because I think if you're not looking at all or paying at all attention, any attention to your customers, like you are doing yourself a disservice in the long run. You cannot pay attention to customers for a few months, But if you try to do that for a few years, you, you need to know…”

“when pivoting first came out, they would say, like, Slack was a, it was like a video game company, right? And it's like, they pivoted the video game into Slack and said, that's not a pivot. That's just a, you just started a new product. Let's not, let's be real about that, right? Pivot was overused. To me, a pivot is…”

“What I mean is, you are decreasing your chance of success By bootstrapping, B to C, a two-sided marketplace, et cetera, et cetera.”

“Anytime you hear someone talk about product market fit as I've hit it, or I haven't, or do you have it, it's helpful to think of it with nuance, to think of it as a spectrum instead of a binary.”

“Number one is don't bootstrap a two-sided marketplace unless you already have one side.”

“Number four is don't try to define a new category of software from scratch.”

“Commandment number five is that marketing beats product. I know it's a tough sell to talk to a bunch of builders and let them know that your skill set is actually less important in entrepreneurial success than learning how to market and sell.”

“Bottom line is if you don't know how to market beyond Social media, tweeting about your launch and putting it on Product Hunt, you're damn near doomed.”

“if you really want to build a seven or eight figure SaaS company with net negative churn, you want to think about having higher pricing, and you want to think about having a few hundred high value happy customers that you can build into a multi-million dollar business.”

“I've often said that funded startups fail when they run out of money, and bootstrap startups fail when the founder runs out of motivation.”

“The people who tell you only what you want to hear are usually doing it because they want to sell you something, and that's the easiest way to do it. It's not because they want to help you succeed.”

“The first part developers do over and over and over and over and I say, I don't know, maybe 49 out of 50 times it just doesn't work. They're not very good. Zero to one marketing is really, is also really hard, you know, and it often takes founder activation energy.”

“don't bootstrap the two-sided marketplace unless you already have one side.”

“SaaS is one of the best business models, but it is one of the hardest company types to start. Because just building a SaaS and maintaining And hosting it, making it secure, making it performant, making it mostly bug-free, building something that people want and are willing to pay for, all of that is five or 10 times…”

“funded companies Fail when they run out of money and a bootstrap companies fail when the founders run out of motivation.”

“I don't put a lot behind having an audience per se, right, to build SaaS, because it's like, you can only sell to a very small portion of that, and it doesn't, doesn't actually, uh, Get you very far”

“It failed because the economics of B to C businesses, especially SaaS, are not good.”

“For a SaaS company, I don't think you should build an audience.”

“I realize that funding is far from the goal, and in fact, a lot of folks who take funding do it because they don't know any better, not because they actually should.”

“That's where it is, and if I was really good at building a personal brand, and building audiences, and going on podcasts, I wouldn't start a SaaS. I would start an info product and course business.”

“Stop doing B to C. Stop doing two-sided marketplaces and stop staying in your comfort zone when it comes to marketing and sales. Your customers don't care. Your customers don't care what you're comfortable with. They care how with how they buy and how they want to be spoken to.”

“Dollar for dollar, hour for hour, building an audience is not anywhere near the best marketing approach that you can use to build a SaaS. I have seen so many people with large audiences fail miserably at SaaS and plateau and build that no one wants.”

“probably most software? Doesn't matter. If I think of most B to B SaaS software, I, I shouldn't say doesn't matter at all, because you can have catastrophic US and then every UX and then everyone hates it, but it doesn't matter nearly as much as I think.”

“Sometimes, if you have a low touch, no touch funnel, you don't have sales at all. You don't do any outbound, and you don't do demos, and so it's purely a marketing driven SaaS. And that is kind of the, you know, the bootstrapper indie hacker dream. It's pretty rare, and in fact, those tend to need lower price points,…”

“I'll say it's impossible to outrun, you know, the churn of a 15 dollar a month business if you want to become, let's say, a ten million or twenty million dollar business.”

“With single non-technical founders or founding teams that don't have a technical founder, this is the biggest headwind consistently, you know, and we see it with tiny seed founders as well.”

“being a founder is making hard decisions with incomplete information. And people who think they can get all the data and a hundred percent data driven, that's bull, you know, and, and even data can be twisted, even at big companies where they have a lot of data. It's all, there's always some gut feel. There's always…”

“I think there's a point between 15 and 20 where if we are not communicating that, if we have If the people at the top, let's say Anar and myself and, you know, Tracy and Alex on the accelerator side, if we are not directly doing the hiring and training, and it's people that we've hired that are doing the hiring and…”

“when does it make sense to rebrand? And usually, that's further down the line. It's if you basically get an MVP brand out, and you're doing 20 or 30 K a month, or your brand is hurting your efforts. It's not helping you close sales, it's actually driving prospects away because your design looks cheap, It isn't…”

“And I think that's the big lesson I learned from there is to get your brand or exact company or product domain name, and then the TLD, the top level domain, I think is less important.”

“Don't think affiliation or affiliate marketing will fix your acquisition issues. It'll just create another acquisition problem. Acquiring affiliate partners. 100% true. And I don't know if Pierre found this on his own, or I've, I've been saying this for 1012 years, that affiliate marketing is enterprise sales.”

“if you're going to be a SaaS founder, don't build your audience, build your network. Because if you build a network of folks who have audiences, that's the killer play right there.”

“And then if you get to about a million and a half, two million ARR, and you're growing, and you're selling not just the technology, but kind of the, the team, like the whole company, the product, everything you've built, that's more than two to five X ARR, usually.”

“those are the four skills, and those are the order I have in marketing and sales, then product, then engineering, then hiring and managing.”

“If you're building SaaS, build your network, not your audience.”

“if you're going to sell info products, build an audience, not for SaaS, not worth it. There's other things you should do”

“is that you don't need a product person before a million ARR, and usually I see it between one and two million, somewhere in there, and it depends a lot on the product.”

“Similarly, my rule of thumb for when do you need kind of a head of marketing or someone to run marketing that's not the founder? Usually it's between one and two million.”

“The reason that people come to us is because we're unlimited all that stuff. And that's why that's why I have customers. So I can't stop doing that. And I'm like, you are building a terrible business. You are not increasing, you know, they're getting more value and they're not paying you. This is, this is a, you're…”

“This is why freemium, it's not a never for bootstrappers. It's a by default, don't do it. What do you do if there are many free signups and not many paid conversions? Don't do freemium. Listen to this podcast and in general, don't do freemium.”

“Think of AI as an accelerant. It gets you there faster. If you don't use it, you will be slower than your competition. It doesn't differentiate you because your competition can and will use it.”

“am I getting 10 to 20% that are complaining about my price? Good. Then I'm probably priced accurately. If no one's complaining about my price, I'm probably underpriced. And if people are saying, oh, you're so cheap, or I'm way less than competitors, I'm probably underpriced”

“During the course of running your business, you've learned how to build, how to sell your product, how to market, how to lead your team, how to build a profitable company. None of those skills apply to what you're about to do. In fact, the main drivers that got you to this point, your passion for your product, your…”

“I get emails to this podcast about, you know, I have a good day job, and I'm making good money, but I really want to be an entrepreneur, but I just have a tough time getting motivated. And I think to myself, then you don't really want to be an entrepreneur.”

“enterprise would pay a higher price per user, not a lower price. And that's because they need things like custom terms of service. They need to be able to redline everything. They need to be able to have invoices and POs, which are probably already doing at 75,000 a year. They might need single sign-on, which I know…”

“your company's not your product, because your product, you have to make a bunch of judgment calls, and you're making, you're making stuff up, basically, as you go along, but your company, there, there is, you know, standards for that, or at least frameworks for it.”

“social media is a distraction that masquerades itself as productivity, and people justify it by saying, well, I'm working, well, I'm marketing. No, you're not. You're not marketing. You're, you're getting on social media, and you're feeding, frankly, feeding an addiction that these apps are really good at feeding, and…”

“I believe that code is usually a certainty. Code is something you can hire someone to do because building that next feature does not have any risk. Versus marketing and sales usually have a ton of the risk, as well as product, like deciding what to build, How to take feedback in, how to find product market fit, all…”

“Now with a portfolio of products, never try to grow more than one at a time. You focus on one, you get it to grow, and you get the, basically that recurring traffic that then builds hopefully recurring revenue, and then get it to the point where it's stable, and maybe you autopilot that one too.”

“Usually actually branching into other platforms is a lot harder than you think. We've seen tiny, I've seen tiny companies and non-tiny companies try to do it, and it can work, but in the majority of cases I've seen it hasn't worked.”

“You can't run, I say can't in quotes, you can't run a million dollar, two million dollar air or SaaS company with just you. At some point you have to let some stuff go.”

“This is why I say build your network, not your audience, because that network is so much more valuable than 10,000 people on, on x Twitter following you. Having five people that you can integrate with or co-promote or get in front of their audience is worth five times, 10 times the value of a social media following.”

“Part of our biggest strength is that we are so nimble and can move so quickly, and frankly, 90 days in the life of a startup is like a year in the life of a big company. So trying to think, I don't know, I'm going to be responding to customer inquiries and, and, and things in the, as the market shifting, how can I move…”

“I think that if someone's at six months and they don't have traction, it's probably time to start really evaluating. Do you need to quit?”

“B to B SaaS in general, once you get a little bit of traction, it doesn't fail very often.”

“I talk about it in three phases and there are more than this, but like the first phase is building a product. Second phase is building a business. Third phase is building a company. And usually I think of product as being zero up to Usually about 10 K, MRR, to be honest. It's like, I have a product, I'm trying to…”

“The approach is where it's like, build an audience. Yeah, great. That's fun. But it's not, not for your SaaS company. Build your network, not your audience.”

“if you're bootstrapping and you're hiring your first 10, 15, 20 people, And this person doesn't already know how to do the job and you're going to train them up from scratch, unless you really, really need to save on budget, that is a case where you are going to spend a lot, a lot of time training them unless you have…”

“If you're gonna build a SaaS company, don't build an audience, right? Build your network and build marketing channels, not a brand.”

“Cause most, I'll just say most free offerings don't work. Like most people don't know how to do it and they kind of backfire and you like devalue your product and then you have a bunch of on and on and on.”

“Like, there are venture capitalists who will say, if you've raised less than a million dollars, you are effectively bootstrapped. Like, that's how they view it. And for me, usually the number is in the two 50 to 500 K. I think that's when you start to transition and like, oh, you're pretty well, you know, you're like…”

“Same, same thing with, oh, you should build an audience in order to build your, it's like, oh, that's a real long way to do it. I built an audience. I built multiple audiences over You know, several years, and it's, you know, 15 years or whatever, and it's, um, way more time than sales you will make if it's for SaaS,…”

“And then those customers, if you go to try to sell this app, now they are a liability because you have to service them and there is no ongoing revenue.”

“Like, you can't, you can't make money on a product doing cold outreach at 29.”

“for you to have 300,000 free users, There are tens of millions of users worldwide, right? If not hundreds of millions, and like how many, there's a rhetorical question, but how many software markets have that many users? There's probably electronic signature there, you know, we can think of a few, but there aren't,…”

“All things being equal, I would lean towards naming them, if you want to know the truth. But you do have to weigh the pros and cons of potential liability, which again, I think is low, but it's not legal advice. But I found the more specific you can be about positioning against specific incumbents, I think is, is…”

“HIPAA compliance is not out of the realm of bootstrappers. Now, if you want SOC II compliance, that becomes pretty pricey, pretty quick. HIPAA compliance is different. And of course, this is not legal nor HIPAA advice that I'm giving you, but I have known many bootstrappers, even folks who were on tight budgets, who…”

“TAM, total addressable market, is top down. It's coming from the MBA at Harvard saying, well, we could capture 30, 50, 80% of an entire market and then it's worth decabillion dollars. That's top down. When you are bootstrapping or mostly bootstrapping, I think in terms of bottom up. So I call that term, total reachable…”

“The thing is, is most developers don't know how to build products, they know how to write code.”

“They're going to churn way higher than businesses. They'll churn similar To consumers. I don't know if it's exactly, I mean, I'm sure it depends on the space, but no, you're going to have a high churn, low price point, high price sensitivity. Therefore you are going to need a very wide funnel, a lot of incoming…”

“it's great to watch it grow in your index funds, but it is not a major driver of wealth. It's more of a way to maintain wealth or to grow wealth, but not to actually make wealth.”

“two exceptional people who are on the same page with a similar shared vision can build incredible things. But the moment you get to three, four, five, it can often derail that vision.”

“I often say, look, if you have an audience, great. That is a great advantage. But if you don't, don't go build one for SaaS. You know, if you're going to do info products or courses or books, of course, but for SaaS, I think it's more trouble than it's worth, and the time would be better spent doing SEO or product…”

“And that's the thing that, that I see with a lot of folks who do launch that second product is they're launching it to escape. Usually it's to escape something that's not working or, and they're not putting in the hard work on the first thing. And then they take four months, five months, six months to build it and…”

“that's why I don't like it when people use Basecamp as an example, because usually it's to justify an opinion or justify an approach to business that I just don't see working for anyone else.”

“thinking that any developer can build a SaaS app is incorrect. In fact, the vast majority cannot.”

“Sure, because these numbers, this is the thing with vanity metrics, and I'm gonna say YouTube subscribers are vanity metrics, more so, like, email subscribers are, like, not vanity metrics, right? Unless you're, if your open rate's really low, whatever, certain people beat their lists up. But, like, email subscribers…”

“if I was growing a company looking to exit in the next few years, I would not be worried about profit. I would be pumping every dollar I had back into the engine to get it to grow faster and grow bigger.”

“Their biggest weaknesses are they don't listen to customers. They don't move fast enough. Usually they don't have the best developers, designers, because they don't want to work there. So their software is usually pretty crappy. There's a lot of politics, and usually their customers don't like their software, don't…”

“starting a software company and then being that attached to it, I think is, see the, the talk from Dr. Sherri Walling a few years ago where she talks about how founders look at their logo and it stimulates the same part of their brain as when they look at pictures of their kids. So kind of literally lending credence to…”

“I think really experienced founders who know what they're doing are probably in the 80 plus, 85, 90 plus, you know, like it's like eight or nine out of 10 are at least in the ballpark.”

“Where I get on an interview with anybody, developer, designer, support person, and I'm looking at their resume saying, oh, they worked at Google. They worked at Facebook. They must be really good at that. No, don't do that. Or they had, they were there for seven years and they became a senior, blah, blah, blah. It's…”

“Unless there is a, a network effect where getting free users actually increases the value of your business. In almost every case, almost every case I see of an early stage or a new entrepreneur trying this, it's a mistake.”

“You have proven so very little until someone gives you money, specifically with B to B SaaS. You've proven almost nothing until someone gives you their credit card.”

“If I was bootstrapping this and actually trying to make money on it, freemium pushes out your revenue, right? It pushes out that revenue line. And if you have a bunch of funding, that's okay. And you can play the long game like Dropbox did and the other freemium players that we could mention off top of our head, Figma,…”

“And usually the buyout is a little less, it's usually less than market rate for that, that app if you're buying them out in cash, because it just should be, right? Because you're left with the business and you now have to slash get to run it.”

“literally going after two verticals at the start, it's not a hard pass for me. Just because we talk about niching down or focusing our product doesn't mean that we can't have a couple highly related verticals, especially if both of them onboard and use the product in the same way, even if the sales process is slightly…”

“Like, you can't grow three SaaS companies at once. No one does this, right? It's an anti-pattern. You can grow one and then have a couple that are flailing around, and so if people see you tweeting about one, two, three, four, five different projects at once, it's pretty obvious that you're not giving any one of those…”

“I think about one percent of tech startups should consider raising venture, I think about nine percent should consider raising what I call indie funding, which is Tiny Seed, Indie.VC, Upeka, and the other Alt-VC funds that you might hear about, and then 90% should probably bootstrap.”

“Don't bootstrap a two-sided marketplace. Unless you already have one of the sides. That's, this is Rob's rule of two-sided marketplaces, we'll call it.”

“So the third thing that you should, for the most part, never do, is build a second product because your first one has stopped growing.”

“The fifth thing you should probably maybe never do if you're bootstrapping is translate your application into multiple languages, and I mean spoken or written languages, not coding type languages.”

“Realistically, if you're not losing deals to competitors, and your churn is low, stop building.”

“The problem is, if you just listen to your customers and build what they tell you, A, you're gonna build a bunch of crappy features that are disparate and all over the place, and B, they're pretty much gonna have you replicate whatever competitor they switched over from, because that's the tool they, they used.”

“I'm usually less worried about competitors replicating, you know, my features and, and trying to, uh, I guess, out, out innovate me because if you're the one innovating, then, you know, they can never get ahead of you.”

“My thoughts on pausing are that I wouldn't start a business that allowed pausing. That just means it's really a high churn business. It is a business that probably shouldn't be a subscription in reality, and you're forcing it into the subscription model, and to adopt a pausing feature really does dilute the Benefit of…”

“I feel this way about launching a second product. Usually, you probably shouldn't. The odds are good. It's gonna take away your focus and be a distraction.”

“You launch, everyone's gonna approach you about white labeling. Almost always a waste of time. Not always, but most of the time.”

“I always say like two sided marketplaces. Here's my advice. Don't. That's because you're kind of, it's like starting two SaaS apps at once. It's just, you're fighting things on two fronts.”

“Now there is this flip side, the indie hacker lifestyle dream, right, that you're talking about where you get the portfolio and you're, you know, perpetually traveling or you're just working the four hour work week. That's not a bad thing, but it, to your point, it hampers momentum. You will rarely, if ever, get to…”

“your customers are not going to have the product sense to be able to design your product. They don't have the vision, For what it needs to look like. They don't have the vision for what the UX needs to be to keep the elegance in. They see a problem they have and the shortest path to a solution, and they're not worried…”

“if you take someone who does product management at a large company or a mature product that's been around for 10 years, and you put them in the spot of, we don't have product market fit, or we have like five customers, get us there, to where we've built something that people want and are willing to pay for. Usually…”

“if you let customers guide you, most of the time, they'll just have you rebuild MailChimp, or Basecamp, or HubSpot. They'll just, they'll just have you replicate that, because that's what they've used, and that's what they know, and they'll just keep suggesting those features, and pretty soon you will have a, just a…”

“it doesn't work when you're building software for a hundred dollars a month or when you're selling to the end user. But if you are selling to some corporate procurement person, AB is 100% correct. I've seen it myself. Ridiculous checklist requirements are very common.”

“I think a big mistake that you're making is if you're going to sell to accountants, self-serve is 99% not going to work. Pretty much it's not going to work. I never say never and always and these kinds of things, but I cannot imagine trying to sell to non-technical folks, especially folks who are busy and bill by the…”

“bootstrappers don't make that work. The only time they make it work is when they have one side of the marketplace already, right? They have an audience, like the tropical MBA guys did when they started Dynamite Jobs.”

“being anti-funding is like being anti-Hammer. Hammer is just a tool, and it's right sometimes, and it's not other times”

“But if I were running a SaaS aimed at a niche, community would be far down on the list of things that I wanted to start. Unless I felt like there was an extreme vacuum in the space and I already had an audience. Where I could kickstart that community.”

“You don't have to be lucky to get rich. You don't have to be lucky to build an audience. You don't have to be lucky to build a SaaS company to 10 K a month that can change your life. You don't have to be lucky to build an incredible network. You don't have to be lucky to be a successful entrepreneur.”

“I see the companies who don't have a technical co-founder where it's just a subject matter expert or a subject matter expert and a salesperson, for example, the number one issue for them constantly ongoing, sometimes for years is the product.”

“it comes back to my rule. Don't bootstrap a two-sided marketplace. That's exactly what this is, unless you have access to one of the sides.”

“Usually when you get to about a million ARR, sometimes 1.5 million, if you are growing quickly, and growth is a big key to this, and your churn is not super high, there's a bunch of factors, but if it's a really strong business, that's when you can start asking for revenue multiples.”

“if you want to make money from something, then know that you're gonna have to Do away with your technical preferences, and there's a decent chance you're going to build stuff that's going to be too simple for you, or you acquire something and it has a shitty code base that you don't want to work on.”

“When you hire a bunch of contractors, you typically get a bunch of task level thinkers. And that's not bad as long as you have a project and or an owner level thinker at the top able to manage that.”

“The content bar, especially with AI now, but even before, even before that, like, 1015 years ago, I could hire someone to put out articles and just build links, like almost buy links from, what were they, blog networks or whatever, and you could rank in Google, and you can't do that anymore, right? So it is more…”

“The biggest mistake I see is someone building, trying to build the exact same thing as a bigger competitor, and they'll be like, well, the market's huge. I just need one percent of it. It's like, no, no one's going to stand up. You have to be opinionated and either have unique feature set or unique positioning and be…”

“is to make the economics work, it will have to be different than, certainly than Silicon Valley, but even than, like, the tiny seeds in the indie.vcs, you would be at a level, I would say a level lower, just in valuations, in order to make the economics ever work.”

“I don't know that if you've worked at a job for five or 10 years in the same technology, same code base, I don't know that you have that malleability. And so I think maybe that was an advantage that I had, having worked in so many code bases.”

“In, in SaaS, people try freemium, and it usually doesn't work. Like, if you're funded, you have buckets of money, you can do it”

“And pretty much the blanket advice I give is like, it's almost not worth doing if you're not going to raise, let's say, a hundred grand. Maybe for like, 75, you know, I mean, because it's, it's time consuming, it's distraction, it is legal fees, and again, how you structure it, it can be more or less expensive.”

“in the cases of a lot of these smaller products that you're trying to get into the marketplaces, I think that building it first without doing a ton of validation is probably the way to go.”

“You can lose product market fit. You can have it and you can lose it because the market will drift if you don't chase it, but either with features or with, uh, you know, I say chase, constantly work on refining it, right? Keeping it. You can lose it as fast as you found it.”

“The plural of anecdote is not data. I think Sherry heard that when she was getting her PhD in psychology and they did a bunch of research. They said, yeah, a bunch of stories does not mean data. It doesn't mean qualitative and quantitative are not both important, but this is similar to the startup founder who has one…”

“If you're 18 and you've built a business to the point where someone offers you nine million dollars, you take that money. That changes your life.”

“funded startups fail when they run out of money. Bootstrap startups fail when the founder runs out of motivation.”

“money in your personal life saves you hours. Money in your business saves you years.”

“when I say don't bootstrap a two-sided marketplace, the end of that sentence is unless you already have access to one or both sides of that marketplace.”

“don't bootstrap two-sided marketplaces unless you already have one of the sides, right?”

“unless you're written in a really odd stack that no one can find developers for, no one's heard of, usually an exit is not going to depend on your tech stack. Again, if you're using one of the standard tech stacks, it's not going to be a big deal.”

“Like, if you go to sell a SaaS company and you're solely built on top of a platform, you sell for a lower multiple than if you were on your own.”

“And so if you're, if everybody's too price sensitive to your point earlier, if everyone's a fly fisherman podcast and everyone's paying in, you know, 10 to 20 bucks a month, and that's kind of where most people are, and then your churn is 10%, like, you just can't. You know, almost impossible to build a 1,000,002…”

“If you're, if you are non-technical and you've never started a startup before, I would say don't build a SaaS app. It's too hard. Like go, I have this thing called the stair-step approach to bootstrapping, which is like start small with like a WordPress plugin, a HubSpot add-on, a Salesforce add-on, a Heroku add-on,…”

“One thing that I'll say is, if you're starting a company, never tell people that you're never going to sell or go public. I'm not saying they did that. Other people have said, employees said they were under the impression they would never sell or go public. My guess is they didn't say that, but that would be a mistake…”

“You should never hire a C-level person in the first, you know, in the first, you need to get to a lot of millions. I'll put in ARR before someone has a C in front of their title, unless they're a founder, in my opinion.”

“That's the pattern that we've seen in bootstrappers who get it done. Usually it's one or two-person teams.”

“If you don't have a strong network or some type of in and you'd want to build a B to B SaaS company, 10, 20, thirty million. I have not seen someone be able to raise around at that point pre-revenue.”

“because they don't scale like SaaS, because they're often reliant on a single individual, not all the time, but often reliant on a personality or a personal brand. And the exit multiples aren't there, right? I mean, that's a part of why this works is that SaaS sells for such a crazy high multiple.”

“If you're going to take funding to be like, Hey, I would sell if I got an offer for twenty million, right? To be upfront about that, and if the investor doesn't want to invest, then I don't think you should take the money, because you're going to have this conflict now. When you get that offer for twenty million,…”

“Is I actually going against the, I think, traditional wisdom is I try to keep as little cash in my home as possible. Some people want to pay their home off, but I view, I view cash in a home as money that's tied up and money that I can't be using for all these other things.”

“languages, computer languages don't last 50 years, right? They last, I don't know, 1015 years, especially in the web”

“And you can absolutely hire contractors to do task level stuff. It's harder to find folks who do project stuff, but you can find project level, but I don't know contractors who are like that owner level strategic thinkers, but I do know folks who will come on full time with you and be on that journey with you.”

“I think the one other thing is two-sided marketplaces are possible to bootstrap, but I think you need an audience. Not need is not the right word. I think you're almost destined to fail if you do not already have an audience with one side of that network, right? That you're not trying to build bootstrap a two-sided…”

“no one should ever sell their company. And you know what? That's just not realistic. Because people don't want to run the same company for 40 years. A, it gets boring. B, there's a lot of risk. You can have all of it, you can have tens of millions of dollars of net worth tied up in an asset that you have no liquidity…”

“And that's why I always say you can have an autopilot business for about 12 to 18 months has been my rule of thumb.”

“oftentimes when I see bootstrapped or mostly bootstrap companies with three or four co-founders, usually they're too many. Usually there's at least one too many and there's like a weak link. There's someone who's not Maybe holding up there”

“until someone has, I don't know, 10% equity. It depends on the person, but until someone has 10% equity, they don't really feel like an owner to your point of, Giving someone half a percent or one percent, it doesn't tend to mean that much.”

“Most SaaS apps have almost zero product risk, and that's why you'll hear me say, don't go build the product because there's no risk there. The risk usually is in the market, or in the execution.”

“I mean, and that's the, probably the most common mistake that I see with early founders is, especially developers and designers who think that the product is everything, where in fact it's like, 25% of the things, and, and really all the other things, the marketing, and making sure you, you hit the market right, is the…”

“The folks I've seen who try to transition from working in an office to working from home usually have a pretty rough transition. And that would be a, I would say at least a yellow flag for me if they didn't have You know, pre-COVID work from home experience.”

“if you're a product person, you never take customer suggestions and build what they want because you wind up with crap software. You wind up with a million settings. You wind up with terrible UX. You wind up with terrible UI because customers are not product people. They're not experts for the most part in general.”

“using the thought of what would I do if I sold my company as a reason not to do it in my mind is a mistake.”

“I would even posit that a hundred grand in the bank is enough for most people to take a year off over multiple years.”

“I think it's very, very hard to build something into the seven figure run rate without some type of, of brand and community.”

“you can be a bootstrap founder and run yourself into the ground and, and work 90 hour weeks. I've seen folks raise 20, thirty million dollars of venture capital and work eight hour days. It, it happens, like, and, and be happy with their business.”

“I contest that it's, it's great for info products and that it's a lot less useful for SaaS.”

“I don't think you can grow multiple businesses at once because of the focus that it takes, unless you are in that Richard Branson situation where you have a bunch of budget and you truly have GMs or CEOs or someone who's just, has the owner mindset.”

“And I don't think most developers have this, the product skill. It's a totally different skill set. You know, writing code and architecting and building a feature is a skill set and scaling and all that stuff is a skill set.”

“there's almost always a way that more money gets you there faster.”

“There's all, it's not binary anymore. Bootstrap versus venture. It's I can bootstrap. I can do one round. I can take money from tiny seed. I can take money from Indie.bc. I can do revenue based financing if I get to the point where that makes sense, or I can take venture, you know, it's like this whole buffet of…”

“I do think a lot of people make the mistake of wanting to build a SaaS app, which is awesome, and we all aspire to do that, but trying to do that as your first step is a real challenge.”

“Now, once you get, I mean, once you get to product market fit and you have customers and you start having channels at work, it kind of is, it's extremely repeatable. And usually there is a pretty solid blueprint of how to go from there up, how to go from there to a million to ten million or whatever.”

“We don't need a business plan if we're not raising capital or it's not super complex thing, or there's not 10 of us working on it.”

“for my bet, for my money, I'm probably gonna write a little bit of code and get it out there, and the learning starts with every bit of validation, and frankly, getting something out there quickly in this, if, if it's a small, small niche is not the right word, but if it is a micro idea, I would lean towards action…”

“It's even better if you get really big competitors, because these are way easier to compete against.”

“Word of mouth is usually the wrong answer.”

“It's not a software product. But you learn a lot. It's probably 70, 80% the same as building a SaaS.”

“One thing I would stay away from personally is using, uh, performance evaluations as some type of, Of thing that affects profit sharing. I think that that can be dangerous as different managers across a company might rate people differently. I also think, you know, if, if the performance evaluation, basically you…”

“Most of the successful founders I know don't have a lot of patience when it comes to their business. I might go so far as to say that for a bootstrapper, patience can be dangerous. It can lead to complacency and comfort with the status quo. There's something about impatience that can drive you to push things forward in…”

“And while that is totally possible, it is not actually the optimal way that I, you know, in my experience to build a big business quickly. Really, if you look at more of the SASTR model, which is, it's going after the big ticket, the fortune 1000 or the fortune 5000, and it's the high touch sales and it's Big contract…”

“Not that there's never a reason, you know, I mean, you can have code that is so bad that you can't add features and it takes you a month to do a days worth of work or whatever. Of course that happens, but it's, it's a lot less frequent than I think developers tend to make it out to be.”

“is this app complicated and is going to need 24 seven support and it has a lot of moving parts and it's going to be hard to scale and there's going to be performance stuff and there's a lot of things moving around. I think of like an analytics app or like, you know, drip, which sucked in a bunch of analytics. It was…”

“Because oftentimes, like, the founder isn't the best person to run a hundred million dollar company. Because a hundred million dollar company with xt thousand employees Is very different skill set than what you and I have talked about today.”

“when a company is spending 10, 2030, a hundred million dollars on a product, they're not buying it for the code quality. Unfortunately, as a developer, that's not what is driving the price.”

“when I see kind of a new expert or a new name come on the scene. I typically ask myself, have they done it at least twice? Obviously, there are exceptions, you know, Jeff Bezos has not built two Amazons, the Collison brothers, actually, I think they did have a startup before Stripe that was successful. Like most…”

“Transparency in the startup space is mostly about marketing. Like most transparency, I'd say, 90%, maybe 95%, is to spread the word so that people will talk about them”

“And when I've seen manufacturing lines at big companies of 20, 30, 40 developers, and they want to quantify stuff like lines of code written, bugs fixed, that's when you go down this line of A, building crappy software, and B, all your good developers are going to leave.”

“they can come out and say, we don't use any tracking, we don't use Google Analytics, we don't track open rates, and if you have a hundred million dollar business throwing off tens of millions a year in net profit with 50 employees, you can do that too. But if you're a bootstrap startup and you're trying to get to 10 K…”

“most of the second-time founders and third-time founders, the serial entrepreneurs I see, they do more research and more validation before they select an idea. Rather than when they were first time and kind of, kind of flailing.”

“You don't even need to be in the top 10,000 SaaS apps in the world to have a completely life-changing outcome. Whether you sell, whether you just take profits,”

“I think it's dangerous for a bootstrapper to have a feedback loop that's this long, because you're just going to waste years of your life. I can't imagine taking, that's such a risk. The opportunity cost of this is significant, so I would either be looking for smaller customers or a vertical where there are customers…”

“you should not Be making big decisions when your nervous system is dysregulated, when you feel that tightness in your chest, when you're really concerned and worried, and you're thinking in a pattern that isn't, it really isn't that healthy. It's certainly not calm, and it's certainly not a, I'll say, a rational or a…”

“The couple challenges are, you need a high enough annual contract value to justify it, and you need cash up front. Because especially at the start, you're going to send a lot of letters or gift boxes that aren't going to work as you optimize your process. And so you are going to need a significant amount of capital…”

“I'm almost viewing the criteria more like freemium, because it kind of is freemium. You get one payment, you do get some money, but then they're freemium from then on.”

“lifetime deals are like free plans, and free plans really only work well, they're only worth it, usually, If you have some type of virality, like built-in virality, not like, oh, there's a share button here.”

“You don't get to a hundred percent validation. You don't get to, to where it's like, oh, the hundred percent, this will work. There's no way. Maybe you go from zero to a hunch, which is 10% to, I mean, doing validation and vetting, do you get to 30, 40, 50% certainty that'll work? Yeah, it's probably somewhere in…”

“Generally, the people who succeed, they do a lot of things, and they're right more often than not. Not all the time, but they're right. They can be right 60% of the time, but they just do a lot of and the founders, and they're not flailing.”

“Saying X is dead is a way to get free clicks. It's a way to get eyeballs for declaring something outlandish, and nobody comes back to check if you were right or wrong.”

“B to C SaaS with that high of churn doesn't sell for the same multiples that B to B does, but that doesn't mean that every thousand of MRR that you add to this product isn't worth a lot of money.”

“So the desire for founders to do free plans, to underprice their product, hey, nine bucks a month for something that should probably be a hundred bucks a month, and to try to do one-time purchases in the early days, I think is a crutch.”

“But I do think of one time, if you, if you think about it, it's kind of like a free model. You just happen to get a payment up front, and then you have free users for the rest of your ever-loving life that you're supporting.”

“By the time you get there, like, cut the lifetime, cut the one time deal, but it becomes addictive, right? Because it's a lot of cash, because you're getting your whole lifetime value. Up front.”

“Typically, with consulting services built on a SaaS, I'm fine to break even If I'm charging enough on the monthly recurring. You know, if my annual contract value is 5000 dollars a year and up, and I have net negative churn because of the work I did up front, am I willing to do a thousand dollars of work for a thousand…”

“The only way that you can market a consumer-facing business that I know of, the only ways, I should say, are virality, word of mouth, SEO, it's all the, it's the free stuff, because you can't afford to spend or invest any money on marketing, and that's why, one reason why B to C is so hard, high churn, high customer…”

“You probably won't be able to do freemium because you can't kick your revenue super far out into the future, and you need to charge enough that you don't have to find a kajillion customers to make 10,000 dollars a month or whatever you need to live on.”

“That I would try to find people that are solution aware. They're gonna be so much easier to sell to, talk to, and convince that this is a thing. That it actually works. That it's viable.”

“I think that you should ship things even if someone else launches something similar. It sounds like you might be looking for excuses not to ship because that feels Scary, right? Shipping feels scary, and pulling it and not doing anything is less scary.”

“The question you have to ask yourself is, if I can't generate traffic today, if I can't find people who will buy it today, how will I find them once I actually have a product?”

“The minimum annual contract value for making cold outreach work, making the economics of that work, is about 10,000 dollars US.”

“Because of all the 20 B to B SaaS marketing approaches, if you have a price point of 50 dollars a month, I think you can do four or maybe five of the B to B SaaS marketing approaches. If you have a price point of 500 a month, you can do between five and 10 of them, and if you have 5000 a month, you can do all 20 of…”

“Oh, I've tapped out my entire market, which almost never happens.”

“Takeaway number two is that new customers, new revenue fixes everything unless you have a high churn or your pricing is bad.”

“The thing I want to call out is that pricing is the biggest lever in SaaS, and if it's messed up, For example, if you're five X underpriced what you could be charging, you will build a 250,000 dollar business at best when it should be a 1.25 million dollar business.”

“the lower your prices, the higher your churn, the higher your support burden”

“one quick way to test whether that lower end, that bottom end pricing plan is doing you good or harm, is to just hide it. Just hide a div on your pricing page. And watch your numbers. This is obviously where it's like a lower touch sign up, you know, this is not sales led, or high touch funnel. But this is a quick way…”

“the two biggest skills I think you want to develop is figuring out of all the feature requests of everything coming in from support and sales and from your own head, all your internal and external everything that you could build next, It's figuring out what to build. Like picking that, and having a decent gut feel, and…”

“There's a certain amount of repetition and understanding and practice, and it can translate from app to app, but I don't think it, like, just because I was, yeah, Derek and I were good at product at Drip, I wouldn't be good at product at Simewell. I mean, it would take me a huge learning curve, you know, so I want…”

“building analytics dashboards is a tough space because they're often vitamins, not aspirins.”

“And if someone paid five or 10,000 dollars up front to have custom software written, think of how sticky that is. They're not going to cancel in three months, six months. The lifetime value on this is going to be high. The churn is going to be very, very small, if not net negative.”

“you don't have to be right all the time. You can be right 60% of the time. And be pretty well off.”

“I see a lot of makers and designers who, Build a product and then just redesign it over and over. I'm going to redesign the landing page again. I'm going to redesign the homepage again. Instead of actually doing marketing and doing the hard thing, they just want to keep redesigning, so be careful of that.”

“TAM is not going to be the limiting factor. It's going to be Term, total reachable market, that you can actually get in front of, and more than that, it's just going to be, can you rank for this term in the Shopify app store? Can you try to get to number one for this term, or for the, you know, the search terms, is a…”

“until you get something live and get people using it and see how fast it grows and see where it plateaus, I think it's going to be really hard to try to answer all these questions because there's just not publicly available data on this topic.”

“how do you know if it's time to pivot? If what you're doing is not working for long enough that it's just not working? And that's it. It's when you're out of ideas or out of motivation on the current product.”

“If you have 50 customers that are not really paying or churning, and you ask them what you should do differently, they'll tell you 47 different things. And as the founder, you have to make the hard decision with incomplete information to figure out what and how To pivot.”

“I would say you are going to have a superpower of, of being able to prioritize and delegate ruthlessly, and most people don't have to learn that. Look, if I was single and I was 24 years old and I have infinity time, let's say I don't have a day job, I'm in college, or let's say I do have a day job, but I work 40 hours…”

“They're not going to be any amazing high demand niches with no competition. That doesn't exist anymore.”

“prepayments are still not a hundred percent validation, right? Nothing is a hundred percent until customers are paying you and not churning, and you have to have a full-blown MVP or full-blown product at that point.”

“I know of very, very few examples Of bootstrappers that have been successful when folks don't even know that they're not even really aware that they have that problem that needs to be solved.”

“I think it can be an easy trap to think of building for folks who don't have the budget or the real interest, and this is kind of a, it's a side project for them, right? And I don't mean a hobby, I don't mean a nights and weekends, but if their main focus of their job is X, and then five or 10% of their job is Y, and…”

“For me, freelancers are to fill either a temporary gap or what I call a more of a, it's a black box role, and what I mean by that is if I could put a black box here on, on the desk, and you could feed it in some kind of input, and you know the output you want, It's a great role for a freelancer, especially if you don't…”

“when you ship your fifth book, and your 800th podcast episode, or your seventh album, or 14th album, I do think that That at a certain point, the process takes over, and the desire to ship things into the world overrules or outweighs necessarily these ancillary feedback mechanisms.”

“funded startups fail when they run out of money. Bootstrap startups fail when the founders run out of motivation.”

“you have the individual plan, and you have your financial planner plan, and you have your call us plan, because you should always have that, because you never want to have someone come who should be paying you 35,000 dollars, and they, they sign up for your financial planner plan, which is a thousand a year, or 2000 a…”

“And I think of it like a task level thinker probably thinks ahead a few hours Or maybe, depending on the task, a day or two. I think a project level thinker is thinking ahead weeks, maybe a few months, again, depending on the size and complexity of the project. And an owner level thinker might be thinking ahead six…”

“a lot of decision making as an owner level thinker, making a lot of hard decisions with incomplete information, versus as a task level thinker, you don't have to make hard decisions, and you usually have very complete information. And as a project level thinker, you might have to make some hard decisions, but for the…”

“if you get someone right on that cusp, who becomes an owner level thinker within the first year or two of working for you, then obviously you can get them at a, You know, at a certain, a certain salary range. And if I think U.S. or North America, I mean maybe 80, 90,000. But if I think of someone who, who has the…”

“only hiring virtual assistants, or really inexpensive resources, and really junior resources, and training them up, and giving them SOPs, and it was fine, and it was, it was what I needed at that time, but it came back to bite me later, because it was a bad habit that I developed, and it took me a long time to get to…”

“I think generally if you want someone who's really going to take control of an entire area, entire business unit, entire, you know, whatever, you want them to take ownership, I think you're talking at director level or above.”

“This is a hard way to go as a bootstrapper. It's really hard, and it infectively means it's mostly outbound, and usually you're either good at that, and that's what you want to do, and you want to do outbound, and you want to do sales, or you raise money to do this, and you really kind of build it up.”

“Funded companies fail when they run out of money, bootstrap companies fail when they run out of motivation”

“I often say funded companies fail when they run out of money, and bootstrap companies fail when they run out of motivation.”

“because we know you can build a CRUD app, we know you can build Basecamp, we know you can build Drip, we know you can build MailChimp, right? It might take you a while, These are certain things that will happen. There's no technology risk.”

“And so if I were non-technical, I would want to build this out in just a basic GPT first. And if I was a developer and someone was asking me to come on as a co-founder, I would say, have you built this in a GPT first? And if not, let that be the first thing that we do, you know, if I'm going to agree to come on to get…”

“And there's no hard and fast rule, but I do know generally the smaller the acquisition, the more likely it is to be an asset purchase.”

“If you sell for two million and up, You should be, I'll say, thinking in terms of an ARR multiple, even if you're not growing quickly. Let's say you're, you're, you know, flat, or just growing 10% a year or something, and you're at two million, I would be looking at a one to two X ARR multiple as a loose rule of thumb.”

“And if you're at two or three million, I mean, or five million, it doesn't really matter, And you've doubled in the last year, let's say you grew a hundred percent. Yeah, you're talking five to 10 X ARR, four to eight X, somewhere in that, in that range.”

“I would not want to be in a mastermind with my co-founder because I think it's a waste of time to have two high functioning co-founders getting the same information and spending that same time in a group. You want a myriad of opinions. You want different inputs, different smart people thinking through the problems that…”

“I see the GMV being higher quality than usage-based fees, Because it tends to be, it depends on the business, but it tends to grow over time in a way that usage can be spiky and not grow as smoothly.”

“and being able to prescribe how to improve moves you from being a critic to Creation and mastery, right? Being able to actually improve a work of art, or in this case, a piece of software or a website. And this is kind of like ninja level expertise, right? It's, it's editorial vision. It combines a lot of experience,…”

“So if you're a stage one in design and you hire a really good designer, you might need to get out of their way and put your opinion aside.”

“the persistent are the ones that, they just figure it out, and the obstinate are the ones that get in their own way over and over and over. And the only way they're successful is if they happen to luck upon the right answer from the start because they're so attached to their ideas about how to reach it.”

“Even when something isn't your fault, as an entrepreneur, it's still your responsibility.”

“Now that I have like raised funding with tiny seed and I see companies that raise a few million, you know, we have a bunch of tiny seed companies that have done this. If you do it well, if you think about it like a bootstrapper, and you approach it like Laura Roeder, or like a Ruben Gomez, or like, even like a Jason…”

“don't model yourself after Apple. Because they also have infinity resources to do things. Model after people who are constrained and who have solely, you know, like a, a Derek Reimer, any tiny C company, maybe some of the indie hackers that have taste, I don't know, we could point to some people, but I, I don't like it…”

“if your app is a single feature, the beauty of app being a single feature is you kind of development can be done. It can be done. These are great, like indie hacker lifestyle. Step one, step two businesses. You know, you don't have to constantly build an ad and compete, but the danger there is that I think, I think…”

“Because if you're effectively working for free, and I know they're paying for your developer, but you are doing whatever it is, project management, and hiring, and training, and, you know, keeping folks on staff, so to speak, and that's for free, there needs to be a tremendous amount of upside, because nine out of 10…”

“I wouldn't want to do a standalone SaaS app in your shoes because it's just too much. It takes too much time to get it going. That's where the stair-step method is so freaking helpful. Is where you, you don't have a kajillion hours every day, or every week, and you can ship it in little bits and get it live and learn,”

“Sales, marketing, product, and development. Those are the core four elements of building a SaaS company. And if you go on social media, or you listen to podcasts, or you see founders who are trying to succeed and failing over and over, usually they're missing one or more of these.”

“So if you're doing enterprise with procurement and marketing expertise and C's, Like to me, it's a minimum 35,000 dollar a year contract. That's USD.”

“Versus works better when you are a brand. Like now people are searching for missive, but alternative twos are a big one.”

“Email is a space having built myself an ESP. It's a space where you can have a lot of success in that negative turn as a horizontal play. There are other spaces where that's harder. There's something about that stickiness of email and it's so permanent.”

“If you're going to move into another vertical, try to make it adjacent to the vertical you're in.”

“you're validating until you sell that company. Like, you're still validating, do people need this feature? You're validating the every expansion, every strategic decision, every move you make, every marketing approach you add, you're kind of, Doing some validation in advance, right?”

“I would not do a .co.nz domain because that will, it will be detrimental, especially if you try to market into the US. I can't speak for all the other countries, but in general, I think folks who live in a particular country or area are biased towards that area, and .com is just the most kind of, you know, generic, or,…”

“two co-founders at two million, if you're thinking about selling at some point, there's just, there's not much of a business there without the co-founders, and so you're, you're saddled to it, right, where you, like, can't step away, and it's like, then they really need you to stick around for two or three years to run…”

“strategic buyers are at the top, private equity, and then search funds, then high net worth individuals, then your co-founders, and at the very bottom we have your network, your customers, or your employees, and that would of course include a management buyout.”

“if you're growing quickly and you can get these really accelerated, aggressive SAS multiples, management buyout just isn't gonna, it's not gonna compare to that.”

“Affiliate marketing is enterprise sales. It's finding affiliates. Who are willing to promote it. It's not actually affiliate marketing. It's finding affiliates who have big audiences that are willing to promote your product, and that's not actually that easy to do if you're outreaching cold, and this is why I say, if…”

“if you find a co-founder, um, have vesting. Have four-year vesting with a one-year cliff, such that they, you know, if, if things don't work out after a few months, they don't walk away with a big chunk of your company. We have seen tiny seed applicants that we were unable to fund because a co-founder walked away with…”

“The challenge of having high churn with these kind of one, they're like more one-timer project based Users. Raising funding and exiting are both going to be severely impacted by that, because the metrics look bad.”

“Usually, the deeper root cause is that you haven't built something people want, and churn reduction tactics are just gonna mask that.”

“It is extremely, extremely rare, and extremely, extremely lucky for someone to build a legit, like, seven or eight figure business. Without marketing or sales acumen.”

“10,000 customers sounds sexy, but it is a nightmare for support. It is a nightmare if you don't have the process or the resources to be ready for it. More customers means more support. It means more churn, and it usually means more stress.”

“An audience gives you reach, but a network gives you leverage. So your audience might retweet you, whereas your network might introduce you to your first 10 customers, or help you find your first hire, or if you decide to go down this road, your first investor.”

“The biggest threat to your company isn't gonna be competition. It's gonna be you. The potential for burnout, self-doubt, loss of motivation, destroying your relationships, mental health. These things kill more companies, I think, than any external force.”

“Marketing is not the same as development, but the progression is similar. An entry-level marketer with zero to, I don't know, six to 12 months of experience Is comparable to an entry level software engineer with six to 12 months of experience.”

“And with info products, a huge percentage, let's say, 80 plus percent of folks who buy your info product, they never use it, and it doesn't matter, and you never hear about it. Now that sucks, but it's the reality. If someone's not using your SaaS, they cancel.”

“the only one that I agree with is that it would be a distraction, because it always is.”

“It's just a different game with this customer lifetime value. You can't run ads. You can't pay salespeople. You can't, you know, so many things you can't do.”

“Strong virality is when I invite you. Strong virality is Slack, where I'm the, the tech lead on my five-person dev team, and I invite my four other people. They create an account, And they do stuff and they interact with it more, more deeply than just clicking a link or clicking a thing.”

“All exits are painful. There are no smooth times of selling your company.”

“For a long time, I've been saying, you know, if you have to go through procurement, 25,000 dollar minimum ACV, and now I think I'm up to about, given inflation, literally, and, and just how many years it's been, it's like, I think it might be 30 or 35 is kind of my number.”

“This is why it's so hard to run a SaaS company for like more than, I don't know, 10 years. Like it just gets, the markets shift and especially a ten-year-old SaaS company is a lot of legacy code and you start moving slower and you can't Hit that momentum”

“Customer success and marketing are the, are two unexpectedly complex things to hire for.”

“the moment that you rise up one layer of, of abstraction, you lose granularity, and two hours on churn makes no sense if there's a biotech company next to you, and a hardware company on the other side, and a two-sided marketplace on the other side, and a B to C company on the other side, you know, of you. It just, you…”

“The thing with building a SaaS out of an agency is every agency wants to do it. Some agencies try and almost none succeed. It's very, very hard.”

“You don't need to be right a hundred percent. If you're right, 6070, 80%, but you're just shipping a lot of things quickly, you hit it. It all doesn't have to work.”

“you can't punish people for making mistakes if you want everybody to have a bias towards action. Mistakes are not bad on their own, because they show that people are moving in a direction.”

“if they make, let's say a salesperson makes a million dollars in, in, it's obviously salary plus, uh, commission, they should be generating, I think that it's a loose tenant, 10 to one, I think, they should be generating ten million in ARR for you.”

“The worst is saying yes to revenue and having it churn, but the second worst is turning down revenue.”

“So this to me is actually a good thing because it's a little bit of a barrier to entry for upcoming apps that could potentially compete with you. Not a huge moat though.”

“Most of the wealth that I see built in entrepreneurship is not actually from taking profit out of an operating business. Most of it is from exits. It's from selling it, and that's something that a lot of folks I don't think are familiar with.”

“If you're going to take a small percentage of GMV, or you're going to be ad-based, or you're going to need a million users in order to be viable, these are just not easily bootstrapable. I say they, in general, they aren't bootstrapable, but I suppose one in a million, you could get lucky.”

“Didn't realize that I needed to hire project and owner level thinkers or else I became not only a bottleneck, but a project manager and someone who was basically just managing a bunch of task level thinkers.”

“You're never going to be happy for very long. This is the curse that we have as entrepreneur. It's a blessing and a curse. It's a blessing because it motivates us To do things, right? To ship, and to grind, and to believe in the growth mindset that we'll get better, and that we'll figure it out, and that we can change…”

“The solution is not to listen to no one. It's to listen to people who you trust to give you honest feedback that comes from a genuine place, but also qualified feedback. So it's folks in your mastermind, if they are ahead of you, or you believe that they're smart founders who are getting things done, it's advisors,…”

“If you are doing, let's say, two million bucks a year, and you're going at 40, 50, or more percent per year, if you do not have that, let's say you're flat, let's say you're at two million, and you are, you've grown less, you know, less than 10% say in the last year, which effectively is flat. Odds are you're gonna get…”

“the math for calculating your plateau, you know, which is the new MRR in a given month divided by your churn rate.”

“I don't know that I can think of a single SaaS app in our ecosystem that, you know, is in between, let's say, one and twenty million ARR that has just continued to grow and grow and grow and grow based on something they did in the early days. It always requires some type of additional, as you said, activation energy,…”

“I do think that when you get to about a million or two, it depends on a bunch of stuff, the type of business and all this stuff. I think this is when a founder can think about Uh, handing off one of those three. Marketing, sales, or product. Now, it's not delegating, abdicating, handing the complete thing, but it's…”

“I'm a believer, for sure, that you should be charging for them because, as opposed to just comping it, which is not anything that you, that you indicated, some founders are so desperate to get the business that they want to try to give it away, and there's so many problems with that. Number one, you can waste a bunch…”

“I want to feel okay about the pricing. Like, if this is the only work I ever do for them, And they basically say, you know what, we don't have the budget, or it didn't work, or leadership change, or whatever else happens, they go out of business. I don't particularly want to be in a position where I'm thinking to…”

“the fastest way to make money is not with SaaS. That s**t takes forever to build, a long time to launch. It's very complicated. It's actually to do some freelance work.”

“there's a difference between raising your prices and going up market. Those are two different things. They can be the same, but a lot of times you are just underpriced for the market. You're charging 29, you can charge 49 to the exact same customer base, same positioning, same product. That's not what you did. Going up…”

“Having a two million dollar e-com business selling a widget versus a two million dollar ARR SaaS company, It's just night and day, both in terms of the profit you can pull out of it, but also for the exit multiple. That two million dollar ARR SaaS company might sell for ten million dollars, right? It might sell for…”

“To be a startup founder, and to build a business to 10 K a month, a hundred K a month, 500 K a month, you don't need to be the best in the world. You're not competing against everyone else trying to do it, where there's only one winner, like being a heavyweight champion.”

“Like, how many B to B SaaS marketing approaches are there? There's about approximately 20. That's it.”

“The only time I think you get in trouble with this is when you're, you have a multi-million dollar company, two, three, four million dollars of ARR, and you're still relying on a single channel, that's when it makes me nervous. Because even if it's SEO, which is huge, man, what if Google accidentally deranks you or…”

“What you don't want to do is try to experiment with and develop four channels at once because you're basically, probably with your limited resources, not going to succeed at any of them.”

“there's some rare instances where you can offer unlimited something but not your value metric, right? If you're measuring based on the number of email subscribers, there is no unlimited email subscriber plan with MailChimp or if I was starting an email service provider. You can offer unlimited other thing like, hey,…”

“So what I would definitely avoid is hearing, build this feature, and I'll subscribe, and going off and building it based on just that. Because the odds are pretty low they're actually going to follow through.”

“If you have a bunch of infomarketers or bloggers using your tool, and you set up an affiliate program, and they like your tool, and you pay them 20 or 30% top line, they will likely get you hundreds or thousands of customers. Like, if you work hard at this, and this is your focus, and you do webinars with them, and you…”

“This is also why I believe horizontal SAS is so much harder. Like, like if you're building Sinewell, right, Ruben Gomez has, it's a competitor to DocuSign. Horizontal electronic signature, like, Can he possibly have one ICP? Probably not. Versus if I'm vertical... the Bins for an ICP is much smaller when you are in a…”

“If you were to come and be like, Hey, I'm at 20 KMR and I have 20 customers or 30 cut, whatever. And I can be like, oh, great. Let's, I can playbook the out of this. You know, I know the next steps. I can almost blueprint this out of exactly what I would do in which order, blah, blah, blah. But where you're at is just…”

“The idea of you coming into a domain that you don't understand and seeing a huge gap without first getting the frontiers of knowledge and noticing those knowledge gaps, Is a one in a 1001 in 10,000.”

“white label is a risk, there's platform risk, and it's a form of, I guess, technical debt, because it's something that long term, I mean, if I'm going to become a ten million ARR, twenty million ARR SaaS company, I have to undo this at some point. Much like if I'm going to become a 10 or twenty million ARR SaaS…”

“Your second hire in product-led is almost always customer support, because you will be a higher volume, probably a higher volume app with a lot of customers, and so you're going to have a lot of emails and live chat if you offer it.”

“Again, around three or four engineers, if I didn't want to be managing engineering myself, I'd be looking for someone to take that off my plate, because it is work, and it's one-on-one meetings, and it's, you know, all the, the overhead of being a manager that you don't necessarily want to have for the rest of, you…”

“I think the biggest benefit of building public is not, ooh, like, look at me, and I'm going to get customers from this. I think it's the feedback loop of really quickly, especially, well, if you're building in public, and you're targeting the people who are actually listening”

“Funded companies fail when they run out of money. Bootstrapped companies fail when the founder runs out of motivation.”

“the tiny seed founders we see succeeding. They do a lot of things, they ship a lot of things relatively quickly, and they're right the majority of the time. And by majority, I say it on this podcast over and over, it is not 90%. You know, it's some number. It's 60%, 65, I don't know. You're right, just enough, but…”

“And I think the biggest problem that developers, especially in makers and builders do is they either don't know or they kid themselves. They convince themselves that the bottleneck is actually the product and features because it's so fun. It's the fun part, you know, and it's easy to just be like, well, I'm gonna tell…”

“pricing is the number one lever in SaaS. And if you it up, you can have An amazing business that should be a million dollar business that is actually a 200,000 dollar business. Like, I've seen companies do that, and you can do the math, it could be a ten million versus a two million, you know, it's pretty easy.”

“You know, sometimes people will say, I was going to build project management for hair salons, and now I'm going to pivot into building in a mobile app on Facebook. And it's like, that's not a pivot. That's just a completely different thing.”

“I would not expect my app to exist 10 years from now if I was heavily, heavily reliant and built on a platform.”

“people think that spinning something out into its own thing is, well, the code, it's easy to spin, the guy just forked the code, and it's a, or even I just point to the same repo, and that is, I don't know, maybe 10% of the effort? It's 20% of the effort? It's all, yeah, the spinning something out into its own thing…”

“if you're saying nine out of 10, that's an incredible win, because I've seen folks try to do a, like, a pivot like this, or an expansion, or whatever, and maybe it's five out of 10, and it's still the right call. You know, because the other, the other five want five different things, but at least if you can get half…”

“the only SaaS company I ever have seen that actually split tested pricing was Zapier, and I'm sure someone else has done it, HubSpot maybe. I mean, there's a few, but as a rule, like bootstrappers, you don't test pricing. You take your best guess, and you make the switch, and then you roll it back if it doesn't work.”

“we do pricing teardowns at the kickoffs for TinySeed, and one of the biggest repeated things we see is too much. There's too many value. You don't need three value metrics usually. It's like, let's try it. Why do we have that one? Oh, that's because a competitor. Nope, get rid of it. Like, just make it either unlimited…”

“That was a big thing, was for them to start, A, generating deal flow, but B, to get the trust, I think, from people so they weren't a commodity, because they were a commodity before. It's kind of like, if I'm gonna go borrow money for my house, who's gonna give me the lowest rate? We know with no prepayment penalty.…”

“realistically, there are different gradients of complexity with products, and not all customer success approaches work for each of them. And so you can be, You can be naive if you're going to build a really complicated slash powerful product and think that, ah, everyone's just going to self-serve and get on board,…”

“That's the dirty little secret, right, of author blurb testimonials is most of those are just because you know someone and they don't actually endorse the book, they don't read it”

“A good exit strategy is like a prenup in a marriage, especially if you have a co-founder.”

“Entrepreneurs who have never thought about it usually find themselves blindsided three, five, or 10 years into a business when life circumstances change. They get tired of the business, or they get an offer with a shocking number of zeros.”

“the most successful founders across the Tiny C portfolio of a 192 companies. Are those founders that do a lot of things relatively quickly. They put a lot of things into the world, and they're right enough of the time.”

“trying to encourage word of mouth marketing is something I have never seen B to B SaaS do well. I've never seen a silver bullet is more of what I should say. There are ways to encourage it, and I'm going to run through a few of those here, but there's no way to control it like you could control your ad spend if you…”

“I know people who have refer a friend or affiliate programs and refer a friend, you get a month free, they get a month free. That's fine. That works well with B to C. I find that it works perhaps less well with B to B. I'm not saying you shouldn't do it, but a lot of B to B folks are just less motivated by a free month…”

“One approach that you should not take is to scrape the portfolio companies from a website and cold outreach them one at a time. Because it really pisses people off.”

“The thing there is it has to be significant. It's not a 10% discount. That doesn't get you on perks pages. You know, you're talking 25, 35, 45% discount, like something noticeable, or like free for the first year.”

“consider structuring profit sharing as a pool rather than a committed percentage to an individual. For example, instead of telling early employees they get one, two, or three percent of profits, have all key employees share in a 10 or 15% profit sharing pool.”

“we're doing this To better our life, not to make a dent in the universe. Like, we're doing it because we want our lives to be better, and your lives are not better if you torture relationships.”

“there are only 20 B to B SaaS marketing approaches. That's it. Because otherwise you think there are thousands, and it's just like, no, here's the list. Pick one. Now maybe I missed one. Maybe there's 21, but it's pretty much all of them.”

“if you try to learn it and you try LinkedIn ads and they don't work, you don't know if you're not good at them or if they don't work for your business or your customer type. But if you hire someone who you think is pretty good and you get references and you pay them a couple grand a month for three months and they run…”

“Any type of thing that someone might want a recurring use out of or that they might want to monitor or use on an ongoing basis is one approach to trying to become a subscription tool when you're currently a one-time use tool.”

“when you're selling to schools or businesses or enterprises, there are no bad deals. There are only deals that aren't worth it because you didn't charge enough.”

“a friendly platform is friendly until it's not. And that's really what platform risk is, is when we think about the aggressive platforms that I'll name in, in level eight, they all were friendly at one point.”

“Here's another distraction that I see masquerading as productivity in our circles of entrepreneurs. It's launching another product without marketing the one you've already launched. Or how about this? It's focusing on writing more code, or answering support tickets, or doing something that's certain without selling…”

“80 or 90% of things I do don't work, but the ones that do have asymmetric upside, and they push the business forward, and they push my life forward, and they work. And that's the pattern that I see with successful entrepreneurs, and frankly, someone who's successful at all with their life.”