The Exchanges

Q but you're also an angel investor and an advisor. Were you kind of a founding member of Capital Factory in Austin? Am I remembering that correctly? So you've been exposed to dozens, if not hundreds of startups. Do you feel like, like more of your knowledge and information that you share comes from your first-hand experience or from the experience with, with other companies advising on the internet or otherwise?

A I would say when it comes to specific things like this decision framework or this prioritization or this workshop, that's coming from WP Engine. That's coming because we tried things and this seemed to be something that worked for us or for some teams, and so that seemed worth sharing. When it comes to more strategic or high-level, long-reaching things, some of that's my own experience, but a lot of that is like, oh man, I've seen this like 20 times, which obviously doesn't mean I saw it in my own One to four examples. So the 30th time you hear someone pitch something and you go, oh my God, you know, that that's coming from, from a breadth. So I would say, or personal psychological stuff obviously starts from myself, but a lot of that isn't talking to other founders where there's certain kinds of things where, you know, 80% of the time that I share, oh yeah, I felt like this, or I felt like that. And, you know, almost all the time the other person's like, oh my God, I thought it was just me, or I didn't, I can't believe you're admitting that. And that, that again is some kind of, not universal, but, but, you know, pretty useful good truth there. That's coming from talking to other people, right? That's the only validation that it's not just me.

AI assessment note: “when it comes to specific things... that's coming from WP Engine”

Q designing the ideal bootstrap business, there's some filters for kind of finding an idea and finding the right type of business for bootstrappers, right? But if someone has a business that checks all those boxes, it's recurring revenue, it's a good market, there's, Maybe no enterprise sales. If folks are solo in your essay, the, excuse me, is there a problem? You show that maybe that's still not good enough.

A Yeah, it's not. I mean, there's so many things that have to be, have to go right for the, for any company to work. Right. And you're right. That talk doesn't cover them all and maybe it's too hard to, but yeah, like, like what about, it has to be possible to get to the customers. Like even if there is a problem to be solved, can you find them and can you find them cheaply enough in the noise that is the internet? And then when you find them, can you convince them to buy you instead of the other 20, you know, alternatives they could buy? What about your own psychology? Are you going to be able to last three years or are you going to crash out? So like, ah, kind of no one article, I think, maybe a book length thing could do it, I don't know, but no one article is going to capture the many things that have to go right. And so what do you do with that fact that many things have to go right? You know, how should you react to that? So I think, first of all, Whatever is the weak link or one or two weak links, you really have to decide whether that's okay. And you have such overwhelming strength in some other areas that it's, that you can survive anyway, or whether you really need to do something about it, or it's even a deal breaker, right? So let's say, let's say the overwhelming weakness is the market's very small. There's only a hundred people that have it. Okay. There are certain …

AI assessment note: “Yeah, it's not. I mean, there's so many things that have to go right”

Q Yeah, in terms of niching down, I get asked the question, when should I niche down? How do I know if I should niche down? Like, what are factors that you think about when a founder's trying to be like, should I be horizontal? Should I pick a niche? Should I pick three? Three verticals to start with and see, you know, how do you, what's your framework for that?

A You know, with the caveat that, that of course it has to depend on what's going on. I think you should always be focused on as narrow of a ideal customer profile as you can. But I think when people hear that they think, oh, but that means I'm selling only to them and the rest of the market is off limits and that's too limiting. And I don't believe that. Like, in other words, when people say niche, niche down, I think they either think I can't talk to anyone else or I can only sell this market. And, um, That's not how I observe it actually works. The way it actually works is you, you find this niche and you, and you find this ideal customer and you talk only to them. And because you've been so specific, you can be so compelling with things like your advertising and your homepage message and what the price is and which features you choose to build, because it's so clear who you're building for, because you've narrowed it down so much that you know how to thrill them. So the first thing that happens is at least those people, when they hit your website, they'll know. So you can at least sell them. That's a, that's a start. Cause if you, if you're not that specific, you never get that benefit. That's not good. But what else happens is most of us are not the ideal customer for any product and yet we buy them. So what's happening? What's happening is we see the product. There's things…

AI assessment note: “I think you should always be focused on as narrow of a ideal customer profile”

Q for 20 years, 20 plus years. But as you look at AI, if you were to start your next company, how would you think about it as an opportunity? Like, is it a What feature is it? Would you build a wrapper? Like, what, what would you, how would that impact your ideation and your, I guess, your thought process and where the opportunities are and where the pitfalls are?

A Yeah, it's a big topic. First of all, I would, I separate how I use AI operationally to do stuff like write code or write marketing from AI that's in the product that the customers use, whether directly or indirectly. So first of all, take all that operational stuff. Let's set that aside. Cause I don't think that's what you were asking, but, but I find that in conversations, sometimes people start confusing that. It just makes it more difficult to deal with an already complicated or complex question. Right? So let's just ignore that. It is true that corporate budgets now are heavily biased toward things that are AI, whatever that means. And it's a fuzzy thing. Like the companies themselves are not clear on what that means. So we have to be fuzzy. That tells me that whatever I do does need an AI component somehow, because that's where the budgets are. It doesn't tell me what to build, but the idea of like, well, I just won't have AI at all. It'll just be a typical thing. That could be a good idea by the way, but I would worry that. That I'll be fighting a budget battle and an attention battle. And so that doesn't feel like the easiest path. Okay, so, however, the wrong way to think of it is, I need an AI product. That may be how the budget is, so you may, you know, that may be down the line how you, you know, sometimes how you talk about it. But this is another thing I see peopl…

AI assessment note: “whatever I do does need an AI component somehow, because that's where the budgets are.”

Q wondering how you got there. Like, have you always been a critical thinker analyzing your own behavior and what's going on around you and trying to framework things, or did this kind of evolve For you, as you were starting companies, you're like, oh, I'm learning a thing, and I should just share that with the world on this, on this blog that you started in, what, 2007 or eight?

A Right. For me, writing is thinking, and, and I have this, this drive to teach. Uh, both of my parents were teachers, so I think it's literally in the, in the DNA. And, of course, we all know that if you want to learn something the best, you teach it. On the other hand, can you teach something you've never done? A lot of people do. This is just not me. Right? I think that's another reason people like it is at least this came from experience. And so what generally happens is I'll have a thought either cause I observe it in some other company, I observe it in our own company. We've learned something, something went wrong, something went right. And that'll give me an idea for a thing. Like maybe it's a framework or a concept or a story or something, but in writing it out, I often find, wait, maybe that's not right. Or maybe I don't even agree with myself and I haven't even published it yet, you know, and, or maybe I do like it and I'm just even more excited about it because, oh, look, I'm finding other examples. I don't know. Like, you know, I could get more excited. So, I mean, I have hundreds of things in draft that I'll never write because I, I don't actually believe it, or I, I haven't figured it out well enough. I haven't sorted it out well enough for myself to put it out there. So a lot of these things are, oh, it seemed to be right. We wrote it down, then we tried it at WP E…

AI assessment note: “both of my parents were teachers, so I think it's literally in the DNA”

Q at least half ass vibe code that in a few weeks, right? If I only spent a few months building it. So there it's this thing of like, well, the tech is, is, is not a moat. And your tech was not a moat at the time, right? Or at least the, the underlying hosting and such. So how did you win? How did you do so well with this?

A Yeah, I mean, and as we were just saying earlier, it can be hard to tell, and I think one of the reasons why I'm somewhat credible in how I write is I don't, I'm never quite sure, is this really the reason? Did we win in spite of this, or because of this, or was it just that, you know, and I also don't know, and I, in fact, have even written about how I don't know, right? So it's all like on offer as things that, that, that seem good, but the, the listener will have to decide for themselves what, what for fits in their own mind and feels good. But my best idea is the following. The idea of managed hosting, which means it's 10 times as expensive, but it's also like multiple fast, like the site loads, uh, multiple faster, like four times faster. We used to have a shirt. My blog is four times faster than your shirt was our first marketing swag and things like security and service were also like really good compared to the cheap, uh, shared hostings and they still, and it still is. So it was pay more, get more. Right. A shared host are just not designed for that. So there, there's no, to this day, they don't really have that. But a new company could be, I think, you know, one of the things that you can do is, is when other people think it's dumb or impossible, but it's actually is possible. That's usually, it's not a moat because anyone could do it, but they don't. So it's a, it's …

AI assessment note: “The idea of managed hosting, which means it's 10 times as expensive, but”