Question + Answer: Jason Cohen, Founder of Smart Bear and WPEngine – MicroConf 2015

[Music] [Music] thanks for coming sir thanks for having me so in the other stage it was all setup that we were gonna sit on these chairs nice and awkward so far oh yeah right so Jason has has started four companies he's sold two of them for cash that correct yeah all right and he's currently working on WP engine and when I say working on he just raised they just raised their forty first million dollar of it that wasn't grammatically correct but he just rate they've raised forty-one million dollars and they're at around two hundred and sixty-five employees so but what I like what I've always liked about Jason and his writing and his his sharing with our community is that he's a bootstrapper at heart and he has he just you always bootstraps the businesses to the point where it makes sense there's a certain point where it just makes sense to raise funding and that's that's what he's done so I have a few questions that I'm gonna kick us off with okay so Jason validated or I guess such a test it to you so you validated wpengine you famously talked about getting 30 people or 40 people to pay you 99 bucks a month right you made a bunch of phone calls bunch of emails and you got them to commit to paying you that I actually used a very similar process when I validate a drip I only got 10 people but it was it was a my go ahead is that still the approach you would recommend to someone in the audience today yeah definitely I think um people tend to first of all when you go out to validate an idea the thing is your idea is pretty okay like you're not an idiot you're not your idea is not just complete crap and so you go out and you talk to a few people they're probably people you know or they're closer near circles in some way because of course it's hard to talk to strangers and so you quote-unquote validate the idea after talking to maybe five people and of course that isn't really validation because you're not really trying to invalidate which is the the job so before I had the idea first wpengine I had an idea for another thing and I validated that except I invalidated it and it it's also instructive this the failure to validate was also it was actually more instructive because of how because I would explain what the product did and the first thing everyone would say is that's perfect I need that sounds like validation except the next set of stuff that they would say would be different and so one person would say that's perfect and you know what it should do is is cost five thousand dollars a month and you should sell it through agencies and they should do this that and the next person says that's perfect you know what you should do is take that and make it just for ad Tech and do that and someone else would say that's great you don't you should do is make that a freemium model and you can give millions of people to use it and all this kind of stuff right and so actually the the what happened next was divergent and now it's a signal it's actually not a good idea even though the first thing they said was that's a good idea and so it feels like a good conversation and so it's important to run down the sort of full view of what the person how the other person's thinking it's important to talk about price because price does determine the product I just talked to someone over lunch who had collected over a hundred and twenty emails of people who were interested in the product which is great except he didn't ask any of them if they would it's actually not clear that they will they're just interested and if they do buy it will they pay a dollar or a thousand dollars a month because that's pretty different and so I think these things like price aren't things to be overlooked and you should go in thinking I want to invalidate my idea and run those down to see whether they diverge because even a decent idea can diverge and make it a bad one and when you talk to them about price do you say would you pay $99 or with the first few did you kind of say what's this worth to you until you gauge something and then fixed on a number yeah I was through a price out there and usually I was and for both a wpengine actually and this other this other company I used 50 bucks a month I'm actually not sure why it just seemed like a thing to do place to start so I think you know if people aren't flinching then that's a good sign that that's a state something bigger and if they say oh I thought it would be free until XYZ then that tells you something else I think I think throwing out a number is useful there's there's some circles or some talk about instead of just getting someone to commit to purchasing that you should get a you know a check that you're not gonna cash or you should even get it you know get their credit card number charge of 50 bucks and say wanna you know if you don't want to want to build it all over fund it or whatever like actually get payment up front what's your take on that yeah definitely do that another square so you can take credit cards and I would absolutely cash those checks are you kidding me they just give you a check catch it you can always give it back later it's okay I mean so the ultimate version of this of course is crowdfunding right so you go and Kickstarter or something or something like that and and that's another form of validation there's actually an interesting effect if you look at what's happened with things like Kickstarter it turns out that it's not as much validation as you would think it would be you'd think that if someone gives you a total of 30 grand to do something or set of people but that's validation um but actually because that's that doesn't that is not a distribution system that you can repeat and so it turns out that those extremely early adopters main in fact not represent a market that you can repeat and so of course it's better than nothing get the money and go build it right so so don't not do it but it's actually not validation it's getting the engine turned over which is also useful okay so you validate a WP engine which was if I recall too early it's it's WordPress hosting but the early idea was that it was super fast super reliable right right I've also validated rip which at the time I was saying email marketing software built for startups what if someone has something that they're building that is too complicated or or if yeah it's too complicated to describe it in four words yeah so I don't believe in that I mean if Google can describe what they do by saying you know organize the world's information and they're making self-driving cars and Gmail both then you can do it too so I think what happens when you cannot be oil it down into a short phrase is either you're not sure what it is actually you haven't gotten to the root of what is it what's the important interesting thing about it but you know you haven't articulated that maybe because you don't know or maybe just because you haven't figured out what the words are it's the hardest thing to make the shortest the shortest phrase and and so I just I just simply don't believe that you can't do that and anyway you're gonna have to put headlines on your and buttons that lines and buttons on your on your homepage so you're gonna have to figure out some phrase of what it is you're gonna have to do that in AdWords you're gonna have to put it on your t-shirt you're going to do those things right so you're going to have to boil it down so let's do that now and and and I think that the trouble and actually a lot of the stuff that Joanna was saying before is is um it's actually applicable which is the job of the of the phrase is not to do everything to say what it is and how much it cost and what the market is and you know how you're gonna get there is not the job the job is is if you're the right target person then you should say well that actually sounds interesting tell me more right that's the job of that of that little statement or to align what you are going to do or not do so Google is actually great example well organizing the world's information but they make all their money on ads so how come the phrase doesn't say selling ads it's actually because the more information they get the better they can be at selling ads more accurate and the more ads so although ads is the business the mission is to organize information in other words to know everything they can about all of us at all times because that power that's what they monetize any mostly monetize that through ads but not necessarily always so that's why that mission statement it's not even a description of the business model or the market it's a description of what is the most important thing for them to always be pushing forward so that they can do other things so they have to organize maps because otherwise the self-driving car doesn't know anything and they have to organise websites or else they can't search anything up to etcetera they organize your behavior where else they can't give you good ads it actually does come from that one place okay so hypothetical situation you imagine that you have something that's working you have a product a business but it's not working as well as you would like how do you know when to quit and when to push forward because it's more obvious when it's not working at all but it's always hard when it's kind of working yeah I mean I think the graph that I want to say patty Oh Patrick put up with the point reminders is a perfect example it's a growing business but it's growing really slowly and it's painful so what do you do with that information right that's that's a toughy so I think um so first of all that there's you know Seth Godin wrote a whole book about this called the dip I mean if you read that whole book at the annual you'll go I still don't know what to do like it's absolutely useless and which is kind of typical actually you know so that doesn't help I mean cuz all tomate going to be a clear like formula to say right so that's the problem I think what patrick said actually about whether it's worth doing actually what Jacob was saying too about it is this what you want to do with your life are you happy to wake up every day is actually a pretty good metric to use it's may be hard to be introspective and to separate out your ambition and what you what you would like yourself to be from what's happening and whether you're happy doing it that's difficult but if you can be introspective and honest in that way then that is actually the path to decide hey the revenue is not growing fast enough and I love it so who cares versus revenues not growing fast enough and I hate it so I mean look being an entrepreneurs fundamentally it's almost always a bad financial choice like what Patrick should do financially is just be a consultant and make 30 km a week and do that once a month that's probably maximizes his money right but of course he won't do that because he wants to do other things but so financially everything's gonna be slower than you want nothing's gonna take off the way you want people won't react the way you wish they would the marketing campaigns won't be as effective as you wish and everything's gonna take longer and harder because it's life and that's how it works whether you're remodeling your kitchen or building software or making a company doesn't matter right that's life and so of course the it's how you're feeling in it that matters and to separate out the stress and pain and risk and the other things you know you're working another job or you have a family which is another job and all these things your sacrifice it's very hard to separate that fact from but is what I'm doing something important so I think that's important I think what Steve Jobs said is in the morning he'd wake up and say if this were my last day alive which actually we now know is something that was a question that was hovering over him for a long time would I want to do what I'm about to do which doesn't mean well I loved every moment of it but it does mean will I be fulfilled by it why am i proud of doing it am I glad that I'm gonna do it I mean certainly I know everyone in here is the same but I can say like I do not love every moment but the company of most things that you have to do you don't really want to you know as engineers you want to just make new features and that's probably not the right thing to do next for the business right it's probably distribution website stuff getting new customers tech support finding out the next thing to do maybe hiring the next consultant or oDesk person or employee or whatever like that's probably what you should be working on because I probably would help the business the most but what you want to do is open up the IDE and make a feature because it's fun and you understand it you don't to talk to anybody but it's it's it's comfortable but it's not probably the right thing to do so most things I think as entrepreneurs that we have to do or things we don't want to because we're a little uncomfortable and it's not the fun part but you ask like is this correct as this fulfilling if the answer is yes there you go so I think again trying to separate that from from you know it's just not working it's just difficult and I think in this community especially we have a little more luxury to do that because most folks haven't taken investor money and maybe not you know I have the flexibility to shut something down if it isn't working instead of having to see it through okay product market fit phrase bandied about a lot but I'm gonna say it here meaning this is where kind of the rubber meets the road and things start scaling up basically it means you've built something people want your turns going down a lot of people are converting it's easier to communicate your value prop and it's just working what till I guess the first question is kind of do you I'm sure you've seen this product market fit in some of your products you've grown what tells you that you've hit it and what is your process for hitting it quickly hmm I don't know that you can you can decide to hit it quickly I mean some of these questions you know how do you succeed these are things where if there was an answer then you know we wouldn't need conferences and venture capital would actually be good at their jobs so clearly there's not a good way to predict it even if it's your job to do it so what does it feel like that's a good question because at each of my four companies we've achieved it and it definitely feels different and again like I've only raised money this last time right all the rest of bootstrapped and so on and so and of course WP engine was bootstrapped until post product market fit as well so there's definitely a palpable change in the struggle that it is where as a consultant I think the turn the turning point is when you're you are just telling people no all the time instead of scrambling to find the next that the next thing to do and and getting to choose that may be of course raising your rates is at the same time in order to winnow down who you're dealing with or at least being able to be more choosy about who you work with I think for a consultant that's kind of what that looks like when you've achieved this sort of thing for product [Music] you know usually you can just see it in the metrics I mean the what it looks like is you start growing faster all of a sudden and you look around say why and there's not really a great reason like you didn't you you're not spending a lot more in ads or you didn't do some new social campaign or like you didn't really have a new release like it just changed and you don't really have an explanation and which is kind of kind of weird like I kind of what you know you want to understand the mechanics of the business but the other hand that's what it looks like when suddenly there's a sea change there's some critical mass going on whatever that means and so for us that happened in January at WP engine happened in January of 2012 and we know because besides you can see it in a literal hockey stick with like the low thing and then the thing like that which by the way is nothing to do with funding it just can happen right and it suddenly happened and you know again we are asking why and it's kind of unclear like we started going to these conferences for months before but there was no immediate change from going to the conference so why in January and you could say well people came back from holidays right but it never ended so I would why did that stick that should have been a lower holiday bump in January in the back to business as usual and I just never went down so why is that so we can invent all kinds of reasons but it just occurred and I actually think that happens in a smart bear it was similar in IT watchdogs it was similar as well the things just just worked better and and there was no good explanation and that's actually signal and what were you doing during that time you know let's say the six months before the year before you were obviously there were folks writing code there were folks doing marketing do you feel were you moving towards something or or was it kind of like we were just thrown a bunch stuff at the wall and eventually boom in January it kind of locked in yeah I definitely feel like my path has always been and all I company's has been a random walk that's trying to seek something so like it's smart bear the company was founded to because I wanted to lend net that was a mistake I wanted to do I felt like Oh Microsoft platform is moving along this is like 2001 or something I'm like oh I need to keep up with what's going on and so I'll do this weird thing that integrates with version control but I just sort of wanted and it wasn't that good of a product it didn't sell that well and then eventually I discovered that people were abusing it to do code review and then it was a code review fine I'll just add these features and I still didn't understand this is a market that can exist that doesn't exist yet okay so eventually I realized this and we actually rewrote everything in Java which was wise usually the full rewrites back but when it's done it's it's why it's and them and and it and it really took off once we figured out code review was actually the thing but there was none no sense of that at the beginning whatsoever I think even with wpengine of course now you know once you're at scale you have to be predictable and so on because you have to hire and do other things that take a lot of lead time and so you have to have some predictability so that you can do that but even so you know we've seen the rise of enterprise customers again it's nothing to with raising money smart bear was almost completely enterprise customers and that was me with zero sales people so this is nothing to do with raising money but it just happened and again is this a market change or did we did we get a new fit you could argue about it but the but you know we went from almost none of our revenue being those kind of fortune 100 brands to all of a sudden large percentages of our revenue and a growing percentage is that and so you know that's good and I'm happy I started happening like three years in so I think you still never know as you're going even with IT watchdogs we found these odd things like even two years in and so I do watchdogs we did server room climate monitoring we made these the physical devices so I was doing the embedded software but this was this was a hardware company that you could that you and once we went from a little dongle you plugged into a computer to a rack mounted thing sales went up by a lot like that's what that was a key thing as the rack now then there was another revelation which again like is something you can discover but isn't something you could predict but that's or a random walk I remember and this is really instructive because it's it's useful for every single person here because you know you think about pricing but but one of the biggest things about pricing is how does the customer buy and what can they buy what's easy for them to buy and what's hard for example and IT watchdogs we're sitting there with this IT guy and we have all our stuff because we have devices and we have all these sensors that come off of it that you can buy and you can mix and match and whatever and he goes I'll buy a base unit and two of these and what does that come to and we're like oh you know for 89 this is not recurring revenue right this is hardware and so yeah 49 is like perfect that's what I want and then you guys can come back in a month like why and he goes because if if I spend less than five hundred dollars on my credit card I don't have to ask permission ha so we rejiggered all our prices so that the normal units you'd want to buy always total between like four night before 50 and 490 and we sold a ton of them as long as didn't go over to like 600 and so like these little these little things but how do people buy what is where they're like so by the way customer development why do you talk about price this is one of the reasons because when do you have to ask permission we give you a separate example the Austin Independent School District which is government but still once you get into that kind of they buy a lot there's similar limit is $20 that's like never mind it's just impossible another reason why it's dumb to sell the schools as if patio hasn't said it enough times uh-huh because I've desperation for everything that can't go well when it's government so anyways so this question you know what do you have to do to earn something or to try something it's critical all right I'm gonna do one more question and then we'll go out to the audience so if you've thought of yours get them ready I want to ask you about moving upmarket let's say someone in the audience maybe has you know feels like they've hit a product market fit maybe at a smaller scale things are working and but their price points are low maybe 10 10 20 and 50 or they're three price points or twenty and fifty and a hundred and they're thinking about moving up and you know trying to get a minimum price point I'm saying 99 and kind of moving up from there when does that make sense to do because they're like the sales process is obviously very different and I guess so I guess when does that make sense to do and what things would you typically change moving up to that I think so I think some of this depends on the kind of company that you're wanting to build if you want to keep it as one or two founders and we're gonna do this forever that's great but it's gonna be very hard to service IBM they just have all these expectations of these things that they want and so you you could decide to charge all this money it doesn't matter because you won't be able to deliver on the things that they want which is fine it's just not a fit for the style company and so going up market a bit like 99 and say whatever is smart because it's better to have you know a couple hundred customers giving you more money instead of again as just a few people and therefore you have no time and you know no resource to do it and cetera and do something that fits so I think that I think it's always it's always good to push prices I have million stories to know I know a lot of people do hear about about that I remember I was I was talking to one company that was at Capital factory they were selling their product for $300 a year and I said great who's your customers and there was people like like that like the USGA and stuff like that was like well what have you've made it $300 just changed a year to a month just say per month just to see what happens what happened was nothing the sales were exactly the same that's a 12x pricing crease so if you just look at who's coming in and doing it you can see that as another example there was a guy selling um a product that helped you optimize Facebook Ads just a pretty run-of-the-mill thing that you'd expect right and he was charging something ridiculous like 15 dollars a month that's okay I said we'll just just just humor me and like make it 30 just an a/b test to do it for a week what's the worst case so he did it and again there was no change in signups so I said great now what are you gonna do he's like oh my god well now that is making so much more money I'm gonna buy more ads I might hire this person I'm like no what you gonna do next is double it again and feel that stops happening right of course this is the lesson right so I think kuching it up makes sense I think in huge why not people are scared what if my customers say this or that and the answer is do the right thing so you can keep your old price that's it now we're done what else you got I also feel like you can you can drastically change your prices on your customer base when you're small so for example there was someone who but we both agreed they should three or four X they're there their price this is again a capital factory company and so so they're what they were worried about is they're like I really want to go back to all my customers and make them upgrade because this just isn't profitable and this is you know it's just kind of I think it's the right thing to do actually and I think a lot of them would agree and so we crafted this email and would it more or less said was this hey I'm you know I'm this single founder or whatever it was you know one there's two of us we're trying to make it go with this if you think about it you know we only have a few hundred customers we're charging at 20 bucks a month whatever it was and like we can't even feed our families and we realize it's a mistake and you know we think that you know we hope that you like our product and you like what our doing what we're doing and that you want to support us and continuing to do it and so we're gonna raise our prices from 2010 I think it was not you know 89 or 79 or something like that as the lowest and they're like we realize you did not sign up for this in that and we get that we understand that and you're right and if you want to leave will you know will understand but which we're not you know pocketing all this money and moving that and this is literally what we're putting in there like a person just writing to another person on a newsletter right and in you know so if you're in it for the journey with us wheats we want to do this too we want to hire another engineer I just keep making the product great and be able to answer the phone when you call and this is gonna let us do it I hope that your you know with us on the journey sign their names put their photos on there right this is us this isn't some faceless ll you know Inc or whatever and something like two out of their hundreds of customers quit too so I'm not saying it's always gonna be like that etc but I really feel like you can play on the fact that people wants to hurt ups to succeed and they they understand this is the American Dream and that they can be a part of it so when you invite again honesty wins most of the time with most things of life including business including you know this is this is the first talk I gave here actually and this is a great example of being honest and inviting the customers actually along in the journey because they are because by the way your product sucks and your support sucks because they're just two people and so they're already on the dirty so let's just acknowledge that and say thank you and but let's do it together and bring them in emotionally like that and actually works really well okay we're gonna go out to the audience mic is in the center here with a microphone and he'll be walking around just raise your hand and he'll come to you ah hi my name is Joe and by a quick show of hands like really first to know how many Canadians are in the room very cool way to go love to talk to all of us I've had a couple people's today made comments about how it'd be a great idea to seek out partnerships build relationships that sort of thing that's awfully great advice I haven't heard anybody say explicitly that they should think about building a marketing channel finding resellers maybe even selling their product through distribution I I happen to come from fifty years old I'm old enough to know that software obviously got sold that way in the past is there an intrinsic reason why that model wouldn't work with sass related products yeah so I think this is a good question so that model and we in an IT watchdogs we did used to have resellers although most of the stuff we did was selling direct we had resellers especially in other countries such as the UK where we could ship in bulk over there and then and then they could resell it and we tried to get into something's like gray bar in those kinds of typical VARs I think or VARs or straight up resellers um I think with software it's harder for that scheme to succeed because you don't have the troubles that that that sort of pyramid at we used to call upon life because it's like each company it's the next and so just for everybody because I think a lot of people probably don't know what gray bar is and so you imagine and we'll just use IT watchdogs as an example so we so we have some some some product that we've built and it's in Mexico somehow that's got to get sold to a hospital somewhere and how does that happen and so traditionally it's very hard for a company to contact a customer directly you know it only big companies could afford advertising in the old days only big companies could be in newspapers magazines TV oh my god right there's only three channels and it's very expensive to be there and so on and so this is not plausible for a start-up or new company to somehow get a personal direct relationship with any customer consumer or larger enterprise and so you need it to go through someone else who did and so this is what the reseller is so these companies gray bar is an example as many where they don't make anything their job is they will buy some product from you and put it in their inventory and they're the ones that have all of the agreements pre-arranged with all kinds of different companies and so then they'll sell it of course they want to cut the typical cut for one of these kind of things is 30% but they're not the only ones because you have to get it to Graybar you have to buy in bulk if they don't sell it they want to sell it back to you depending on how much leverage you have either your footing the bill or they might for a period of time it's very complicated but has to do with physical goods moving from place to place and being put in in in warehouses it has to do with those Goods then being delivered and set up which is where you get value-added resellers or VARs that also do the setup for a fee and then there's all kinds of stuff in-between shipping and other kinds of vendors and parts to get all this stuff together and each time you go through one of these steps it's 30 percent and so as an example that IT watchdogs we built this little US in the late 90s we built this little aboard this big that cost us $15 in parts and would web enable a power strip which at that time was really special and cool that power strip sold for $3,500 and the reason is that that power strip then caught cost the power strip manufacturer who put it in there you know X you know a couple hundred dollars and then that would go to the distribution center so now it's a thousand dollars and that would go to graybar.com out it's looking right and and so the prices get outrageous and the companies who invent it get almost nothing that's the old model and what's happened with software but more specifically Matta the internet right because even software in the 80s also was you know you have to get into a comp you know a store right like hump USA for consumer or this or the software had to be you know sold by enterprises to buy people like IBM which is similar kind of model but internet changed everything with the internet I don't need gray bar because I don't need inventory for my software and I don't need gray bar to get between me and the customer they can just buy from me now the enterprise is still have their complex buying you know processes which is you know you ask like going up market when you really go up market to enterprise it's just it's a whole different buying cycle which people don't write about enough it's actually not that it's complicated but it's not that hard it's just just people usually don't have experience with it but it's not that bad and you know it smart bear we had hundreds of customers including people like Lockheed Martin and Dobey Microsoft Qualcomm like every Cisco everybody they had all kinds of complicated buying things and again we had zero sales people and we just did it all ourselves right so you can do it the fact that me someone who's never never did enterprise sales can just go sell something to Cisco or make a million-dollar sell to Adobe and I don't need anybody else that means they're not gonna last so just like book sellers you know you know the big book publishing houses are needed less and less the internet disintermediate Saul these middlemen who take a lot of money and are just not necessary when it's bits instead of atoms that you're moving so that you don't care about that and returns or any of that and you don't care about the relationships because you can go make your own so you never hear about people talking about it now having said that usually when people are ignoring something it means there's an opportunity so I absolutely believe that Graybar wants to continue selling things and that they're being ignored and that someone who could make an interesting relationship with them maybe could have a channel that other people are overlooking so I do think at the same time like a smart bear I had a book a physical book and I'd send it out we sent out over a hundred thousand copies of the stupid book while everyone was saying oh no it's ebooks and PDFs and like you shouldn't do that like no that's exactly why it's gonna work cuz it's a book and its physical and when you get a package in your office like this never happens why would this happen I'm gonna open it then it's a book you don't throw away books that's sacrilegious so it's a basically a brochure that never gets thrown away awesome let's make it bright red so you notice it and so I really think that things like going old-school in in whether it's advertisement distribution etc whether it's channels like yeah it may be wrong for most people but if if you can make it work maybe you have a unique edge hey Jason with a couple significant exits under your belt what drives you to keep showing up every day that's a good question by the way there was a whole Freakonomics episode about that's a good question about why people ask it and it turns out that or say it and it turns out that Americans say it like fifty to one versus other people so there's some kind of like weird American thing they probably buys you time to think and complements the asker which is always nice right no but it is a good question and it's one that I talk about every single time we do so every three weeks we have a new employee orientation we take new employees through all the stuff and orient them to the company and this is something I dress on the first day to everyone because I hope that everyone's at my company for the same reason I am because you're right I don't have to be there I don't have to work again and yet here I am so you know the sort of selfish and absolutely true reason is I think look everyone in this room isn't here again for rational reasons no way this is irrational this is difficult it's stressful it's hard on your family it's probably not gonna work like this is not a good idea right but we we all I mean you know we all have to do it we have to were compelled it's we it's on chromosome 13 or something there's this sequence that makes us do this and we must and it's why people tend to be serial entrepreneurs and why I'm doing the fourth one same reason I'm doing the first one because whatever that was is still there it didn't go away right and that's why people don't go to the beach and sip mai tais or whatever well let this sound pretty good right now so so it so whatever that fundamental whether it's ego or I know better than everyone else or I don't want a boss or whatever the kind of egotistical self centric thing which it is to start a company whatever that is is still there and so still want to do it right so that's the selfish reason but as wpengine developed and again this wasn't the original idea so another example of a the fortunate random walk theory I guess is is um at this point I'm a fewer than half the people at wpengine have college education and that's a pretty amazing thing for you know almost 300 people and the fact that we can we can provide an opportunity for someone that has the right kind of culture the right kind of we call it a attitude and if this person has the right attitude and aptitude to learn will teach you the stuff we can teach you dns but you can't teach things like empathy or curiosity or account self accountability and caring about the people around you so so for us to hire people who have those kind of attributes which we do very intentionally in the interview process and even after the fact and and every day really gives people who should have an opportunity opportunity that they would not otherwise have and you know even from very early when we didn't have a lot of money of course I could put in money of course I did and so even early on we had a health plan with same-sex marriage benefits which is more expensive for every single person all this stuff because it's important and so for us to be able to do that client you know all these kind of things for all these kind of people that means every job is important and we've had people who you know they just got a mortgage for their on a house of their family and they they would they say I never thought I could have a house ever or I never thought I'd leave this state and now I'm on a you're sending me on a trip to London to go pitch people and like I I didn't even think I would ever be skilled or leave the state or do anything and you know when someone's in your office and they're breaking down because you're giving them that opportunity that's important and so why do I come to work every day because of that now the same thing they're very similar thing actually is true of our customers you know I don't want to make a pitch for Delhi Tianjin but you know almost no one is technical and can't really set up WordPress or anything you know well with security and uptime and so on and so for us today but if you're not on the internet you're invisible right and so and so to to take a person who's a victim to technology or consultants they don't know how to hire consultant it's like it's like trying to interview a pancreatic surgeon you know what do you ask like nothing right you can't so but almost everyone is not able to make these decisions and so for us to help then not be victims is important so and that's not even that's not even a pitch for wpengine I know the page you guys are here they do exactly the same kind of thing they do for it for all of their customers as well so I think I think that's that's why I come to work there's a third component where we give back to our communities it's that's another long story but we put some of our stock in in a nonprofit organization we do all this work around Austin and the other places that we have offices in London in San Francisco in San Francisco in San Antonio we um anyway we do it we get back to WordPress itself and so forth I think these are the kinds of things that make it worthwhile and fulfilling and I think that everyone in here probably has these kind of higher reasons why we're doing it we started probably for completely selfish and self-centred reason okay but now what what is it that you can do for your customers because it's not just saving them time that's just not enough and it isn't all you're doing for them you're enabling them to do something or you're create helping them create a life they're also a say an entrepreneur trying to make it and if because of because the I don't know their email campaigns are better because they listen to this advice about about headlines and calls to action and they have this tool and so they can really make it happen that's what's important and I don't want to I don't want to speak for these guys but I'll bet you hearing the stories of success at this conference is way more fulfilling and fun than another sign up on on a product because it just is and I think everybody here has those things for their customers and so zeroing in on what are the what is that thing that's amazing that we're doing for people I think that is interesting to take a hold of and when and you know not everyone here wants to hire anyone or anything in which is which is great right but if you do then that's the reason that join the company that those things because you're not gonna pay them that well they're gonna work to art it's the same kind of thing really reflected in to the employees this isn't going to be kind of a mess but if we're doing this for people and we are doing it to you know this tight team is just doing it for individual people that's amazing and almost no one on earth has the opportunity to do that in the world so as entrepreneurs we're mean I don't want to make it sound too grandiose but I mean we almost have a obligation to create things that are important because we can how many people have the opportunity to be in here how many people are look how lucky I am a cisgendered white male born in Austin Jesus Christ now you're kidding that's every single opportunity and and-and-and-and-and deck stacked in my favor I could possibly have they almost have an obligation to do something about that and there's nothing wrong with just making a lot of money right the purpose of capitalism is to accumulate capital no problem but then what are you going to do with it that's maybe the more interesting question what happens with that and so I think well all right anyway I think I think everyone here has that and it's ziering on that and articulating that at least for yourselves that's um that makes this all really important we have time for one more audience question hi it's a quick follow-up on the question you just answered so did you do you think that you have less stress now that you're on your third or fourth company or are you managing in the same way the same risks and everything or do you you know you feel a little bit more laid back now that you have like a you know a good landing comfortable you know type of financial prospect yeah that's I'm not gonna say it's a good question that was a ridiculous question wait no that's not good yeah that's a great question no I don't have less stress I do feel more comfortable with certain aspects of the business so I think the for the first few times you deal with employees and things that come up with employees is especially difficult and never gets easy but you understand how to do it and that's helpful I think also I've worked very hard personally to understand how to manage stress so I have some well many days I have less stress than I would otherwise if I didn't do those things and that could be a whole talk actually maybe it ought to be because I'm sure we all could use advice when it comes to that kind of thing a lot of people use things like meditation because it helps the kind of center and quiet the mind and see things as they are and get a little less emotional in a little distance away doing things like distancing yourself from something so if someone says something mean on the internet that's hurtful and you carry that stress the rest of the day right all bloggers I think feel that I certainly do to be able to distance yourself and say things such as you know they're very angry at me which is odd if you think about it because I just wrote something from the heart and then they're pissed so it's probably they're pissed they're a pissed person they're an angry person it's because it's not like I said anything even they disagree that's fine but then why be angry like that's kind of that's an interesting reaction it's probably not about me it's probably about them and then you realize geez I feel sorry for that person I that's terrible to be angry like that that's that's uh that's like that's not a nice that's not a happy way to live that person may not be happy and that's something to pity and then so in other words by distancing yourself and saying what it is and so on that can help reduce the stress because you're changing the frame for self what it is so things like meditation oddly I know that sounds weird sounds kind of new aging and stuff but it's true that things like meditation help create a mindset and help you get into that mindset that's that way so I think that's useful I think there's other things if we're sticking on the on the Buddhist track there's things like you know all things all things come and and they are coming to existence and then they they end all things end that's something that humans don't like to deal with you know we've talked about a few times just now about selling the company and what that's like in your identities in it and that's true and unhealthy right because it will end all these things will end all these companies will end all of us will leave those companies what will that be like and you know we don't like talking about our own deaths and we don't like talking about the companies ending and so on and we don't need to dwell on it either and get obsessed on the other hand it's the truth and ignoring that is not healthy either and so asking like so if all things end and what does it mean about what I should do every day and you get right to it now patio and other people have been saying you need to make sure that the journey is the valuable thing and not the end that the end is simply another thing that happens it's temporary and that the whole journey is actually what's important and maybe what you do for other people and so on and so I think these kinds of attitudes I'm going down this path because I hope it's useful I hope it's useful to people here but I that has helped me reduce stress more than I don't know just experience or something like that because I feel experiences is also a it also is a is it's an anchor because you think well I did this before therefore the world must still be the same way and I know how to do it of course that's not true right experiences what you get right after you need it and that never stops being the case so it's people ask me often like what smartbear how did you get that started and the answer is because AdWords was new and I was one of the first ones to use it in my you know the universe and so I was the only ad on the page and it was five cents so who cares what I did who cares what the logic was who cares what happened that's because none of that world doesn't exist so whatever that I learned about that is gone is just like engineers you know you know assembly well who cares we're gonna use that again that's actually very similar business so hopefully some of the things are similar and carry over and are wise but on the course thing might be different so you have to keep humble and keep that a beginner's mind which is another Buddhist saying so I guess I'm saying you should become a Buddhist but no it's still very stressful especially with a lot of folks that you have a you feel a personal obligation towards I think you know people say that I just had this conversation last night someone said something about being your own boss it's like oh no no one in this room is their own boss you have your families you have your all your customers tell you what to do your product is always seeking them not vice-versa in the market right the markets your boss if you have employees of it they're your boss obviously because you care about them more than yourself which is why you pay them more and so they pay them first anyway and so no you have bosses everywhere and so that the whole idea of your own bosses actually does not manifest and that's stressful to have all that and that doesn't that stress at least for me that doesn't go away that obligation is weighty and it doesn't go away for me all right let's say we're wrapping up our Q&A let's give Jason a round of applause for that now we're we're gonna move into SmartBear live we have three contestants I think we might be able to get through all of them working into about five minutes each and they're gonna come up here jason has no prior knowledge of their names their companies any of that and so he's gonna go through some Q&A with them and they typically they have a specific issue that they submitted to us that they want some help with and that's what he's gonna talk to him about so our first victim I mean volunteer is Anders Peterson please come to the stage so I'm building a new app and I have invented a new way of managing a team and called time block and I wanted to hear your comments on this idea um what's a specific question one sentence we have five minutes so we have to be specific yeah sorry but my brain just froze up and I honestly can't remember the specific question I send in so so I'm so sorry about that I totally up now Jesus Christ no yeah well honestly I just wanted to hear your comments on my idea and and see if you can have a welcher first of all am I the target market sorry am I the target market for the yes you are and my track yes I am my target market is midsize small to mid-size developers it's a new methodology and I'm just when I submitted the question I was still in doubt if I should run with it and I'm not that much in doubt anymore but but I'm still wondering what's the single most important thing you need to work on right now and if you don't know then what is then it's probably what is the thing that's probably going to kill the business most likely running out of cash building it so that means that we're getting to revenue quickly yeah okay so what's what's hindering you from getting to revenue quickly probably me but I'm thinking also getting an app that people will pay for how many people know about it at all right now 25 companies so that's probably not enough know I have seven companies using the method but not using the app because it's not ready yet and so I should get more companies how much are they paying $49 per user per month so that sounds like a lot how many users on the average company ten to twenty five so that sounds pretty good so how many these come all 25 were doing that would you be sad I mean just set for now sorry if all 25 companies were paying the $45 times the number of people there would that be sufficient revenue yeah so that's the next thing to do then yeah so what's stopping you from doing from getting them up and running the app I haven't built it yet I'm still building it well they how are the seven people using it sorry how are the seven people using it well I've pitched the method and they started using it in using Excel sheets and and just doing it because it's a method so you you don't need the app to using the method so how about doing that with the other twenty five or try to do that with the other 25 no yeah but I've pitched it to 25 companies all like that as seven started using it a third one to use it when the app is ready and the last third has no use for it but like the idea and want to help me move on how much time do you have left to build the app well to run out of money three - I wonder if you could get those the balance of those companies so that I could get the bet so the other I guess 18 companies that are not paying yet I wonder if you could get them to pay because that might extend your runway and give you the time you need to really finish it and get it to their hands I don't think so because the it's larger companies enterprises so they won't be to pay until the ad is ready and they can so that means you need to get it even faster because otherwise we'll have the app out you'll get it in their hands they'll give you the purchase order months later then they'll pay that months later yeah I mean while you're out of money yeah so you got to start now charging so well what'd you one of the things you can do because big companies pay with purchase orders right so one of the things you can do is you got to get that system going they've got to get you in their vendor system they've got to get you approved through whatever then that then their accounts payable Department wants to argue with you about price so it's generally good to quote high so that you can give them a 20% discount and get back to where you want it anyway that's a typical trick and you want to start that now because what what they can do is they can get the PIO issued in their system but not pay it until delivery of the product which might not be for a few months but you can get them in their system all the way up to that point so that when you do deliver it they can click the Box in their system and then that triggers the money and so you won't have that extra six months that you will otherwise have so you could start that now and then the other thing I wonder I'll just just wondering aloud is if 25 out of 25 companies you can find seven that will pay you anyway that's nice maybe we can find another 25 50 75 companies out of which that kind of you know a quarter of them will pay and maybe that's another way to get ahead yeah I think I can do that I'm just holding back so because I haven't built the app so I'm kind of nervous that they start using the method and when the app is ready they're like no no we're fine with the excel sheets and we're paying $50 a month as long as they're paying $50 a month who cares maybe they can use Excel all right okay thanks [Applause] okay our next next contestant is mr. James Kennedy of rubber stamp that I always saw his site earlier when Patrick was doing a teardown and I'll let James explain what his company is but should I should I call out what his because he put a what are you looking for advice on thing in this doc should I read that out now maybe I'll just show it to him so he remembers yeah come up on stage sir so this is your this is what you're asking adjacent Ohio so we have an online purchase order system you know people we target companies between 50-100 employees we have 30 customers making up five four or five customers a month we're doing that we only have one lead source that's working which is paid comparison websites like get up and search in places like that we're getting uh pretty much all our customers from that and we're looking for our next channel so the next target is try and get to twenty that's our kind of you know acquire twenty quest customers a month so um what's on the table is you know doing AdWords is what everyone does and then you know we're looking at sponsoring specific live events and but we found out or we have to target like CFOs or we feel like most of our customers to date or CFO's but you're expensive to get in front of and so yeah and we've also looked at was the question how do we get in front of them twenty or fifty at a time per month well that would be great yeah yeah so um so I think there's some interesting things so the CFO even at a I mean if they even have a CFO at 50 to 100 they might or they might really have a VP of Finance acting as that and so on right I think even at you can say 80 to 100 people there's other people in the finance department it's not just the CFO sitting there with the spreadsheets and so they may have a controller by then they probably have some like intern ORS post intern type folks who you know want to be a corporate account in some day so maybe their junior accountant maybe they're doing things like entering in receipts and stuff you know the kind of menial work that is part of sort of the accounting world's way in which you work yourself up right over time and so what I think is I love it when there's people who are underserved and ignored so I feel like the person who's entering in those receipts is an ignore to person and it is a little harder to find them because they don't get to go to the conference which is sort of the point they're ignored right they're sidelined and on the other hand if you can if you can find them they love you to death because you're paying attention and trying to do something for them and if they can bring something like a tool to help with purchase orders into the company that's it that's actually a notch on their belt look I found this thing I think it could save us some time so if you think about like who's so if you think about not trying to go straight to the CFO it was probably busy and so on right and say like I wonder who's the controller the VP of Finance a junior accountant I mean even that's probably pretty good the junior accountants probably having to do some kinds of approvals and such now so they're actually the one with the pain too and so for them to say hey look I can actually replace a half from all of my job with this tool so I can do something you know that requires a bigger title and a bigger salary that's actually a pretty good argument right and so I love that I know there's companies who target things like EA's for executives because guess what you can find EA's which is another one the EA of the CFO you may be able to target EA is almost for sure know everybody else is like sort of in the sphere right so that so the CFO's assistant does know all the other players and can pass a message now why would they well okay this is it's always a challenge to get in front of people and get their attention quickly but people like that don't get inundated with lots of stuff because they're ignored so I think EA is I think not in your case but but in a broader case office managers the people that run the front desk again they're they're not valued and ignored by a lot of people but they actually have a lot of value and they often can control certain kinds of budgets and things that goes on in the office I I feel like there's a company in Austin actually who's exploiting that very well and it's just they're exploding because they they go to office assistants this is not quite the same thing but it's simple it's parallel and what happens is they all know each other like eh talk to each other they all like there's um social group something's all kinds of things again they're usually invisible because they don't it's not conferences it's it's chardonnay right it's a totally different thing but it's but it happens and so I mean they found that um they were able to get just about a one or two dozen ei is on the platform this particular platform and got hundreds afterwards just through word of mouth that they didn't even do just because once you're there it's Brett so I wonder of course I don't know but I wonder who else in the finance department could actually be a catalyst for this and as it is is usually ignored oh there I mean that sort of broadens idea we can go after but in a way that makes it sound harder to me because you know at least if it's e phones let's say you know okay well we know generally what they should be caring about you know what their job is specifically now it's yeas which I can see okay we can just ring them up which is something we should try but then and another thing which is which is tangent like a story to say right so we have software which is pretty boring let's face it so we're trying to think well what's the hook that can really you know it's not boring at all because if I'm the controller my job is to control and that's what purchase orders do is they control the flow of people wanting to order and under what terms and with which vendors and when is it approved and getting all those things ticked and tied and early on it's just for general control and auditability like that's what we're that's why we actually don't have purchase orders yet but we probably ought to and then of course later on when your biggest our beans Oxley and other reasons why you must do that right and so know like if something gets paid or not approved or it's on them and if they're holding up processes inside the company that's hurting the company from doing business the marketing department can't buy you know one of your guys is software right because the because somebody doesn't know how to reprove it or the but whereas in the budget you forgot that line on the spreadsheet because it wasn't in a tool whatever like they're hampering the business if they can't do it and mistakes that they make materially sometimes material you hurt the business and to be able to rep for them to say I can wrap this up in a tool where I know that's never had like this certain workflow is happening is their job it's very valuable so I wouldn't poopoo in say a software's boring it's like no no well okay maybe software itself is not interesting but the solution that you're you're providing is well we know what we have works in a you know people go to get up there looking for the software to compare us what everyone else and then they pick us yeah and then or if you have you know any on the keywords they're looking for that now we've certain we seem to be kind of plateauing maybe we can optimize but we you know we're getting the number we're getting to those channels and what I'm thinking as well now we have to sort of go broader like you're saying and we're so we need something to talk about talking about sulfur if they don't have that problem is a thing and we're thinking well you know we're it's like we're talking about like thinking of like for the CFO we might say you know you're losing control you don't have control of your company spending and we're starting to turn that into a story it's AI same story it's just the CFO is not the only person responsible for solving that problem they may be ultimately actually the CEO is ultimately responsible by the way and so if there's control issues in sarbanes-oxley it's not just the CFO that goes to jail it's also the CEO right so notice there's there's many people whose responsibility it is but it goes down as well and so no I agree you need to find other channels and it's not just broadening who that's actually not how I would think about it I would think of it as being very specific but different so instead of being specifically CFO's what if it specifically controllers where what do they do where are they and you know how can you tell it's the same story in terms of control and and at saving time and so forth but how can you attack a different persona maybe in different chant and maybe in a different way as well but five per month is very small there's obviously millions of companies that need to use purchase orders right so I mean you haven't even started scratching the surface of where you know what that could mean so and one final thing and then we're out of time I would say just throwing it out there is comparison sites cannot be the only way people discover and use these tools there are ways and and some people here probably experts on this more than I but there are ways of finding out how are those other people getting customers are they running AdWords where where's their traffic coming from and there's sort of some interesting ways to try to figure that out and it and it sounds like you don't know where those other companies are getting traffic cuz otherwise you would say well I'll try that and so that might be another avenue of saying well how else is this happening because clearly thousands or maybe even hundreds of thousands of companies just in America are going to start using purchase orders every month and they're doing it some there's into finding out some way and doing it somehow like for example what if it's even like an Excel template that they're using what if you provided a good one but as a foot in the door to do something else but I don't know but the point is what what are they doing where are they going because it's maybe it's not AdWords okay well it's happening some house or answering that might help then say how do I get into whatever they're already doing to seek it thanks thanks all right we are gonna do one more and another five minutes and then we're gonna have our break we have coffee and snacks and such our last SmartBear contestant is Jack Jones with dev Patrol we're yeah jack oh there you are hey let's welcome Jack to the stage Jason good meet you so a little bit of history before we get into the question well what's the question yeah the question is when I know the history the history is every time I hear collaborate I think oh my stomach kind of feels weird what's that smell I smell it's I got like a Pavlovian reaction to you now it's really bad alright we can skip collabing it I know it breaks water mains and all that I'm actually compelled to start a business on topical abhinaya right now so it's the it's the stupidity of entrepreneurship coming out and it's a two-sided marketplace and so I know it's idiotic I don't want to go too much into that the so what's the question the question is in building a two-sided marketplace which is going to be hitting the technical recruiting arena Patrick I know it's an underserved market I wasn't so the question is in building that with with trying to get an audience is it is it everything in me says to start monetizing immediately because that's what I've done with my previous two businesses with a two sided market should I be working on building up the the audience first building up the market on both sides before I try to monetize which feels very consumers and so assistant is this for finding and placing people this is for or it's kind of an OkCupid so matching people based on interests with the companies it but for the purposes of hiring or hiring is there's a lot of places you can post for free or cheap and everybody knows that they're low quality so I feel like in that particular space the idea of it's free or cheap just implies low quality maybe it's not but it implies it and on the other hand as Patrick was alluding to but if it isn't slow quoi if it is low quality we don't need another one of those we already have monster and indeed thank you and on the other hand if it is high quality it's worth a lot of money and you know we're gonna use we're going to use Patrick's thing at wpengine and he quoted us a big a number and we went well we know he's gonna send us good people right this is kind of his point I think but but so he Patrick solved one side of the initial marketplace scaling won't be Patrick but he sells in initial side which is the demand side because Patrick along with his co-founders but especially him already has the ears of many really good software developers and so he's got that part literally solved he's gonna post a couple of times I'm sure and something like something between one and ten thousand people are gonna go through the game programming thing and and then good people will come out the other end and well that's scale forever that's that's their job to find out if it scales and so on but it certainly is going to start because they have that side of the marketplace so then then because Patrick and his co-founders as well had some industry contacts on the other side that sells the other side so they already have both sides solved small and then any question is you know how big and how scalable can that model be which is a very good question so starting from scratch on the marketplace I would say definitely charge absolutely because that demonstrates and there's this precedent set up of what it means if it's free I think I think it's important for any marketplace at all this and this is one to work when it's little so the reason for example at sea is a nice marketplace is when they started even if there was just like a couple dozen artists the idea that you could go here and oh my god these are people and they are not even allowed to use paper they have to make their own paper or something this is ridiculous it was really cool and interesting and you could buy something and support an artist no matter how many there are so that means that small-scale that's still a compelling thing to do and as it grows it can become stronger sure the marketplaces generally do become stronger and more defensible as they grow know everything small is important so if you can place one person at one company however big you need to make both sides to do that that's really important and I guarantee you that company wants a second one like that's the nature of it I'm good so you can get going so I think just like just like where Patrick's doing I think um I think you can start small and in fact it might be easiest when it's small I mean to me the difficulty of the hiring business is scaling it yes of course you can just cherry-pick some companies and cherry-pick some people unlike yes because you're basically shaking your network putting up through a very sophisticated sieve and then of course some good people will come out and of course it's valuable if you place them and that's not like you should do that because it gets it going but actually isn't new information yeah that's it anything it's can you do that times a thousand you don't want to do with pounds a thousand yeah that's fine I know Patrick does that's why I keep saying that just cuz I have that in my mind but but but scaling it is is is the hard thing so I would say absolutely charge and charge a good amount let that you know helped to fund the thing I hope there's a good insight because they at least have an insight I think that's it it doesn't have to be unique insight but it does have to be insightful so that you really are finding people I think I think the idea of matching is is a really good one I really feel like you know a great employee for wpengine is a bad one for someone else and vice versa we have a lot way we've we've let people go who are insanely good engineers but they would be culture fit at Facebook where everyone's an and that's fun and that's good that is not a bad thing at all it's like no you just need to find your people at least we're all reasonable and you're right that's why we love it yeah I love that I think it's I think people love it I think it's important okay this is a tangent by it's important I think one of the things you you do when you have employees even one or even a co-founder is when people are really unhappy and it's a bad fit and they're not being successful and they're not going to because you've worked on it they usually still won't leave because they won't have the initiative because it's a big risk and it's scary and this and that to leave everyone in this room has taken plunges so we know it's really really hard and most people won't do it right and so as as them as the manager it's your job to discover this to communicate that and to have them leave so that they can go be successful so they can find a place where they can be happy and fulfilled and you were literally preventing them from being happy and fulfilled by not letting them go and if you can do it before you even hire them that's obviously way better right so I really feel like that's an important lesson in general and it certainly it letting someone go is one of the hardest things anyone can ever do and it get for me again it doesn't become easier it becomes more I understand the mechanics but it's still emotionally just as hard but that over and over again I see that that people go on and they're successful and so the idea of matching I think is an important one I think people don't do it themselves and so not only is it a service to companies trying to hire which obviously is but the truth is that it's it's even more of a service of the person to be placed somewhere where where they will have a better chance of being happy that's I mean that is literally helping people to be more happy which sounds again vast but this is what I mean there's always something this is why I'm compelled even though other things going on good for you I wish you luck with that thank you very much Cheers so thank you very much Jason let's give a round of applause for Jason [Music] you

Channel: MicroConf

Views: 509

Rating: 5 out of 5

Keywords: Entrepreneurship, Boostrapped SaaS, Startups, Startup Community, Indie Startups, Business Conference, MicroConf, SaaS, Micropreneur, independent funding, Entrepreneurs, SaasS Videos, Startup Videos, Startup Education, Software, Infoproducts, Founder, Co-founder, Technicial Founder, Non-technical founder

Id: IuRk77JkQAE

Length: 67min 43sec (4063 seconds)

Published: Thu Mar 26 2020