Alright, what's up everybody, this is Courtland from AndyHackers.com, and today I'm talking
to Mike Parham, the creator of a very popular tool called Sidekick.
Sidekick essentially allows programmers to write code that runs in the background, so
that it doesn't get in the way of other parts of the code that need to stay fast and snappy.
Mike came on Andy Hackers and did a text interview back in November, and I've done about 150
interviews total, and his is somewhere in the top five in terms of popularity.
And I think a lot of that has to do with the fact that Sidekick is an open source project,
and also the fact that Mike is basically running the business alone, and yet it brings in close
to $80,000 a month in revenue.
So Mike, I'm super excited to have you on, how's it going?
It's going great Courtland, thanks for having me, and congratulations on your move to Stripe.
Yeah, thank you.
So I'd like to start the story at the very beginning, because I want to give people an
idea of what kind of person goes on to run a million dollar a year company by himself.
What were you doing before you started Sidekick?
Well, I've been a software developer for close on 20 years now, doing everything from enterprise
software to consumer facing web properties, just worked for maybe a dozen different startups.
And the common theme in all these companies was I was always working for somebody else.
And sort of solving their problem and earning a salary while doing it.
And after this latest startup, I wanted to both work more on open source, solve the fact
that I wasn't making any money off of my open source, and also try to solve a problem that
was more interesting to me.
So that I felt more fulfilled in solving sort of a problem that I had rather than somebody
else having.
So that's what just stated Sidekick.
And how did you get into open source development in the first place?
Well that was just a matter of scratching your own itch.
We all are using various software libraries, various packages to solve various business
problems we have.
And it's sort of natural to fall into using open source.
But obviously open source usually has bugs or edge cases that aren't handled properly
with how you need it to work.
And so therefore you go and you change something and you push it back upstream to the maintainer
to sort of improve the status quo.
And so I had sort of naturally been maintaining more and more Ruby libraries as I broadened
my Ruby knowledge and was working on various Rails apps.
And part of that was working on background job processing libraries like Rescue, like
delayed job, and starting to build my own because I wanted to build something better.
Yeah, and at that point in time, when you first started working on Sidekick kits, you
already been spending a lot of time reading about internet businesses or thinking about
internet businesses because I know a lot of people spend years just reading about people
doing this stuff before they take the plunge.
Were you kind of like preparing in advance or did you just jump right in?
I really had no experience whatsoever.
I had always told myself that I was the last person that wanted to start a business, that
I was just scared of it, didn't want to hire anybody, didn't want to deal with accounting,
didn't want to deal with taxes.
I just didn't want to deal with the administrivia that comes with owning a business.
So what I did was when I started Sidekick and I said, I want to start charging money
for this is I just did business as myself.
So all the sales and income that I had just went on my personal income tax and I didn't
even have any sort of LLC or company as a separate entity to take in the sales.
Once I hit a point where my sales were larger than my monthly salary from my full-time job,
that's when I realized I needed to make a change and I needed to actually do the hard
work to learn how to run a business, how to start a business and how to make it legit.
And it turned out to be a lot easier than I was expecting, I think, which is true of
a lot of things when you're really scared of something.
It's very oftentimes a lot easier than you thought it was going to be.
Yeah, it's funny because a lot of people, I mean, you said you didn't really start worrying
about that stuff until it was substantial enough of a business that you could quit your
full-time job.
But a lot of people don't get started even collecting the very first dollar because they
haven't figured out the legal situation and they haven't figured out the accounting and
they're afraid of that kind of stuff.
And you really don't actually have to do all that much to legally start a business at least
in America and to start collecting money, but eventually you should get your stuff together.
Did you have any sources of inspiration?
Any other open source projects inspire you to create a business or other people creating
businesses inspire you?
How did you even know it was possible for you to just create something and start charging
money for it online?
I consider myself an accidental entrepreneur because I really had no idea what I was doing.
I just wanted to solve the problem of working hundreds and thousands of hours for no money
at all.
And so I said, I'm sick and tired of this.
I'm just going to charge people money and the money is going to land in my bank account
and I'll be happy.
And I don't care beyond that.
You can talk about legal issues.
You can talk about accounting issues.
You can talk about tax issues.
But no one cares about any of that if you're not making any money.
So until you're making thousands and tens and hundreds of thousands of dollars, it doesn't
matter what you do because the amounts are so small that nobody cares.
So I just started charging money and once I decided to go into business, then I contacted
a lawyer and he incorporated me and I talked to an accountant and he showed me sort of
how to keep books so that everything is legit.
But don't worry about the paperwork.
The hard part is just getting money in the door in the first place.
So that's what you should be focusing on.
And so no, there's very, very few people that are doing open source and getting money at
the same time.
So I really didn't have anybody to look up to when I was starting out.
I don't remember really any companies that I was looking at as inspiration.
There might have been one which was Fusion.
They make a library in Ruby called Passenger, which is a web server or an application server.
And they started doing their Passenger Enterprise like a month or two before I started.
And when I saw them do it, I said, well, if they can do it, why can't I do it?
And so I kind of quickly followed in their footsteps by creating my own sort of business
oriented software.
Yeah, it's funny, a lot of people and I put the cart before the horse and they're so worried
about the legal issues that they don't even think about the fact that it doesn't matter
if your business doesn't make any money.
And another example I see of this all the time is that people get into startups and entrepreneurship
and they kind of assume that the hard part is coming up with the idea and that that matters
the most and they totally underestimate how difficult it is to actually find their first
users.
So I totally agree with you that if you're an entrepreneur out there and you're listening,
don't worry about the trivial stuff.
Worry about the actual hard stuff, which is going to be building an actually successful
business and generating revenue.
The other stuff will fall into place.
It's pretty easy to find an accountant or a lawyer.
Don't even worry about a logo, really.
I mean, some of the most successful people that I've interviewed never came up with a
logo and they're doing like $50,000, $60,000 a month in revenue.
So worry about the actual business first and then get into it.
So what's the story behind how you even came up with the idea for Sidekick?
Were you, you said you were working on background job, open source libraries beforehand?
Yeah, I was a consultant working in San Francisco for a company that was using a large amount
of background processing and they had maybe a dozen machines chewing through all these
background jobs.
And when I realized the set of software that they were using and how little efficiency
they were getting out of their solution and that not only that, but their stack was pretty
much best practice for Ruby back then.
I said, I can build something that's much more efficient that can process all these
jobs with one machine rather than a dozen machines and thus save a lot of operating
expense and thus be really valuable to companies.
Once I realized that value, I said, there's no reason why I shouldn't be charging for
this thing or there should be an opportunity for an enterprise version of this thing.
So I spent about two months building Sidekick and launched it after about two months of
working on it internally myself and it got pretty good take up almost immediately.
I guess I was the right time, right place.
But in the back of my mind, I was always thinking, okay, I've got this open source project.
It's getting successful.
How am I going to sustain this for the next five or 10 years?
Because any successful open source project is going to last at least five to 10 years
with all the businesses that are using your software and relying on it.
So how was I going to sustain, how was I going to run that marathon the entire time?
And that's when I said, I'm going to charge money for this and if I'm making money off
of it, then I will be incented to stay with it.
And so after about six months of working on the open source version, I released a layer
on top of it, which was closed source, which I charged money for.
And that was Sidekick Pro.
And that is a feature pack, essentially an add on that adds a bunch of features that
the open source version does not have.
And I saw sales almost immediately.
The open source version gives me a natural sort of market because those users of my open
source version will naturally convert as they find that they need those paid features.
So the business just kind of worked itself out really easily from there.
I've got a natural set of users to market to and I just make their life as easy as possible
and they upgrade and pay me money for the work.
Yeah, it's funny that you immediately saw the value that you're providing in terms of,
hey, I can save this company money because they're going to pay for X servers, whereas
with use me, in Sidekick, they're only going to use one server or fewer servers.
I think for a lot of developers especially, it's difficult to think in business terms
like that, right?
It's easier to think, okay, I'm a developer and the amount of time I spend coding is worth
as much salary per year and it doesn't matter how much money I save the company, developers
are only worth X or code is only worth this amount.
Why do you think it was that it was so easy for you to determine the business value of
Sidekick or did it take you a while to determine that?
Well, I had been working in software for 10 or 15 years at the time.
So I had seen a lot of different companies and how efficient or inefficient they ran.
Not only that, but I had been doing open source for five years or so before that.
I had seen what happened with projects where they were of a certain complexity and so the
maintainers just are hit with support requests all the time and they burn out very quickly.
I saw not only the business value, a little bit of business value there, but I also saw
the alternative which was burnout, inevitable burnout after a year or two and I said there
needs to be a happy medium here.
Charging for a little bit of that business value that they're getting to prevent burnout
seems like that dovetails nicely, those two things solve each other.
But as to how I picked up on it, I think that was just experience and wanting to solve that
problem of burnout.
What did you think, hey, I have a real business on my hands because it took you, I think,
a year and a half to get to the point where you're ready to quit your full-time job.
That entire time, were you working up to be able to quit?
Not explicitly, no.
For the first six months to a year that I was selling Sidekick Pro, I just said, you
know, I'm doing this as a nice side gig.
This will provide, I'll be happy if it provides me 20 grand a year so that I can afford a
nice vacation with my family every year.
But I didn't really have any goals beyond that.
Well, no, that's not quite true.
When I first started, I said, listen, I'm going to sell this thing and I want to make
a million dollars off of it.
I'd been working for a bunch of different startups trying to punch that lottery ticket
that would make me a lot of money and I'd always failed for a thousand different reasons.
So I said, if I'm going to build this big successful open source project, I want to
make good money off of it.
I never thought that it would just be a full-time job.
I figured it would just be a side gig that makes me good money and over time, it'll
just add up to be this nice big number.
But at some point, it gathered up enough inertia even beyond what I was expecting to where,
you know, suddenly I was making more money than my full-time salary.
So why am I working for somebody else for a full-time salary when I can be furthering
my own thing and potentially growing this well beyond a full-time salary?
And so that's kind of the trail I've been on for the last two years.
Was that an easy decision once you passed your full-time salary to just quit?
Well, what happened was that the company I was working at was sort of naturally tailing
off.
They weren't seeing much growth.
And so I knew that I saw the writing on the wall that I'd probably be needing to be looking
for a new job sometime in the next six months to a year.
And I said to myself why I've got this great thing that's making me plenty of money.
Why don't I just do that full-time working for myself rather than getting back on the
startup treadmill?
And so that's sort of the course I picked is I did a couple of tweaks to the business
model to make it more sustainable for myself.
Specifically I switched to a subscription model in terms of payment.
So instead of a one-time fee, I started charging annually for the software.
And by switching to a reoccurring subscription, I had that more predictable income that then
I could sort of guarantee how the business was going to go over the next couple of years.
That went really well.
And about four months after I made that switch, there came a time where it was just natural
for me to quit my job and move to full-time.
That's when I incorporated.
That's when I did the legal and accounting stuff and made everything legit.
How much time were you putting into Sidekick before you quit your job?
Because I know one of the most challenging things for people to do is to basically start
a business while also working a job.
And especially if you have a family or other hobbies, it's just hard to find the time on
nights and weekends.
So how much time were you spending on Sidekick?
Yeah, well, that was one of the nice things with my projects and my full-time job is that
we were the number one user of Sidekick and Sidekick Pro.
So we were using all of the features that I was building.
They were my first commercial customer in that I gave them a free license to use the
software in return for all of the alpha and beta testing because I was essentially the
director of technical operations at the company.
So I was the one who was in charge of production.
I was the one who got paged if there was downtime, that sort of thing.
So building Sidekick and sort of designing the entire business around those background
job workflows that scaled really well with Sidekick, I was able to sort of alpha and
beta test all those features before rolling it out into my commercial releases.
The job was good as I was growing the commercial offering in that since I was very lucky.
But I was probably spending, I don't know, maybe 20 hours a week on Sidekick.
It's hard to say because a lot of times my Friday nights, even my evenings would be two
or three hours working on various features and various bugs in Sidekick.
At the time, I had a very small child so my wife and I were just naturally at home almost
every single night doing the whole childcare thing and so instead of watching TV, I would
just be on my laptop building features, fixing bugs, that sort of thing and that was every
day for probably at least a year.
I don't think I've ever talked to anybody who's had that situation where effectively
the company that you're building on the side, you can really spend time working on it at
work or at the very least your job is using it and so by going to work every day, you're
effectively testing your own software.
Did you have to do anything special to come up with that arrangement or was it?
Well, as I said, Sidekick was the library that we were using to sort of scale the business.
Everything went through the background jobs so that we could scale it across many machines.
Effectively, because I was solving the business problem, it was legit for me to be working
on my thing there but a lot of the commercial stuff I did after hours, I did on the weekends
and then I would just sort of roll that feature into the application during working hours.
There was sort of a, I don't know what you'd call that, two sides to it.
I'd build the feature during my off hours and then during the business hours, I'd be
integrating it into the app and testing it and that sort of thing.
You were really just dog fooding your own application which is awesome because that's
something that I think everybody really should do.
You should test out what you're building and see what it's like from a user's point of view
and that takes time.
The fact that you were able to offload that time into your actual working hours means
that the 20 hours that you spent on Sidekick at home was really augmented by hours and
hours using it from the same way that your users do while you're on the job getting paid.
So that's a pretty unique situation and I think it's so advantageous that you had that.
That's awesome.
Well, yeah, for sure.
I mean, I was very lucky in having this set up.
I think if you're building a SaaS, oftentimes people building SaaS's have those one or two
or three initial customers that sort of trust them and recognize that they are part of that
getting that SaaS off the ground and they know there may be some rocky periods but they're
getting business value out of this new SaaS but at the same time maybe they're getting
a really low price or maybe it's free for the initial year or two that they use it while
the SaaS is really becoming productized and being made reliable.
Another thing that I think is really remarkable about Sidekick as a business and that I think
illustrates a lesson that people could benefit from understanding is that if you look at
Sidekick is a background job processor for Ruby and Ruby is one of at least six or seven
popular languages for web development and even within Ruby there's at least three or
four other popular background job frameworks.
So it's a product with a lot of competition and it wasn't even the first one on the scene
by a long shot yet it's still been able to succeed and grow and I think that's not an
intuitive thing to a lot of people who want to start a business.
People think that in order to create a successful business they need to think of some new product
that's never been thought of before and solve a problem that nobody's ever solved.
What are your thoughts on that and were you worried about competition when you were first
creating Sidekick?
That's a great question.
I think open source is a very interesting area in terms of business.
I think people really overestimate how good open source is.
A lot of open source is just not that great.
It's cobbled together over time to something that works and that's a lot of times as far
as it's taken is you have something that works and it's good enough and so when you come
along and you say I'm going to build something that's better not only that but I'm going
to work full time on it for years and polish this thing so that it is not just good enough
but good all of a sudden you stand head and shoulders above the competition.
I'm not really terribly afraid of open source as competition because I know that I can spend
full time on competing against it whereas open source inevitably people who are working
on open source are just looking to get what they can get working and then that's it because
they're not getting paid anything.
And so therefore after a little while you just burn out and you don't want to put any
more time into it.
I think there's a lot of solutions for Ruby and there's a lot of solutions for a lot of
different languages but I'm proof that if you just pick a little niche and you provide
enough value that even in my little tiny niche in the world I can still make millions of
dollars.
Almost every niche there's plenty of money for one person if you can make a difference
as one person.
And of course this goes into the whole aspect of do you get investors, do you bootstrap
it yourself, that sort of thing.
Luckily I didn't have to have any investors, I was able to bootstrap it myself.
And so I can keep my prices low and that has the advantage of making it relatively easy
for you to convert users into customers because you're not having to convince them that they've
got to spend five or six figures on these big enterprise packages.
It's something that's reasonably priced for a startup to use.
Yeah and I think that's another good topic to get into because you mentioned having a
pro version of Sidekick and a free version of Sidekick.
Can you go into detail and describe to us how exactly your business model works?
What do people pay for and how did you settle on that being your business model?
Sure.
I have three tiers of packages, Sidekick is the base one, that's open source, it's free
for everybody to use.
And then on top of that base I have a pro library and an enterprise library.
And those are just additional tiers of features that just cost more money.
So Sidekick is free, pro is $1,000 a year and enterprise is $2,000 a year.
Pricing is very simple.
I'm trying to keep the model very simple so that it doesn't get terribly complex and easy
for people to understand.
But as I was developing Sidekick and then developing additional features for my company,
the previous company I was working at, I said what are the features that 100% of my users
are going to need?
Well, that stuff should go into Sidekick.
And then for features that aren't necessarily used by every single person but are still
very useful, then those are the ones that would bump up into the commercial libraries,
the commercial tiers.
And that's proven to be a great model.
There's a dozen different features that are in the commercial tiers that sort of people
naturally upgrade to as they realize that they don't want to maintain and have to integrate
and test all these various different open source packages that you can integrate into
Sidekick.
Because that's the interesting thing about my offering is that you can replicate something
similar to my offering by integrating a dozen different open source packages.
But the problem is, of course, that you have to do all that work yourself.
You have to test it.
You have to validate all these different packages written by all these different people all
work well together.
And the alternative is to buy it from one guy, me, who has done all that already.
And so that value proposition tends to be very easy for people to understand once they
realize the work that they're going to need to do as an alternative.
So yeah, I've gone from having zero customers to having, I think I'm about 800 customers
now, something like that.
I was going to say, there's two things that you said that really struck me.
One is that you've got basically your prices are like $1,000 a year somewhere in that range,
and which I think a lot of developers would consider expensive for anything that they
make.
And that combines with this other thing that struck me, which is that doing the math is
no brainer.
Why not pay for Sidekick?
Why would you spend all the time putting all these things together?
And I think a problem that a lot of developers kind of uniquely face is that we tend to undervalue
our work.
We tend to make something and say, okay, well, I made this using code, any other developer
can make this, they just write their own code, why are they going to pay for what I made?
And then they charge way less than $1,000 a year.
They charge $5 a month for something that could easily save somebody thousands and thousands
of dollars.
And I've been meaning to write something up about this, because I think there's a lot
of problems that are challenges or distractions that developers tend to run into that non-developer
founders actually don't run into.
So undercharging and devaluing the products that we write and the code that we write.
And also the opposite problem, which is valuing the coding process too much and neglecting
to strike the right balance with other stuff, like distributing and selling their software.
So I'm curious if you've had any trouble with any of this.
Have you ever underpriced Sidekick or have you ever spent too much time coding and not
enough time actually trying to sell?
Pricing is difficult for sure.
You bring up a number of good points.
One of the drawbacks to my business is I sort of have a bottom-up business model.
That is, I'm targeting developers directly.
Companies like Oracle and I'll shoot, I don't know any others, Microsoft, they're targeting
the CIOs, the CTOs, the folks that have million dollar budgets and are looking for a million
dollar solution.
So when you're talking about an individual developer sitting in a seat who just needs
to solve a problem, they don't have any budget.
And so when you propose a six-figure budget to them, they're going to laugh you out of
the room, especially given that these people are used to working with open source where
your average price is zero.
So you are correct in that I have had a bit of an uphill struggle just in convincing Ruby
people to buy software at all because they are so used to just going to GitHub or installing
a gym or something like that.
So keeping my price relatively low and my operations pretty efficient has been crucial
for my success.
If I had to get VC, there's no way I'd be able to make this business work.
The profit margins I need to have to justify VC, to justify any sort of seed round, A round,
that sort of thing, I'd have to increase my price tenfold.
And I don't know that that kind of pricing would fly in the Ruby market.
So to some extent, I've had to tune my business over the last couple of years to work with
who I'm targeting.
That's what's hard about pricing is you have to figure out who you're marketing to, who's
the one that's going to be making the decision, what's kind of going to be their budget.
And you'll never get it right.
I mean, I've got the two person startup in a closet that have no money as a customer.
And I've also got the Fortune 10 as my customer.
And so I charged the two people in a closet $1,000.
And then I charged the Fortune 5 company $1,000.
And that's the drawbacks to pricing is there's no good price for everybody.
So you make the best of what you can do.
And I think I've got something that works.
But it certainly is not going to pay for a dozen different employees in a company kind
of that size.
Yeah.
I think to your point, if you were to go the VC route and you're expected to create some
sort of $200 million company, then you for sure would have to change everything about
how you operate.
You'd have to raise your prices.
You'd probably have to hire dedicated salespeople to call the higher ups in these companies
and sell them on what it is that you're building and have an entire sales process dedicated
to that.
But I'm curious what your sales process looks like now.
Is it almost entirely inbound developers finding sidekick on their own?
And how did you make your first couple actual sales once you first released the Pro version?
So yeah, here's my secret.
Here's Mike's secret to enterprise sales.
Don't do it.
I don't do any sales.
I work on the product.
I try to document the product as best I can.
I try to make the features as useful as possible.
And I try to make the product just stand on its own.
So 90% of my sales come without me saying a word to the person who's buying it.
And so a lot of that, I wonder myself, and I have no idea, but I wonder myself about
how many of my sales just come from people who've used it at previous jobs, who've used
Sidekick Pro and Sidekick Enterprise at previous jobs and just see it as one of the tools in
their tool belt now.
And so they go into a new company and they say, we got to have this thing.
It's great.
And they just buy it.
But that really is 90% of my sales.
I do get inbound emails every day saying, hey, we got questions about this, that, or
the other.
And obviously I answer as best as I can, but I don't do any outbound sales.
I don't do any calls.
I don't do any webinars.
I don't even do really any advertising of any sort.
My market that I'm focused on is solely Sidekick users and convincing them that I'm a legit
business and that I sell legit software for a valuable price or a reasonable price and
to get them to upgrade.
So part of that has been to optimize my business as much as possible.
So when people come on board, when they buy, it's completely automated to sign them up
and give them access.
When they don't pay and they churn out, that's also completely automated.
So I really don't spend much of any time on the actual admin part of my company.
It's really just focused on support emails, dealing with issues and building new features
and that sort of thing.
Yeah.
You're living like every developer founder's wet dream, which is, I don't want to worry
about sales and marketing at all.
I just want to put my head down and build my product and have people come use it.
And it's funny because for a lot of businesses, that's terrible advice.
They'll never get even their very first customer if they do it and it works really well for
you and I think it's fun to think about what it is that makes that work well for Sidekick.
A huge part of it has to be the fact that you just have a product that is better than
a lot of your competitors and that's very niche.
So it targets people who don't have that many alternative solutions.
And then I would guess another part of it is, and I would love to hear your thoughts
on it.
But another part of it is the fact that you're in a place where there's already demand for
that thing.
And before Sidekick existed, people knew that they needed a background job processor and
so they're going to search for that thing versus a lot of people who are building these
totally new things that no one's ever heard of and have never searched for have no demand.
And so they have to kind of drum up this demand and educate people as to what it is they're
building.
Yeah, it really is a better mousetrap.
So you're right, I mean, that is an aspect of my success is that I don't have to educate
people about why they want this thing.
They are already using a background library or they are already using Sidekick for free.
And so upgrading is just convincing them to part with a little bit of money in return
for these features, which are also well known and they know they need those features.
Another aspect was when I first started, I had probably maybe 20, 20 really heavy users
of Sidekick who loved it and who worked with me on the open source stuff.
And so when I said I'm going to start selling this pro version, probably five to 10 almost
immediately purchased it.
And so I had sort of that natural first round of customer interest just built in just because
I put six months of work into the open source version and people saw how well it was going.
They saw how well it was taking off in the market and they saw my development process
and the quality they're in, the test coverage and that I was sort of dotting all the I's
and crossing all the T's and therefore putting a little money in that I was somebody that
was worthwhile and trustworthy to invest in effectively because that's really what your
early customers are doing is they're investing in the growth of this new product and that
it will continue to be useful for them for the next few years.
Yeah, that's such a great way to get your first customers.
Like you said, they already trust you and they already have been working with you.
And I think, again, that's like something that's hard for a lot of people to start doing
just because it's difficult for them to take the time to spend six months building a product.
And I think your story in a lot of ways is the story of taking these unfair advantages
and using them to your advantage and I don't say that in any way to take away from what
you put into it.
I say that more with a thought towards everybody should identify what their unique advantages
are and try to leverage those things.
If you have got a big following on Twitter, you should leverage that.
If you have an ability to build a product that your company can use, you should do that.
If you've got friends in a particular industry and they could be your potential first users,
you should talk to them.
So I think a lot of people can learn from how you started Sidekick and hopefully those
lessons will help them get over the difficult initial humps to getting a business off the
ground.
I think another thing that's really cool about Sidekick and I mentioned this early on is
that you're pretty much a single founder if you accept the people who've helped out on
the open source side of things and it's very uncommon to see one person doing so much in
revenue.
Generally, beyond a certain point, you see founders bringing in some help, bringing in
sales people, marketers, additional developers, etc.
What has enabled you to stay solo where other companies your size have had to hire?
Part of this whole I don't want to start a business and then deciding eventually to start
a business was me saying, I'm not going to take anything as gospel.
I'm not going to necessarily follow the well-trodden path that many other people do and instead
ask why am I doing this or should I do something else?
So one of the first decisions I made was I'd worked, like I said, previously in about a
dozen different startups and I'd seen it fail so many different ways.
And I said, you know what, if I'm going to have a business, I don't want to have other
employees that are going to depend on me.
Either this thing's going to work with just me or it's not going to work and I'm going
to be the only person who's going to fail because of it.
And so I just said, I don't want to hire anybody and a lot of my business decisions have come
out of that.
So I also made the decision I don't want to run a SaaS.
So I do have a server running 24 seven that I do have to monitor, but it's extremely simple.
It's as simple as I could humanly make it.
And so I don't have a large operation that requires other technical people to build it,
to improve it, to monitor it.
I don't have my customer side.
My administration side is simple enough where I don't need accounting people.
I don't need legal people.
I don't need bookkeepers or anything like that.
I do all that myself.
So I've purposefully said, Hey, I will, I don't want to hire anyone where possible.
I'm going to automate stuff where, where also possible.
I'm just going to make things as simple as humanly possible so that I can scale.
And so far I've got something like I said, 800 customers and I'm scaling just fine with
that number because I focus on just on the products and maintaining the software.
And so I'm not running a SaaS that has this sort of complex operations overhead.
Yeah, it strikes me that there are always a few constants that exist for pretty much
any business that can take up your founder's time or your time as a founder.
So, you know, there's development to improve the product itself and operations to keep
things running, which it sounds like you've, like, you know, max gone hard on development
and minimized operational costs, but then there's other things like growth related stuff
like sales and marketing and distribution, search engine optimization.
There's always customer support, taxes, accounting, that kind of stuff.
And at first, I think early on for any business, it's pretty manageable to wear all of these
hats as a founder.
But over time you start to build up, at least I do in my past endeavors, I started to build
up a to-do list, and each one of these categories, it's absolutely humongous.
And at any given time, I feel like, okay, well, I've got all this stuff I could do on
the SEO side of things, and all these features that I could add, and all these things that
I could do to streamline customer support, etc., etc., etc.
And you just can't get to it because you're one guy.
What have been the hardest parts of scaling a business as a solo founder?
And have there been any things that you really wanted to get to but you just couldn't?
Well, I've always thought about how can I bring Sidekick to other languages.
So I wrote a version for the Crystal programming language, which is sort of similar to Ruby.
And then I also broadened out into another product category.
I came out with a product called Inspector that just did not work as well as Sidekick
didn't sell as well.
So I've sort of dropped that and don't really do much with that anymore.
So my success is not 100%.
The secret to my success is just time.
I didn't quit my job and just say, I got to make this thing work in the next six months.
Like I said, I was working full time for the first 18 months while this thing was growing.
And so it wasn't until I was making good money where I went on my own and relied on
that income.
And then since then, I've been working for two, three years now on my own.
It's just a constant grind.
Every day you're executing, you're working on your documentation, you're polishing your
landing pages for customers.
But because I'm not having to convince random people about the value of my commercial stuff,
I'm solely focused on my Sidekick open source users.
I don't really need to do a lot of search engine optimization.
I don't need to do a lot of the stuff that you might need to do if you have a more sort
of generic consumer SaaS.
And so that's another, as you said, another natural advantage that my business has.
You mentioned Inspector and I want to kind of bookmark that and come back and talk about
that for a second because I think it'd be very interesting to explore the differences
between Inspector and Sidekick and talk about why one is so successful compared to the other.
But also back on this topic of scaling your efforts as a single founder, I think another
advantage that you have with Sidekick is that retention is pretty great for the business
that you're running.
I mean, people probably don't switch around their background job processor willy-nilly
every other month, which means your churn is low.
So when you bring in a new customer, I'd imagine you're not just replacing old ones, you're
just adding new customers and allows your revenue to kind of snowball.
And also it gives you a break where you don't have to focus that much on growth.
Whereas by comparison, me selling ads with indie hackers, well, people don't buy ads
for like 10 years, you know, they buy ads for a few weeks or a few months and then they
stop and I have to find someone else to fill that ad slot, you know, and there's a ton
of businesses out there like that.
For sure, a lot of the low churn and the recurring revenue means that I can just depend on organic
growth over time.
My business is growing generally anywhere from a 50% to 100% a year, which is pretty
darn good, but it's not the 100% a month that VC wants to see, but it's great for one person.
Are you kidding me?
I'm doing really well for one person.
So I'm very happy with my nice, easy growth that I'm seeing over time right now.
Another big aspect is, like I said, the automating of all the payments, infrastructure, and customer
management stripe is invaluable for that.
I push as much as I possibly can into Stripe so that I don't have to do accounts receivable
and badger people to pay their bills.
It's only the largest of my customers that I allow to pay via invoice.
Everybody else I force to pay through Stripe so that everything is done in an automated
fashion.
So that credit card is charged every year and the money just shows up in my bank account.
I don't have to do anything.
There's no way I'd be able to scale to 800 customers if I didn't have the majority of
my payment infrastructure all automated through Stripe.
Yeah.
Another thing that strikes me is you talk about having 800 customers.
For a lot of people who just charge $5 a month, 800 customers is what?
$4,000 a month?
You've got 800 customers and you're doing I think over a million in revenue per year,
which means you have a pretty high price point.
A lot fewer customers paying you more money, which also means that you don't need that
many wins in the sales department to build up your revenue.
You also don't need to spend nearly as much time on customer support, which speaking from
experience can be a humongous time sink for a solo founder.
By the way, for anybody listening, if you want to avoid a customer support nightmare,
don't sell to cheap customers because for one, the cheaper it is, the more of them you
get and number two, cheap customers are super price sensitive.
You're the ones who worry that their investment and whatever it is that you're building won't
be worth it and that worry translates into all sorts of a name support requests and emails
that quite frankly are going to take up your time.
How do you handle customer support with Sidekick?
One of the best things I did with pricing was making a decision that I would never ever
give a discount to anybody and that has proven to be such a great decision.
The people that ask for discounts are inevitably going to be your worst customers.
I find that the people that are paying me the most money are the ones that treat me
the nicest.
On the other hand, by corollary, the ones who pay you the least are the ones who treat
you the worst and so those are the ones you don't want as customers.
I always said everybody pays the same price.
I will not give any discounts ever and so I have maybe one or two a month people write
and say, oh, I've got a startup, we don't have any money yet.
Could we pay you and we get our first round or can we just pay per month?
And always, always, always, I always say, no, I'm not going to allow it.
You can Sidekick is free, you can use that all you want, but if you want my commercial
stuff you have to pay the same as everybody else.
Support is a tricky thing because like you said, as the customers scale, the support
burden increases.
What I've tried to do, and this is another natural advantage that I have as part of my
business, is that my users are used to open source and they're used to not having any
support at all.
So they are used to reading through issues, they're used to reading through wikis and
man pages.
So what I try to do is document my features as best as I can with all the caveats and
everything like that.
And I also have four years of issues built up in GitHub so that when people do have problems
they will inevitably Google, they'll inevitably go into my wiki and read the docs so that
I don't actually have to deal with a lot of emails all the time.
I still do get a half a dozen support emails a day probably, but since I'm working on it
full time it's not an issue for me to keep up with it so far.
We'll see how that goes long term.
But I also have a commercial support policy which is pretty conservative where I tell
people technically you're only supposed to contact me once a quarter or something like
that.
And so that gives me an out where if somebody is contacting me a lot I can point to that
and say I'm sorry but I need to keep a sane support policy so that that scales with me.
But that's sort of the way I run support.
Yeah, the first half of your answer where you were talking about the cheapest customers
being the worst ones, again I want to talk about selling ads on indie hackers.
And I don't want to disparage any of the people who bought ads on indie hackers, they're
all great customers.
But at the end of the day there are companies that could afford to buy ads for like two
or three months at a time and it was nothing to them, it was just a drop in the bucket
and you might think oh those are the people that are going to have to do high touch sales
with and it's going to take forever and they're going to be taking all of your time.
Those were the customers who are the easiest to deal with.
I would call them and they'd be like yeah, yeah, yeah, we'll take two months and then
I wouldn't hear from them again versus people who were running very small startups and didn't
have an advertising budget and 100% of their marketing budget was spent on like one news
letter ad for indie hackers where by far the most fretful about whether or not it was going
to work and they would send me the most emails and change things at the last second.
So I think it's kind of just a universal constant that the lower priced customers are going
to be a much more of a headache and it actually affects your ability to run your business
if you're spending more time dealing with those kind of emails.
Absolutely, I mean you've got to keep the business sane.
Yeah, for sure, especially if you're a single developer, I mean it's not, running a business
is a psychological thing.
If you don't enjoy doing it, what's the point?
You could just go get a job for somebody else and there's no point in starting a business
that's going to have a whole bunch of aspects that you hate.
So make sure to keep an eye on your customer support requests and other aspects of your
business that matter because ultimately I think most businesses fail because their founders
quit.
They quit before they get their business to work or maybe they quit after they get their
business to work and if you are not doing what you like, it's just going to make it
that much harder to justify continuing when the going gets tough.
Couldn't have said it better myself.
To end on, I wanted to say that you've been kind enough to share your story on Indie Hackers
and other places and I seem to get a lot of people writing to you asking for advice and
stuff like that.
Do you ever mentor other people and if so, I'd love to know what kind of challenges are
people facing and what kind of questions do you get asked?
Most of the people that ping me asking for help are in my same sort of area.
They're open source developers who are frustrated with having to work for hundreds of hours
building a project and then find that their projects are being used by the largest companies
in the world for zero dollars.
And my advice generally is always the same and I think you've picked up on it very well
in this interview which is try and figure out what are your natural advantages.
What are the points or the break points where you can say, I'm going to give this away for
free but I'm going to charge money for this additional value?
At the end of the day, Sidekick itself, the free version is still extremely valuable but
I give it away and I give it away because I need that market to upsell to.
So I get something of value out of Sidekick as well as the users that are using Sidekick.
But for open source developers, every project is going to be different.
What works for me is not necessarily going to work for every library and every framework
out there.
And so people really have to determine how can I find a way of making this work long
term of sustaining this project and whether that's money or whether that's building expertise
such that you can run a nice consulting business based on your knowledge from the projects.
Whether you're charging for support contracts, there's a half a dozen different ways to make
money off of open source but you have to use your best judgment and experience to determine
what's right for each project.
So that's really where I go with that.
And I think you also said it well which is if you're not happy doing something, don't
do it.
My business looks very different from so many other businesses because I said I don't want
to do something that doesn't make me happy.
I don't want to run a company with a dozen employees so I just chose not to hire anybody.
And that was a forcing function to design my business a little bit differently so that
it scales with just me.
And I think that is a great place to end the interview.
We're kind of out of time.
I wanted to get into the details of Inspector.
We're not going to have time but maybe I'll have to have you come back on the show another
time and talk about that business and the differences between that and Sidekick because
I think it'd be really interesting for people to hear and I think you'll probably learn
a lot too.
But thanks a ton for coming on Mike.
I really enjoyed talking to you.
You can let us know where we can go online to learn more about yourself and about Sidekick.
Sure.
The best way to sort of pay attention to me is my Twitter account which is mparam, my
first initial last name.
And I also have a blog at mikeparam.com that I publish occasional interesting tidbits on
technical and open source business stuff.
Alright, thanks Mike.
Thanks for having me.
If you enjoyed listening to this conversation, you should join me and a whole bunch of other
NdHackers and entrepreneurs on the NdHackers.com forum where we talk about things like how
to come up with a good idea and how to find your first paying customers.
Also if you're working on a business or a product of your own, it's a great place to
come and get feedback from the community on what you're working on.
Again that's www.ndhackers.com slash forum.
Thanks and I'll see you guys next time.