What's up, everybody?
This is Cortland from IndieHackers.com, and you're listening to the IndieHackers podcast.
On this show, I talk to the founders of profitable internet businesses, and I try to get a sense
of what it's like to be in their shoes.
How did they get to where they are today?
How did they make decisions, both at their companies and in their personal lives, and
what exactly makes their businesses tick?
The goal here, as always, is so that the rest of us can learn from their examples and go
on to build our own profitable internet businesses.
Today, I am talking to Tyler King.
Tyler, welcome to the show.
Hey, thanks for having me.
You are the CEO and founder of a company called Less Annoying CRM.
I love that name.
I've had a couple founders on the podcast recently who have product names that tell
you exactly what they're doing and pretty much spell it out.
But nevertheless, why don't you explain to us what Less Annoying CRM does?
Yeah, yeah.
Well, that's the goal because, as I'll probably say several times today, we're bad at marketing.
So it's good if our name just says the whole value proposition at the beginning.
So basically, we are a CRM, a customer relationship manager.
There's a whole history of the CRM industry that's basically they're designed for really,
really big companies with really sophisticated needs.
So Salesforce and Microsoft Dynamics and all of them are really powerful, but probably
overkill for a small business.
So what we do is we make just a simple contact manager for people who need a place to store
all that for their business, but not all the bells and whistles and automation and all
that stuff that a bigger company might need.
The CRM space is obviously not new.
It's not particularly unique.
There are tons and tons of companies working on various types of CRMs.
And there have been for the last two decades.
And yet you guys have managed to stick it out and do really well for yourselves.
So you bootstrapped your way here.
You have 22,000 paying customers, and you charge them $10 a month per customer.
That's right.
And we actually hit 22,000 about an hour ago.
Sweet.
So we're officially at 22,000.
Cool.
Yeah, I was just rounding up from 21,000 something, but now I'm actually right.
So I feel pretty good about that.
So you're doing over $2.6 million in annual recurring revenue.
And I think what's really cool is putting these two things together, the fact that you
came up with an idea that's not particularly unique.
It's not like you found some entirely unexplored market that no one's ever hit before.
You have this totally brand new, unique idea.
You've done something in sort of well trodden territory.
And a lot of people think that they can't get started with an idea unless it's totally
unique.
And so I'm excited to sort of dive into how you did that, how you realized this was a
good idea in the first place, and how do you make a business work when you have so much
competition and you're not innovating at the front bleeding edge of new technology and
new ideas.
Yeah, because there's a certain risk you take by going into an industry that has a lot of
competition.
Exactly.
So you can't build the better mousetrap.
But there's a different type of risk if you go into something brand new, which is that
no one even wants it.
And if I have to pick between those two risks, I trust myself to build the mousetrap a lot
more than I trust myself to create a market that didn't exist before.
Yeah, it's a trade-off.
And a lot of times people go into one and they think that's not a trade-off.
They think, oh, I'm doing something that's brand new, and so that's perfect.
Now I just went.
But you're right.
Now you have to prove that people even care about this new thing that you're building
that no one's ever built before.
But a lot of times that kills people's companies.
And in your situation, you've got a lot of competition, which means you have to innovate
in other areas.
You have to either somehow build a better product or you have to figure out distribution
channels even though they're super competitive or niche down in a way that others aren't
really doing.
You've got to somehow make yourself unique to compensate for the fact that you've got
a ton of competition.
It only really works to do that if it's not a winner-take-all market.
So that's one of the great things about CRM is if company A is using Salesforce and they're
upstairs and they're building, company B is using us, neither product is worse as a result
of that.
Whereas if you're using Facebook and I'm using Twitter, neither have any value to us.
So I wouldn't do what we're doing against Facebook, but I'd absolutely do it against
Salesforce because of that lack of a winner-take-all dynamic.
I think that's one of the key ingredients to being an indie hacker, to use a business
that's not a winner-take-all market.
Even if you innovate and you build something completely new in a winner-take-all market
and you're thinking, oh, I want to be an indie hacker and just generate revenue.
At some point, it's probably going to be a well-funded competitor who comes along who's
got a ton of VC funding and they take that market from you because you're not focused
on growth or whatever and you're kind of screwed.
But if you enter a not-winner-take-all market, you can always carve out your niche.
You're not really worried about the competition making it so your business is now obsolete
and it's just a lot less stressful and a lot more profitable for you.
So I recommend all indie hackers to go that route.
Yeah, absolutely.
Let's talk about how you got started on this journey because you say that you got started
kind of by mistake.
You didn't grow up super entrepreneurial, you didn't always dream of building a business
and yet somehow you found yourself working at a startup and doing a lot of entrepreneurial
activities.
Tell me about how you got there.
Yeah, this is like the least reproducible story.
It's like totally worthless as advice for other people because I just lucked into it.
Basically, I was doing my fifth year of college to get a master's and a friend reached out
to me and said, hey, do you want to come work at this startup?
And I'm not being like falsely modest or humble or anything.
This is like 100% true at the time because I wasn't great in school.
I wasn't terrible, but I didn't get good grades or anything.
So I just assumed that would translate to a lack of professional success.
So I thought, I'm not going to be great professionally.
This startup is already, you know, they just raised a Series A, they had a really great
team.
I was like, if I just join, maybe I'll get rich without doing anything basically, which
is stupid.
That didn't make any sense.
But that's what I thought when I was 21 years old.
So I left school and went to go work at that startup having no interest at all in entrepreneurship.
And then yeah, that was the first kind of stroke of dumb luck is that that fell into
my lap.
The second stroke of dumb luck was that that was 2007, 2008.
This was not lucky for most people, but it worked out for me.
You know, the recession happened.
And so the company was a year into having raised a Series A growing quickly.
I think I was in play number eight.
I think a year later, it was at 30 people and everyone gets laid off in one day except
for me and for other people.
And when I say everyone, I mean the CEO, the CFO, the COO, every single person above me
in the org chart was laid off.
So I showed up to work the next day and just I was kind of in charge like me and one other
guy really were the only ones interested in taking on that responsibility.
So we just showed up and effectively were the co-founders of this company all of a sudden.
How does that happen?
How do you not get laid off as someone at the very bottom of the org chart?
I thought it would be the opposite.
Yeah, I now understand how like boards of directors and CEOs work.
But at the time I was like, the CEO is the God.
How could that person lose their job?
But it literally payroll could not be made.
So they kept the five cheapest people.
So it was all five of us were the lowest paid people of the company, no responsibility.
I now understand the goal of the company was to just keep the lights on long enough to
sell, but that didn't happen.
And so as a result, for the next year, we were just kind of running the company, not
knowing what we were doing.
So what was this company that you found yourself basically running and what are some things
you learned by going from bottom of the totem pole to suddenly at the top?
Yeah, well, I think it's really, I learned a lot of what not to do, which isn't to criticize
them.
I mean, I think a lot of startups get stuff wrong and that's the main thing I learned.
So the company, it was called Zane Benefits, it's actually still operating miraculously
under the name PeopleKeep.
It's in Salt Lake City, Utah now.
So it was a health benefits startup.
I learned a bunch from it.
One thing was we had a ton of great ideas that we couldn't do because it was like against
insurance commissioner codes or something like that.
So I was like, well, I'm not going into a regulated industry after this.
The company did a very traditional venture capital playbook, like raise, I think it was
a $3 million Series A, which at the time was big, now that doesn't sound like much, but
grow really fast, hire like after I joined the next five hires were all VPs of whatever,
see whatever officer, hire a management team and just kind of run the traditional playbook.
And I saw that in action, I just kind of hated it.
So the biggest takeaway from that was if I ever start my own business, I'm bootstrapping
for sure.
It's not a bad takeaway, and I ended up with you starting less annoying CRM after a somewhat
windy path of going through other ideas and working on other projects.
I want to dive into that because that's where most listeners are at.
They haven't found an idea they really want to work on.
They're trying different things out or considering it.
And I think it's kind of a tricky path to navigate.
It was tricky for me to navigate earlier in my 20s as well.
How did you go from basically running this company and learning all these lessons on
what not to do to eventually starting your own company that ended up working out?
Yeah, the first question anyone faces is like, what is the impetus for actually starting
the business?
And maybe it's scratching your own itch or having some passion for something.
In my case, it was the third of these strokes of luck happening to me, which is the right
co-founder fell into place.
I would not want to run a business by myself.
A lot of people do it.
It can be great.
I'm not saying you shouldn't.
But like for me, having a co-founder is the only way I want to do this.
And it's hard to do, like you can't just go out to a networking event, chat with someone
for 30 minutes and be like, yep, that's the person I want to, you know, hitch my wagon
to for the rest of my career potentially because that's how long I want this to last.
So there were only a few people in the world that could have been the right co-founder.
And basically what happened is my brother who was in grad school at the time came to
me with a business idea.
He had even less entrepreneurial spirit than I did.
So I was like, this is a once in a lifetime thing.
He's not going to, he's really, really smart.
Obviously I trust him.
He's like, oh, this is not going to come along every day.
So even regardless of what the idea is, I'm going to do it.
That was kind of the first step.
What's his business idea, less annoying CRM?
No, no, it was not not even in the ballpark.
It was, do you remember sent sports from back in the day, it was like a way to gamble for
free sort of on sports.
The idea was to do that, but for like stock market pick.
So give people a small amount of money for free, let them play the stock market.
And if they hit a certain threshold, let them cash out real money.
And at this point, you said neither one of you are really all that entrepreneurial, but
you're pretty excited about working with your brother.
But as someone who's not an entrepreneur, someone who hasn't really dreamed of doing
all this, how do you even evaluate an idea to know if it's a good one?
Like how do you say, oh, this is a great idea, let's work on this together.
How do you decide to move on from that idea when you've realized it's not?
Yeah, I think it really helps to have constraints.
If you just have the whole wide world of options available to you, it's almost impossible to
pick something.
Like I said earlier, one of the constraints that I knew for myself was I want to bootstrap.
And there are a lot of businesses that could work, but can't work bootstrapping.
So for example, like what we really both wanted to do is build a fantasy football website.
We'd already built one.
We were running it on the side as a hobby.
We both knew we couldn't bootstrap that.
It just wouldn't work to, we wouldn't be able to monetize it quickly enough to support ourselves.
So we threw that out the window.
And then we thought about this stock picking thing and we actually threw that out for a
variety of reasons.
But one of the big ones is the same thing.
You can't like, I would say almost anything that's primarily monetized through advertising
is going to be a tough thing to bootstrap probably, combined with a million other reasons.
We knew we could throw that one out and then we just kind of kept trying.
We had a whole bunch of different ideas we went through.
Yeah, I love that you mentioned that you need constraints.
So I think generally speaking, when you're getting into something, it's really helpful
to have some sort of checklist, some sort of list of things that you can kind of just
go it out and be like, let me make sure I'm not making a boneheaded decision.
Let me take like five minutes to make sure I'm doing something that will not get in the
way of my goals or prevent me from reaching my goals.
I have my own gigantic validation checklist.
A lot of it is stuff that's like, okay, I need to check this box to make sure the business
will actually work.
But a lot of it is just totally personal stuff.
Will I enjoy working on this project?
Will it be something that I can bootstrap?
Will I like working on it for the long term?
And I explain it to my mom in a way that she understands, which is just an important thing
for me and working on a business.
And I think more people should have this list of constraints.
What else was on your list besides just I want to bootstrap this thing?
Yeah.
So one I mentioned earlier is I didn't want it to be a regulated industry.
And I'm not saying this, I'm not opposed to regulations, just I am bad at...
I'm not a very thorough person, like if someone gives me a terms of service to read, I make
it through one sentence and I'm like, whatever, I agree, I can't make it through this.
So I'm just not the right person for that, which I think you can generalize to say what
are all your weaknesses.
Another one is I know I can't do sales.
So if you look at Lesser Knowing Serum, why are we going after small businesses and not
enterprise where all the money is?
A variety of reasons, but one of them is I just know I could not sell to the enterprise.
So I can remove that from the list of possibilities.
I love that you mentioned that you put your weaknesses down, which is kind of I think
the best way to take advantage of prior experience as an entrepreneur.
People talk about, oh yeah, try lots of things and you can basically learn from your failures.
I think it's super true.
If you correctly identify what your weaknesses are and what you don't like, you can make
sure not to run into those problems again.
I did the same thing for Andy Hackers, one of my biggest weaknesses is that as a developer,
I love to code.
And I will just sit down and code things for a year straight and not look up, not do any
sales or marketing.
And so one of the things that eventually got onto my checklist and my constraints was I
cannot work on any idea that would even allow me to code for that long, otherwise probably
going to fail.
So I think it's really important to recognize your weaknesses and build that into the things
you will or won't do.
Yeah, definitely.
And I also think just to contrast, a lot of the startup advice out there is assuming a
certain outcome that's really based on what the venture capitalists outcomes are.
And that assumes you have to have a certain set of skills.
You have to be ready to blitz scale and you have to really crush it real hard in these
various ways.
And if you remove that, you can say, well, I don't have to be good at any of that.
Every entrepreneur can decide, I'm going to make these aspects of the business harder
on myself so that I can make these other aspects easier on myself.
And by doing that, you can say, I'm going to play into my strengths and avoid my weaknesses.
Exactly.
So having a checklist, having some constraints, that's a good way to filter out ideas, to
say, okay, this idea is not going to work.
Let's move on to something else.
But how do you come up with an original new idea?
How do you go from having nothing in your head to suddenly knowing what you're going
to work on, because there's no list of constraints that will magically create an idea from nothing?
Yeah.
It definitely helps to, like what we were talking about earlier is that I didn't invent
a new thing, right?
This CRM isn't an idea exactly.
It's more like identifying an opportunity that there are certain types of customers
that weren't well-served.
So if your question is, how do you come up with an idea for some brilliant new thing?
I have no idea.
I've never done it before.
I'm probably never going to do it.
But if it's how do you identify those opportunities?
I've heard some classic ones, right?
Back in the day, it was look at what people do on Craigslist and then spin it off, and
now you've got Airbnb.
In the business world, the version of this is look at anything people are doing in Excel.
Is it big enough of a problem that by making a specialized app for it, you could charge
for that?
A lot of stuff out there people are still using Excel for, but could be spun off.
In my personal experience, the best way to come up with this idea is to just get a job
at some company that's dysfunctional in one or more ways, and software could make it more
successful.
So just see it, experience it in person, and fix it.
And so that's what happened for me.
I had had that experience with CRM from my previous job.
Tell me about that.
How do you work a job and identify a particular problem?
Because a lot of people have jobs and don't see any problems and don't see any challenges.
And I think that doesn't necessarily mean there aren't any business opportunities.
But sometimes it's hard to sort of, you know, put your brain into a mode where you can recognize
these opportunities and turn a problem into a business idea.
Yeah, it helps that I think I'm a complainer.
I'm probably insufferable to hang out with because I'm just constantly saying negative
stuff, but that's a good way to come up with these ideas.
So yeah, I had three different kind of points of contact with CRM that led me to believe
that this would be an opportunity.
One, my mom was like an MLM, like a multi-level marketing sales rep person.
Not something I would recommend for anybody, but I kind of grew up in that environment.
And it's this army of people who don't have any sales background.
They've never heard of a CRM and their companies were providing nothing for them.
There's no tools provided by these companies.
And so that was just in the background thinking like, why aren't they taking advantage of
software?
Then I had two more specific experiences at my last company.
One was they put me in charge of setting up Salesforce.
This was 2008, I guess.
I spent about a month on it full time and like I have a degree in computer science.
I'm pretty tech savvy.
A month of full-time work, I didn't get anywhere.
I couldn't figure out how it worked.
I couldn't even get it set up.
So I was just thinking about, well, what does a company do that doesn't have me?
There are a lot of companies out there that no computer scientists work there.
And then the third experience I had was what the company did that I was at is it sold software
that enhanced group health insurance for businesses.
And so we sold it alongside health insurance that insurance agents were selling.
And so we built a tool to let insurance agents sell our product when they were selling insurance.
That tool looked an awful lot like a CRM without really intending for it to.
And they ended up putting all their other leads in there and they were like, can you
build a little more reporting in here?
And can you give me a way to enter notes?
And eventually we found out like these people had never heard of a CRM before.
They loved what we built, but they had no way of buying something like this as a standard.
They had to pay us $1,000 a month to be a member of our reseller program.
So I looked at that and I was like, the bottom end of the market here hasn't even heard of
a CRM yet.
And they're probably still using Excel for that.
So let's pull that out and make a specialized tool.
One of my favorite hacks for coming up with business ideas is at the very least looking
at what people are willing to pay for.
And if you see people constantly paying for a particular thing or asking for more features
so they can pay for those, it's usually sort of a good clue that that's a solid market.
You're not entering a market for something that's like, you're going to have to innovate
and prove that there's product market fit.
It's like, no, people are already paying for this, there's already value.
And the fact that you had these experiences with your mom and with these other companies
who had never heard of a CRM, sort of additionally validated that not only is this a product
that people will pay for, but there's lots of people who need it and also don't use it
yet.
Yeah.
So if I can piggyback off that, like a lot of people talk about how to write marketing
copy and that you're supposed to use this jobs to be done framework where you're explaining,
here's the job that needs to be done and here's how our product does the job.
If you're looking for these really boring ideas that are kind of already proven, ask
yourself, does anyone need to be told the job to be done here?
Because we don't do that type of marketing copy at Western Knowing Serum.
We assume you've already tried Salesforce and didn't like it.
So all of our marketing is like, you already know you need a CRM, but you just can't bring
yourself like, you know, you need to brush your teeth with our product.
You're finally going to be able to do it consistently.
This is a good example of why I think a lot of advice should be prefaced with, it depends.
And it's kind of frustrating if you're looking for advice because you're like, I don't want
to hear it depends.
Just tell me what to do.
But usually it does depend, right?
If you have a business that's in like a crowded market that people are pretty familiar with
and like people already pay money for, so product market fit is already kind of decided,
then you have a whole different playbook for how you market that thing and how you advertise
it and what you should be looking for.
Then if you're going the other route and trying to build something brand new that no one's
ever used before.
If you're going that route, you need to do a lot more education.
You need to do a lot more like explaining to people what the jobs to be done are and
like showing them how to use it, et cetera, et cetera.
You look for customers in different places, but if you're going the route that you did,
like you said, it's not as much about education.
It's more so differentiating yourself from the existing options or finding a gap in the
market where people don't really know about this particular thing.
I think, you know, you say you're not good at marketing, but the fact that you named your
company less knowing CRM, put the value proposition right in the name, I think speaks to some
knowledge about the situation that you're in and the fact that you're really just trying
to differentiate yourself from other players in the market and explain to people why they
would use your CRM instead of somebody else's.
Yeah, and that can kind of be a superpower if you like every other company in the world
is putting up the same jobs to be done explainer video.
And then when people call us up, I have this conversation every time I talk to a customer,
they say, what's different about you guys?
Like what features do you offer or anything like that?
And I'm like, oh, none.
Not a single one.
We don't have a single unique feature.
And it just kind of puts them on their heels and like, wait a second, okay, now I'm talking
to a different type of company here.
Yeah, yeah.
If I'm going to a coffee shop and they're just like, you know, we'll sell you coffee,
then it's like, well, you know, I guess that's your value.
It'll keep you awake.
You know, it's like, I guess that's your value proposition, but how is that different than
any other coffee shop?
But usually they have like some differentiator, something that makes them unique.
You're telling people that you basically don't offer any different features than other people.
But you're also called less annoying CRM for a reason.
So tell us about how that differentiation helps convince customers to sign up.
Yeah, so it really comes down to that word annoying.
And I think people immediately get an idea in their head of what that means.
They think it's the user interface, which it is to some extent.
But even before that, most companies, and I actually, I love indie hackers, a lot of
the advice on there is to do annoying stuff.
So for example, if you're asking for someone's credit card before the free trial starts,
it might work.
It might make you more money, but undeniably, no customer wants that, right?
There's no customers like, I really wish they would have taken my credit card before I could
try it.
That would have been great for me.
Pricing pages.
Our pricing is $10 per user per month.
Now first of all, that's lower than a lot of CRM's costs, but setting that aside, there's
no tiers.
There's no extra fees.
There's like the pricing page is literally $10 per user per month.
That's the end of the page.
So even before someone starts using the product, we're sending all these signals to people.
Like you know all that nonsense that you have to put up with calling their sales team, getting
quotes, all that stuff.
You don't have to put up with that here.
Yeah.
So I guess your pitch is kind of like, hey, our features are the same as other CRM tools.
However, every feature is less annoying than it would be with the competition.
Yeah.
I mean, at the end of the day, it is like, you know, it's a CRUD app.
It's a spreadsheet with a slightly better user interface on top of it.
No one wakes up in the morning dreaming of using their CRM.
They don't use it for fun.
They don't get joy out of it.
It's like I think the business world took too much marketing from the social media and
video games and stuff like that where people really love using them.
It's like, no, this is a tool.
It's going to do what the tool is supposed to do and then get out of your way.
So let's go back to the early days of you working on this because you mentioned you
tried a few other ideas.
You tried like a stock trading app.
You did your brother's idea and that didn't really work out.
What was it like when you sort of hit on this idea and were you convinced early on that
it was going to be a good idea that stood out from the other things that you tried?
Yeah, we were pretty excited about it.
And it's a little weird.
We would have probably gone with CRM from the beginning, except I thought I couldn't
because I had built that CRM-like thing at Zane Benefits.
And I thought it would be a conflict if I were working on this because I had not yet
decided to leave my job.
And then I kind of had a pivot point where I was just like, you know what, screw this.
I'm going all in.
I'm leaving that job.
And they offered to let me stay on part-time.
And I said, sure, but I need it in writing that I can work on a CRM.
So that just kind of opened it.
So to me, it was really obvious.
So all the other ideas we were bouncing around were because we didn't think we could build
a CRM.
And as soon as that became an option, we were all in on that.
How do you fund yourself when you're working on this business in the early days?
I mean, you could work part-time at your business, but your brother also needed to work on this.
And it's quite frankly pretty harrowing to have a business that's not really making very
much money.
And you're dividing your time between this other job that's, yeah, paying your bills,
but distracting you from what you want to do.
Yeah.
I mean, of course, it'd be great to be able to spend your full-time working on your idea.
I think the sacrifice of not doing that is normally worth it, unless you have enough
personal wealth that you can do it without sacrificing anything.
But our original idea, which I actually, if I had to start a new business, I think I'd
go back to this.
And I think it would have worked probably, is my brother, he was in a PhD program at
the time.
MIT, that's where you are, right?
Yeah.
Yeah.
All right.
Maybe you were there at the same time.
Maybe.
What year was this?
He finished maybe in 2010-ish.
Okay.
Yeah.
I graduated in 2009 from undergrad.
Okay.
Yeah.
You were there at the same time.
He was getting a PhD in biological engineering there.
And through his lab, he knew a bunch of biotech startups that could use just a normal software
engineer to basically do what I said earlier, take an Excel spreadsheet and turn it into
a little piece of software to like manage your lab equipment or whatever.
So he thought he could get me a bunch of consulting jobs.
And the plan originally, even before we came up with CRM, was do these things to pay the
bills and wait for a pattern to emerge?
Like are the same, are these companies asking us for the same types of tools over and over?
And if so, let's productize that.
So that was the original idea.
I think that's a valid way to go.
But I ended up getting lucky because after I quit, I never had any intention of this.
Like I said, the company came and said, we'll pay you for 20 hours a week to kind of consult
or whatever.
And that was enough to cover my bills.
So I was 20 hours a week consulting, but it's not really consulting, right?
It's like a long-term multi-year contract.
And then the rest of my time, which was probably another 40 to 60 hours a week on less knowing
CRM.
My brother was full-time on his grad school.
When he graduated, we didn't have enough revenue for him to go to less knowing for full-time.
So he ended up getting a job at a different startup and was kind of doing this on the
side.
So everyone's going to have to find their own path.
But having no runway, like being able to go for an unlimited amount of time is an amazing
superpower because there are so many things that work, but they work really slowly.
And so they're only an option if you have that runway.
Yeah, with IndieHackers, I basically spent a couple years contracting and working on
side projects on the side.
But I could never really focus on my side projects the way I wanted to.
And then eventually, I just had saved up enough money to live for a year, and I quit contracting.
And that was sort of the kick in the ass that I needed to get super serious.
I think it forced me to make better decisions because I saw the money in my bank account
declining.
I was like, I need to make something work in the next six to eight months.
Otherwise, I'm screwed, and I just wasted a whole bunch of money.
But that's not the path that everybody necessarily wants to take.
How long did it take you guys before you were at the point where you could fully support
yourselves from less annoying CRMs revenue and you could actually quit your jobs?
Yeah, so we took a somewhat non-traditional path here.
So I've got my numbers pulled up here.
So we were about two years in when we were making enough to pay.
So two years after launch, we were making $5,000 MRR, which that's not the amount of
money you want to make long-term, but it's enough to pay one person at least enough to
survive.
So we faced the decision two years in, which one of us goes full-time?
And what we settled on was neither, and we just hired someone else.
So neither of us were the first full-time employee of less annoying CRM, actually.
That's pretty fascinating.
I don't think I've talked to anybody who's done it that way.
Why not pick one of you two to go full-time?
I mean, you guys are the founders, you're the most invested in it, why hire somebody
else?
Yeah, so the question we asked ourselves, and I think you could debate whether we made
the right decision or not, but we're basically saying, we're a very product-driven company.
What moves the product ahead the fastest?
Is it for me to have an extra 20 hours a week to work on it, or is it for me to never think
about customer service again?
So it still ultimately came down to how to leverage my time better.
But what we decided was having a full-time customer service person who could also, customer
service was not a full-time job at the time, so we could also help out with marketing,
help out with all kinds of other stuff.
That would actually free up more of my time for product than losing that 20 hour a week
thing would have.
Something I hear pretty consistently from the creators of SaaS software is that there's
this huge unexpected sort of customer service burden, especially early on, where you can
spend hours and hours and hours a day just answering emails, responding to questions
and requests, and I think it's very common that the first hire is somebody to take that
burden off your shoulders.
Yeah.
Yeah, I listen to a lot of podcasts from founders in different stages of the company, but the
people who don't yet haven't hit that point, they think, you know, the revenue is going
to get good enough, I'm going to be able to go full-time, and it's going to be smooth
sailing.
And it's like, there's a lot of gravity and friction working against you as you move up,
and having help helps.
So you and your brother, we're both developers.
Your brother is sort of a back-end developer, and DevOps, and you're a designer and a full-stack
developer.
So for the two of you, I imagine building the product was kind of the easy part, right?
You're not necessarily innovating, you're building a CRM, you've worked with CRMs and
built them before, but there's all this other stuff, like we're talking about customer support,
there's marketing, sales, all sorts of stuff, legal.
How do you build a business when you're essentially strong in one area, all the product stuff,
but you don't necessarily know how to do all the other legal stuff?
Or did you guys get good at that other stuff?
I wouldn't say we got good at one of those other things you mentioned.
I think you can summarize it to say, anything that fundamentally comes down to trying your
hardest to make the customer happy, we ended up being good at.
And what I mean by that is customer service.
In the early days, I was so averse to the idea of dealing with customers that we literally
tried to sell off 50% of our revenue and like a revenue share to someone else to handle
all the customer facing side and all we would do is put the product, which once again, stupid.
I made a lot of stupid ideas in my day.
It didn't work.
Luckily, the other person didn't accept it.
The point is I did not want to deal with customers, but as soon as we started getting customers,
it became really easy.
It's the same as product.
It's like figure out what they want and give it to them.
There's nothing complex about that.
So we got really good and I think our support right now is the number one thing that kind
of propels our business.
We never got good at marketing, sales, legal, any of that.
I think your options are bring in someone who knows what they're doing, which I tried
and we can talk about that.
It didn't work, but at the end of the day, earlier I said you can decide what's going
to be easy and what's going to be hard.
And we decided that's going to be the stuff that we're not going to make that any harder
than it has to be.
So really low price.
We're willing to spend way more on customer acquisition than a normal company with our
price point.
And so basically we're just bad at marketing, but we make up for it in other ways.
I like that idea that you can strategically be bad at certain things.
I think it's very easy, especially as someone considering being an indie hacker to think,
oh, I don't have enough skills.
I don't have enough know-how to really start a business.
I have all these blind spots, but it turns out that you can actually build a very successful
business even though you have blind spots and things that you don't love doing and you're
not good at doing because you just sort of avoid that and just compensate in other ways.
Yeah.
I will say though, if you're doing the venture route, the venture capital route, A, you probably
can't afford to have those blind spots because your investors expect more from you, and B,
you have to move so much faster that I don't think I would have had time to learn the things
I didn't know at that pace.
If we were quadrupling year over year right now, I would have been ousted as the CEO already.
I'm learning, but yeah, but I can't learn that fast.
Did you ever at any point think that you wanted to raise venture capital?
I mean, I know you were sort of a little bit traumatized after your experience with that
business with all the layoffs and you wanted to bootstrap, but I mean, you guys are growing
pretty fast in the early days.
Did you think maybe we should raise money, maybe we should try to grow as fast as possible?
Not really.
The only time we considered raising money was we had an idea for a different product
that would have been complementary to lesson knowing serum, but very different.
It would have been freemium and potentially had a little bit of a consumer play to it.
I think, rightly, we said the only way to execute that would be with funding.
Ultimately, we decided to not raise and to not work on that idea because we didn't want
to raise, but this is a weird instinct I've never fully understood from a lot of entrepreneurs.
This idea, yeah, we were growing pretty fast for a while.
That's all the more reason not to raise money, in my opinion.
This is working.
I don't need to raise money.
Yeah, that makes perfect sense to me, I also am not a particularly big fan of raising money
just because it comes with so many different strings and so many expectations.
Again, you're right.
If you're already growing really fast and you're getting to keep 100% of your profits
because you own everything, why put the added pressure of having to hit some crazy metric
that you're not really sure you can, otherwise you're a failure?
We would have failed.
We had a two-year stretch where things got, we weren't shrinking, we were still growing,
but our growth just tanked.
That two years would have been the end of a venture-backed company, but because we were
already strapped, we kind of just weathered the storm and got back on track later.
That happens to so many venture-backed companies, where they're like, we're growing so fast,
let's raise money, we're killing it, and then the growth peters out, as it often does,
because it's very hard to sustain killer, super-fast growth for 10 years.
The vast minority of companies can actually do that.
Most companies either never grow that fast, or they are growing fast, but they eventually
hit some sort of natural slowing point, at which point if you have a bunch of investors
who expected you to go for a billion, you're pretty screwed, and your life goes from being
super happy to being kind of miserable as a founder.
Yeah, so much so that there are a few noteworthy stories of people getting out of it, like
Gumroad, for example.
It's so rare that it makes national headlines when it happens.
I know a lot of founders who I'll talk to, and you're one living in SF, they raise money
from investors, and they're super happy, and then a few years later they're just like,
yeah, I don't know, I mean the company is growing, but it's not growing fast enough.
And it's a tragedy, because if your company is still growing 30, 40, 50% a year, but that's
not good enough for your investors, then you're in this weird position where you've done a
really cool thing, but you feel bad about yourself, and you feel like you're letting
other people down, and you in fact are letting them down.
So it's yet another reason to really think hard before you raise venture capital.
Yeah, this year, our growth has not been great this year.
We were shooting for 25 to 30%, we're only going to grow 20%.
That's still $500,000 in new ARR.
I'm not mad about that.
Yeah, well I feel bad about that, but if you had investors, you would probably have a lot
of reasons to feel bad about that.
So let's talk about your growth.
Early on, you said it took you about two years to get to the point where you were making
about 60 grand a year, you can hire your first customer support rep.
What did you do to find your first users when neither you nor your brother were particularly
good at sales and marketing?
We took the lazy route, which was just paid advertising.
We tried other stuff, nothing else worked.
So blogging, when people make blogging work, I'm just amazed, because I really respect
it.
It's so appealing, because it's like, marginal cost is zero, it seems great.
We were able to write blog posts that got traffic.
The things people wanted to read never had anything to do with less knowing CRM.
So then we'd write other blog posts like, how to improve your sales funnel, and no visitors
to that.
But we'd be like, how to hack Chrome to let you add an application link in Mac OS?
Nothing to do with our business, and we got a ton of traffic to that one.
So we were never able to get that to work still to this day.
You got to kind of marry these two things where it's relevant to your business and it
gets people reading it, and that's pretty hard to do.
Right.
And some businesses are just fundamentally boring.
CRM is one of those.
I'm not aware of any CRM companies that have been particularly successful.
The only model I know of with that type of thing is if you're selling to other entrepreneurs,
writing about your journey, kind of like Groove did, their help desk.
But we're not selling to startups.
So anything we could write about our journey, I think we could get followers, but they wouldn't
be potential customers, really.
So anyway, that didn't work for us.
Ultimately, the only thing that really did was Google AdWords.
Nowadays, we found a couple other ad channels like that, like pay-per-click stuff.
We just had to pay way, way too much to get a customer.
So I think our first customer is $1,000 or something like that, and they pay $10 a month.
So this was not positive ROI, but the hope was you got to start somewhere.
Every little bit counts, and then we'll just figure something else out.
We honestly never really did figure anything else out except that word of mouth kicks in.
So it's really hard to measure second-order effects.
But if you pay $1,000 to get a customer, and they're really happy and refer another customer,
that just cut your customer acquisition costs in half.
So we can't totally track that to prove that it works, but one way or another, now we're
profitable.
So I don't really have a good way to connect the dots there.
It's pretty interesting that you could look at something like AdWords, and you can say,
you know, this is a bad ROI channel for us.
We're only making $10 a month, it's going to take us $1,000 to acquire this customer,
and yet do it anyway.
I think most people would be like, oh, that's ruled out.
We can't do this.
Let's try something else.
But the fact that you're able and confident enough, I guess, to try a channel that looked
like it was going to be bad, and you stuck with it until it kind of worked for you is
pretty amazing.
Why did you go with this route, even though you looked at the numbers and it didn't look
like they're going to work?
The reason was wrong.
What I'm about to say was what I thought at the time, and I don't think this anymore,
but I was very confident at that time.
I had bought into the idea of, like, growth optimization hacks stuff, where even if something's
not working, okay, now run some A-B tests and your conversion rate will go up, and work
on your onboarding, and your, you know, trial to paid conversion will go up, and we did
get it up.
At one point, we were paying $150 to acquire a user, which is probably on the border of
Acceptable, but I thought we're bad at everything right now.
Our homepage is bad, our product's bad.
We don't know how to use Google AdWords.
It can only get better from here.
That's such an interesting approach.
Basically, it's not good, but we'll just do it anyway, and we'll eventually iterate and
improve enough where it becomes good, and it's fine.
You did an interview on IndieHackers.com a while back, and you sort of dove into your
exact customer acquisition numbers in the early days.
So you were at six paying users after six months, you had 47 paying users after a year,
200 paying users after a year and a half.
So it was actually kind of a slow process where you're building up momentum.
Was all of this from Google AdWords, or were you guys using other channels that were sort
of succeeding and getting customers in the door?
Google AdWords, I think of every marketing channel as planting seeds, and then the seeds
grow into a network of people through word of mouth.
So Google AdWords was our main way of planting seeds, and then word of mouth has always been
our main channel beyond that.
But I'll say this, one of the hard lessons I've learned is no marketing channel scales,
or at least for us, and even a marketing channel that's working at a small scale will stop
working eventually.
So for example, we had a brief period in time where the Chrome Web Store was driving almost
all our growth.
I don't know if you remember the Chrome Web Store.
I do.
Yeah.
Now it's just basically Chrome's extension library, but their goal was to make an app
store for web apps, and nobody was on it.
And so we were one of the first, maybe the first CRM to list on it because it was free.
We just got a ton of free traffic for like two years, and then they shut it down, or
I don't know what happened, but all the traffic stopped.
I think you deal with that emotionally when you're getting a ton of traffic, and you're
like, oh man, we're killing it, and then suddenly your distribution channel just disappears.
Yeah.
At the time, it was really hard.
Now I've come to terms with this.
Marketing channels are all temporary.
Even Google AdWords, we are doing it now.
We have stopped like four times because it stopped working for us, and then we'd wait
six months and be like, let's give it another shot, and then we try it again.
I think you just have to be zen about the fact that everything is temporary.
And the one thing that's not temporary is word of mouth, if you can get it.
Not only is it not temporary, but it scales with the size of your customer base, whereas
everything else doesn't.
I felt this way.
I've talked to so many other founders that expected this.
You're small.
Let's say you're making $1,000 a month in revenue, and you're on pace to double it
every six months.
You're thinking, well, I'm going to keep up that pace forever, and it's even going
to get easier because I'm going to hire an AdWords specialist.
I'm going to hire a content specialist.
The reality is doubling a $1,000 a month business is much, much easier than doubling a $5,000
or $10,000 or $100,000 a month business, and just eventually gravity pulls you down.
But word of mouth is the one thing that keeps up with the size of your customer base.
Yeah, I love the way you put that, that it gets harder to grow, especially using these
different channels later on.
I tell a lot of founders that the easiest time to double your customer base is going
from one user to two users.
All that requires is one conversation with somebody, but when you're trying to go from
a million users to two million users, you've got to be crazy clever.
You've got to do all sorts of strategizing and marketing and have deals and unique distribution
channels set up because there aren't that many channels online where you can reach an
extra million users.
It's not an easy feat to pull off.
Yeah, and so you asked emotionally how do you deal with that?
I think you just have to fail and get hurt and then realize it's okay, the business is
still around.
But I guess what doesn't work is to put yourself in a position where that failure ruins you.
So where you're not profitable, you've overextended yourself, and then that failure would have
just killed us.
When the Chrome Web Store died off, it could have been the end of the business.
So you guys are a little bit relying on word of mouth.
Your channels for growing can disappear, but at the end of the day, your customers are
still recommending less annoying CRM to other customers, and so you continue growing.
How do you fuel word of mouth growth?
Is it just building a good product or is it something else?
Yeah, I think it's just that I'll say this, it's a really hard channel to optimize for
because it's very hard to measure.
Maybe it depends on the product, but for us, we've never been able to get a good read on
how much of our, like we have a certain amount of signups that we can attribute to a source.
These people came from AdWords, these people came from our newsletter, whatever.
The vast majority is unattributable traffic, and we think a lot of that is word of mouth,
but we can't really prove that.
We've tried asking on signup forms, we've tried all kinds of stuff.
We have a referral program, like give a month, get a month for free.
Nothing we've done has worked to get this information, which makes it really hard to
optimize because you can't really run an A-B test on that.
You can't say, well, let's change this thing here and see if word of mouth growth improves
because even if it improved, we couldn't measure that.
Yeah, our strategy is basically intuition, and a part of me is really jealous of more
data-driven companies, and I want to be that way, sort of, but also I think the startup
world has abandoned intuition and should...
Sometimes you just know that this thing will provide value to customers, and so just do
it.
Yeah, and your intuition definitely gets better as you run your business.
You've been running less annoying CRM for 9 or 10 years now?
Oh yeah, just over 10 years.
10 years.
That's a long time to develop good intuition to see, okay, we've changed this thing.
How did growth change?
How did word of mouth growth change?
Maybe when you're brand new, your intuition is not worth that much because you haven't
really trained it, but you've been running this business for so long that you probably
have an intuitive feel for what kinds of things to change, even if it's not 100% supported
by data, which is hard to gather anyway because how do you measure word of mouth growth?
Yeah, it's also a huge advantage for anyone out there like me that is thinking, I don't
want to do customer service like I was in the early days.
Talking to customers, I mean, it's not even your intuition at that point.
It's their intuition, and so I obviously, at our 22,000 users, I'm not personally talking
to every single one, but we have a team of 9 or 10 support people who are on the phone
all the time with people, and we have a meeting once a week where they bring all that feedback
and talk about it with the whole company.
So when we launch a new feature, there's not any uncertainty about, are people going to
want this or not?
We really, really know this is one that people are going to love.
One of the things that I struggle with with Indie Hackers, because Indie Hackers is also
largely fueled by word of mouth growth, but it's also fueled by me doing particular things
like content marketing, the podcast brings in a lot of people, sometimes building certain
features just change the way that the website works and can contribute to lower term rates
or higher customer satisfaction, et cetera, so I'm always sort of pulled between these
two different approaches of, should I do the obvious things?
People are asking for this particular feature, this bug fix or this incremental improvement
on the website, or should I do these more experimental things where it's like, I want
to build this totally new feature that might not even exist on other websites, or maybe
it does and it's working really well, but it's not on Indie Hackers.
I wonder if you have the same pool, a less annoying CRM, where you can either just make
the existing product better or change how it works.
Yeah, if you had asked me, what's the number one struggle challenge I'm dealing with right
now, I would have said exactly word for word what you just said.
Throughout the history of the company, we've never really innovated in the way that Steve
Jobs would talk about innovation, like maybe we've had micro innovations, like this button
is in a better place or something like that, but we basically told ourselves, we're going
to take the easy win until we have enough resources that we can do both.
I think we're at that point right now.
We're not huge.
We have like five developers, but that's enough that, or let's call it four.
I don't really have much time for that anymore, but so two people can work on the core product
and do the easy stuff, the things people are asking for.
Let's just call it, for example, performance improvements.
No one's ever complained about a site not getting faster, so then two other people can
go take a risk on something else, but this is the first time we've ever been in that
position and trying to figure out how to do that, what to do, how wild should it be?
Should the next thing we do be adjacent to CRM, maybe invoicing, or should it be something
like you said no one's ever even thought of before?
We have a variety of ideas that I can't describe them like invoicing because there's not a
word for it yet, but things that we think would play nicely with the CRM, but that literally
no one's asking for and it might completely fail.
Learning how to prioritize that stuff is definitely on my mind.
I'm a little bit jealous because at IndieHackers right now, at least, I'm the only developer.
I'm violating my own advice to focus and stay small and I'm rapidly oscillating between
like, this is a week where I'm doing these little quick, easy wins, like you said, performance
improvements, fixing bugs, making existing features better, and then other weeks where
I'm like, let me build this totally new thing and it's really hard when you don't have the
resources to try to focus on both of those things because it means both of them are going
to suffer.
Would it be inappropriate for me to ask you a question here?
Go for it.
So a while back, I don't know, is it a year ago or something?
When I went to IndieHackers, like the main community page, it went to like an almost
Twitter feed.
I imagine that's the type of thing you're talking about here where like that was one
of those experiments.
It was definitely an experiment and it did not work well, but I had a lot of reasons
for doing that.
And it turned out that there are all these second order effects that I didn't anticipate
that really made it backfire.
And so I'll go into it briefly, like one of the things that really bothered me about running
an online community is that so many people would make posts that didn't get responses.
And so you'd see some posts at the top of the community that had 30, 40 comments and
everybody was like collaborating and you have other people who'd be like, hey, I make these
posts on IndieHackers and nobody really responds.
And so a lot of what I did was try to educate people.
Here's how you make a good post, right?
Here's how you come up with a title for your post that people are actually going to want
to read.
In a lot of ways, it's kind of good training for being a founder.
Like how do you write good marketing copy?
It's kind of, you know, posting on the forum is good practice for that.
But also I was like, you know what, how can I structurally change the product itself to
make it better?
And so I made all these changes to make it a little bit more Twitter-like, a little bit
more like a feed.
I changed the algorithm such that instead of being super winner-take-all and the top
post getting hundreds of comments and everyone else getting very few, it would be that every
post got kind of a middling number of comments, everyone got like five or six comments.
And it actually worked really well.
Like the number of comments got spread around, a much higher percentage of posts were getting
commented on.
But the downsides were all these second-order effects that I didn't really predict.
For example, people will come to a forum and they'll sort of judge whether or not it's
a lively place based on the amount of activity on some of the top posts.
And so when I'm spreading out the activity in the comments among a bunch of different
stuff, people come and they're like, oh, these posts are only getting a couple comments.
This site's dead.
I'm out of here.
Because only 10% of people are getting responses, but they're getting a ton of responses.
And you come to the homepage and see that.
You don't really see all the posts that aren't getting responses.
You just see the ones that aren't.
So you're like, oh, this site's great.
I'm going to make an account and sign up.
So it was like death by 1,000 sort of these small, invisible, unpredictable cuts.
And I ended up reverting the change back to the original forum.
And I would definitely be further ahead if I hadn't spent time doing that experiment.
But then there are other experiments I could point to where I built these sort of new features.
And they are largely the reason why Andy Hackers is as big as it is today.
And so it's hard to say I shouldn't take these risks, even though they sometimes don't work
out.
There wouldn't even be a forum if I didn't take these risks.
Right.
So I've basically never taken that level of risk.
We've had redesigns or a new feature that maybe we prioritize more than customers.
But there's never been anything where I imagine nobody suggested to you, make it like Twitter.
No.
That was an idea you had.
So we've never really done that.
And what you just said, yeah, that's what's on my mind is most of the time it will fail.
Are the wins enough to make up for the losses or is it better to just take that slow but
steady approach we've been taking this whole time?
And I'll say on my end, I would guess your audience is a little more forgiving of experimentation
than mine is.
So we've been pretty conservative about that thus far, where it's not just about does it
work for us, yes or no.
It's about I don't want to give my customers whiplash of like, oh, there's this whole new
thing.
So six months later, we're going to shut it down.
They would not like that.
Let's talk about your customers a bit because you have a very particular audience.
Specifically, you're selling CRM software to I think people who aren't the most tech
savvy.
You're not like, let me target brand new startups, you're more so targeting people who've never
used CRM software before and you're targeting the end users rather than their bosses who
are higher up the food chain.
You mentioned earlier that you don't really excel at doing sales and so you need sort
of a user up bottom up approach to finding customers.
You're not calling enterprise customers and making a sale over the phone.
I think that's a hard thing to do, to decide who your ideal customer is going to be.
Because early on, at least, you have so many different people who could use what you're
building.
You have so many different directions to go in.
It's really hard and painful to basically say, you know what, forget about everybody
over here.
We're going to only focus on everybody over there.
How did you end up making that decision and when did you make that decision?
I'd probably be lying if I said like, I remember making that decision, but I know this.
What I think the tempting thing for everyone to do is to say, the easiest thing is to sell
to someone like me because I already know a lot about them.
I have a lot of insight and that's really tempting and a part of me, you know, you've
got the grass is always greener thing and a part of me is like, I want to build software
for, you know, remote, not that we're remote anymore, but like at the time remote tech
savvy startup companies or whatever.
The problem is, of course, everyone who makes software is that type of person, so it's just
incredibly crowded.
So we just went with the exact opposite route.
Like in the middle, I would say is enterprise businesses where they're not like us, but
there's so much money there.
There's lots of software serving them.
I think if I were to make up my rationale at the time, it was probably just looking
at it and saying, I'd rather be the only one trying to serve these people than be like
one of a million project management apps for, you know, design agencies or whatever.
That makes sense.
But then there's the downsides that come with it, which is, okay, why is nobody else targeting
these people?
Number one, because they're hard to understand because they're not you.
You're super tech savvy.
They're not particularly tech savvy.
Also, people who aren't that tech savvy are pretty hard to reach online.
They don't all hang out on a particular internet forum and they don't listen to a ton of podcasts.
You know, they're just harder to figure out how to reach.
And third, I think they're generally more okay with the status quo.
So somebody like me, if I've got to do something that needs a CRM, like I'm going to immediately
look up a great CRM to use, some of your customers might be like, you know what?
I'll just do this in my head or I'll do this on paper and not even think to sort of find
you.
How do you compensate for all those challenges?
Well, first of all, I'll say if you go back to what I was talking about earlier, that
you get to decide what's easy and what's hard, if you just accept that you're going to be
bad at marketing no matter what, all those things you just said are like they're downsides
if you otherwise would have been capable of taking advantage of the upsides.
But if you aren't and you're just like, I'm going to do product led growth here, I'm going
to build a great product and hope people are happy and they're going to tell their friends.
In a sense, you almost want to be in a space where all those other marketing tactics don't
work.
That was not an intentional decision.
This is definitely like rationalizing things after the fact, but I think that's if someone
wants to build that type of thing, like really slow growth, patient, product led growth,
I think these non tech savvy offline people are actually pretty good to sell to.
When they're happy about something, they're really happy about it.
I think they're more willing to recommend stuff and there's just no one else serving
them.
But yeah, no, you're right.
All the time, I'd say every few months I have some kind of daydream about like, what if
I build something that had a viral loop?
Wouldn't that be cool?
That would be so cool, unfortunately, not the easiest thing to do, especially in your
particular niche.
Let's talk about this idea of competition because you said something there I think is
interesting, which is, if you don't have a particular strength, then it's kind of advantageous
to be an area where no one else can really utilize that strength anyway, so you're not
really missing out.
If I'm terrible at dribbling in basketball, for example, I probably want to play in like
some sort of special league where everybody has to have one hand tied behind their back.
So everybody else is also bad at dribbling.
This reminds me a lot of Peter Thiel's book, Zero to One.
Have you read it?
Had it summarized to me many times, but I've not read it.
Yeah, I read it a few years ago and there's only really one idea that kind of stuck out
and stuck with me and it was this idea that as a business, you really don't like competition.
Competition is almost always bad, but that doesn't necessarily mean don't enter a crowded
market.
It mostly means like if you do, you need to somehow differentiate yourself from other
businesses.
You need to find a distribution channel that works for you, that doesn't work for others.
You need to niche down and target a really particular specific subset of people that
no one else is targeting.
You need to somehow have like a much better product, like you need something where nobody
else can really compete with you.
What do you think that is for less annoying CRM?
Yeah, so this one's the easiest question to answer because it's pretty obvious where we
are right now.
Like we experience this every day.
We feel it.
The difference is we are willing to forego revenue that other companies are not willing
to forego.
And that sounds vague, so let me make that more specific.
But every one of our competitors is venture backed or publicly traded.
And so they will not pay customer service people what we pay them because it's not profitable
to do so.
Or it's profitable, but it's not profitable enough.
They will not charge as little as we do aside from like a loss leader, like a freemium type
product.
They just won't do it.
They won't stay committed to small businesses because the money is an enterprise.
So across the board, if you look at everything that's unique about us, it comes down to the
fact that I'm okay making a million dollars instead of a billion dollars or whatever the
numbers are.
And that kind of gives you this unfair advantage in certain markets where like a thought experiment
I do all the time with myself is if a private equity company bought less annoying CRM and
tried to turn it into a cash cow, all of a sudden, what would they do?
And all of the things that they would do are our competitive advantages.
They would come in and they'd lay off most of the customer service people.
They'd raise prices.
They'd stop doing phone support.
All these things you can look at and say, great, that's what no other company is going
to be willing to do.
Let's keep doing this.
I kind of think about businesses as almost having four different areas where they can
differentiate and be really good.
So there's product, what you're building.
And you guys, I think baked into your product is really good customer support.
And the fact that you're kind of a low churn business, partly as a result of having good
customer support, and partly as a result of what you're doing intrinsically, a CRM is
a low churn because you put in all your data and so you don't want to just leave.
There's pricing, which you just mentioned.
You charge $10 a user per month.
Other CRM tools are much more expensive.
A private equity firm would come in and jack up those prices.
So those are two different ways in which you're very different than other people.
There's your market, sort of the third leg, which is who you target.
And you're targeting people who are a little bit less tech savvy, a little bit more like
end users.
Again, very different than other non-endy hackers, CRM tools.
And then there's distribution, which is like, how do you reach people?
And I think for you, that's primarily through word of mouth.
And so out of all four of those quadrants, it's like pretty hard for you to differentiate
in terms of distribution, like Google AdWords is taken and very competitive.
But the other three, it seems like you've got a really good way to stand out.
So it doesn't matter that you're building something in a crowded market because you've
got these at least three out of four different ways that you're different.
And I'd actually disagree with that fourth point.
You're absolutely right.
Over the same time period, we cannot differentiate ourselves.
But patience is something we've got that no one else has.
So if you have word of mouth growth, all you have to do is wait.
And if you have investors, you can't wait.
You have to get them their money back.
And if you don't have investors, you can be like, I love this job.
I'm making plenty of money personally.
So if it takes the rest of my career to get where we want to be, then so be it.
That's super fascinating.
So your distribution channel is patience, basically, just waiting and no one else can
really afford to wait because they need that money now because investors are clamoring
for it, but you can wait five or 10 years and build a really super solid business.
It's also awesome because every day we continue to survive.
We're a day ahead of the next company that's going to start tomorrow and compete with us.
So there will always be venture backed companies that leapfrog us and get huge and all that.
But it's harder and harder and harder for a bootstrap company to come along and do what
we're doing the older we get.
Very cool.
Let's talk about the future because you're kind of at this point now.
You've been working on this for 10 years.
You are thinking about building completely new features and new projects and things you
haven't done before.
What do you think the future looks like for a less annoying CRM in the next few years?
Yeah.
I mean, fundamentally, I guess I'll start with nothing, hopefully changes too dramatically
in the sense that the number one word that matters to me is trust between our customers
and us.
And our customers trust us.
And I would rather slow our growth tremendously or not even work on as innovative things if
it means keeping that trust.
So that's the number one thing.
We're working on a major redesign right now that we have to do for a variety of reasons.
But we've spent the last nine months emailing our customers like, it's coming, here's screenshots.
We're not doing a big splashy launch because we don't want to rock the boat with them.
So anything we do, we want it to fit within the expectations our customers already have.
Having said that, I think we've come close to hitting a point where we are constrained
by the price.
And so we have no intention of raising the price, but we probably need to sell something
else for a different price so that we can fund.
Like for example, I really want to build email integration at some point, whether it's now
or later.
I don't think we can afford to do that at our current price point.
That's fascinating, the fact that you charge $10 a month, and that definitely kind of limits
who you can serve.
I mean, it kind of determines who your market is.
And at the end of the day, there's certain things you can't build because it doesn't
necessarily fit in with your existing customer base, and it'd be like going in a totally
different direction.
I wonder what some of the advantages you have are.
Some things that you guys have that others don't, that will enable you to build new products
going into the future that really take advantage of the fact that you have maybe cheaper customers
or less sophisticated customers, or whatever you have.
Because I think whenever you're sort of leapfrogging from one area to the next one, there's always
sort of advantages you could build on.
Does that make sense?
Yeah, absolutely.
And so what most companies do is they try to go vertical here and they say, we've got
a CRM, let's make it more powerful or add machine learning here, do whatever.
Because we don't want to leave our small business customers, pretty much the only option is
to go broad with it and say, let's keep our exact, current, perfect customer and figure
out what other products do they want to buy from us.
And yeah, I think there's probably some slam dunks where we don't even, like the same way
less knowing CRM is not innovative.
We could make an even less, we could make an invoicing tool that's the same as any other
invoicing tool.
And just by virtue of it being built into less knowing CRM, probably a lot of people
would want it.
There are some easy slam dunks like that, or I say easy, nothing's easy, but like there's
some things that seem obvious like that.
And we're thinking about that, but we're also thinking about, we have ideas for like, for
example, how to do internal team chat in a very different way from how Slack does it.
Because our customers primarily are not Slack users, but that's like much more risky, but
higher impact potentially.
So that's what we were talking about earlier, but we're probably going to do one of those
two, either the easy invoicing, appointment scheduling, you know, something like that.
Or let's try and solve a problem in a more novel way.
What a dilemma.
You're probably going to do one of these two very opposite, completely different path things.
How do you decide between those two?
And how do you think about it as an Andy Hacker, a bootstrapper who's not really behold to
anybody who's already making a lot of money, you can do pretty much whatever you want to
do.
Yeah.
So let me tell a little background on this, which is early at the very beginning.
So the second half of 2018 through maybe February of this year, we had actually already decided
what we were going to do.
We were calling it sparse.
We had sparse.app.
It was, we had a website, we were collecting emails for it.
The idea is we wanted to take a big bet, but like I said earlier, we don't want to rock
the boat for our customers.
So we didn't want to build it into less knowing CRM because that might, if we then decide
to kill it, that wouldn't be great.
So sparse was basically a combination of like a team message, messenger tool, like Slack,
a task management tool and like an inbox basically.
And I still to this day believe it would be great, but we worked on it for about eight
months and then just killed it.
So like that doesn't give me any clarity on where we're at right now, but that's a little
important context that we haven't completely given up on the idea of trying bigger ideas.
But what we decided at the time was we are big enough to invest resources and other things.
And we're still not big enough to compete with the resources of a venture backed company.
If they're going entirely after that one thing, we need to get bigger first.
So we're going to do, we decided it'd be easier to build something into the less knowing CRM
platform and take the revenue from our existing customers, like an easy win and build up.
And then if we want to go take a bigger risk, we can do it later.
So we've kind of narrowed it down that much that it was too big to bite off.
We're still not big enough to really go after that type of idea.
That doesn't really clarify it, but that's something.
It makes sense because you're basically learning by trying different things.
And those things don't always work out, but you're armed with a new knowledge and it sort
of closes off like one small path and opens up other ones.
So I think that makes sense sort of proceed incrementally.
And it's kind of a testament to the fact that you've been doing this for 10 years where
you have the time to actually try these experiments.
So we do have the time.
One thing I was very delivered about when working on sparse, I was the only person at
the company working on the product.
The reason being, it is emotionally hard to work on something for eight months and kill
it.
Yeah.
And I thought it would be demoralizing.
I knew from the beginning, there was a high likelihood of that happening.
And I wasn't trying to hoard it or keep anyone out or anything.
I talked about it all the time.
I did brainstorm with people, but I didn't want anyone to get too emotional, anyone that
works for me at the company to get too emotionally invested in it because I thought that could
be damaging.
Yeah, I think about that all the time with indie hackers.
I mean, it's really just my brother and I full time, but we have some contractors.
And we've tried lots of different things and shut them down.
And I've run into firsthand how demoralizing it can be for someone to work on something
and then to sort of pull the plug and be like, hey, it's not going to work.
And as a founder, it's like, it's not that demoralizing to me because I'm like, kind
of going into this, expecting it to be an experiment.
Let's try this content series.
Let's try this feature.
Maybe it'll work.
Maybe it won't.
But I think sometimes as an employee, you're not really looking at the bigger picture as
much as the founder.
And so it's a harder hit when something doesn't work out.
Yeah, that was like your whole job, especially like we don't have a culture of like some
startups have this very risk tolerant, like maybe we'll all be unemployed in six months,
go big or go home type of attitude.
We have much more of like an emotional safety thing going on here.
And so our team is not really built for those big risks.
How do you think about your role as the founder and CEO?
Because it's pretty fascinating that you can take eight months to really sit down and like
plan a new product and code it and do all these sort of things as an individual contributor.
But you also have a growing team that you have to manage and sort of lead.
How do you balance this as your company grows?
Probably less intentionally than I should.
Like I've done things on and off, things like Monday is no meeting Monday, I'm just going
to work and kind of like, it's hard to stick to a diet, it's hard to stick to those things,
but they do work.
Recently, over the last year or so, I've come to terms with the fact that we're not growing
nearly as fast as we were before, and that's a good thing in certain ways.
And one of the ways it's a good thing is like, if you're at a scaling cost, a company that's
growing really fast, your goal is not to get better.
Your goal is to get bigger, to do things at the same level of quality, you're already
doing them, but with twice as many people.
When your growth slows down, you lose excitement in a certain way.
But now you say, well, we can actually try to do things better or not do them at all.
Like a huge amount of the work that we were doing was on scaling and now we're not.
So that actually freed up a lot of my time just coming to terms with that and saying,
you know, yeah, like I said, our growth hasn't been great this year.
I could go out and be like, I have to fix this, I have to go spend all my time on marketing.
Instead, what I'm saying is, let's spend another year making the product better and if it hasn't
fixed itself, then we'll see.
So partially just being like, I'm taking a lot of pressure off myself and saying, I want
to do product, that's what I want to do.
And so I'm going to.
I'm a little jealous.
I think ironically, ND hackers has become kind of a high growth startup.
I'm not really trying to generate revenue.
I'm really trying to grow as fast as possible.
It's very ironic.
And I like it on one hand because it's like, well, I don't have to focus on generating
revenue.
That's an interesting place to be in.
But in another place, it's when you're focusing on growth, just like you said, you don't necessarily
have as much time to just make the product better and do these types of incremental fixes
because at the end of the day, it's probably not going to make you grow 10 times bigger.
And so you're always sort of worried, there's all this stuff I want to improve and processes
I want to automate or outsource or just things I can just do that are no brainers, but you
just don't have time to do.
Yeah, absolutely.
And another thing to add on to that, a common question in interviews like this is what's
the biggest mistake you've ever made?
And I never have a good answer.
I do have an answer if you choose to ask that, but my answer is not great because if you're
growing a little slower, you never make a huge mistake because you fix it.
But if you're growing really, really fast, you see all these little mistakes that you're
making.
I'm sure you experience this where you're like, I really wish I could do something about this,
but I can't.
And that's what turns into big problems down the line.
Yeah, it really does.
And at the same time, you have to kind of be okay with it if you're prioritizing growth
where you're like, yeah, I know this thing is not good, but that's a strategic sacrifice
that I'm making.
And then you just have to open it and blow up in your face.
Exactly.
Yeah, we're built on mountains of technical debt.
But over the last couple of years, we've been paying it off in a way that we never have
before.
And that's another example of this where it probably wouldn't make sense for you to do
that.
But it probably doesn't make sense for us to do it either.
But we're all happier with the less technical debt.
Well, Tyler, we're running close to your hard stop here.
I've really appreciated basically digging into your brand and trying to figure out how
you make all these decisions that are very similar to the decisions that I have to make,
even at a much smaller company.
A lot of people listening in are dreaming about getting to the point where you are,
where they run their own business generating millions in revenue, and they can make these
sort of decisions that just make them happier.
What's your advice for somebody who's just now starting out, or maybe even somebody earlier
who's maybe working as a full-time developer or something, and they're not sure if they
have a good enough idea to get started or if they should even go this route?
Yeah, I mean, like you said earlier, everyone takes different paths.
So I guess the most general advice I can give is assume everything you're thinking right
now is wrong and that 10 years from now, you'll have a better idea, but that the only way
to learn that is through action.
So even if your ultimate path is you don't want to start a startup, the best way to determine
that is to start one and hate it.
And then you can live the rest of your life knowing that it wasn't for you.
My story involved a handful of lucky moments that I could never reproduce, but the one
thing I will take credit for is when those lucky moments happened, I took advantage of
them.
So basically, if anyone's interested in this or they're doing it, the only thing you can
do is do something and then realize how dumb you were and do it better next time.
But sitting around and waiting is never the right answer.
The only thing you can do is do something.
Tyler King, thank you so much for coming on the show and sharing your story.
Can you let listeners know where they can go to find out more about less annoying CRM
and what you guys are up to in the future?
Yep.
Sure.
So our website is lessannoyingcrm.com.
We've got a blog and a newsletter and stuff like that.
I'm on Twitter, Tyler M. King, and I've also got a podcast at startuptolast.com.
So you can find me or the company at any of those places.
Thanks so much, Tyler.
All right.
Thank you.
This was fun.
Listeners, if you enjoyed hearing from Tyler, I would appreciate it if you reached out to
him and let him know he is at Tyler M. King on Twitter.
So if you learned anything or you appreciated hearing his story or his advice, just take
a second and tell him thanks.
I also appreciate hearing from you.
I am on ndhackers.com all the time, which is a community of many thousands of founders
and developers who are just helping each other build profitable online businesses.
So if you're working on something new or you're just thinking about getting started, I encourage
you to sign up, make a post, and feel free to tag me.
I am at C.S.
Allen.
And again, that's ndhackers.com.
Thanks so much for listening, and I will see you next time.