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?
And the goal here, as always, is so that the rest of us can learn from their examples and
go on to build our own successful internet businesses.
Today, I am talking to Josh Wood.
Josh, welcome to the show.
Thanks, Cortland.
It's great to be here.
You are one of the founders of a SaaS company called Honey Badger.
There are two other founders in addition to you.
You also have two full-time employees, and with the five of you in total, you're very
profitable.
You're doing over a million dollars in annual recurring revenue.
You have low expenses and super high SaaS margins, and you bootstrapped your way to
get here.
You own 100% of the company, is that right?
That's right.
I couldn't have said it better myself.
I think you're entirely remote too.
So none of you are clocking into an office, you're just working from home or wherever
you want.
Yeah.
So I'm located in the greater Portland area.
I'm in Vancouver, Washington.
And then my two co-founders are up in the Seattle area, Seattle and Kirkland, as well
as our marketing manager, Ben Findlay.
And then actually Vancouver.
Yeah.
Yeah.
And you said you've been?
Yeah.
I don't know why.
I think I was in Portland and we just drove up to Vancouver for some reason.
Yeah.
There's been a lot of tech activity in Portland over the years here, and it's a great place
to work and live.
Yeah.
I'm pretty sure I was just like singing karaoke and getting drunk.
Were you?
I wasn't doing much tech.
Well, it's great for that too.
So give us a sense of your working hours as well.
Are you putting in like 80 hours a week as a founder, or is it 20 hours a week?
Do you have any flexibility?
Do you take any patience?
Probably not 80 hours a week, and we try to take a lot of vacations.
We actually were pretty low hours on I think the grand scale of things.
We try to put in like 20 to 30 hour a week.
And really like our week target is like a total week of 30 hours.
And that's actually what we advertise in our job postings and stuff too.
So we're like a 30 hour a week company.
Very cool, man.
You're living the dream.
I feel like most of the developers I know would love to spend their time hacking away
on their own software project that's printing money on whatever schedule they want, 20 hours
a week.
And you're also working alongside a pretty tiny team of people that you actually like
to work with because you got to handpick these people.
Yeah, it's great.
And I think we've kind of been learning that if we hire people that are a little bit like
us in that regard, that are kind of a little bit more of having an entrepreneurial spirit
to them.
Like they might have their own side projects, and that's why it's appealing to have kind
of a job that doesn't completely consume all of their energy.
But we keep it flexible to where everyone can make their own schedule basically.
Okay, so what's the catch here?
What's something that's challenging or some downside that as an outsider looking in, I
might be missing?
That's a good question.
Well, we're a small team.
We are definitely not like rocket ship or hockey stick growth that you might have with
a lot more either funding or trying to scale up a large team quickly.
So you kind of have to settle into a slow and steady routine.
And that's what we've done over the course of the business where this is a year seven
for us.
So we've been here a while and we've overcome some plateaus like with growth, that's kind
of a continual pattern we've noticed, like you kind of grow for a while and then it kind
of tapers off and you got to figure out what the problem is and get it going again.
But yeah, it's just slow and steady, kind of boring.
But yeah, it's great.
Sounds great.
This is the worst problem.
It's slow and steady.
I don't know.
Like, yeah.
I mean, I'm sure there's other problems we can go into.
The nature of our business is very technical, we're a SaaS monitoring app basically.
We have a lot of like high volume data ingestion that's happening that has a pretty heavy
like ops burden on the team that's so small.
So I mean, it's not, you know, we have our moments, but yeah, I mean, like I think overall
we're very happy with the way things are going and in our lifestyle that has resulted from
business.
Yeah.
Tell me a little bit about Honey Badger.
You said it's a monitoring application.
Who's using it and why are they using it?
Yeah.
So our customers are mostly small to medium sized teams, I would say, of software developers.
We're, you know, we're pretty much all software developer.
We're a software developer run company.
All three of us founders are developers ourselves.
So it's kind of natural that that's like pretty much all we know.
So we've, we've gone very heavily into like, you know, developers are our people.
But what we do is we're a web application monitoring platform.
So we do a few things.
But the biggest one is probably exception tracking.
So when an exception, you know, you plug us into your, your application framework code
or whatever, and then when an exception happens, we collect a bunch of information about what
happened with your user specifically is kind of our end goal.
And then, you know, perform alerting and notifications and, and all that stuff to help the development
team fix the issue as quickly as possible.
Okay, so let's talk about how you got here and find out exactly how you built this business
that has very few downsides.
You started Honey Badger in 2012.
Oftentimes the real starting point for business though is well before the founding date.
So what would you say is the point where the story of Honey Badger really begins?
I would say it began in 2009.
I was at least my part of the story definitely began in 2009.
So I was a freelance developer, web developer.
I was at I think prior to that I had done mostly like PHP and front end development.
Pretty much like your standard fare at the time.
And I had always wanted to get into Ruby on Rails, which is the framework by at the time
37signals and is originally had been the framework that they built Basecamp on and it still is.
But I really liked that and I wanted to, I wanted to break into it.
And the way I did that was I ended up meeting my current co-founder, Ben Curtis.
I think he had just posted a blog post about wanting some contract help with Ruby.
And I was like, Hey, like I'm kind of playing with Ruby on Rails.
I really want to learn.
I'm freelancing full-time.
I'd love to work with you and that's kind of where the relationship started.
And yeah.
And then from there, it's like, you know, we kind of worked together.
Our other co-founder star was kind of in the same position.
He was also subcontracting with Ben and we all worked together over the next couple years.
I think like they ended up even going and getting like a day jobs together at a startup
in Seattle, but we like never left the campfire chat room basically and stayed in touch.
And then that's kind of where Honey Badger came out of that relationship of like just
working together on a day-to-day basis.
And we kind of saw this need that we had that we wanted to basically solve for ourselves.
Yeah, that's perfect.
When you can find co-founders who you've already worked together with on certain projects in
the past, because then it's not this huge mystery box question mark, what's it going
to be like to start a company with this person?
You already know.
Yeah.
Yeah.
And I like it's funny because like a lot of the like come to realize like lately that
a lot of the things we do and the way we've run the company, like it's totally just an
extension of that original like relationship, which is a little, it can be a little weird
probably like now that we're bringing more people into the mix because it's like, you
know, we're just like three guys in a chat room basically.
But yeah, so that's, that's pretty, pretty fun.
Give me an example of that of it being a little bit weird for an outsider coming in
and seeing how you guys work together.
Well, I think we're, we're, we've been having to like come up with a little bit more process.
I think now that we were bringing more developers and things in and even contractors to like
into the day-to-day of what we're doing, because the three of us are kind of like, we're all
very independent and, and we're all used to pretty like, you know, to kind of just picking
what we feel like working on and then going and doing it.
Like we're, we're very much like individual, like, you know, we're not, we're honestly
like we're not pair programming, like very rarely.
We kind of like to just put our headphones on and, you know, be in our own offices and
just work on something.
Cause that's like, you know, that's what we did as freelancers basically.
We were always remote.
So, you know, it's, it's natural for us to, to be just, you know, at home in our office
quietly.
Yeah.
Yeah.
That sounds, sounds a lot like me.
I started freelancing in 2009, using PHP, learning to be on rails, doing the same thing
you were.
Yeah.
I think a lot of us were.
Yeah.
And I was also working from home.
I've been working from home for like 10 years.
I'm part of Stripe now.
I still work from home every day.
Awesome.
So all three of you were freelancers.
I think freelancing is the best way to transition from having a full-time job and to being a
founder of your own company.
It's not that different.
You guys are probably all still writing code every day, just like you would a normal job,
but you also don't have a boss.
Instead, you have a client.
In fact, you have multiple clients instead of being beholden to one company.
So it's just a good way to get your feet wet.
It's a great stepping stone between employment and being a founder.
What are some lessons you learned from freelancing and if any of those stuck around to help you
run Honey Badger today?
It definitely, well, from a remote standpoint, I mean, that's where I learned how to work
remotely and how to be productive when I don't have someone, you know, like a manager,
like sitting over me, like telling me what to do.
Like I remember, I mean, it kind of like I did it for so long that it feels natural now.
But I think like if you're just getting started out, that's got to be a really tough thing.
And I actually remember, you know, over the years, like I had to learn a lot of things
in order just to get my work done at home and like, you know, not sit around and watch
Hulu or something.
My brother used to watch me basically work on my started from home all the time.
And he had a full-time sales job.
And I would complain about not being able to get stuff done sometimes, being behind.
And he was like, man, if I didn't have to go into work every day and report to a boss,
I would be so productive.
I'd be a machine.
And then like six months later, he quit his job and I was teaching him how to code and
he was just like watching Netflix, chilling all the time, like we don't have that external
pressure.
Yeah.
I mean, you got your, you got your Xbox like sitting right there.
Exactly.
It's just so easy to do other stuff.
And you realize like the reason you're not doing that all the time is because you have
a boss.
Yeah.
So, yeah, so that, you know, that's, that's kind of a, it can be hard, but it's also,
I think it's really awesome.
It's an awesome process to go through, especially if you're the type of person that likes to,
you know, that can like self-learn and, you know, kind of grow on your own, especially.
Yeah.
You build up these, these independence muscles, so to speak.
Yeah, totally.
And I mean, that's, that's essential obviously for, for starting a business and where, you
know, you, you end up becoming the boss to some extent.
We try to, we try to say we don't have bosses at Honey Badger, but you know, there's a little,
decisions have to be made sometimes.
Yeah.
So what would you say about going the other direction from sort of freelancing from like
a consulting business to running a product business?
What are some of the differences there?
So that's, that's a good question.
One of the reasons that I would say we all three of us wanted to go the product route
and transition from consulting and freelancing to product is the recurring revenue stream.
And I think we were all to various extents dealing with, like you said, when you're freelancing,
you don't have a boss.
You have like, you know, 50 bosses or, or probably more like, it's probably a smaller
number, but you know, you have like three to five bosses, which are your clients.
And also like your income is usually, you know, your ability to have income is tied
directly to your time.
And, and that's a really tough, that's a really tough situation.
Like, I mean, you can do really well freelancing and it's fun.
Like I like it, but ultimately I think if you don't find a way to create some sort of,
you know, like revenue, cashflow stability and ultimately maybe some, some sort of recurring
revenue stream, you can risk burning out over time because, you know, at least this is my
experience, but I, it was difficult to go on vacations because as a freelancer and I'm
sure you can relate to this, like, you know, you know, that the minute you go on vacation,
you're, you stop making money.
Yeah.
This is no better impetus to, to switch up your business model than like, Hey, I'm not
making money.
If I'm, if I stop working and I want to be a break.
Yeah.
And so that was like, that was the thing I think that was like why we had the dream of
like having, like having some sort of recurring revenue stream and, and we naively went into
product into, into software as a service.
And I, you know, I, I say that kind of a, I'm kind of joking there, but like it's a,
we've learned a lot of lessons from that too.
And it's, you know, it's not, it's not all it's, it's not easy to build that up either.
It's a slow process and you got to be in it for the long haul.
Yeah.
And then you get into a lot of those lessons, but first things first, how did you come up
with the idea to work on Honey Badger?
We were at the time using a similar service called a, at the, actually it was called originally
it was called hop toad.
It later became a air break.
I was going to mention that to use.
Yeah.
Did you?
Yeah.
So what did you think of the name change from hop toad to air break?
Were you happy, sad or indifferent?
I wasn't different.
I kind of liked the quirky, like green hop toad branding, but I didn't really care that
much.
I liked, I really liked the, I liked the quirky branding and maybe you can guess from like,
we named our company Honey Badger, but you know, we, we liked that style, like the,
you know, the, the kind of quirky fun style.
And so I was actually like, I was pretty, pretty bummed out when they had to change
it, change the name.
But anyway, you know, we were, we were big fans of the application for a long time.
It was like the first of its kind, at least that I had ever seen the way the, the, the
ability to basically as a developer understand and know what, when your users are having
problems with your code, like is, was an extremely powerful thing that I'd never experienced
before.
Like before it was like, you know, you just kind of throw it out there and hope that it,
hope that it works.
And especially as a freelancer, like that gave us the ability to serve our clients a
lot, a lot better because we could respond to their issues with, you know, if they encountered
a bug or something, like we would know about it before they would have to go and like email
us or something or, or ask what happened.
So we could be proactive.
And so yeah, we were big fans of, of air break.
And it at round I think it was around 2011 ish, they had been thought by the, the agency
that had originally built and run it sold it.
And I think they sold like a private equity firm.
It got passed around a little bit, like, like sold a few times over the span of, I think
like, like, I forget what it was, like five years or something.
But during that process, like we noticed that it's like, it was like going downhill pretty
fast.
Like we were having a lot of issues with it.
It started like not basically just not working.
It would send us error notifications that something happened, but then we would, we
would go to see it in the, in like the application UI and it would just have like a loading and
like spinner, you know, that would like, it wouldn't tell you, like they'd tell you that
something happened, but then they wouldn't tell you what it was.
And it was like the most frustrating thing in the world to like, to know that, you know,
your client just like, you know, your app just blew up for a bunch of your clients,
customers, but you don't know what it is.
And they're asking you, but you can't tell them without, you know, doing going and digging
really sounds like air break needed to use air break.
Yeah.
Yeah.
Or maybe they could have, they should have used honey badger when it came out.
But yeah.
So, so that was a, that was the frustration.
And after a while they got so bad.
And I think actually like the thing, like the last straw, interestingly was actually
not just the, the technical issues, but it was actually their customer support, which
was pretty much non-existent.
And that was the problem.
I think it was Ben, I think it was Ben who like got really mad one day when like the,
like the issue that I mentioned, like we got, he got an alert and then went to see what
it was.
And he, it couldn't tell them.
And I think like, you know, he probably didn't have other instrumentation set up because
he was relying on air break now.
So he emailed their support and asked like if they could tell him what happened.
And I forget the response, but it was basically like, yeah, you know, like shrug, like, I
don't know.
It was like some generic response.
Wow.
Like, you know, like a can support response type thing.
Um, and that, that was like the final straw where like, you know, he was like, you know,
I can't deal like, yeah, I don't know.
We all get really mad.
We're all really adamant about good customer support.
And that's one of our like core things on honey badger too.
So yeah.
So at that point, like we're, we're like, you know, we can't use air break basically
at this point.
So what are we going to do?
And combined with, uh, you know, we'd, we'd all been talking about, uh, wanting to do
products and we're kind of, kind of looking around like, uh, Ben had actually like started
some things before I think star had one or two as well.
Um, I was new to it, but I really wanted to, wanted to get into it.
And so, um, when that happened, we were like, you know, let's just build it, you know, let's
just start building this for ourselves and, and then maybe, you know, it'll turn into
something.
Very cool.
I love this, this sort of business Genesis where like an existing tool that's good goes
away and now there's a gap and no one else is stepping into Philip, but you kind of already
know that the business works because you've seen it work before.
Yeah.
And the other beautiful thing about that is that, you know, there are customers that are
in the same position as you that are frustrated.
And they're wishing that something else existed, uh, which was kind of just blind luck for
us to be honest.
Like I think, you know, we, we honestly, we got pretty lucky just building at that time
because there were other people like us that were in that position.
And honestly, like a lot of our initial customers were ex air break users.
So that's where a lot of our initial growth came from was basically just like telling
people, Hey, like there's an alternative.
So do you remember how you got your very first customer?
Very first.
I forget who was actually first, but like our first 10 customers, for instance, um,
I would say like absolutely came from our initial, just our friends and our, our current
like professional network.
Like we were basically just emailing people saying, Hey, like check this out.
Like we're building this and, uh, and then giving them like basically a beta invite.
So the good thing about being a developer and building developer tools, cause then suddenly
you know a whole bunch of potential customers, you know, where they hang out, understand
them.
Yeah, exactly.
Yeah, totally.
How long did it take you to have something that was actually worth people using and eventually
paying money to use?
I think we, if recollection serves, we, we started building around May or June of 2012
and we launched in, I think it was in September.
Okay.
So that's pretty fast.
It was pretty fast.
And uh, and that was at that point, like, I think we got our first paying customer and,
and then it was from there, it was just kind of, you know, that slow ramp I talked about,
but we, we were well-served by the fact that we knew, like we, we identified that people
were looking for this.
And so then we started like looking for ways to, to, uh, tell them about it.
So give me a sense of your lifestyle at that particular moment, cause you weren't making
enough money, obviously right out of the gate to support doing this full time.
Did you quit your freelancing and work sort of live off your savings or were you guys
freelancing on the side while running this business?
So we freelanced on the side, uh, totally.
So in the early early, like at first it was completely nights and weekends cause it wasn't
making anything.
Um, and we were just building it so we could use it during our, like in our day jobs basically.
So I remember at the time I was into like getting up really early and having some like,
you know, spare time in the morning to work on things when there's no clients knocking,
you know, sending emails or, or bugging you about anything.
So I think at the time that I was spending most of my time on honey badger, like pre-launch,
it was between about like four and six AM and, uh, I'd get up and hack on it for, you
know, a couple of hours or something and then take a break, you know, do my morning stuff
and then go get back to my desk basically, um, where I'd been that morning and work on
client stuff for the rest of the day.
So this is where the freelancing stuff really paid dividends.
Cause not only did you build up like this sort of muscle, we were talking about earlier
where you had the discipline to really work on this on your own hours and get stuff done,
but you also had the flexibility from your free-lancing schedule to basically work around
that and work nights and weekends on this project.
And I assume like you eventually started scaling down your freelancing as honey badger became
more and more profitable too.
Yeah, we did.
And that took, I think it took about a couple of years before, like for us to go to full
time, which like, I feel like is really fast.
I'm like, I'm pretty, I'm pretty happy about that.
And uh, but yeah, over the, I mean, it was, it was definitely like, you know, at the time
it felt like a slow process and it was a lot of work, you know, jumping between things
and uh, yeah, but we tried, like, we, we tried to be good about actually like as honey badger
started to make revenue, we tried to make that like income that replaced our existing
income and then, and then scale back on the, on the freelancing versus like just trying
to do more and more and more because that's, that's kind of a, that can be a trap.
Like you start making some money on your product and it's great.
Like you have extra money, but I mean, you might not want to like, maybe you just want
to have extra money, like, you know, so you could keep making a lot of money from consulting
and then just try to keep doing the nights and weekends thing on the product and try
to, you know, just bank that extra income basically.
But I mean, eventually as the thing grows, like it becomes more and more stressful and,
and it's good.
I think like it worked out really well for us to gradually like cut back on our client
work.
So basically, you know, every so often was, was say, okay, like how much more income is
honey badger making?
Okay.
Let's cut back that much income on the, the freelance side.
Yeah, that's perfect.
I know a few people that have had on the show who were able to convince their boss at their
full time job to let them cut back and go to like a four day work week or a three day
work week.
But that's like a lot rarer.
It's a lot harder of a sell.
But if you're a freelancer, there's like, you're only needing by these permission.
You just set your own hours anyway.
So it's super easy.
Yeah, totally.
Yeah.
I've heard, I've heard a few, a few people mentioned that they've gone that route too,
but yeah, it's not, it's not a ton.
So you guys started building this for yourselves.
Was there a particular moment in time where you said, oh shit, this is something that
could be an actual business where we used to charge other people to use it?
I, you know, I think we already, I think we always had it in the back of our minds that
we were going to sell this.
Like, I think that's kind of like that kind of comes naturally to us.
I don't know if it's because we were like part of the freelance thing or if that's just
the way we are.
But like, I think, you know, we're, we all, we always have like the, the thought that like,
you know, if we can, if we can build this up and make it into something that we could
sell or, you know, other people would want that we want to do that.
So I don't know if there was like a specific moment where we said, you know, where we realized
that I think it was kind of always in the back of our heads.
And then maybe as things, as we started to get like gradual, you know, we gradually saw
interest from other people and we saw the response of people being excited about it
when we told them about it.
And I think that's when we were really like, like, it got us excited.
And I probably, you know, it spurred us to action to like actually go out and make it,
make it a real thing.
So the scary part of all this is that even though the three of you were very entrepreneurial,
very self motivated, you'd never actually started a product business before.
And I'm sure there are all sorts of question marks in your head.
Was there anything you guys were, was there anything you guys were particularly worried
about in the beginning that you didn't quite have figured out?
We didn't have like, we pretty much didn't have anything figured out, but I don't think
we were worried about it, to be honest.
So I guess it worked.
It worked for us.
Yeah.
I mean, I think we kind of just dove into it.
I will say that my two co-founders are great and they both had a little bit, they had some
more experience than I had at the time.
And I'm very thankful that for that experience, because I think it did play, you know, it
played into a lot of some of our earlier, like our first actions.
So we did have some, some experience and knowledge of like what, like they were, they were at
the time part of the, I think the microconf community was kind of just getting, it was
either just getting started or it was kind of new-ish.
They were kind of in that bootstrapped, like bootstrapper, early bootstrapper community
a little bit.
So we had heard, you know, some of the things to do, like, and some of the things to not
do.
So I guess we, we knew a few things, but yeah, it was, it was all very new.
And I don't think we, I, at least I personally didn't realize how much that we were going
to be having to learn over the next, you know, seven years of the business and continue to
learn today in order to move it to the next level, basically.
Yeah.
When I look at your team, the first thing that stands out is all three of your developers,
which is great because it means you can build a really solid product that's going to work
probably.
But also, you know, do you have any experience with marketing?
Do you have any experience with sales?
Like, how are you going to actually get this in people's hands?
Because I know so many developers who can build something that works, but then nobody
actually wants to use it.
So how did you guys figure out, you know, how to grow Honey Badger beyond your first
10 users who are all friends and colleagues to, and to what it is today?
So we, like I said, we had like, we had a small amount of experience in, in marketing
and some of the other like that.
So the sales side of it, like I said, Ben had, Ben and Stard both like, had a few ventures
that they tried successful and unsuccessful.
So we had a, we had a little bit.
But going back to the freelancing thing, like I think that, again, that played a very big
role in our ability to, to actually like sell, because we could sell ourselves, like we knew
how to sell our own services and you know, we knew how to get clients, like we're all
pretty successful as freelancers.
And and so personally, like I had already started that learning journey, I guess, like,
you know, probably 10 years before where I was like, you know, I was making no money
and I was trying to freelance and, and, and, you know, like learning basically just about
general business stuff, you know, learning about a little bit about sales, like I'm not
at all a sales, you know, the sales is not my specialty.
But it was a necessary thing, like to be able to go out and get clients and network and
all that stuff that goes into actually like serving clients.
So some of that translated, I think, into the business, being able to run a business
like in the early stages, at least with Honey Badger.
And then yeah, I don't know, like, I think freelancing isn't probably it's not the only
route to take, like to learn those skills, like I hear these days, I hear a lot of people
talking about, you know, starting with smaller, smaller products or, you know, like doing
info products, for instance, instead of like jumping straight into a SaaS.
Yeah, so you can build up some of those those skills that you need in order to grow a business.
So you learn some, you see some sales, you learn some marketing, and then and you know,
the feedback cycle is a lot smaller.
So you can get feedback a lot quicker and refine what you're learning.
Let's say I'm listening into this, and I'm a developer working a full time job at a company,
and I'm convinced on the freelancer route, what's the tip you might have for me to get
started as a freelancer that, you know, would help me out as somebody who knows nothing
about how to find clients and run a business of my own.
So disclaimer, I like pretty much I never had a job.
So I can't I can't speak like from the experience of like having a job and then jumping into
freelancing because I pretty much like like web development was a hobby when I was a teenager.
And I kind of just gradually like, you know, started learning how to like get small clients
and then get slightly better clients.
One of the most valuable tips, I would say, it's not directly related to, like, you know,
transitioning from full time to freelancing.
But basically, curating your client, like the type of clients that you're that you're
working with, I've heard a lot of people talk about, you know, you should you should trim,
I don't know if it's like you should trim your, you know, 20% of your worst like clients
or something like that every year.
But I started doing that, you know, and it's like, it's kind of like, you know, like the
whole fire the client idea.
But that's a real thing like, you know, you're not the only person that needs that should
get fired sometimes.
And you know, if you want to actually like build up a consulting or a freelancing career,
you're not going to have the best clients in the beginning, like, just take it from
me like you'll have pretty probably you'll have pretty bad clients, at least that I did.
And I had to learn a lot about how to get the clients that I actually wanted.
And so through that process, you know, you can it's easy to get stuck in that in a rut
of just like, you get some clients and you just work for them, you know, as long as they'll
have you, that doesn't give you the opportunity to to grow or, or, you know, expand the type
of the quality of the client that you can that you can work for, basically.
So I think paying attention to that and actually like having some targets of like, who you
want to be working for helping in the future is a good is a good goal to have.
Yeah, I love that advice.
I also fired quite a few bad clients when I was freelancing, you get a lot of clients,
it's really easy to get bad clients.
But I ended up in the end, working primarily with high growth startups, they're very well
funded that weren't worried about their budgets, and that will work on pretty cool stuff.
And that was what really worked for me.
Yeah, well, that's like, that's a great like, yeah, that's like a great audience to serve
as a as a consultant.
Okay, so let's talk about sort of the earliest days of Honey Badger post you guys going full
time on this.
Was there like a certain point in time where you all three decided, okay, this is real,
let's all go full time?
Or did you transition out of your freelance jobs at different times?
So it was around the same time, probably, I would say because it was at the same time,
not necessarily because we were all in the same place, but because we kind of all waited
for each other to get to the get to the point where we wanted that we were it was all like
comfortable for us.
Because we were not all in the same places in our lives at the time.
And I will say, especially for Star and myself, and even going back to the whole like working
nights and weekends thing, even as a freelancer, like we did not have kids.
So that's the I just want to qualify that like, it would have been much harder with
kids.
And, and I know it's possible, but it would have been more challenging.
So as we like went through that bootstrapping, you know, cutting down on the freelance work
as the income from the business came in, we all had kind of targets that we had discussed
of like, what, what is like a reasonable full time salary for us basically, that can replace
our current income.
Because at the time, Ben had been has a couple kids and you know, they're, they're a lot
older than like, yeah, they're older and you know, he's got a family.
And so he can't just, you know, take a huge pay cut, basically.
So we kind of, you know, we had pretty, pretty standard at the time, like, you know, developer
like basically, we didn't want to take much of a pay cut, right?
From what we're currently making.
So we did the gradual process.
And it took us, like I said, I think it took us a couple years to ultimately get there.
But when we did finally say like, okay, we're gonna be like, we're gonna start cutting the
clients and just go full time on this.
It was around the same time for all of us, I think.
Were there any early decisions you guys made that if you could go back, you would do it
differently?
Because there's so many decisions you have to make to get a business out the door.
Like there's the name, which obviously you love, and I love as well.
There is your pricing and your business model or the types of customers you're selling to
there's your marketing copy and like the way you describe yourselves.
How much of that has changed?
I think the way we describe ourselves has like we've refined it over the years.
I don't know if it's changed dramatically.
Maybe it has, if I go back and look at our initial sales page or something, I'm sure
it's pretty different.
But I think we haven't changed a whole lot in the spirit of what we are, what we do.
I think if I could go back, maybe one thing that I would like to have had would be more
outside, like a greater variety of outside input on what I was doing at the time, if
that makes sense.
Because all being developers, we're all very similar in the way we think and our approach
to things.
I think over the years, I've learned the value, started to learn the value anyway, of having
more diverse opinions and other ways of thinking and input into the business or into what I'm
doing.
I guess that's a newer realization, but that's something I'm looking more into these days,
just from a standpoint of personal growth and growing the business into new territory
that I don't understand or is out of my realm of expertise.
I think it's like having people that don't think like I do is a good thing.
Give me an example of something that the three of you guys might all be very similar-minded
on as developers, but like an outsider, for example, I think one of your employees now
is a marketer.
What do they bring to the table that you guys would consider?
Ironically, Ben Finley is our marketing manager.
Ironically, he's one of the most analytically-minded of all of us.
I mean, focused on numbers and analytics and actual marketing results of advertising, that
sort of stuff.
That's probably one area.
We like marketing and it's something that we're really invested in learning.
All three of us are pretty marketing-focused, or I should say all, basically the whole team
is pretty marketing-focused.
Bringing Ben on, he thinks more like a marketer and definitely not less like a developer because
he's not a developer.
He's definitely brought a lot to the company that we didn't have.
He routinely will have, if we were talking about a problem, he'll approach it from a
totally different angle.
That's been great.
The analytics thing, I think when we do marketing, I think we're still all about the building
and the doing of it and the shipping aspect of it.
A lot of the times, the trap we would fall into is we just forget to measure the results.
We forget to have any discernible prediction of was this successful or not beyond our feeling
and did it make us happy?
We have people that liked it.
Could we see some results from it?
You're almost treating marketing like a product feature, like something that you build and
you get it out the door rather than as an experiment that you run and really test what
happened.
Yeah, and experiments, funny you mentioned that, but the whole, been trying to develop
much more of an experimenting mindset lately and I'd say like over the last five years
even, but yeah, basically like the idea of like just not only like forcing yourself to
ship things, but then understanding that it's okay if it's not like a huge success or it's
not something you even keep, but as long as you're like trying specific things and that's
like, I think that's a big takeaway for me as I've learned marketing is that a lot of
it is just like actually experimenting to see what works and then having a way to measure
the results and using that information to keep doing what works and then continue trying
to find other things that work.
Yeah, I've tried a lot of things that don't work over the years and I've grown away a
lot of code and a lot of marketing approaches.
Yeah, but the act of trying itself is the, I mean, that's like the discipline, right?
Like if you don't develop that, you basically just don't do anything or you just keep doing
the same thing that may not be working and you don't grow like you want to.
You were mentioning earlier that part of running a SaaS business is that you grow and then
you taper off and you got to figure out what's wrong, what's the new channel that's going
to work for you and then you start growing again and then you repeat.
What are some of these growth spurts that you had and what have been sort of the primary
mechanisms for honey badger growing during those spurts?
I think so far, I think most of it has been like pricing issues and I know early on like
we had, I think our first kind of plateau was related to our pricing not being quite
right and I think it was low, lower than it could have been and we ended up experimenting
with our pricing, our plans and our tiers and that sort of thing.
I remember going through like a few iterations of different pricing and we continue today
even to play with it some.
So that's something that like never, I don't see it ever going away but that was, especially
in the beginning, like when we had no idea how to price a product basically or what the
market would bear, that was one of the first ones.
I just talked to Patrick Campbell, CEO of ProfitWell and his entire business is around
helping companies figure out their pricing and reduce churn, et cetera.
He's somewhat of an expert.
Yeah, he's an expert on this.
He was saying that there are really three levers to how a company can grow revenues.
Part of it is user acquisition and that's what everybody focuses on.
How do we get new customers in the door?
But the other two are monetization, right?
Your pricing and figuring out what you're charging for, how you're charging, how much
you're charging, et cetera, and then also reducing churn.
So you're talking about pricing being like a lever of growth for you.
How did changing your pricing enable you guys to grow revenue?
So I mean, initially, we just started charging more.
We raised prices in general and we're making more money off of the users that are coming
in the door.
So that's growing revenue at a greater rate than it was.
We experimented with different methods of tiering.
In the beginning, I think we were all very, like we all really want, like we had the idea
that we didn't want to limit people in some specific ways that we had been limited with
other products and we just didn't like it.
And we were like, well, if it's our business, we're just not going to do it.
That works out.
We still have a little bit of that mentality, but I mean, those levers are really important
in your pricing.
So things like, are you going to tier on features?
Are you going to tier on data or usage limits?
You have to have some kind of lever because if you just depend on your customers basically
just to throw money at you just because they like you, maybe a few will, but that is not
the norm.
So we had to take a little bit of a harder line at times than we probably wanted to initially
in order to actually get what's, make the product worth what it, extract the amount
of value that you need from the product for what it's worth.
Recently, one of our last plateaus that we've broken out of recently and started, like we've
seen some growth has resumed pretty well, was related to volume limits or usage limits.
So we had gone, one of the things early on, like we were really adamant about was like,
we're not going to have any, basically we're not going to have any volume limits, like
no rate limiting anything.
That worked great.
Like when we had like a couple hundred customers, but when you get into the thousands and some
of those customers are like eBay or something, like large applications that are basically
performing denial of service attacks on your servers, you need to have some sort of limits.
So we've experimented a lot with that.
We landed on a pretty good like compromise we felt that was, it was still very generous
to our users, but it was also, it was, you know, fair to us in the business.
But then we basically like didn't enforce the limits.
So like we published, you know, we published the limits basically, but then we didn't like
build the backend to, you know, to basically like turn off, cut people off because we like
to be nice.
You know, like we don't want to cut people off because we know what it feels like.
So you know, we learned from that, like people just, if, you know, if they go over the limit
and there's no, there's no repercussion, then it's just, it's like, you don't have a limit.
So we, again, we went back and we built some, what I think is like fairly generous still,
like we allow people to exceed the limit to a certain amount and send them a lot of notifications
and all that sort of thing.
But eventually they do get cut off.
And just that act alone is like, that was enough to like, just, you know, you know,
enforce the ramp back up.
Yeah, that makes so much sense.
I think the thing that Patrick was telling me about on the show that was really new to
me, I hadn't really thought of it that much was choosing the right, what he called value
metric.
And so you want to choose for something that like as companies grow, they sort of grow
into that plan and they're, when you charge them more money, they're actually getting
more value from it.
So for example, if you're charging like per user, but like they don't really get more
value from having more users who can sign into Honey Badger, then they're going to be
like grumpy about that versus if you're charging for what you guys do, which is like the number
of errors per month that they can run into or the amount of retention for the reports
that you guys generate.
Like that's pretty cool.
If I'm, you know, paying more money, at least I'm getting a lot more value, I can report
more errors.
I can see my errors for longer.
So it makes sense.
Totally.
Yeah.
Yeah.
So that's kind of our, you know, that's basically, I think the main things that's been the main
growth strategy for us so far.
And ironically, like we're, well, maybe not ironically, but we're terrible at the user
acquisition side of it, to be honest.
Like we're a, that's one area where we're really like trying to, we're trying to learn
more.
And that's the side of marketing.
I think that is, you know, as developers like that doesn't, hasn't come naturally to us.
But I will say like all of our like user acquisition growth for the most part, like we've done
a lot of marketing and advertising stuff, but it's all centered around word of mouth.
And in like actually like interacting in our community, being a member of our community,
like that all kind of plays into word of mouth, I think.
So a lot of our marketing is like centered around that.
But our customers are amazing.
And like, they're pretty much our number, like, well, they are our number one priority.
So everything we do pretty much centers around our customers and shipping things for them,
listening to their feedback, even just like giving them cool experiences at conferences
or you know, whatever we can to make their lives better.
And that that's paid off on the, I think on the at least growth from user acquisition
is we haven't really had to figure that out yet.
We probably will, but it's, you know, we've been able to grow still without being like
amazing at like, you know, marketing, yeah, gurus or something.
You mentioned earlier that you have really slow, steady linear growth.
And I think that being an exception handling service, monitoring service, that automatically
means you're probably gonna have pretty good retention, assuming you're not air brake with
like terrible customer support and like an unreliable product.
People generally once they sign up for monitoring, and if they like it, they're probably not
going to just like churn next week.
Because if you're building something like a to-do list application, well, like that's
pretty easy for people to churn from because they have to remember every week to add new
tasks.
And if they don't, then they automatically turn by default.
So that's like a pretty cool way to keep your growth going.
And it seems like you've really doubled down on that by focusing so much on customer support
and making sure your product is really good.
Yeah.
And the people using it feel taken care of, because now they're, you know, even doubly
less likely to churn and quit.
Totally.
Yeah.
And that is really paid off for us.
Our churn is has been around one or sub 1%.
So that's crazy.
Yeah.
It's worked really well for us.
And like you said, we're probably in a good, a good, you know, we have a good type of application.
And what we do is fits well for that.
But yeah, I think that, yeah, our efforts there have like really paid off.
If you're churning like 1% or fewer than 1% of your paying customers every month, like
you can basically have no customer acquisition.
So see, like, yeah, that's where we can afford to like be terrible at customer acquisition.
Exactly.
Because no one leaves.
Because no one leaves.
I think it's something that a lot of people just overlook when they're starting businesses.
Like, how do I get people in the door?
But it's like, well, 80% of your customers are leaving after a month.
So like, do you really want to spend your time getting more people in the door?
If that's what your churn looks like?
Yeah, no.
Yeah, totally.
And I think you're right.
That's a hugely overlooked.
And I think, yeah, for me, like that, that can feel daunting.
Like when you see how few, you know, if you put things in context, like how few, you know,
end-ups you actually get for like where you supposedly should be, but yeah, it doesn't
matter.
Like, there's still ways to grow.
And you can always go and learn how to also, you know, do customer acquisition better.
Yeah.
One of the things you guys have done that's sort of a customer acquisition play, if you
will, is you have a podcast now.
It's called BounderQuest.
I'm kind of on a roll here.
I feel like the last 10 people I've talked to are either in the podcasting space with
the Business at Service podcasters or they have a podcast.
You're no exception.
Tell me about FounderQuest.
What is it?
And why did you guys start a podcast?
So FounderQuest, you can listen or subscribe at founderquestpodcast.com.
But it's basically the three of us, the three founders of Honey Badger, just chatting every
week about the business and a lot like we discuss a lot of like topic.
We go deep on topics like that we're discussing right now.
So a lot of it has been in a similar vein to like the discussions we've been having,
like what's worked, what hasn't.
It's all been pretty much marketing and business and bootstrapping focused.
We get into some of the technical, some of it's technical.
It's kind of targeted at developers who are interested in bootstrapping or starting their
own companies basically.
But yeah, it's been a lot of fun and it's made me really like podcasting.
Like I said, we're all pretty independent.
We chat, but we're not always talking face to face and we're remote so we don't always
see each other.
So it's a really nice way to get together every week and actually just chat.
So I look forward to talking to my co-founders and yeah, it's a lot of fun.
I love your art for your podcast.
I'm on founderquestpodcast.com.
Are you the the barbarian with like the red beard and the axe on the left?
I am, yeah.
You're looking fierce.
Thanks.
Yeah.
Yeah.
It's kind of a, we were going for like a Dungeons and Dragons kind of theme I think
with the whole quest and the artwork and all that.
That's actually Starz doing, he's a big D&D fan.
Yeah, it looks great.
There's this video game I used to play as a kid on Sega Genesis called Golden Axe and
there's like a dwarf character with an axe.
You remind me, your character on this website reminds me of my favorite character from that
game.
Yeah, the artist who does the artwork on that also does all the artwork on our stickers
and t-shirts and stuff, which is one of the other marketing things that we're really big
on is we like doing badass t-shirt artwork and that sort of stuff and then giving a lot
of them away for free.
So you've got a podcast, you go into conferences, you're giving away stickers and shirts and
stuff like that.
Which of these user acquisition techniques would you say has worked the best?
Like if you had to keep one and give up the others, what would you keep?
That's a good question.
I don't know if we've seen, like the podcast is fairly new so I don't know if it's, I can't
say like if it's been a huge, if it's made a huge difference in like user acquisition.
I think we're looking at it as, like I said, kind of like an experiment, like we always
wanted to do one, we just never, we didn't, you know, we procrastinated on it to be honest
and just never did it so we were like, let's actually do this.
And we like sharing about, you know, we like, like I said, like the develop, you know, the
kind of starting out developers, a bootstrapper, like that's kind of our, those are our people
so we like being able to just like share with them.
I would say, you know, we've gotten a lot of value out of conferences and being part
of the community.
We're torn on conferences because they're very hard to like measure.
Like I said, like we never had a way to measure how effective they actually were like in getting
new users, but since our, a lot, like pretty much all of our growth has been word of mouth,
like actually going and meeting people and having them like know we exist and we're real
people and we're developers like them and making those connections has been like a big
win for us, I would say.
And so like, I think any place where we can actually like communicate and meet our customers
and prospective customers has been a, has been a good thing to do.
You said earlier that you were naive enough to start a product business for your first
business and that you've learned some lessons about it, that it's not easy and that it's
a slow process.
What would you say is the biggest lesson that you've learned from running this product business
that you would hope first time founders and people just considering this would also know?
I think that really that the slow, the slow growth trajectory of a software as a service
business, like I didn't really know what the growth trajectory was when we started.
Like I didn't know it really, I didn't know much about SaaS or other products for that
matter.
And so I think like, you know, it's a lot more, there's a lot more awareness now of
the different, like what you can expect when starting, you know, different types of businesses
or if you go the info product route or, you know, that sort of thing.
Like I think the, you know, you start to get, you get a lot more feedback, a lot more quickly.
You can make changes a lot more quickly with SaaS.
It's you know, when you're starting out, usually it's like six months before you actually,
at least before you actually have something that's, that's even somewhat complete.
And as you're building it, it's easy to, to just build it and not talk to anyone.
And especially as a developer.
And so that's, you know, I think there's a lot of people today.
There's a lot, frankly, like there's so many, so many more resources for bootstrappers and
especially bootstrap developers today that didn't exist back eight, seven, eight years
ago when we were getting into this, at least like, you know, I didn't, I didn't know about
it about a lot of this stuff.
So like learning, learning ways to actually like validate your market and build what people
want.
And, and that sort of thing, like it start getting as early feedback as much as possible.
Like all that stuff is good to know if you're, especially if you're going to go into SaaS
because like I said, it's, it's easy to fall into just like build it and then you don't
build the right thing.
Yeah.
I think that's so important to sort of go into with your eyes open and know how long
the cycles can be for starting a SaaS business to get things started.
And whether you start off as a freelancer or you start by building an info product or
you start by building a really small SaaS product, just having some sort of small bite
that you can take to make the transition easier is, is really important.
Yeah.
Yeah.
And building, like having a good foundation to build from to like I said, like I, we had
the freelancing, which, which made it a lot less risky for us to just start building a
SaaS that was going to take, you know, five years or whatever to, to become like real,
real money.
So yeah, I think there's other, there's other ways to build, build on a foundation and you
might mix, you know, mix and match a lot of these different things that people do to,
to kind of support themselves until the software as a service can grow to the point where,
where it's a, you know, paying the bills.
Well, listen, Josh, it's been great having you on here.
You guys are killing it with Honey Badger with your slow, steady, low-turn growth.
You guys have gotten acquisition offers to sell.
You've turned them down, obviously, because you're still here working on it.
What's the future look like for Honey Badger?
What do you think it'll be in another year or two?
Hopefully like, you know, not, not too much is different.
Maybe a few more people.
We're not planning to hire rapidly, but we, you know, we'd like to add to the team a little
bit and you know, keep working on making the business more sustainable for everyone.
I think that's like one of our, you know, big things is that we want to, we want to
enjoy this while we're working on it.
And, and so, you know, we have sacrificed some, some growth for an exchange for a healthier,
happier lifestyle, but it's been totally worth it in my opinion.
And and yeah, we're just, you know, we want to keep growing the business and and keep
kind of learning about this this whole like style of working and style of building.
So there's a lot that there's a lot that I personally know I'm going to learn and, you
know, hope to learn.
And so yeah, just keep, you know, keep, keep at it basically.
Well, listen, Josh, thanks so much for coming on the show and sharing your story with us
and helping other people who are trying to accomplish what you've done learn a little
bit more about what that path looks like.
Can you tell listeners where they can go to find out more about what you're up to at Honey
Badger and also where they can find your founder quest podcast?
Yeah, totally.
So you can find us at honey badger.io.
That's our our main website, founder quest podcast.com is the podcast, you can find us
on whatever overcast or iTunes or, or wherever us Spotify, just search for founder quest.
We recently launched a get with the the GitHub student developer pack, which is kind of a
cool, it's a thing GitHub put together, which basically takes a bunch of like partners that
serve developers.
And it gives, we all give away special things for students, basically.
So if you go to education.github.com slash pack, if you're a student developer, you're
just getting started, you can basically get the whole pack and then you get a bunch of
offers basically for free.
So I think we're giving away like a free small Honey Badger account for a year to new students.
So yeah, and if you want to connect with me personally, it's Joshuawood.net.
All right, thanks so much, Josh.
Thank you.
Listeners, if you enjoyed the episode, I would love it if you reached out to Josh and let
him know.
His website is Joshuawood.net and all his contact details listed there.
I believe his email address is just josh at Joshuawood.net.
But my favorite thing is when guests who've been on the show tell me that they've received
all sorts of nice letters and emails and tweets from all of you.
So again, if you enjoyed hearing from Josh, just reach out and email him and tell him
thanks.
Also, I am available on ndhackers.com.
At any point in time, if you're trying to start a company or you have any questions,
feel free to make a post there and just tag me.
I'm at CS Allen and I will get back to you.
As always, thank you so much for listening and I will see you next time.