What's up, everyone? 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 do they
get to where they are today? How do 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, so that the rest of us can learn from their examples and go on to build our
own successful businesses. Today, I am excited to be talking to the one and only Rob Walling.
I think the best way to describe Rob is that he's really the entrepreneur's entrepreneur.
He's bought companies and grown them. He started companies from scratch. He has bootstrap companies
from nothing to profitability and millions of dollars in revenue. Somehow during all this,
he found the time to write Start Small, Stay Small, which is the book for developers looking
to create their own profitable internet businesses. He's the co-host of the podcast,
Startup for the Rest of Us, which if you haven't listened to, I highly recommend.
He co-created MicroConf, the world's biggest conference for self-funded software companies,
which I was lucky enough to speak at this past year. And today he's working on a new project
that a lot of people are talking about called TinySeed, the first startup accelerator designed
for bootstrappers. So Rob, welcome to the Indiacus podcast. You are just everywhere,
man. And I really appreciate you taking the time to come on.
It's my pleasure. That was a heck of an intro. You nailed it.
Well, you've done a heck of a lot of things.
It's been a long list. I think that starts implying at a certain point that you're just
getting old. Yeah, I was tempted instead of doing that whole intro to just introduce you
as the grandfather of bootstrapping, but I didn't want to date you.
Appreciate that, man. Now I've been doing this for a while. I started trying to launch stuff
around almost 18 years ago and really had my first success maybe 13 years ago. So that gives
people an idea of time frame.
Yeah, what made you first decide to become an entrepreneur? Take us back 18 years ago.
Well, yeah. I mean, so I graduated from college about 20 years ago in 98. And I really didn't
want to work for other people. I wanted the freedom to be able to make things. And when
I was a kid, let's say eight years old, I learned a program on my little Apple II that my parents
got me. And I loved the freedom and the power. I was eight. I felt godlike power to be able to
write a text-based game with code that actually worked and that people could play.
And ever since then, that's kind of all I wanted to do was make stuff. And I wrote
booklets. I wrote nonfiction booklets in high school, and I sold them through classified ads
just because I wanted to create something and have it justify my time with a little bit of
income. And so when I graduated from college, I realized I worked construction for a couple
years, which was hard, but a good learning experience to know what hard work is really
like to be out in the field. And then I started programming professionally, took a salary job,
and then contracting. And I realized it was super fun. And I was creative for a while.
But then building things for other people got old for me. And so I started looking around like,
what can I do that would allow me to have total control of my time? And I was thinking like,
should I write a book that can sell a bazillion copies? Should I buy real estate and create
passive income? I literally was just looking for ways to own my own time. And after a couple years
of flailing around a little bit, including I owned several properties in LA at the time,
and I was trying to turn that into a passive income stream. And that's a heck of a lot of
work. I mean, talk about, yeah, it's a lot of work to get that going. I finally realized I
have this skill that so few other people have. Why don't I double down on that? And that was
basically writing code at the time. But then I slowly learned to market and such over the years.
And that was really the goal was to just not have to work for other people and to create what I
wanted to create when I wanted to do it. So your goal here was to really just find freedom to live
your life the way that you wanted. Did you know what you would do once you found that freedom?
I didn't. I figured that I would just create more things. And the nice part of that is I didn't
know what would happen. But at that time, I didn't have kids. I now have three kids. Once I had one
child, I realized, oh, I would totally hang out with my kid more if I wasn't doing this commute
in Los Angeles, if I wasn't working this 40, 50 hour weeks for this coding for a credit card
company. And that is what I realized would probably fill in some of the time. And then I would just
work less. I would read more. I would write. I started blogging in 2005. And I was publishing
two big long blog posts a week. But I was doing that. It was literally nights, weekends. I also
used to go out into my car. I mean, this is what a loser I am. I used to go into my car at lunch
when everyone else was eating. And I would scarf down my lunch. And I would try to hammer out a
blog post or an essay. Yeah, I was that determined to make this work. And I didn't know what the
blog would get me in the end. But looking back, it was the seed that then became the podcast and
microconf and all these other things. So yeah, to answer your question, I didn't know what I would
do at the time. But I knew that I had plenty of things that I could do with the time.
People have a lot of trouble managing this transition between working a full time job
and eventually working full time at their own company. I think for many people, it can take
years to make that switch. A lot of people never successfully do it. How did you
manage to juggle those two facets of your life? I think anyone who is able to do this
really quickly and easily, I think they either got lucky or they are much smarter person than I am.
Because for me, I dabbled in it from 2000 to 2005, where I would launch these little efforts,
and they would get a little traction and make 100 bucks a month. And then it was so much work. And
I just knew it wasn't going to grow. I couldn't spend six months of my nights and weekends and
nothing would happen. It wasn't until 2005 that I had this first kind of breakthrough. I figured
out how to I had a business that a software business that made wound up making about two
or $3,000 a month, which was a house payment plus a car payment. I mean, it was pretty cool.
Nothing compared to what I made as a programmer in LA, but it was nice. And then it took me until,
I believe it was December of 2008. So that's really four years, five, six. Yeah, that's four
years it took me. And I made the transition slowly. And I did it by building small utilities and tools
or by acquiring them. And that was an interesting realization for me is by that time I started
consulting and contracting and I was billing about 125 an hour, writing code 40 hours a week.
But I didn't want to ever carve out time to sit and spend 100 hours coding a little tool. And so
I started noticing that people were selling these little businesses that weren't doing much in terms
of making revenue, but that I could apply my toolset that I had learned on this first product. All I
learned was a little bit of SEO and a little bit of AdWords. And I just started applying that to
the next thing. And then I learned a little bit of display advertising. And then I learned a little
bit of retargeting and a little bit of copyright. And each skill that I learned and put in my
tool belt, I could apply to all the products that I was working on at the time. And so I took a
little unusual approach to it, honestly, in that I had almost a portfolio of these little products.
And even there was an ebook that I purchased from someone, all the rights to it. And there was an
e-commerce site. It was like six or eight things that all wound up generating about 10K, maybe 12K
a month. And that was when I was able to really feel okay. Because I had a wife and a child in
a mortgage, I was able to feel okay about pulling consulting out altogether, which as I said, was
late 2008, maybe January 2009. That story is fascinating for so many reasons. I think the
first thing that sticks out to me is that most developers who I talk to will say, yeah, they
really want to start a business and achieve some measure of financial freedom. But really what's
driving them is they want to code something from scratch on their own. And it takes a tremendous
amount of discipline to say, no, I'm going to buy somebody else's business, somebody else's
website, and not build it from scratch and just work on that existing thing. What motivated you
to take that approach? And how did you even learn that that was possible? It's a really good question.
And I've been asked this a lot. I think there were two things that allowed me to do it. Because I'm
as picky about my code as anyone listening to this. I think I'm the best developer and that
everyone else's code sucks. And no matter what code, you know, code base I can do, they always
did it wrong, and I would do it differently. So I totally get that. It's not that I'm not,
you know, frankly, as picky as anyone else. But there were two things that allowed me and my
mindset to do it. One was, I really did want the freedom. And at a certain point, I said,
what will it take to do that? And is there a way to shortcut this? And so the answer to that was
don't build it by it. Because as I said, I was making quite a bit of money as a developer,
frankly, more money than I mean, I grew up solidly like working class dad was an electrician,
my mom was a homemaker. And so we were fine. But we, I didn't have money as a kid. So when I,
you know, had $10,000, $15,000 in the bank after coding, you know, for X amount of months, like,
that was a I'd never seen that much money. And so, you know, to be able to take that and basically
skip ahead, you know, instead of saying I need to launch five things, I'd already launched five
things, and none of them had worked. Could I just buy one that is kind of working and make it work
more and skip all the trial and error. And that was part of the mindset. The second thing was the
very first one I bought was called dotnet invoice. And I was a dotnet developer at the time. And it
was still in alpha, it was really early stage. So the code, so I kind of took ownership of the code
base. And I felt okay that I hadn't built it from scratch. In fact, they'd done a bunch of really
good plumbing code that kept me from having to rewrite a login screen and rewrite it forgot your
past where, you know, they had taken care of all that. And they had built a simple invoicing system
that I could then build on. And it excited me that I didn't have to build all that. And so I wound up,
you know, I approached him and I found, you know, to your point of your question of how did I figure
out this was possible, it was pure dumb luck. I was just it was that whole thing. It's that
luck surface area, this idea of you do a bunch of things. And eventually your surface area gets so
big that you know, something hits it. I was on a forum called site point, which later became well
site point forms, I believe are still around, but the later became flippa. But I was on site point
forums. And it was like the marketing and entrepreneurship forum. And there were these
two developers that said we've built this product, but we don't know how to market it. We'd love to
partner with someone who knows how to market. And I emailed them and start talking with them and
it's like, you know, I don't really want to partner. But would you just sell the whole thing to me?
Because then I can take it and run with it. And they agreed and they said it was about 400 hours
of work, of dev hours. And of course, stupidly, because I had no idea what I was doing, I did the
math in my head. And I said 400 hours times, you know, my hourly rate is like 50 grand,
maybe it was 40, 40 or 50 grand, I forget what I was building at the exact moment. But I said,
boy, if I can get this thing for like even 10 grand, that's a bargain, things worth a lot,
which it wasn't because it wasn't generating any revenue. So it's not it's not what we know today,
you know, this is this is 13 years ago. But actually, to be fair, it was generating about
two or $300 a month. And they had had a month that was 800. And it turns out there was a launch they
did, you know, it was a little bit, I don't know, it was a little shifty. But I bought it for that,
or maybe it may have been 11,000, I think that countered. So I bought the thing. And instantly,
I do the price was 99 bucks, I tripled it to 300. And it didn't never sold that many copies,
you know, it made two grand, three grand a month. So you figure it sells seven or 10 copies.
But that that was game changing for me. And that's when I knew, this is a this is possible,
I can actually make money on the internet. And I was coding, I mean, again, I'm coding 40 hours
a week at a job. And then I was coding 2030 hours a week, nights and weekends. And I loved it. As
much as I love hanging out with my wife, when she left town, I would just ratchet that up. So I do,
you know, 30 30 plus hours a week, nights and weekends and make some progress on it.
Yeah, it strikes me is when you're talking about this, that the thing that you have the most of
when you have a job is money, you're actually getting a salary, it's coming in on a regular
basis, then you have the least of his time, because you're spending 40 hours a week in this
job. And what most people do when they're trying to make this transition is find little stretches
of time, like you said, go out to the car and eat your lunch, and then find some time to blog work
nights and weekends. But the approach that you ended up taking was to take the thing the resource
you had a lot of, which was money from your job, and use that to save time. So it's really smart
that you did it that way. And I even today don't see very many people buying businesses and building
them up. Yeah, it's really an insight. That's a good way to put it. And that is exactly how
I thought of it too, is I remember at a certain point telling my wife, I right now I have more
money than time for the first time ever in my life, because all the way through college, and you know,
early, early married life, you're trying to save for a house and this stuff. But when money started
piling up in the bank, it's a good problem to have. But the bad problem that I had is I didn't
want to work for anyone else. So how can I take that, you know, I'm not going to save a million
bucks or 2 million and retire right now. But how can I take that and leverage it? And that's,
that's exactly the calculus I did in my head. And I did it multiple times, right? There were
multiple things I acquired. Do you have any salient memories of major failures and mistakes
or things you did wrong when you were first starting out buying these companies and trying
to grow them? I remember the realization after I bought dotnet invoice, and gave the guys the
money, took the code base got the website, and I emailed their existing customers. And I got I
said, Hey, I acquired this and I'm you know, if this is it's a good product, blah, blah, blah,
I thought the product was fully baked. And it was not and I got 30, maybe 40, just pissed off
replies. People saying those guys weren't maintaining it. There's like bugs in it. We've
reported all these bugs, no one's doing anything. And I thought, holy shit, I just spent $10,000
on a lemon. Like I've that's more money than I've spent on anything. I'd never spent that much on a
car. I mean, I was like, this is catastrophic. And one by one, I mean, I remember like the hair
stands up on the back of your neck, like you think, I can't believe I just made like the,
the worst mistake of my professional life, you know. And I was reading through the emails. And
at a certain point, I realized, I can fix this. Like I'm a developer. These are bugs. These are
pissed off people. I can make them not pissed off. And so one by one, I would respond and said,
what's your bug? Well, this doesn't do that. And I expect cool. So I'd go in, I'd spend two hours
here, and I would fix that thing. And that I spent 60 hours in the first two weeks, just triaging,
you know, angry customers, and people who weren't who were trying it, and they had errors and just
fixing little things. The nice part about it, though, it was obviously super stressful. But
there was an interesting thing where my, the fact that I'd written that that $11,000 check,
my back was to the wall. So I couldn't justify walking away from the product. And I feel like
sometimes people launch a product, it doesn't get traction, it gets hard, and they kind of walk away
from it. This was actually motivation that I had to make it work because I was all in because I had
written that check. And what an amazing way to build goodwill with these early customers. I mean,
the juxtaposition between these earlier owners who weren't really responsive to customer complaints
and feedback, and then you this new guy who's taking it over who immediately starts fixing bugs
one by one. I mean, I bet you they're pretty happy. Yeah, it definitely got me some goodwill
with them. And then, you know, I was able to get annual upgrades, it was a one time sale,
but I was able to get annual upgrades. And when I increased the price, and the annual upgrade price
went up, like really didn't get many complaints. So it was definitely it was it was worthwhile,
not only for that, but really for the the learning experience for me was huge. You know, I had never
answered support emails, really, right. And so this is coming straight into my Gmail. And I'm just
sitting there, one by one answering them, and then eventually realizing, Oh, this is how you
this is really how you should talk to customers, even when they're angry. It's stuff we all know
today. But it's like, there were no blogs podcast talking about this, there was no indie hackers,
you know, so I was just kind of making it up as I went along. And so it was just my holding my feet
to the fire was definitely a helpful, helpful learning experience that I took forward with me
to every other product I did, you know, that's the thing, it was like, respond, don't panic,
get in there, elbow grease, do what it takes to get this done. And you know, and it'll yield
some results. So we went from making, like I said, two or 300 a month. And it consistently made
between two and 3000 a month for years and years until I took on a just a business partner, because
I wanted to move on to other stuff. And then eventually, I just gave it to him when it became
it was just a small thing at a certain point. And it wasn't worth you know, my attention anymore.
So one of the more interesting projects businesses that you moved on to
was a company called hit tail. What's the story there?
What was interesting is around 2009. I when I stopped consulting, I had this period of immense
creativity. And I acquired hit tail in two years later in 2011. But there was this two year span
where I wrote my book star small stay small that you mentioned, I launched and on what I believe
is the first ever online training for bootstrap software founders, it was called the micropreneur
Academy. And now it's called founder cafe. But it was a membership site with a bunch of content,
everything I had learned from, you know, doing what I'd done. We launched micro cough, and we
launched startups for the rest of us. All four of those things happened within 18 months. And
that was, you know, when you asked earlier, what did you know what you were going to do with your
time once you had it? I didn't. But that's what I wound up doing was just pouring out information,
you know, and I blogged more and I the podcast went weekly and the you know, the conference and
everything. And so I did that, our son was born in 2010, our second son, and I spent about eight
months with him. I was working about 10 15 hours a week. And he and I hung out. I walked around the
town with him, you know, he was in a baby beorn strapped to my chest. And I loved it, man. It was
like I have some of the fondest memories of my life are that stretch of time. And as it eked into
2011, I was getting bored. I was just restless to do the next thing, you know, and I realized that
I could build something from scratch. And I started entertaining that idea. But I came back to the
what if I could acquire a sass app, and basically do a Warren Buffett play by something that is is
valued at less than what I think it's worth, and then just, you know, grow it because I have again,
I had all these skills by that time. And I had even an audience and I just had so much more,
I kind of stair stepped my way up to where I felt confident enough that I could really,
you know, do some damage in a good way, like really grow something.
Hit Tale was an app that I found that was neglected. And it had been built by a PR firm
in, I believe it was 2006. And I found it by going back and Googling, I think your listeners
might dig this, but I went back and Googled like, top 10, you know, startup launches or top 100
startups of 2006, top 100 startups to 2007, I would just go through the list. And anything that
wasn't like B2B sass, I just ditched, but anything that was I would then go and see, are they still
around? Do they, you know, are does it look decrepit and ancient and neglected? Even if it
wasn't, I would still just say, are people using it? Do I think this is making money? And I would
cold email the, you know, the founder or sometimes even just the contact form. And that's how I
found it. I sent out, trying to think probably 50 emails, maybe between 50 and 100 and got some
responses and some not, but Hit Tale, you know, resulted from that. And Hit Tale is, it's still
around. I actually sold it in 2015. As Drip was really scaling up, I just didn't have the time
anymore to maintain it. But it is a long tail SEO keyword tool.
So at some point, during all this, you mentioned you decided to sit down and write a book before
acquiring Hit Tale. But after your previous successes, the book was called Start Small,
Stay Small. And it was a step by step guide to teach developers how to launch a self funded
startup. What made you decide to write something like that?
I was blogging since 2005. And so about five years into the blog, and just a few months,
I believe into the podcast, which is we started in 2010, I had this massive list of questions
that people would send me about starting up about because I wrote about the Hit Tale acquisition in
I'm sorry, not the Hit Tale one, the I wrote about both of them. But the dotnet invoice one
is called if you if you Google the inside story of a small software acquisition, I have a three
part series where I went into as much detail as I as I could. I'm not sure if I mentioned dollar
amounts, but I really went line by line. And I got tons of questions about all of this stuff.
I also started using virtual assistants in 2007, when I read the four hour work week.
And I realized I was doing all my own support on all these products, I had no idea this whole
world of virtual assistants, you know, remote work existed. And I was looking at like hiring
someone in LA, and they were going to charge 40 bucks an hour. And I was thinking to myself,
I can't even make this work financially, I can't get these products off the ground. But as soon as
I found out about VA's, I had a whole team, I had seven or eight VA's doing all different types of
stuff, design, work and support, and SEO and just helping me. So I would start blogging about that.
And so pretty soon, I realized, wow, I actually do have some knowledge, you know, eventually, you
kind of, I still had imposter syndrome. But I definitely thought I know at least more than the
person who's starting today. So I took all those questions. And I took a bunch of ideas that I
hadn't yet blogged about. And I said, I'm just gonna, I'm gonna go out on a limb. And I'm gonna
write a book and I'm gonna see if this even makes sense. I'm gonna self publish it, because that's
kind of what we do as bootstrappers, right? I don't want to wait. I actually talked to a couple
publishers who had approached me on the blog. And they said it took 18 months from the first
conversation till the time it was published. And wow, I don't have that attention span. Like I need
stuff to happen faster. And that was really the reason I didn't do that. It wasn't even about the
money because I didn't think I didn't think I would sell that many copies of self published.
But it was something that I wanted to build quick and I wanted to ship. And I wanted to see what
the response was. And so instead of writing an entire book, I put up a landing page, like in true
smoke test format, I put up a landing page. And I still have a screenshot of it somewhere if you
want me to send that to you for whatever reason. But the headline said, at last, a book built for
founders who want to build a product without $6 million in venture funding or something like that.
It was kind of a snarky headline. And then it had just a couple bullets of like, this is who I am.
And this is what I'm doing if you're interested to enter your email. That was it, which of course
went into MailChimp. And so I blogged about it. I put it on Hacker News and it went to the
the front page. And I got around 600 emails that said they were interested. And to me,
that was validation. I figured if I could sell even 200 copies at 30 bucks a piece,
that'd be six grand. And I could justify sitting down and spending a couple months
to write the book, which shows you what I thought my time was worth back then.
So I sat down and wrote it on and off, took two or three months. And I repurposed. Actually,
I had some content in the Micropreneur Academy that fit really well that I repurposed. So it
wasn't totally writing from scratch. And then I launched it to the list. And I sold 300 copies
in the first month, which netted me about, well, netted. It was gross, about nine grand.
And I was like, that was so cool. That's great. So glad I did that. Yeah. And then next month,
it sold 300 more copies. And the month after, it sold 400. It was crazy. It resonated with people
enough that it just kept going. So it's sold about 11,000 or 12,000 copies now. I think I made about
a quarter million dollars on it. And you could tell my aspirations were definitely not that,
but it was a game changer. When it went on Amazon, it was part of the recommended books for if you
read the Lean Startup for a while. I mean, there were all these serendipitous things that would
happen. But again, the harder I work, the luckier I get. I'm not sure if you've heard that it's an
old quote. Yeah, it makes perfect sense. It's kind of how I feel sometimes. It's funny,
because your book is still relevant today. There's a post on the Indie Hackers Forum,
I think last week, where somebody was asking about advice from the book, and then you ended
up jumping in. Would you ever write another book yourself? And related to that, what's your advice
for other entrepreneurs who are considering writing a book today? I would write another
book myself. Every year, I consider it. Typically, every December, I think, do I want to write
another book next year? Or do I want to update Start Small, Stay Small, which is more likely
looking what it's going to be, because I get that question a lot. And it's fair. I feel like 80% of
Start Small, Stay Small is mindset and high level stuff that is timeless. And then there's 20% of
it that's very prescriptive. And that stuff went out of date 18 months after it was published.
But the answer is yes, I would love to write another book. I enjoy that creative process.
If other, are you wondering, are you asking me about if software founders are thinking about
writing a book or just someone in general? Yeah, maybe someone listening to the podcast,
who's thinking, you know, maybe I want to start a company, maybe I want to write a book. They're
both totally valid ways of generating and come online. Yeah, that makes sense. I mean, I think
my advice would be like, I didn't launch it with no audience. Like the reason it worked for me
is that I had spent, this was five years after I was, you know, I mean, I had 300 plus essays on
my blog when I published the book, I had 25,000 RSS subscribers, I had however many, I didn't have
very many email people yet, because I was just maybe six months into building email lists,
I just discovered them. And so that would honestly, I mean, if you're going to do kind of the info
product route or a book route, I lean much more towards either figuring out how to make a publisher
work with that or building some kind of audience. So you just have someone to talk to about it and
a built in sales channel. There are obviously alternatives. I mean, if you're going to write a
book about, you know, how to program for kids, you could, if you created some killer visuals and had
credibility, you could go to Kickstarter or Indigo go with that. I don't think that's a bad way to go.
I know I back way too many Kickstarters. And I would totally back that anything that teaches
my kids how to do technology or, you know, nerdy stuff like that, I'm all over it. I think that
less so if you're going to start a software product or a software company, I don't think you need to
build an audience. It's good to have one. And it's always treated me well. But I've seen many,
many, many more people build, you know, again, launch products without much of an audience and
still do okay, as long as they really serve that need. And they do have some type of a good marketing
channel. So let's fast forward back to Hit Tale. You've written this book, you've acquired a ton
of experience, you've written tons of blog posts, built an audience. What is some of the advice that
you gave in the book, start small, stay small, that you found yourself taking
yourself when you were working on Hit Tale? Yeah, no, that's, that's a good question. I,
um, one of the things I did really early on is I went through and did a complete kind of rehab,
you know, when they buy the houses and they, and they rehab them and flip them, I bought it and
rehabbed it and didn't flip it. You know, it's well, I guess I sold it like four or five years
later, but I went through a complete like conversion and funnel analysis of like, this first page
doesn't get people to the next page, doesn't get people to sign up, sign up flow is too cumbersome.
There was just all this stuff of just CRO it's called, right, conversion rate optimization.
And that I talk about, I didn't call it CRO in the book, because I had never heard that term,
but I talk about how to get people to, to the net, you know, to your call to action and to
have calls to action. I also applied SEO stuff I talked about in there, the keyword research,
in terms of how all these incoming links, so a PR firm had built it. And it had these amazing
links from like the New York Times, the Wall Street Journal, Inc. magazine, I don't know,
all these places that I would have a tough time getting links to from high authority,
but no one had ever done any SEO on it. And so just looking at title tags and restructuring
the site and doing that made it start rising, rising in the ranks. And then even pricing,
right, the pricing was all wonk, it was way out of whack, it was like 10 bucks a month.
And then there was some huge plan that, yeah, that was only a couple people were on and it was $100
a month. And that was it. There were no plans in between those. And so instantly, you know,
change that, right, to have pricing based on the value people were getting, not just kind of some
random, you know, no one had ever tested pricing. So I took a ton of stuff, oh, and even using
virtual assistants, right, I mean, I got in there for about a month, I did support for a month or
two on Hit Tale, as I started growing up trying to figure out what the questions were coming in.
And then I had one of my virtual assistants handle support to free me up time to, you know,
to get her done. So one of my big heroes is Ben Franklin. And he has this quote, I think I've
talked about on the podcast before, it's, experience keeps a dear school, but a full
learner, no other. And what he means by that is that, while yes, it's great to learn from
making your own mistakes, because those learnings will stick with you. It's better to learn from
other people's mistakes, because then you don't have to make those mistakes yourself. It's better
to read, start small, stay small, and sort of learn vicariously through wobbling than it is
to spend 10 years making all those same mistakes. Rob, what are some of the mistakes that you have
made and learned from versus things you've learned from other people?
Well, I mean, that list is endless. But I think most things that I learned, it was from one or
the other, right? It's like I learned SEO, which became a lot harder to do today, but there was
just more opportunity, you know, 2005 to 2012, or whatever. I learned that by both, like I learned
it by being in the Moz forums. And there was SEO book.com, Aaron Wall. So he would be like an SEO
mentor of me and Rand Fishkin would be an SEO mentor, even though they, you know, I know Rand
today, but I didn't know him, you know, back then. But I would take tidbits, then it would be
experience because I had to prove that it worked. And B, I wanted to kind of, you know, I had to
get the experience of doing it. So there was a lot of stuff like that, that I think, you know,
that I took from both sides. I'm trying to think of a mistake that I made. I mean, the mistake I
made buying dotnet invoice for more than it was worth, that wasn't great. And I later learned,
you know, later learned what how to add a value software products. But I don't know that I
try to think of a specific example, because I definitely have like, people I respect a lot in
the startup space. I mean, there's like Jason Cohen, like, I had to have learned loads from
that guy, because he's just so smart. And every time he talks, I feel like I walk away with
something that's going to help keep me from making a mistake. Phil Darmesh Shaw, similar, you know,
just like, he's like a godfather of SAS, in my opinion. And those guys, I mean, Darmesh talked
about churn, because as I was doing hit tail, it was like the second SAS that I'd done. But this
was the first that was at this scale. And I took a bunch of stuff from a talk that Darmesh did at
business software about churn and about thinking about it and trying to predict it. And I implemented
that. So I don't know that it kept me from making mistakes, but it certainly helped me help me grow,
you know, hit tail to what it was. You end up accumulating all this knowledge over the years,
and you end up with this curse of knowledge situation where you kind of forget what you
used to not know, also just meshes together, and you suddenly know all these things. And it's hard
to track exactly where you learn something or when you learn something. That's absolutely true. Yep.
So while you're working on hit tail, you eventually started another business called drip,
which ended up being, I think, financially, your biggest, most successful business that you started
in your entire career. Where did the idea for drip come from? And why did you decide to start
another company while you were running it tail? Yeah, well, that latter, the latter question of
why to do both is a good one, because I would not recommend that to most people. I to that point,
I had kind of started something or acquired it, then I built it up, and then I put it on autopilot,
and then I moved on to the next thing. And that works with really small things and really small
niches, where they, you know, you can just kind of own these SEO keyword tools, and Google wasn't
changing very frequently back then. But it gets harder when you have something larger, like a hit
tail, which was doing mid, let's say mid six figures is probably a good way to put it. And
well, there were a couple things. One, Google started doing panda and penguin. And that's when
those were updates to their SEO algorithms. And then they did, they switched to not provided,
I don't know if you remember this, but you used to be able to go into the Google webmaster tools,
and you saw all the keywords that people were finding your website for. And then you would see
which ones were converting for you. It was this amazing knowledge that was so helpful. And so
then you could double down on trying to either buy ads or do SEO for those keywords. And when they
they turned to this not provided thing, all those became, they did stop providing them.
And it kind of decimated hit tail temporarily until I rewrote this big piece of it to scrape
this other thing. And I rescued it from the ashes. But it was my biggest income source at the time,
I mean, it was me and a couple contractors working on that. And I kind of looked around and said to
myself, like, how long is this going to last? Is this a decade or two decade business? Or is Google
going to crush it accidentally, at some point, and I'm going to have nothing else to go to.
So that was it. That was one part of it. I also didn't love it was $10 a month starting, it was
10, 20, 40, 80 were the with price plans. And you know, $10 a month apps are they have high churn,
and eventually they get hard to grow, you just have to have a really wide funnel. And certainly
it was making good money. But I also wanted to do what's it like to run a seven figure business,
you know, I mean, there was that that whole thought process. So now the good news about
hit tail though, I sold it, and it's still going strong. So Google has not decimated. In fact,
they released an API that made hit tail way more stable. So it may very well could be a decade or
two decade app at this point. But yeah, so that that led into me thinking, is there something
else out there that is a higher price point, you know, hopefully has lower churn, isn't built on
someone else's platform, you know, I didn't really want Google or Twitter or Facebook to be able to
crush it. And, you know, that would be another sass app. And so thought about acquiring another
one and eventually just decided, let's let's build something. And so the drip started off,
you know, eventually became an email service provider that competes with the likes of let's
say Mailchimp or Aweber. And then it eventually became a marketing automation provider with a
bunch of automations. But when it first started, all it was, it was a little email capture widget,
little JavaScript widget. And then it was auto responders. And this was at a time where there
it was before Sumomi or OptinMonster, or, you know, whoever else you think of when you think of kind
of the, the JavaScript pop ups that capture email. And so we needed that on hit tail. And I had a
contractor named Derek who I hired to build that out. And it took him a week. And he used a bunch
of jQuery and hacked a bunch of stuff together. And then he wired it into Mailchimp. And I was
like, this took way, way too long. Like that is not a hard thing to do. Why, why isn't this
productized somewhere? And so that's, that's where the idea came from.
It strikes me that this, this experience you had of building hit tail on top of another product,
Google, and then having sort of deer in the headlights moment where you think your entire
company might crumble because Google made some small change is a great example of something that
you learned through your own experience. Because I'm sure people have written about this, the risk
of building on someone else's platform. But you know, you go into the next business, and that's
one of the items on your checklist, don't build something that's completely dependent on someone
else's business. Yeah, that's exactly right.
So I've watched you give a talk was years and years ago, when you touched on this topic of
solving your own problem. And it's the oldest advice out there that if you want to build a
company, you should solve a problem that you yourself have. So you know what it's like to be
in your customer's shoes. The problem is that that's not enough, that doesn't always work by
itself, you need to validate your idea as well. How did you validate your idea for drip besides
knowing that it's a product that you yourself needed for hit tail?
I'm glad you pointed out that that doesn't always work because it doesn't scratching your own itch
only works if a bunch of other people have the same itch, right. And so I knew that by this point,
I was I was far enough in it was probably November, October, November of 2012. And I realized we'd
built this thing. And I talked to Derek again, this contract developer and said, Hey, what do
you think you think we can turn this into a little sass app? He knew Ruby and he was like,
Yeah, that would be interesting. I said, All right, here's what we're gonna do. Don't write
a line of code. I'm gonna talk to people that I know, specifically within sass, just because
that's I knew founders from there. And, and it was working on hit tail. So that was kind of where I
was going to start with it. I always knew or figured it would, you know, move out into other,
you know, bloggers, information products or whatever, which it did, but kind of went there.
So I had a conversation with 17 different founders that I knew. And I just emailed them and said,
Here's what I built. It's going to do this. What do you think? You know, if we built this thing,
I built it once here on hit tail. But if I made this a service or sass app, would you pay 99 bucks
a month for it? And here's the value it provide. And I got 10 or 11 to say, Yeah, no, that makes
sense. It seems like it's providing enough value. Because on hit tail, we were getting a bunch of
traffic. But anyone who didn't sign up for trial, they were just bailing, we had no they had no
email list. So once we added this widget to it, we were collecting, I forget what the number was,
it was like 1000 emails a month or something, it was a huge amount, or huge relative, right,
going from zero to 6000 and six months, it was pretty nice. And it upped our visitor to trial
conversion rate went up 33%. Once we implemented this. So to me, I was like, the results are
insane. You know, again, insane is all relative, but it was it was pretty nice. It was a lot more
money to the bottom line for for no ongoing work. And so, yeah, so I got the ton of the buy in or
the just, you know, verbals that folks would be willing to try it out and felt like it provided
that value. And so then in December of 2012, Derek broke ground with with code on it. And
essentially, at that point, you know, I in my head, I had $1,100 of, you know, $1,100 of MRR in pre
sales. Although in the end, by the time we built it, I had done a bunch of more research talking
to people and I lowered the price to $49 as a starter. And then, you know, there were I don't
know, of the 11, I think about six or seven wound up actually purchasing it. So the numbers didn't
work out exactly as I would expect it, but it certainly was a good exercise for me to have the
conversations. And to even circle back on that, I don't think any of those were actual like,
telephone or video conversations, I believe they were all via email, which kind of shows you,
you know, there are just different ways, different ways to do it.
I remember you showing the email off during your talk at a microconf. And it was this
gimongous email you sent to people that was paragraph after paragraph explaining what you're
working on. And somehow they read through this thing and helped you out. And I wonder
I shortened that later. It was pretty gnarly. Yeah. Yeah. I mean, I think it's cool. Because,
you know, by this point, you've already built a huge audience for yourself through blogging
through microconf, through your book. And I wonder how advantageous it was for you to take
advantage of your network? Like, how do you take advantage of your network? And how did that help
you build trip? Yeah, that was in all honesty, it was the first time I had I had utilized my network
in the entire time I was doing anything I had never I utilize my audience, right? I had,
because I had a blog audience that then I would mention hit tail to or the podcast,
I would mention hit tail and that got a few customers, it didn't really make that big of a
difference. But I had never gone to my network and had not I was never thinking about it like that,
I think as a as an introverted developer. Yeah, I know people, right? I run a conference, I invite
really fancy speakers like Jason Cohen, and he shot and all these people to come speak, but
I don't really have a network. I mean, I literally this was my mindset. And so to reach out to folks
who would respond to my email, you know, to to Ruben from bid sketch, Ruben Gomez to Wade
Foster from Zapier to Jeff Epstein from ambassador, I mean, these were literally three people that I
emailed as part of that drip thing. And of course, they're going to respond to my email because they
know who I am, you know, and there was there was an advantage, there was a unique advantage I had at
that point, because if I was cold emailing those folks, it would have been a much different story.
So I was that was the first time I kind of reaped, you know, what what I had been sewing in terms of,
of, you know, becoming more prominent, having a personal brand. And that's where I'll get the
question sometimes, like, is it worth building a personal brand? And it's like, well, it depends,
you know, are you doing it for the audience? Are you doing it for the network? Are you doing it for
both? What are you going to launch? What do you know, you got to think longer term about it. But
yes, at that one moment, it was key that I had that personal brand. And with tiny seed, you know,
I know, we'll probably talk about it later. But that's been a big thing as well. I think if I
wasn't who I am, and people didn't know me, I would definitely have a much harder time getting
that off the ground as well. I want to dial things back a little bit. At this point, you have worked
on like, I don't know, 1015 businesses. And I know in the short term, your goal is to grow this
presale revenue you're collecting. But what were your long term goals like at this point? And how
were those shaped by the fact that you'd found so much success with your previous businesses?
Yeah, my goals were bigger than each business I wanted to basically make it, you know,
5x bigger 10x bigger than the previous one. And I'm not sure that was necessarily healthy nor
helpful. But I definitely wanted this to be at least a seven figure business. And I wanted,
I didn't want to do the same thing again, you know, growing another SaaS business to, you know,
I don't know, 30, 40k a month, it as weird as this sounds for it to come out of my mouth,
just sounded boring, you know, and that's the thing. I mean, 10 years ago,
I wouldn't have said that, you know, that was that was a goal of like, Oh, my God, are you
kidding me, I can I can own or run or operate a SaaS business, it's doing that and see what it's
like on the inside and be part of it and all that. But I was just kind of done and needed that next
challenge. I mean, I think that's kind of the curse of, of well, one of the blessings and the curse
of being a founder who wants to continue, you know, innovating is that novelty is part of what keeps
us keeps us interested. And so the creative the creativity and the creation of that next
business is something that that I wanted out of out of drip. How did these loftier ambitions
affect your decision making? I mean, what did you do differently to ensure that drip wouldn't be
something that stagnates at 40, 50k a year, but could get to, you know, 10 times that?
Yeah. Well, the price point was one, the early marketing was another, you know, we took six
months before we got to kind of an alpha. And all during that time, I started talking about drip and
building an email list. And then we did a slow launch from about, I'd say it was July or August
until November, where I would email groups, because it was 3400 people on this list, I didn't
want to just email 3400 people and say, Come in the doors, because I mean, hey, you're just going
to bleed people out because you don't have the right features. You can't support all that many
people trialing. I mean, there's a problem with doing that. So started emailing them in 300 person
groups, I believe. And so every week or two, we'd email another 300. And that lasted through
November. And that was when we officially opened the doors and people could could get in. But I
spent, you know, a lot of that time being very cautious and careful about I want to retain as
many people as possible. And really want to build it as something that can, like you said, you know,
can can 10x from here. So I want to make sure that all the marketing I do is worthwhile. I also ran
ads to build the email list, which is something I had never done. I'd run ads before, but never to
build an email list. That was the thing where I wanted to get off to a really good start at the
beginning, so that I could ramp this thing up pretty fast. And frankly, I mean, when we launched,
when by the time we hit the end of November, December, we were at about, I think it was 8k,
was seven or 8k MRR. And I thought that was a pretty good, pretty good start. But I wanted to,
to take it up. And I, you know, I thought it had a lot of potential to do something beyond that.
I know the story of Fripp. And I know that once you hit that point, where you're doing about
$8,000 and monthly recurring revenue, things sort of stagnated there. And you found it hard to grow.
Why was that? Because we didn't have product market fit. We just, we hadn't built something
that was, that people really, really wanted. And although there were users using it, I was
driving trials, because by this time I had the marketing engine going, trials would come in,
and they would stay for a month or two, and then they'd churn out. And some of the biggest reasons
were, well, I can kind of cobble this together with MailChimp plus some JavaScript, or you've
built something, but it's, it feels like it's too expensive, you know, $49, too expensive for what
it does. A lot of feedback like that. And that was a big takeaway for me to make a decision. Because
one way you could look at the too expensive comment is to lower your pricing. But the way that I
looked at it is, I call it aspirational pricing, which is, I aspire to build an app that the minimum
price point is $49. So what would I need to build to make it worth that? And I started asking that of
people who canceled. And it kind of flips the question on its head, you know? And rather than
why did you cancel, it would be like, why did you cancel? Oh, because it's too expensive? Well,
what would it need to do that? And some people started saying, well, you know, I already use
MailChimp. So if you built broadcasts, and a couple other things, but then, you know, MailChimp's
cheaper, right? It's 15 bucks or whatever, it's free, and then has a low plan. They said, but then
there's this automation thing that's coming around, where you can like, you know, Infusionsoft does
this, and a couple other tools, we can like click on a link in an email, and it'll like do things,
you know, it'll move someone from one campaign to another. I mean, it was just basic email
automation. And I was like, what? I've never even heard of this. This is crazy. It's the end of 2013.
And I'd never heard marketing automation or any of that stuff. And so that's when I realized that
there was kind of this movement in more advanced marketers, away from these standard ESPs, you know,
MailChimp and AWeber are obviously wildly successful businesses, and I have respect for them.
But there was this movement towards having a more automated approach, where you can
do things in emails. And so we started looking at that. And I realized, this might be an avenue,
might be a path to get us to some kind of product market fit, where not only have we built something
people want, but no one else has built this yet, at this price point, in a package that's this easy
to use, because it existed. But it was all upmarket, right? It was Infusionsoft, Hubspart,
Marketo, Eloqua, Pardot, and even Ontraport. And if you've never heard of those tools, don't worry.
I mean, those start at $300 a month, and they go up to $5,000 a month, or they go up to way more
than that. But I mean, starting price is like $300 to a few grand. And so to build it in a $49
package, a stripped down version of it, it was a light version. But it was built with modern
software UX and sensibilities. And it was easy to onboard. It was self-service. It was all the
things that we like, as founders, and kind of SaaS founders, that was the path that we eventually
chose to go down. A lot of people start companies and run into some sort of wall where it's hard to
grow, they stagnate, and they really just haven't reached product market fit. By this point in your
career, you started tons of companies. Did you have like sort of a playbook for how to get beyond
this point? How did you know that talking to customers and doing the research that you did
would lead you to sort of the promised land? Oh, my gosh, it was agonizing, man. It was six months
of like, I would wake up in the middle of the night, and I would hear my inner voice say,
you should know how to do this. I would literally hear like, how is it that you've written a book
on stuff? Like, you should know how to do this. Talk about imposter syndrome creeping up.
It's like, we're not growing. And what are we going to do to fix it? So no, I mean, I had kind
of a playbook. I knew that I had to find something. I knew we weren't working. I knew we weren't going
to grow. And I was just looking for how to either pivot or add the features. I don't know that it
was exactly a pivot as much if it was just a maturing of the product that we did. I knew
of customer development from Steve Blank. And Lean Startup was coming around at that point,
but that wouldn't have helped me as much as I think just customer development was the big
conversation in my head that I was thinking about. It's like, have your customers tell you stuff.
I mean, there's also danger in that because there were a bunch of customers that were telling us to
do stuff that were bad ideas. And so I had to filter those out. And now that's where the
there's no playbook, but there are some guidelines. It's like, we got all these requests,
and I could have followed one, we would get requests, hey, build landing pages into Drip,
hey, build ecommerce, build a shopping cart into Drip, build affiliate management, just all this
stuff. We could have gone down that road, but it just didn't feel right to me with the vision
of the product. So I think that's where a founder has to go with their gut and build something
that they think that people will want and then validate it along the way. It took us,
let's say, five months to build all the automation, but two months in, we dropped the first one.
And then we dropped another one every two weeks. And as that happened, like churn went down,
trials went up, all the metrics started going in the right direction. And I realized,
we're on to something, let's keep doing this.
It's a lot of pressure, Rob, to not only have a company that's not working as it should,
but to feel like you should know how to do this because you're the guy, you wrote the book,
how could you possibly not know?
Yeah, it wasn't fun times for sure.
Yeah. So you're, I think with this episode, part of the first husband and wife team to
come on to the Indie Hackers podcast, because your wife, Dr. Sherry Walling came on the show
earlier this year. And we talked a lot about founder psychology and trauma and getting
through what you're talking about right now, getting through the dark times,
were there any other dark times as you had to go through? And what's your take on how
to push through those as a founder?
Yeah, there were other dark times. I mean, I started, there was a period where I burned out
on drip where I was trying to grow it. And I was just doing too much. I was making the
founder mistake of I can handle everything. I'll handle all the fires and all the hard decisions.
That was in 2015. I had some burnout. That was tough. And me, burnout looks like depression
a little bit where I just lose motivation and stuff. And then frankly, the acquisition,
I mean, I don't want to steal your punch line if we're leading to there. But ultimately,
we're acquired by lead pages. And that acquisition was super stressful for me. It was like four
months, maybe five months of just really tough times. And I think, I mean, advice is tough to
give in these spots. But I've definitely learned to like hold things looser and be less concerned
about all the details and not to try to keep it to myself. I was, I wasn't talking to Sherry about
nearly enough of these things as I should have, which is funny, considering she's a psychologist.
It's like, this is her job.
I mean, she could have helped me. But for some reason, I bottled a bunch of it up.
And I stressed more about things. I stressed about things a lot more than they needed to be,
in all honesty. Now that I'm going through this again, starting this new thing, we're going
through some of the same things that stressed me out last time, just the startup phase of,
it's just chaos and all this stuff in a new entity. But I'm like, yeah, this isn't nearly
as stressful as last time. And I don't think it's because I've done it before. I actually think
it's because I'm just having that mindset of like, this is all going to work out. I think that's a
big thing is to believe, not be stupid, to believe everything will always work out. But to know that
just because you had a hard conversation with a customer or with an employee or with a prospect
today, it doesn't mean that the whole business isn't worthwhile, which is sometimes the narrative
that I do and other founders tell themselves, I think. And it's like, do less of that and figure
out how to just look long term and be like, in a year, this will all be figured out. And it's
going to work. How do we get from here to there rather than worrying about the things that are
happening today?
Sage advice. Easier said than done as well.
Indeed.
So we could probably talk about Drip for hours. But you've talked about Drip on many different
podcasts, many different talks you've given. So people who are interested in sort of how you
navigated Drip into the major company and success that it became, I encourage you guys to go look
at some of Rob's other stuff online. But the ultimate end of the story, which you give away,
is that Drip was acquired by LeadPages for an undisclosed sum. And I think it's safe to say
that you're one of the few people that I've had on the show where you would never have to work
again if you didn't want to. And yet here you are today starting a new company called TinySeed. So
what's keeping you going? What is TinySeed and why you're excited to be working on it?
Yeah, it's funny. I took, you know, after the acquisition, I worked for LeadPages, the
acquire for about 18 or 20 months. And then I took about three months off. Well, four months off. And
during that time, there was an idea that had been percolating with me. I mean, frankly,
I look back in a notebook from like 2011, 2012. And I had written this idea. And it said, why
see for bootstrappers? And what I meant by that is, why isn't there an accelerator like Y Combinator
for people who would otherwise bootstrap their company, who aren't where the end goal is not
demo day series A, it's, here's enough funding to like, get to the point where you're sustainable,
you know, and then you can raise a round if you want to. But maybe you don't want to maybe you
want to live off dividends, maybe you want to sell it eventually. I mean, there's all these options.
But let's, let's preserve optionality without having to have unicorns, right to have these
billion dollar companies. Because people, you know, what I do now or what I've done, and people who
I hang around with, they're starting SaaS companies typically B2B that, you know, get to say one to
2030 million in revenue. And they're super fun. They're lucrative. It's a real viable market,
but you can't raise funding, or it's very, very hard to raise funding, you know, you can't raise
traditional venture funding to do a business that's that, quote unquote, small. But it doesn't feel
small to me. So that's, that was the idea when I wrote it down. And as I did my microconf talk in
April, someone approached me turned, you know, wound up being my co founder with Tiny Seed.
And I had known him for several micro comps. And he does some stuff in the finance space.
And one of the reasons I didn't do the YC for bootstrappers back in 2011, 2012 is I didn't really
think I had the network. And I didn't want to deal with the legal and the fundraising and all the
stuff that it takes to do that, right? Because to do an accelerator, you have to raise a small fund
to then, you know, hand out money to the people and run it. And there's, there's just a bunch of
stuff to do. And none of that, that part didn't sound like fun. But all the other stuff did.
So when he approached me, his name's Aynar Valset. He said, Hey, I really, you know, like that idea
you talked about of these small, smaller companies raising smaller rounds, but not from institutions,
like, you know, you should raise a fund and I could help you do that. And I was like, that's
really interesting. Because I know this guy's smart and connected, and you know, kind of trust
his judgment. And he said, Yeah, we should do an accelerator. And so started noodling on that. And
that, you know, became what Tiny Seed is today. It's basically the first startup accelerator
design for folks who would otherwise bootstrap. But the goal is obviously not the Series A,
it's to get to a point of sustainability, you know, and whether sustainability means, hey,
I decided that we are going to get bigger and raise another round, the options there,
or it's hey, I just want to build a little one $5 million, $10 million business and pull dividends
out, you know, and the investors being Tiny Seed would then get some and the founders get others,
that would be the goal. So yeah, we announced a couple months ago and have been, you know,
working hard on it. And I think the other thing I mean, I'll throw out about a differentiator is
a lot of my folks like my microconf people and a lot of the founders that I speak with,
they can't move or, you know, aren't able to move to San Francisco or Boston or another
location for three months and kind of hammer away on things. They have maybe a family or a kid or
just, you know, they're in a situation there where they can't move. So ours is, you know,
one of the few virtual remote accelerators. And it's a year long, which is the idea of the year
being, it is, it takes a long time to grow SaaS apps, you know, it's not the traditional,
the venture funded model is let's throw a bunch of money at it and try to compress time,
right, like try to make the time shorter so that you grow super fast. And with Facebook and
Instagram, and even maybe Google and Twitter, like that works. But none of those are subscription
SaaS apps and SaaS apps take forever, like almost no matter what you do, it's going to take a long
time. At a certain point, you can add stuff and it goes faster and such. But especially in these
early days, like an accelerator would be time, in my opinion, is even more important, you know,
than money. And so that's, that's why we're we've kind of thought it through from all you know,
from all the angles. I hope so anyways. Well, this is huge. And I think it's badly needed.
You mentioned this question you had back in 2011 2012. And you came up with this idea, which is,
why isn't there a YC for bootstrap companies? What's the answer to that question? What's what's
hard about this? And why hasn't anyone done this before? Yeah, it's there's definitely some
challenges to it. One is that there aren't a lot of funding sources that understand this,
meaning, like I said, when you raise a venture fund, you go to these family offices and these
wealthy individuals and endowments for universities or nonprofits. And you convince them to give you
a small amount of money, or it's often a large amount of money, and then you invest it in startups.
And there's, there's a whole way that you go about that, you know, 90% of them are going to fail,
one of them is a Dropbox or an Uber, and it returns the fund. And that's how everyone thinks
about it. And what we're proposing is not that, you know, as we've said, where we can, we've come
up with a model that is successful for these smaller businesses, one to 20 or 30 million,
and convincing investors who have traditionally thought the venture capital approach forever,
you know, that this is viable is a, is a task, you know, and that's, that's what we've been doing,
we've been educating, and then finding folks who are, you know, who are into that approach.
So that's one side of it. On the other side of it, on the kind of founder side or the company side,
it's really only been the last, I don't know, four or five years that this community has
has become what it is, you know, there's there's indie hackers, and there is, there's microconf,
microconf. And there is Hacker News, and there are a lot now a lot of bootstrapping podcasts.
A lot of these weren't around even four or five years ago. And so without some kind of ecosystem
and some type of community, it's really hard to get a fund like this off the ground, because you
need both. It's a two sided marketplace. If you think about it, you know, you need the investors
put the money in, which is an education thing that we're working on. And then, you know, on the other
side, you do need companies that are even open to are interested in and you need to be able to
to kind of, you know, talk to them, which is how, you know, how what we're doing through microconf
in our podcast and all that. Yeah, a lot of ways we're living in the golden age of the slow growth,
self funded startup. And tiny seed is really a bet that we're not at the peak yet. This is really
a trend that's just getting started, it's going to continue and explode into the future. What are
some of the indicators? What are some of what are some of the evidence that you're looking at to
tell you that that's what's happening? And also, why is today a better time to build one of these
companies than at any time in the past? Yeah, I think there is so much more opportunity and
it's untapped because so many great founders, they think that VC funding is the only way to go.
And so they go and they do the pitches and they do the accelerators. And, you know,
I'm not anti VC funding, like I never have been, but I'm just anti everyone thinking that that's
the only way to start a business. I mean, this that's in the first page of my book that I wrote
in 2010, you know, it's like, there are so many other options, you can bootstrap, and you can go
VC funding. And then there's this in between, you know, that you can now, and even without,
like I'll say without tiny seed, I've done six angel investments in the past, I'd say three years
that are all essentially this model, it's B2B SAS. So one is called Cart Hook, run by Jordan
Gall, who's just spoken at microcompensetch, folks may have heard of him, he has a bootstrap web
podcast, churnbusters, another one lead fuse, these are B2B SAS apps that when we talked,
they're, you know, at the time, they were like, I don't think we're ever gonna raise institutional
money, we just want to get to millions in revenue so that everyone's successful. And that was the
whole idea of it. That didn't exist. I'd never heard of anyone doing that before customer.io
did it back in maybe it was 2012, 2013, when they they raised their they call it fund strapping,
fund strapping. And they raised this round and they said, we're gonna raise a quarter million
bucks, it's just to get escape velocity. And then we hope to just be profitable. And it's becoming
more common. Like I said, you know, maybe 2014, 2015, I really started talking about it on the
podcast realizing there's this third option that I think is totally viable. And I kind of wished I
had done it, you know, I mean, I wish that I hadn't taken it hadn't taken me, you know, seven,
eight, nine years to get to the point where I could start drip, the only reason I could start drip
is because I had all these other apps throwing cash off. You know, I funded it myself. But boy,
if I could have done that five years earlier, my life would be my life would, you know, be a heck
of a lot better. So that's why I think I totally agree with you that this golden age, there's so
much opportunity. And there's so many untapped places, because everyone's been focusing on these
billion dollar opportunities. Whereas how many people do you and I know, who are who have these
amazing, you know, $5 million SaaS apps that throw off at 50% net margins, and they had no chance to
raise funding from anyone ever, you know, but I so that's where I think like we are pouring gas
on a fire that has started burning on its own. And I just want to I just want to, you know,
keep riding that. One of the cool things about tiny seed is that it's not just, you know, here you
go, here's some money, good luck building your company, but it's an accelerator, like you said,
you're going to be writing one year of mentorship and guidance to these companies to help them
succeed, which makes it super valuable. You've obviously got a ton of startup experience over
the past 15 years. What advice would you give to people listening to the show right now,
who are sort of in the beginning stages of trying to decide whether or not to start a company and
what kind of company they should start? Know that it's going to be harder than you think,
and start small. That's what I would encourage. And you don't have to stay small, like my book
says, but I started really small. I started with a app that did 24 grand, you know, in 24 to 30
grand a year. That's not a very big app, but it taught me so much. And then I stair stepped up to
the next thing, to the next thing, to the next thing. If I had tried to start Drip as my first
app, I think we would have crashed and burned. I don't think I had the skill, the experience,
the confidence, the, there's certainly not the funds, you know, to be able to do something like
that. So that would be my advice is like, no, it's going to be harder than you think. Start smaller,
like don't look at someone like Jason Cohen, or you know, whoever your startup idol is, don't look
at what they're doing now and try to do that because they're at such a different place than
you are. You know, I really believe in this whole idea of starting small and building your skill
set as you go. That's great advice. And I think it's so deceptive too, because some of the people
that a lot of us look up to is having built these amazing things. Really, what they did was started
small, even Drip itself, which was your biggest startup to date started as a sort of tiny little
widget. Thanks a ton Rob for coming on the show. It's been really helpful to hear your story to
hear about tiny seed and what you're working on today. Can you tell listeners where they can go
to learn more about what you're doing, whether they might want to apply themselves. And yeah,
just where they can find more about you and what you're doing online.
Absolutely. It's my pleasure to come on. I appreciate you inviting me. So tiny seed calm
is where you know, the info is all the info about tiny seed. And then if you're curious about what
I'm up to, because I talk about this stuff every week on my podcast, and I write about it, and I
do all the things, but it's just my name. Rob walling.com is kind of my hub for all the activities
that I'm that I'm doing. Yeah, how would you describe your podcast? By the way, I think
people should really listen to it. And since this is an audience listens to podcasts, I think,
you know, it might be a good place to plug startups for the rest of us has it different
than the indie actors podcast. Sure, appreciate that. Yeah, it's, you know, it's so it's not an
interview show. I mean, that's probably the biggest difference is is my co host, Mike Tabor,
and I started it to software entrepreneurs, and we just started talking about what we were up to
and our thoughts and recommendations and learnings. And it's 420 episodes now, you know,
it's been going for eight years. And so there's a there's a lot there. And it's typically just
two people sharing their thoughts, insights, and even, you know, answering a lot of listener
questions. And we do interviews every couple months, maybe, but it's much more a day to day
me talking, you know, I talked all the way through the story of drip, you know, what we were what I
was up to and the challenges and stuff. And then now I'm talking about, you know, how I'm watching
Tiny Scene. Yeah, it's good stuff. It's one of my favorite podcasts. And I recommend people
listening in to any hackers right now to go give that show a listen as well. Anyway, thanks again,
Rob for coming on the show. Absolutely. Thanks for having me on.
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