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 did they
get to where they are today? How do they make decisions at their companies? 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 business.
Today, I am excited to be talking to the one, the only, Jason Cohen. Jason is one of the
most successful, knowledgeable, analytical, and honest founders that I know of. He's
the author behind A Smart Bear, one of the most informative blogs for founders to learn
from online. He has bootstrapped four different software businesses from $0 to over $1 million
in revenue. And with the latest of those companies, WP Engine, he eventually decided to switch
gears, take a different tack, and he's raised almost $300 million from investors and has
now had over 600 employees, over 90,000 customers, and recently reported that they are on annual
revenue run rate of $133 million. So Jason really knows his stuff. He's been around the
block, he's seen things from every angle, and he's literally succeeded over and over
and over again. Jason, welcome to the show. It is an honor to have you on here.
Well, that was an awesome intro. Thanks for having me.
Yeah, I'm really glad to have you on here. People tell me all the time, Cortland, you
should do more failure stories. And I disagree. I think you learn a lot more from success
stories like yours. I think there are a million ways to fail at being a founder and only a
smaller handful of ways to succeed. So I like to bring it on people like you've succeeded
a ton of times. I wonder what your thoughts are on that. Do you think you learned more
from success or failure? And also looking back on your career so far, what are some
of the experiences that you've learned the most from?
It's actually hard to learn from either one because either way you made a whole bunch
of decisions, and there's a lot of factors that were not in your control. And it's not
even clear sometimes what factors are or are not in your control in the first place. And
then there's an outcome. And the question is, what did I learn? But to ask what I learned,
sometimes there's obvious things, but you don't know. Maybe if you knew that and made
different decisions, maybe it wouldn't have been a different outcome. So it's not an
experiment. It's not an A-B test. So it's kind of hard to tell. Have I learned anything?
Also, I feel like sometimes with failures, sometimes there's something to learn. Sometimes
there's not anything to learn. You have some sort of problem with the product and you made
the right decisions with the information you had. And you can always make up something
like, oh, we should have known more. There's probably something we could have done to know
more. Again, it's not clear if that's really the case. And if so, that's not a very interesting
learning anyway. That's kind of always true. Maybe we could have learned more. No kidding.
Or I'll give you another specific example from WP Engine. Early on when we were trying
to get early growth, one thing we tried was affiliates. So that means people who have
websites that teach people in our case how to build WordPress sites, or maybe they have
newsletters, or maybe they have review sites. There's different ways that people have sort
of content pipes to potential customers. And the idea of an affiliate is they send you
some customers and if they convert, then you pay them. So it's an obvious type of channel
to use. Also, it's very common in hosting in general, and WordPress in particular, very
common to have affiliates as a channel. So it's all very obvious to do. So we tried and
it did not work. We put a lot of effort in and didn't really generate much growth. And
the customers we got had a high churn rate and all this kind of stuff that indicates
it's a bad idea. So you could say that what we learned is affiliates are a bad idea. But
two or three years later, we tried again, we took a different tech tack and this time
it worked better. And so to this day, affiliates are still not like the majority of how we
grow, but they're still important enough that we have an affiliate team. And we do have
a... That's one of the many marketing channels that we use. So it would be wrong to have
learned, quote unquote, from the failure that affiliates don't work in our industry. Although
some of our competitors have learned that lesson. And by that, I mean they've tried
it and they say publicly affiliates don't work. So that's not the right lesson, it turns
out. So how do you know if you're really... This is what I... This is again, what I mean
about that. Do you really know if you're learning something? I don't know. So on the other hand,
you want to have a mindset of, am I learning? What can I learn? On the other hand, at a
macro level, it's hard to say. I think on the one hand, yeah, sure, failures you see.
Maybe you can identify some things you do differently, but in success, it can be hard
to tell why you succeeded. So WP Engine is a success in terms of things like growth and
market share and I guess product market fit and all that sort of thing. So you could say,
what did you learn? Well, some of the decisions we made were probably very important for that
outcome. And some weren't. Some we probably grew despite some of the decisions we made,
right? Well, which is which? Well, of course you try to figure it out, but ultimately,
it's hard to say actually. So I think it's not good to be too quick to decide what you
think you've learned.
So you are sort of a famous giver of advice. You've got your blog, a smartberry, so many
years giving founders advice. And your experience, do people listen to the advice that you give?
Well, when they want that advice, yes. And I say that because I get emails and where
people find me at conferences or whatever and say, oh, you know, you wrote this one
day and we did it and this happened. And so in those cases, the answer is yes. Surely
the majority case, the answer is no. But again, there may not be wrong about that. So the
thing about advice is generally when people give advice, they're giving advice essentially
to themselves. What I mean is they're giving it to someone who's like them. They have the
same goals, values, maybe even came from the same sort of background, the market, the product,
the customers that they're in, things that have happened to be successful or unsuccessful
in their life up until that point.
Very rarely does the person giving advice do what they need to do, which is to understand
who they're talking to. The person I'm talking to, what are their goals? What are they trying
to achieve? What does success look like for them? What does their market or product or
customers et cetera look like? And then what would be advice that would be appropriate
for them? That's something that almost no one does, which is why the advice is sort
of ad hoc. So it's not evil. It's not like they're trying to mislead people when someone
gives advice. But if that overlaps really well, then the advice is maybe relevant, but
often it doesn't overlap. And so it of course is especially with blog posts where it's the
nature of the blog posts that I'm just going to post an idea. And of course, I don't know
if that applies to any given reader, obviously, but as a reader, you can use that filter and
you can say, okay, does this really apply to me? Does it resonate?
So what I would say is this about advice. Anyone on the internet that says you should
do X, you can find an equally intelligent, expert, experienced person with a cogent argument
that says you should do exactly the opposite of X. And that's true of all X. So what do
you do with that information? How do you know which advice to take then becomes an important
question because you can just sort of get whatever you want to get? So to me, the answer
is you want to be clear on what your goals are. I want to have a small company forever.
I want as big a company as possible. I want to do this for three years and get out, whether
that means selling or whatever it means. I want to do this forever. And of course, you
can change your mind on this because we're people and we can change our mind. It's okay.
But still at any given time to have a notion, this is the situation. This is my context.
These are my primary problems and these are my goals. When that's clear, you can pick
up a piece of potential advice and ask, the person giving this advice, are they giving
it to a person like me? The answer is yes and it's more interesting. The answer is no.
It still might be interesting, but you have that extra skepticism you can apply. And in
general, another lesson I take from that is if all of these different, if kind of anything
works potentially, then take the advice that really resonates with you. Where you go, yeah,
that sounds like something I wish I had said. I wish I had made that up because that sounds
so like me. When that's the feeling you get from the advice, when you have that personal
resonance with it, to me, that means just take it. Why? Because if that or the opposite
of is equally valid, well, then take the thing that you're super excited about, that you
know how to put that into practice, that you're already buzzing with ideas for how to do that
and you're excited. Because if you're excited like that, you're going to do a better job.
You're going to put in more energy, you're going to care more about it, whatever. Find
those things that have that resonance and then do them. To me, that is probably a pretty
good formula.
I'm asking you these questions because I just got back from an IndieHackers meetup last
night and I've been there maybe a dozen of these all over the world. I've talked to many
hundreds of founders and I see people making the same, quote unquote, mistakes over and
over again.
These are the same mistakes that I repeated myself with many companies in the past. These
are the same mistakes that people are making despite listening to the IndieHackers podcast,
despite going to conferences and watching talks and reading books and blog posts that
advise them to do otherwise. You, on the other hand, have succeeded repeatedly. You're presumably
avoiding a lot of these mistakes, but you're telling me that it's hard to learn. It's hard
to learn from your own mistakes and it's hard to learn from your successes. I'm curious
and enrolled in which it's so hard to learn. How do you learn, Jason? Who are you listening
to? Whose advice are you following? What books do you read? What is your engine for improving
your skills as a founder?
I think even when the advice is out there and like you said, people are failing in the
same way or making the same mistakes, that doesn't mean it's not useful to have that
advice out there anyway. What that means is there are things where people just need to
find out for themselves. I think that's probably generally true for a lot of things in life
and maybe even more true for entrepreneurs because what is the mindset of the entrepreneur
anyway? It's a person saying, I have a different way and mine's better or I don't even care
if it is better. I just have to do it my way. Otherwise, you get a job. A person with that
mindset like me, you, we're not going to take to advice very well because it's all ideas.
I'm going to do it my way. The advice is still useful because once you do find out for yourself
and you go back to that advice that you're like, okay, now I get it. Well, now you're
reading it with a different lens and usually advice comes with something like, well, most
people do this, but we should do is this other thing. Now they're ready to hear about the
other thing and so it's still useful even if they're not heating it right away. Now
WP Engine is now, this is the current company, is now as you said, over a hundred million
revenue and 600 plus people. We're growing in terms of humans, in terms of computers,
in terms of all the dimensions. The kinds of things that I am learning and thinking
about are simply different than when the company is small. The way I'm learning and what I'm
gathering that from is different. For example, strategic frameworks or strategic thinking
in general is really important for us now. Just finding product market fit obviously
is not important in general because we're obviously way past that, but even for brand
new products that we'd bring to market, it's still not the usual way you'd find product
market fit as a startup because we have so many resources. We have almost a hundred thousand
customers that we can ask or see their behavior that help lead us to additional products that
they will want to buy. That's not something that you can do when you're finding product
market fit as a startup. That's just one example, but there are many examples. Where there's
a product, for example, we could probably launch, because we have such a great sales
and marketing engine, we could launch some product and make certain millions of dollars
a year off of it in the first year where a startup simply couldn't because of not having
that engine yet. That changes the kind of product that a startup might come to market
with first. Again, this isn't about good or bad or anything like that. It's just different
in kinds, just different context. Now the way I learn is not going to be reading blog
posts by 37 signals. It's going to be strategic thinking, systems thinking. For me, often
books can be better for that than a blog post, although there's stuff like maybe Harvard
Business Review type of stuff, which still falls in that category of something that's
good. You don't really take a book and implement every idea in it, but rather to inspire ways
that you think about things. For example, everybody quotes it, but the innovator's dilemma
is a typical sort of framework, which does happen to apply in our market. I think people
maybe over-apply it to every market they can find. In our case, it's actually true for
enterprise content management systems. WordPress is disrupting in exactly that way with exactly
that pattern of it starts out being inexpensive, but also not very good, but then the technology
gets better. That's exactly what we did as a company is cause that betterment of technology,
thereby making it a practical tool, but still much less expensive than the normal enterprise
stuff. That's a key way in which we win enterprise deals. That's perfect.
Actually, the book that I really like on that topic is not Innovator's Dilemma, but the
sequel, which is called Innovator's Solution, because the original book describes the situation,
which is cool, but the sequel describes what you can do about it. How do you go about disrupting
it? What are some ways to think about it? If you know the jobs to be done framework,
that came out of the sequel, not out of the first one, for example. It also talks about
if you are an incumbent, what does it mean to stay that way and not get disrupted, which
we can start seeing that in some of our competitive market where we're the incumbent. We have
both sides of that. Therefore, that sequel book is pretty useful in our current situation,
for example. I find books and stuff like that also talking to other executives at larger
companies. In other words, people who have similar experience, this is what everyone
does, find people with similar experience that are maybe two to four years ahead in
the journey, which is far enough ahead that they have some perspective. We can lend some
thoughts about what they did and what worked and didn't work kind of stuff, of course,
subject to the caveats that we just talked about, but still. But not so far ahead, like
20 years that they forgot what it was actually like, which I think happens as well. Something
like that, the two to four years ahead person is probably an experience set that's useful.
If you're serious about what you're doing in terms of your company, then you'll find
a lot of people are eager to help in that sense. You could say mentor, but it doesn't
have to be so formal. What I think people are not interested in is, hey, I'm not really
doing anything. I'm not really serious. I have a day job, but can I pick your brain?
That's really uninteresting. But someone who's really got something going, really working
hard at it, has some interesting traction, but also has the typical problems that you
have, that's just intrinsically interesting to folks. That's a good message to try to
get a lunch or something.
Let's talk about this process of getting serious with what you do. If you are, let's say, a
developer at Google, you've got a cushy salary, but you really crave a little bit more freedom.
You want to work on the projects you want to work on. You want to build your own company
that has a lasting impact or that you can control. It might be hard to make that decision.
How do you know whether or not you should be a founder? I think a lot of people listening
to the show are in that exact position where I wouldn't say they're not serious, but they
just haven't yet decided to take the leap. How can you know if you're in that position
whether or not it's a leap you should take? What are some of the things you can do to
make it easier?
I don't know why it should be easy. It's scary. You are jumping off. You don't really have
any objective way to know if this is right. You're going to be spending your savings or
whatever. It's also your reputation. If nothing else, you're telling your co-workers and your
family and your friends, I'm doing this, and so if it doesn't work, that's going to be
your story. I don't know why that should be easy.
On the other side, if you hear any stories of founders, usually the story is not, I had
this cushy job and I thought, well, maybe I'll just try this thing because it sounds
kind of like maybe. That's not the motivation. It could be a compelling event. Something
happened and so I did it or just something internal. I just can't work for anyone else
right now or maybe ever again. I have to do this. I don't think it's something that you
just sort of slide into, but what you can do is be somewhat planful or thoughtful about
how to take the leap. You can say, okay, this is how much savings I can spend until this
is not okay anymore. You can do a whole lot of research or product market fit type research
first to have more of a feeling that maybe this will work.
I think just quitting your job and not having talked to any customers to see if whatever
your ideas is worth doing, that doesn't sound right. You can do that while you have a job.
It'll take extra time. You'll be working nights and weekends, but again, if you don't want
to work nights and weekends, then you should definitely keep your day job at Google because
that's what it takes. You can certainly put mock-ups in front of people or otherwise test
your ideas. Of course, that's a whole question. How do you test your ideas, which of course
we can go into if you want. Anyway, of course you can do all that kind of stuff while employed.
In other words, you can gather some evidence, even if it's not super objective, it can still
evidence that this is actually a risk worth taking. If you're worried about reputation
and it's okay to be worried about that, the ego is okay. I think a lot of companies get
started because of ego. Again, my way is better. I got to do it as an egotistical thing, so
I don't think that has to be bad. That certainly was compelling for me. That's what's also
why I started the blog because it's nice when people say, oh, well, you wrote was really
great. That really helped me. That's nice for my ego. What else would I do that for?
There's nothing wrong with that. Still, you could say, well, how do I mitigate the possible
reputation damage? You can say, you're running a test. You can say, look, I've done some
research. I'm going to make a go of it. I know it may not work, but I'm going to make
a go of it for six months. When you describe all that, it sounds pretty rational. If it
doesn't work, you still sound like a rational person. You can even mitigate that part if
you want. You can be thoughtful about how you go about doing it to mitigate the risk
or the downside or limit the downside. If you're like, well, I don't really have an idea.
I don't really want to talk to customers. I don't really feel like doing that. I like
my weekends. Well, then you shouldn't. That's not what it's like.
It's a hard thing to admit to yourself to say, hey, maybe I shouldn't be a founder.
Even if all the good things about being a founder, all those shiny things really appeal
to you. Maybe you're not the sort of person who's cut out to go through the harder parts.
I mentioned in my intro that you're an honest guy. I've watched a lot of your talks and
you're very honest. I don't just mean with the audiences that you talk to. I mean you're
honest with yourself. You're good about not lying to you or misleading yourself as a founder.
I think even when you find yourself doing that, you're pretty good about saying, oh,
actually, the truth is I'm stroking my own ego. The truth is, I think a good example
is you gave a talk recently at the Saster conference. You talked about how you're hesitant
to make a particular hire. The reason was, at the end of the day, because at some level,
you were worried about not getting the sort of credit and kudos that you wanted to get
as a founder, someone else sort of stealing your glory. I think that's something not a
lot of us would admit or even realize it's true. It's hard to be honest with ourselves.
Right. It is very hard.
How do you get to be that honest with yourself as a founder? I'd also like to talk about
what are some of the things that we as founders commonly lie to ourselves about, especially
in the early days?
Oh, man. What do we not lie to ourselves about? Aren't all founders the smartest person in
the room always? Their ideas are better even on subjects that they're not expert in. If
you're an engineer or founder, then you think every business problem can be solved with
code and marketers are not that useful. Salespeople are coin-operated. Finance is not necessary
because you're good at spreadsheets. I mean, it goes on and on about if you were saying
in words what your behavior is, right? That's what that would say. Then in the subjects
that you are expert in, like say engineering or development, great. Well, then once again,
your ideas are going to be better than whoever else's ideas, the next developer on the team's
ideas because they're yours. You're probably terrible at managing people, especially if
you're an engineer because most are. Just because you're the founder, you end up being
the CEO or some kind of leader like that. Most engineers who are super smart and even
those that are good at product as well, very few of them are good at leading people or
even know what that means. They think the only part of the interview process is whether
the person can code. They have no idea how to understand what other people need or personalities
or performance management or establishing a culture or any of these things. Don't care
or pay lip service to it. Yeah, your actual motivations for the company, your real goals
for the company. People lie themselves about that all the time. I feel like sometimes you
see overreactions on social media on that basis. In other words, if you're a bootstrapper,
you probably like overreactively hate TechCrunch and VCs. If you raise money, you probably
overly dismiss bootstrap companies. That's a good example of just objectively why in
the world would you not just say there are many kinds of companies and many kinds of
journeys and that's cool that all those can happen. You could say VCs are evil or whatever.
You can say that, I guess. Some are, but some bootstrapper founders are evil too, by the
way, in the way they treat employees, what they do, whether the success is shared with
all the people that took risk or not. There are some pretty evil bootstrappers out there
as well as evil VCs and of course all vice versa on both fronts. Why wouldn't you just
say that as opposed to these weird extremes? Again, I think you can trace that back to
a lot of that bias of like, well, whatever I'm doing is right and that means you're wrong
or maybe envy. I wish it were like that, but I'll react to that in a way that I'm almost
arguing to myself that I made the right choice even if maybe I didn't. I'm not trying to
call any one person out. I'm just saying all of that just doesn't feel that genuine to
me. It feels like justification or something like that most of the time to me. What do
we not liars to ourselves about? It's ultimately not very productive to do that because you're
not getting to the truth. It's probably not healthy either, but even if you set that aside
and you want to be Vulcan about it, it probably doesn't lead to the best outcomes for the
company. If you're lying to yourself about the performance of all the aspects of the
company, the performance of marketing, of sales, of finance, of engineers, of product,
of design, of your own way that you are contributing or holding things back. I think the more honest
you are about that just with yourself, there's nothing else, then you can improve. While
you are not honest, you will not be better than whatever you are now. That is often the
case especially with engineering-led startups that other departments just aren't any good.
Usually with an engineering-led startup, the product is pretty good and the distribution
meaning the marketing and sales, getting more customers is the problem. Rather than facing
that and understanding there's lots of skill sets and things to do, they don't. That's
a common failure mode. I think what happens also is a lot of times you haven't worked
with someone who's really great at a certain position. You haven't worked with a tremendous
digital marketer before or even a brand marketer so you feel that's bullshit because people
you've met who are calling themselves brand marketers were bullshit. You're probably right
by the way but that's true of every discipline that most people you meet aren't that good
at it. Shoot, even engineers would probably agree that the average engineer, you say,
well, the average engineer is not that good but the superstars, they're worth 10x everyone
else. Isn't that what we always say about engineering? Well, the truth is that is true
of marketing and sales and finance and human resources and everything else that a company
does. That is also true but the engineering founder doesn't want to admit that because
the engineering is the best and the 10x engineers, they think, smarter and better than everybody
else that you could ever even hire. If you have that attitude then that is exactly what
you will get. You will never hire that 10x marketing person because you don't even think
they exist. You will definitely not find them. You will find what you're looking for. That's
just one way to demonstrate how not being honest with yourself and holding on to these
ideas will hurt the performance of the organization, just objectively hurt the organization.
So let's apply this to some specific challenges that entrepreneurs go through especially in
the early stages. Let's say I'm trying to come up with an idea, something that I should
work on that I think is going to lead to a profitable self-funded business. What are
some of the lies I might be telling myself that lead me to come up with less than stellar
idea or to have a lot of trouble coming up with an idea in the first place?
You said profitable self-funded, which I love because number one, I just love those kind
of businesses because I agree with the idea that a lot of VC-funded businesses don't have
a business model. They agree, they just say they'll find it. Personally, I don't like
that attitude, but it's okay, I guess. I agree that's kind of weird. I like the profitable
self-funded model. It also creates lots of restrictions and I mean that in a good way
on what a good idea can be because if it's profitable and self-funded, you can't be wasteful
in certain ways. You can't spend a whole lot more marketing and sales than you pull in.
A VC company can do that and maybe they even should so that they can win market share for
example. But when you say profitable self-funded, you can't. Whether you should or not is not
relevant. You cannot do it physically. You can't spend more than you're getting in.
That creates a restriction. Of course, you could see that as a bad thing that you're
restricted, but it's a good thing because when you have constraints, that helps focus
on what is a good idea, what is a valid business model. That helps you throw away ideas that
are in fact bad. Whereas with a VC-funded company, it's actually hard to throw away
bad ideas because you can afford to try any idea. It's actually kind of a harder thing
to do. For example, you've got to be really clear about how you're going to get to whatever
the first milestone of revenue is for you.
I typically expect it to be about $10,000 in revenue per founder is the first interesting
milestone to me of a bootstrap company because at that point, you can definitely have quit
your day job. It's not until everyone's working on the company full-time that the company
can really flourish and go see what it can really do. Obviously, numbers change based
on circumstance and location and everything obviously. That's just a rule of thumb for
me. What will it take, for example, with your pricing model that you've got in your head
to get to $10,000 a month per founder? If the answer is it takes 10,000 customers or
even 1,000 customers to get there, my general feeling is that's too many. It takes a long
time to get that many customers normally. I know you can always find an example of a
company where they got there faster. You can always find examples, but normally it takes
years to get to even 1,000 customers. WP Engine, our current company, it's this super fast-growing,
big company, blah, blah, blah, still took us two and a half years to get to 1,000 customers.
All of our competitors took about two to three years to get 1,000 customers, even the really
good competitors. You can go down the line like it's very common for that to be true.
A couple of years is a long time to be slogging it out on the side. That's just rough. Why
would that take that? The answer is because the price is too low. That's why it would
take 1,000 customers. It implies this price range of $50 to $150, maybe even $250 a month
being a better price range for a bootstrapped, profitable company, not a low price point
high-end, but a mid-level price point so that M can be smaller, especially to get those
first couple dozen customers because for that, you don't even need some kind of super repeatable
marketing. To scrape together a couple dozen customers, you can just use Elbow grease.
You can use LinkedIn and guest posting on blogs and podcasts and going to certain places
and beating your network. That should be enough for some customers. That's not scalable. That's
not repeatable forever, but it can get the ball rolling. By the way, if doing all those
things you still can't get 20 customers, then you might start questioning whether you have
product market fit at all. You can do that and then maybe you need just one marketing
channel to work reasonably. That could be advertising on one of the social networks.
It could be SEO or other kinds of organic. It could be AdWords or other kinds of advertisement.
It could be affiliates. It could be whatever. Again, many, many, many channels to choose
from. But again, you don't need to be super scalable to get up to say 200, 300 customers,
which is what you'd need if you were charging $50 or $100 a month for the product. It's
not totally crazy. It's not out of reach. It shouldn't take a couple of years if the
product is desirable.
Pricing is an example of something that falls out of this idea of I want to be profitable.
It can't take like four years before I quit my day job. You start backing into these things
like pricing. There's many things. Another thing that it implies is that annual pricing
is your friend because it means you get the money upfront instead of over time. Of course,
usually you discount for that so you get less money total when you do annual pricing. But
getting it now makes all the difference. You can do the math yourself. You can take a little
spreadsheet and figure out, okay, if a third of new customers pick an annual plan in which
to get two or three months free and the rest pick a monthly, how much cash flow would that
be per month? You can play with all those parameters. What percentage would do what?
What's the discount? You can play with all that, right?
What you'll find is the cash flow is like crazy different. It's like game-changing when
you can quit your day job. It could be that you can quit your day job in a month just
by thinking about annual pricing because the cash flows so much better. Then you can come
to the conclusion, oh, that's more important. The cash flow is more important right now
to get going than the total amount of revenue I might get this year because it allows me
to spend that money today, whether that means quit my day job, spend it right now on marketing
or development, or whatever's needed for the company to get better. I can do that now.
That's just so incredibly valuable. Again, it sounds obvious because a lot of people
do annuals. It's way more important than it even sounds like it is.
Those two things, again, a VC funding company can do that. We do that because cash flow
matters to anyone really, but you could choose not to. You could say, yeah, but we don't
care. We can burn cash as long as we make more money in the long run, which you will.
You don't have to do that. For a bootstrap company, to me, it's like you can't afford
not to because the impact to how you can run your business is so big.
Those are just two examples of what I mean by the constraints actually create these clear
ideas for what to do to make the business more likely to succeed.
I love this stuff about deciding on realistic pricing and business models for hitting your
goals as a bootstrapper. I wonder why a lot of these constraints are so unintuitive. You
can do exactly what you're saying. Sit down and do the math and say, wow, if I charge
$5 a month, it's going to require a huge number of customers for me to get to 10K a month
and be able to quit my job. Why do you think it is that a lot of us aren't doing this math?
Do you think it's a result of another lie that we tell ourselves?
I wouldn't quite call it a lie. It's probably more ignorance than trying to deceive ourselves.
But I will say this. Most things in a startup are multivariate. They're complex. Pricing,
I mean, all these things pull on each other. Well, if I lower my pricing, I could have
more customers. And that's good because then I can weather cancellations better. And also
I have ideas for how to charge more later. I'd rather just get them in the door now.
I can upsell them in a year when I have more features. I don't think I have enough features
to charge more right now. Let me just get the N right now. That's a reasonable argument.
You can go the other way and say, but actually, tech support scales with N, not with price.
So that actually will overwhelm me. And I really want the fewest number of customers
possible that will minimize whatever scales with the number of customers, like tech support
or even billing. There's a lot of things that scale with the number of customers. So actually
having the fewest number of customers for the money is the best. And also they're probably
of higher quality. They may turn less. It is generally, again, all this is rule of thumb
of course. But rule of thumb is the more someone's paying, actually the less they churn and sometimes
even the less they use tech support. Certainly in hosting in our industry, it is true that
the lower dollar customers actually use tech support more and churn higher. It's like,
yeah, but that's the lower dollar customers. What the heck? So you should want high dollar
customers. So that's just an example of that argument. Which argument is right? And of
course the thing is, well, there's kind of good, really solid arguments on all sides.
That's the truth. And we only picked one dimension, which is a price, but there's lots of dimensions
of like, is service important at this company that you're building? Nowadays, that's something
that people pick on. On the other hand, select products based on. On the other hand, especially
as engineers, we love the idea of a sort of self-serve model where there's little to maybe
even no tech support like Google has with Gmail, or just scale, scale, scales, and you
don't have those costs. Okay, that's fine. But then service, quote unquote, is not part
of the product. I imagine the user interface better be very intuitive so people can be
successful without calling tech support. Maybe you have a lot of documentation, maybe there
are public forums, like what are the other things that would have to exist so people
can be successful despite the lack of customer service? Or you go the other way, we're in
differentiate based on customer service. Yes, that's going to cost money. It's also why
we're going to win. Because when you treat people well, they stay through reciprocity,
they spread the word to their friends and so on. And so we're going to differentiate
based on service. Of course, there's a lot of successful startups that have done that.
So again, which one's right? And you go, well, they're both very logical. They just come
with different consequences. Does that go with price? Yes, because low price and very
high service might not be affordable. Anyway, so there's all these dimensions and they pull
on each other as well. So it's complex. So that makes it very easy to either justify
any particular combination you want. Or at minimum, it just makes it, you know, the argument
I just made for annuals and a price range between 50 and 150, that sounded clear. But
if you start going through all the other stuff, suddenly it sounds muddy, it sounds less clear.
So what to do about that is when you go through these different choices, making some strong
decisions about some of these dimensions is important. For example, are you going to be
heavy on customer service and try to maximize how much value you deliver because of that?
Or do you want to minimize customer service and minimize the amount of cost you have there?
Just deciding that alone, just in isolation, what kind of company am I building? What do
I want to do? By deciding that, all these consequences can then flow like the ones I
just listed. And also those will flow into other decisions like pricing. So having a
couple of, you might say, putting pins in things or, you know, a couple of fixed points
like that, that you've decided that's the deal. That helps. That helps lower the field
of possibilities elsewhere. So that can help you reach a consistent decision across all
these items. Also thinking about the items together is helpful. I think, again, people
will think about customer service alone, and then they'll think about pricing alone or
not at all. They think of it later. Like first, first, I got to see if people want to buy
the product. And then I'll think about price. I say no. I say price is part of the product.
When you think about cars, price is part of what the car is. It's part of what the product
is. It's part of the brand. It's part of what it means to buy and drive that car. It's not
a separate thing. First, let's see if you want leather seats or not. Then we'll talk
about the price is not how it works. So to me, those are not separate. So I think people
try to think of them separately. Maybe because a lot of advice or blog posts does take them
separately just because, of course, you have to pick something to talk about. And it's
hard to think of them together. But again, if you have a few fixed points, and then you
try to think of it together and ask what is consistent? What are consistent decisions
across all this? Maybe that's more helpful in arriving at a consistent business model.
Let's say you're a founder. You started your company before listening to this episode.
You didn't follow any of this advice. You thought about everything separately or far
too late. And you find yourself in a position that I commonly find founders in. When I go
to these Andy hackers meetups or talk to people online, which is they've got a product, they've
got a product roadmap, that's another six or nine months of coding. They are trying
to sell their product for five or $10 a month, and they barely have any customers. But they've
already invested a year of their life into coding this thing. How do you get out of that
situation? How do you turn it around?
Oh, you just do it. People are worried, oh, I got three customers or 30, so I'm restricted.
No, you're not. You can do literally anything you want. You can change the price however
you want. You could change the brand. You could change the name of the company. You
could do anything.
Now, the more customers you have, the more careful you have to be. Or the more you have
to communicate and explain or help people along or etc. But typically, when it's the
situation you're describing, you feel that but it's not actually true. 99.99% of anyone
that will ever visit your website or any customer you'll ever have is still in your future and
has not seen you yet. It's not too late.
Now, WP Engine, my current company is now nine years old with 100,000 customers. So
then this advice is not true. It's not true. We can just do absolutely anything and that'll
just work. But we can do anything. It just takes a lot more planning, communication,
alerting. This is going to happen now. It is happening. It already happened. Can we
help? Can we roll it out slowly? All kinds of stuff. We still can do it though. It just
takes a lot more effort.
So how do you do it? You just assess what is it that you think it should be. Decide.
And then you can decide on the right amount of process or communication needed to affect
that. But the answer is probably not that much if it's early. Plus, you get to use the
real little startup and I'm the founder card, which is the best card ever. We don't get
to use that card anymore. If we mess up, then we mess up and that's it. Dang it. If we want
to change pricing, we have to face a lot of people talking about that. Whereas we have
30 customers and you reach out and say, hey, it's a little startup. It's just me and a
friend and we're just trying to make this work. And we realized we have to change pricing
because we thought ABC, but it turns out DEF. And we're so grateful that you trusted us
early on. And we want to continue doing that for the next decade. And to do that, we need
to fix our business model. And that means we have to do DEF. And so we're changing our
price like this and blah, blah, blah, blah.
I have counseled people to do that when they've needed to do things like drastically change
pricing, for example. And the outpouring of support from customers is always just so heartening.
When you're honest and open about all that, you just get people saying, that's awesome,
you guys. I'm pulling for you. Love your product. I totally get it. Now, of course, sure, you
have 10% of people going, obviously. But if 90% say I'm with you, let's go. And 10% don't
get it. Okay. So what? That's great. And that is that when you're small, that is the outcome
that you get. You are not restricted really. Just be thoughtful about how you affect the
change.
Let's talk a little bit about when WP Engine was small. I know you said this is nine years
ago. So we're reaching back into ancient history. How did you make some of these early decisions
to sort of set yourself on for bootstrapping, let's say even that first milestone, $10,000
a month in revenue?
Well for sure, the most impactful thing was the process I use to validate the business
idea. And the reason I know that is impactful is I had other ideas first, and I use the
same process, and I was able to discard the other ideas. But the idea for WP Engine, it
just withstood the test. And so I did it, and then it did work. And so again, as we
said, the beginning of the call, does that mean I can, does that prove that my method's
the best? No, but it's all right. It's evidence that maybe it's good. So I would say that
was really important because it found the company, whatever that might be, and discarded
other ones that maybe weren't right.
And so what I did there is, you know, usually you have some idea because you've noticed
a problem or you've got an idea for something, just something new, something different because
of some experience you've had and so on. So what you do then, or if you're following
sort of the thing that I did is you write down a bunch of theories you have about the
market, about your customers, et cetera. So in my case, for example, like I wrote down
things like the typical WordPress freelancer has 10 customers. And I write down another
theory.
WordPress freelancers have to log into a bunch of stuff all the time. And they hate that
because they have to keep passwords everywhere and it's annoying. And then I wrote down people
want their sites to go faster. They always want it to be faster, faster, faster, faster.
And I wrote down, everyone's worried about security and they're willing to pay more if
their site is demonstrably secure and so forth. I wrote all these theories, right? Then I
think what question or questions could I ask which would validate or invalidate the theory,
the second one's more important, without a leading question.
So for example, on the theory that they, that on average they have 10 clients, what you
would not ask is, so do you have about 10 clients? Because that's leading the witness.
You would ask something like, how many clients do you have? How has that changed over time?
That's getting to the answer without leading to any given answer. So you write down all
these questions. I did those in a Google sheets or Excel. Maybe there wasn't Google sheets.
I can't remember. So then those are the questions I would ask in customer interviews, those
nonleading questions. And of course what you find is that some of your theories are right
and they're validated and maybe you have even more numbers to put on them. And some of them
are wrong and you find out why. And then also there's brand new stuff that weren't on the
list at all either way that you learn as you're talking to them and that's all natural. You
just take notes and so every time you do a conversation, you look through your notes
and you update. I'm going to update my theories, adding stuff that wasn't there before, maybe
turning the thing I was wrong about into a negative statement. Okay, people don't want
to do that. And so sometimes that's true that you found the negative and sometimes the answer
is it's neither. It's all over the place. Some people say yes, some people say no, it's
just not a thing. It's not an interesting point because people sort of think all kinds
of different things. That's not a strong signal either way. That could be another result.
So this morphs and then what happens is this when the idea is so I want to say I don't
want to quite say the idea is bad. I think generally people come up with lots of ideas
and it's hard to say ideas bad. There's surely there are good parts of the idea. That's why
you're excited about the idea because there's something good about it. The real question
you're asking is can I build a business around the idea, which is a very different question.
For example, I had an idea for a marketing analytics tool. There were some basically
good ideas in there. In fact, when I would do the customer interviews, when I talked
about the features, invariably people would say that is cool, I want that. That's where
a lot of people stop, by the way, when they do customer interviews. They test the features.
People say that's cool because it probably is. They say this is a good idea. That doesn't
make it a good business. When I started asking about pricing and how they buy and other things
about their life and would this be in the budget now? Well, maybe not now, but maybe
it could. That doesn't sound so good. As opposed to we have budget for this right now. I know
what line item you'd fit into. That sounds good. Or I ask questions about what they read
or where do they go to online? Some markets exist, but you can't get to them. You can't
advertise to them. You can't find them. They're not on social media and they don't go to events.
It's just hard to get to them. The idea might be great, but if you can't get to the customers
efficiently, then it's a bad idea for a bootstrap business who does need to get to customers
efficiently. This is what I mean about is it a good business? You have to ask about
the market. How do I get to customers? Do they agree they have the problem without me
having to talk to them for 45 minutes like a customer interview? Is it already obvious
to them or do I have to convince them of it? And so forth. These are the things that answer
the question, is this a business? Often you have a great idea in terms of features. People
say, sure, but the business stuff doesn't come together. That's what happened to me
with the marketing analytics. Features are good, but the business is too hard with the
cost. The pricing was weird and didn't really coalesce around one way. People had all kinds
of different ideas that was weird. People saw different specific applications of it
instead of just saying, I already know what to do with it. They would say, that would
be great, but only if you do this other thing. And then the other thing was different for
every person I talked to. That doesn't feel like it's coalescing around an idea. On the
other hand, WP Engine, what that felt like was, of course there were still like theories
that were right and wrong and all that other stuff. But after like 10 or 20 interviews,
it started coalescing like, wow, I just keep getting positive responses to almost everything
I ask. It just keeps being the same answer. So by the time I did five, zero, 50 interviews
in total, which took about four months because it takes forever to schedule and do all that
stuff. But if you want to be honest about things, you better get a lot of data points.
And it was just getting boring. And that's great. Boring is good. It means you're not
learning anything because you've actually settled on what's basically true about the
customer and the market and the business model. So if that business model works in terms of
pricing, and by the way, my lowest initial price was $50 and there was a tier that was
$99 and there was a tier that was $249. So you see, I took my own advice there. There
you go. I was able to validate that people would pay that through all these conversations.
And I knew that if they would pay that, that would be the right general ballpark in terms
of price per customer. With that validated that, yeah, they would. If we did a couple
of basic things, make sites fast, secure, scalable, and have good support. See, in our
case, good support is actually one of the things we differentiate on. If we did that,
people would pay these much larger prices 10 times what they would pay GoDaddy, for example.
So the business model part was validated. So then when I went and did it and it worked,
it wasn't a surprise because I did all of that work and also invalidated other ideas
and was honest with myself that that was the case. There were good ideas in there, sure.
It was not a good business model or maybe it was a good business. I just couldn't figure
out what it was. That's fine. I couldn't figure it out, right? That's the only thing that
matters, I guess. So that was exactly the technique I used for multiple things. So surely
that was the most important thing to eventually alight on a business, not just an idea with
that technique.
So I want to do something a little bit different now and get your opinion on a few dichotomies.
You might call these false dichotomies because they are, but I think it's a little bit more
fun to make you choose one.
Fun.
Okay, first one. The importance of the initial idea and idea validation versus the subsequent
execution.
Execution? Very few first ideas survive, but certainly you could have the best idea in
the world and without execution, it won't matter.
Cold hard analysis versus following your intuition as a founder.
I challenge the idea that your cold hard analysis is cold. I think you bring bias into things.
I think you read data the way you want. I think you probably don't do statistical analysis
correctly anyway and you probably don't have enough data to do statistical analysis and
therefore you have to fall back on intuition. I would say the former.
That's not even a choice. There's no way to analyze.
You can when you're Google and you have enough data points, but you don't have those data
points. That doesn't mean you shouldn't look for data. You should, but I challenge the
idea that like, yeah, I'm a cold-hearted Vulcan making rational choices out of data.
No, you're biased and you don't have enough data and that's the truth and that's okay.
That's fine. That's not bad. That's what it is though.
When you do use intuition and you're simply convicted is the word I use. You have conviction
on something as opposed to incontrovertible data. You can let the data point to that.
That's good. That's good, but I do think it's good to be clear about what you're convicted
about.
In other words, even if you use intuition to get there, no problem. But then after the
fact, be really clear on what are your convictions. The market is like this. People will want that.
Just be clear on what that is because those will be your pillars that you're building
your product and marketing and other things around. You'll be building around those ideas.
So regardless of where they came from, be clear about what they are.
Putting your job cold turkey versus working on your business on the side.
I think working on it on the side is a good idea to a point. There are people who have
been working on a business on the side for four years. I think at that point, it's not
working. Something's not working. Either the business could work and you need to quit your
job so that it can or it really isn't working. The reason, because you don't need it to work,
you just got this thing making a grant a month to grant a month.
It's just enough money that you don't want to kill it, but it's just not a business.
That's the trap. I still think to the extent that you can get ahead of things. For example,
do all that customer discovery before you quit your job, for sure. That way you can
fail and try another idea and blah, blah, blah, blah. Once you have that conviction,
then you can start thinking about how do I plan my way into doing this and to really
throwing myself into this so that it can work.
Following your passion as a founder, so choosing a product that you're passionate about or
a space that you really love versus being more opportunistic and trying to look at what
you think is the highest chance of success.
I'm conflicted because it's so easy to find examples of both. I think the common answer
is you need to care about the market, but when you look at lots of successful companies,
they actually didn't care about the market. In fact, it's especially true when you have
an initial idea, but that was wrong and you pivoted it into something very different that
turned out to be right. Well, then almost by definition, you weren't passionate about
that second idea because that wasn't the idea and yet that was a success.
I will say this. I think you need to love your customer. In other words, there are people
who have contempt for their own customers. We're making this product because our customers
are too dumb to do it themselves, so we make it easy. That's having contempt for your customers.
I think that's a really poisonous place to be. That happens a lot when you're opportunistic
and you're like, yeah, we'll get them here. That doesn't feel right, but I think it's
okay if you didn't have incredible visual passion for the problem. You came to that,
but you had better love the customer and love solving the problem. I think that's probably
true.
Solo founder versus taking on co-founders in the beginning.
That is a personal personality decision. For me personally, Solo is better. I know a lot
of people where co-founder is better. I can answer definitively for me at Solo, but I
think that I absolutely do not believe there's one correct answer. That's an introspective
question.
What are some of the things that you can look at and yourself as a person to decide that
being Solo is better? Is that just something you have to try on your own or can you kind
of tell before you even get started?
I don't know. My guess would be introvert versus extrovert. If you're extroverted and you have
to do this incredibly difficult journey alone, that's going to be contrary to your personality.
If you're introverted and you have to work with someone else for 10 hours a day every
day and agree on everything with them, that's probably contrary to your personality too.
That's just a guess. This is not an area where I feel like I know a lot.
I'm just one data point here, Jason, but I've started numerous businesses over the years.
I am an introvert. Every business that I've started with co-founders did not go well.
The only thing that I started by myself, Indie Hackers, has done spectacularly well. Maybe
there's something to your theory. Final question here. Final dichotomy. Bootstrapping versus
fundraising.
Yeah, again, the answer is what is the goal you have for your company and yourself? What
journey do you want? They are just simply very different journeys and you need to pick
a path that is consistent with the journey that you want.
The other thing I'd say is, okay, so the default answer is bootstrap. That should be the default
answer. Almost all companies are bootstrapped and should be simply by numbers. Most things
don't get funding and most things shouldn't.
Yeah, it's very true.
What I would say is the default is bootstrap and the reason to raise money is only if you
meet a whole bunch of criteria like you want that particular journey. That is exciting
to you. You want to go big or die. You want to have the goals of highest growth with certain
constraints versus bootstrapping where the goal is to create a sustainable business.
Growth is important, obviously, but profitability is even more important because out of necessity,
you're building a different kind of business and maximizing different kinds of things.
It just is a different journey. Some people don't like losing some control over having
an investor and some don't care. That's another criteria. There's a lot of criteria. Obviously,
you shouldn't raise money unless you really believe the company can be big, meaning be
worth a billion dollars or more, which means having revenues of at least $200 million or
more later, like in 10 years maybe. If it doesn't even have that possibility because of the market,
the product, et cetera, then it's definitely not a good fundraising candidate.
There's all these criteria that if you meet all the criteria, then fundraising is maybe
the right path. Otherwise, bootstrapping is the right path. By the way, if you pick bootstrapping,
you can change your mind like me. Like you said, I bootstrapped four companies, but the
last one, two years in, I then saw that all these other criteria like the ones I listed
were true for me this time. They weren't true for me before. I made the right decision there
before even in hindsight, but this time I'm still glad I started by bootstrapping. I was
also still right, but it got to this point where I did want a different journey. The
market was there to be had, which is unusual. There's a market that large that you could
maybe be the leader in is unusual. This was a possibility and so forth. There was a few
things like that where, wow, this actually would be right, I think, for me this time.
Again, in hindsight, I think so. Again, with the caveats that it's not an A-B test. Nevertheless,
I'm happy with the results and I don't regret it, so I think it was the right choice. Since
you're making me pick and rightly so, I'll pick bootstrapping because you can always
change your mind and because most companies should do that anyway.
Good answer, Jason. I'm going to have to steal that one from you. At this point in the episode,
I would normally ask you to give NdHackers advice for how they can get started with their
businesses, but we've already covered that. In fact, I think this episode has been non-stop
advice about what people should be doing. Why don't we flip it around? Jason, what are
some things that NdHackers should certainly not be doing during their journeys?
You should not read Ted Crunch, even if you want to raise money. You should not pay too
much attention to what competitors are doing. You should decide what you think is the right
thing to do and do it. You should not charge too little. That's just extremely common.
Another thing is this. There's all these little quote unquote rules about what a good business
looks like, which may be true for many people, but I just feel like they're way over applied.
For example, they say, don't do services, only product because service businesses aren't
valued as much, and blah, blah, blah, all these reasons. I think that a SaaS product
in which there are services to help, especially to help you get going, but even ongoing, can
be this incredible business because they're paying you to help them be more successful
and therefore be a customer for five or 10 years. They would pay you to make sure they're
a high LTV customer. That sounds really good to me.
Now, that's not a Wall Street story. It's a bad story for Wall Street. It's a bad story
to raise money because of that rule of thumb and about gross margins. There's all these
reasons that people give, blah, blah, blah. I just think that that's not necessarily true
for a lot of businesses, and I like that model. I think it's a good one unless you want to
be on Wall Street, and then I guess you can't do it. Why should you care what models work
for Wall Street? Who cares, right?
Another piece of advice I don't care about that's common is you need a unique product.
It has to be unique in the marketplace. I disagree. I think there's tons of bootstrap
companies whose products are really not unique, and you can say, well, they have this one
feature, blah, blah, blah, I guess. In a reasonable person, just looking at a high level at the
home pages would say, these are basically the same thing. That's fine. You don't have
to do that. In fact, I don't want to name them just because maybe it would be taken
as a putdown, and it's not at all what I mean, but I could easily name you companies that
are bootstrapped and are in the tens of millions of dollars of revenue and profitable that
are not unique. They're just well executed. They're great companies, great culture, and
blah, blah, blah. They don't have a unique product. It's a good product. I mean, good
product, don't get me wrong, just not unique. Who cares? Maybe they're unique on some tertiary
front. I don't care much about unique. It's good if it's unique. I think that is a benefit
if it's unique because it helps you sell. It helps you differentiate, so that's good,
but I don't think it's mandatory, especially in well-established markets where there's
already tons of competitors, huge amounts of money being spent total in the market.
That's probably a market where you can add another competitor by definition, and how
unique can it be if it's mature like that? That's okay. You can go make another time
tracking software, another to-do list software, and you need to get attention. That part can
be hard, obviously. But is this to-do list manager really all that different than the
other to-do list manager? Maybe not. That's okay. That's another one. I don't know. Is
that five? I don't know. That's a number of them.
That's a lot of things not to do. I think the last one is fascinating. I want to ask
you one last question about that one because I think it's something that will be helpful
to a lot of people listening because most people that I meet are just stuck in this
idea phase. I think I can't come up with something that's totally unique. The world has never
seen before, and so therefore, I can start a startup. Here you are saying that you don't
need to do something that's unique. Why do you think people have this misconception that
you need to stand out? What are some of the ways that you can find success and find customers
who will pay for what you're doing when there's something that already exists like that in
the market?
I think it's very, very common advice that you need something unique. Then we have words
like your unique selling proposition, USP. We plaster that so you need that. If it's
not that unique, then you don't really have a USP. What are you going to do? The truth
is, calling back to a point made earlier, the company is a complex entity. All these
pieces of advice, including every single piece of advice I've given today, is an attempt
to take a simpler view of some of it. Carve out some simpler piece, make some conclusion,
and therefore, come up with a rule of thumb or a little thing to follow. That's fine.
It doesn't make those things wrong at all, but it isn't the full story. That's why any
one of them can be wrong. Let's take the uniqueness. If you have something really unique, then
of course, that's going to be your lead when you market. People are going to go, what?
You're going to beat the crap out of that thing. You may even be missing features that
other people have as long as you're unique. You're going to beat that drum. You'll build
a whole company around this uniqueness. That's fine. That's great. That does not mean the
other way that you might not have something unique is impossible. Of course not. You can
just see right now there's a lot of products that are not unique. Obviously, it doesn't
be unique, but then other things follow. What would that mean about your marketing? What
would that mean about pricing? Maybe your thing is not unique, but it's cheaper. Maybe
your thing is not unique, but it's friendlier because the other sites are all this cold,
enterprise-y horseshit no one can understand. Yours is the same features as just people
can understand the damn thing. Maybe some people like buying from smaller companies
instead of big one and you can be that. Or maybe it's not unique and it doesn't even
have as many features, but the quality is super high. Yes, this other product has more
features and blah, blah, blah. It's not that good. We have 20% of the features, but it's
done so well. It's such a joy to use it. If you can get by with those 20%, you kind of
want this tool. In fact, maybe you'll buy both because sometimes you need the crazy
complicated thing. Sometimes you want the simple, joyous thing. I do that with, for
example, Excel and Google Sheets. Sometimes you have to go to Excel because Google Sheets
just can't do some things, but most of the time Google Sheets is better because you can
share it and it's fast and blah, blah, blah. So what? The answer could be both and so you
can have a very successful non-unique product just because there's something else that's
part of your value. Maybe you're better at marketing and to a certain niche, so those
people find you and identify with you. So even though the product is absolutely identical,
it works. In fact, isn't that how dropshipping works? I mean, people that are dropshipping
businesses, the products are literally identical. They don't even make the product. They're
dropshipping it from China. You can't be more identical and non-unique than that. So how
do they get business? The answer is they're really good at marketing, so they just get
in front of people. That could be where there's differentiation of some kind or that's how
you get in front of customers in some way. So what I would say is any rule of thumb like
be unique or any of the other ones, including even my own advice about price. Any of them
you can build a company where the opposite is true, but there are other consequences
of that that you would want to be consistent with.
The only wrong thing I think is of all these different choices you have, you pick a set
that are inconsistent. I'm not going to be unique. I'm not going to invest in marketing.
And eventually you go, well, that just doesn't make sense. You need something. Something's
got to give here. I think the decisions you make need to be self-consistent. That's fair.
But any given decision can be whatever you want. So if you're stuck because it's not
unique, then say, okay, fine. I'm going to declare that I'm building a business that
is not unique on purpose. You could change your mind later. Obviously this is a thought
experiment, right? Just a thought experiment. I'm declaring my business will not be unique.
I guarantee it. I promise you it's not unique. What else has to happen for it to be successful?
And you can look at other competitors and what they're doing or other markets and what
are other commodity markets like and what do people do there to be successful? Get ideas
for like what are those other things and you might get excited about those things. I would
much rather become an expert on X online and get business that way than be an expert in
AdWords. And so I'd like to differentiate through brand and recognition than based on
AdWords and features. Awesome. That sounds like a very consistent idea for a company
to me. So yeah, if you're stuck on something, you can just assume the opposite or something
like this. And then start asking what else would be consistent with that that I would
have to do.
Don't worry so much about the common rules of thumb. Just consider the adjustments and
the trade-offs that you'll have to make if you ignore those rules.
Right.
Jason, you've given us a ton to think about. Thanks so much for coming on the show. I feel
like I've squeezed you like a sponge to try to drop out every last strip of advice. And
yet it's still only a tiny fraction of what you shared over the years on your blog and
in the videos and talks that you put out. Can you let listeners know where they can
go to learn more about yourself and WP Engine?
Sure. So my blog, which I've been blogging on for 13 years is blog.asmartbear.com. Smart,
like intelligent and bear like the animal because that was my third company, which I
was at when I started the blog. It was called Smart Bear. That's the name. So asmartbear.com
is the blog. Asmartbear is also the Twitter handle. And the current company is WPEngine.com.
So if you have a WordPress site, you could take it with us and we'll take care of you.
All right, Jason, thanks so much for coming on the show.
Thanks for having me.
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