What's up, everybody? This is Cortland from IndieHackers.com, and you're listening to
the IndieHackers podcast. On this show, I talk to the founders of profitable internet
businesses, and I try to get a sense of what it's like to be in their shoes. How do they
get to where they are today? How do they make decisions, both of their companies and in
their personal lives? And what exactly makes their businesses tick? And the goal here,
as always, is so that the rest of us can learn from their examples and go on to build our
own successful internet businesses. Today, I'm talking to Arvid Kaul. Arvid, welcome
to the show.
Hey, thanks for having me.
You and your girlfriend, Danielle, are the founders of a company called Feedback Panda,
and you recently posted a pretty exciting milestone about it on IndieHackers. I think
you called the post, We Sold Our SaaS, and you explained that it took you two years to
grow Feedback Panda from just an idea into a fully-fledged business, making $55,000 a
month in revenue with just the two of you, at which point you sold it. So first of all,
congratulations. That's great to hear.
Yeah, thanks so much. It's been quite amazing.
You posted this milestone a month ago now. Obviously, you were super excited at the time.
How are you feeling now?
Oh, I'm still super excited. This is a thing that's going to last us forever because it's
just the accomplishment alone. It's wonderful. And the doors, this kind of stuff opens, the
kind of people you get to talk to after this, and the kind of new avenues you can go to.
It's just great.
Well, you have one of those businesses that I think would be tough to sell. I mean, it's
just two of you, you and Danielle. You bootstrapped the company, so you both owned together 100%
of the company. You grew super rapidly to $55,000 a month in revenue in just two years.
How do you decide to sell a company like that?
Actually, it took us by surprise. We really never wanted to sell the company, but we built
it with it being sellable in mind. I've been reading a lot prior to building this particular
company because there was a time when I was not a founder, when I was actually employed
at a company in Hamburg in Germany while living in Berlin, which is like two and a half hours
away by train. So I was commuting three days a week from Berlin to Hamburg and back, which
is like five hours a day and 15 hours a week that you sit in this metal box and you just
zoom through to Germany. And if there's one thing about Germany is that the connectivity
between cities is really bad. So you didn't have the internet, you just couldn't do anything.
So what you could do was reading or listen to podcasts or listen to audio books, these
kind of things. And I was doing this for two years. So two years, three days a week, two
and a half hours of just commuting. So I would listen to all the podcasts I could find, particularly
this one. I think I went through the backlog of like every single episode that you made.
And I was reading a lot of books among which was Built to Sell by John Morlow. And that
really stuck with me. Like if you ever build a company, I was thinking, and I wasn't planning
to, it was just an employee at that point. If I ever built a company, I'm going to build
this ready to sell at any point, like automate as much as you can, like take yourself out
of the business, that kind of stuff. And that stuck with me. And we built a company from
the beginning like this so that there would be optimizations, automations all towards
making it super easy to exit. But we never really wanted to exit because we kind of just
wanted to grow the company from the idea that it wasn't the beginning to helping as many
teachers as possible. This feedback kind of was a sass for online English teachers. So
yeah, that's why it took us by surprise to actually sell the company.
What does it mean to build your business with it being sellable in mind? What are some of
the tips you got from that book?
Well, I think Morlow describes like an agency that like, and it's just a story in this book
where it describes how somebody who owns an agency wants to sell it and suddenly notices
can't really sell my company because I'm the company. Because if you have an agency and
you do design work and these kinds of things, then you have to do the work. It's like being
a freelancer essentially in a corporate box, but it is still just you and your services.
So if you are out of the company, if you sell it to somebody else and then there's no service
in there because you were the company. And what he describes for companies who want to
be able to sell themselves at some point to somebody, they described just make it that
you're not needed. Build the company with you leaving the company in mind or you not
needing to be actually working in the company. And that means hiring people. That means building
processes. That means building automations and just making yourself... It's like the
opposite of what Seth Godin is talking about in Linchpin. The way you are... The most important
thing, make yourself the least important thing. Make the most easily replaceable thing.
Make yourself easily replaceable. Terrible advice if you are an employee, but great advice
if you're a founder trying to sell your company. And I think it can be very tough to give advice
to other founders selling businesses because quite frankly, everybody's situation is different.
So oftentimes, people email me when they're considering selling their company or they're
going through an acquisition because I've been through the same thing before with indie hackers.
And the situations are just so different. If I look at your situation and mine,
I was a solo founder, you have a co-founder. I was only making six or seven grand a month when
I sold indie hackers, you were making $55,000 a month. I went to work for my acquirer Stripe
and I've been there actually two and a half times longer than I worked on indie hackers
by myself. Whereas you basically quit working on feedback panda after you sold it.
So there's just a lot of variables and it's hard to give advice for anything from your
experience actually applies to the person that you're talking to.
It's always the same, particularly with bootstrap businesses or indie hacker businesses.
Like all advice is anecdotal. Everything you say that you experienced in your business
is depending on so many factors that are unique to your own business. But in all this anecdotal
advice is a lot of truth that is applicable to every single business. Because there are
things that just work because they're the right thing to do. And there are things that work
because they're the right thing to do for your unique business at the time. And you
kind of have to figure out which is which. And a lot of advice that bootstrappers give each other
is kind of always coming with the caveat of this might not be the right thing for you. But think
about it. Think how this could be applicable to your own business and if that's the right thing
for you. Totally. So you said that your acquisition came as a surprise that you and Danielle were
just happy growing feedback panda the way you were. Walk me through the story there,
what happened to make this acquisition a reality? Well, we got an email.
Well, actually, the story goes way back in a way. And I think I wrote about this in the exit
interview that we gave like Fortress with Capital, who we sold our company to.
They made a nice interview with us. And I could actually tell the story where it all started.
And it started funny enough with an indie hackers podcast episode for me. You were interviewing
Morgan Stausinger, if you remember that, like way back, who sold his two businesses. Doc Parcer,
male Parcer. Exactly. He sold these two to I guess must have been like three or four years ago.
It's been a while at least. And I distinctly remember, we started our company, it must have
been June or July 2017 around that time. It's always kind of hard because in your mind,
you started way earlier and then you kind of formalize it into an extra company.
And I remember the day I went to the bank to open the bank account for our company,
I was listening to that particular episode with Moritz. And on my way back from opening the bank
account, I listened to the last part of it. And he was mentioning that he sold his company and he
sold it to Fortress with Capital. So I was thinking, oh, that's kind of interesting. There's
a company that would buy companies like this and that would have such a positive kind of vibe with
the founder who sold it to them that he would then talk about it. That's kind of cool. So I
Googled them and kind of forgot about it. Two years later, we get an email from Kevin, Kevin
McArdle, who is the CEO of Sheriff Capital. And I see the email and I immediately thought, oh,
yeah, these guys, because I remember back then your episode with Moritz. And that was like, yeah,
it's just a full circle. The day we opened the bank account was also the day we kind of stopped
needing a bank account for the company. So because it started like the whole acquisition process.
So we exchanged a lot of emails, we got just talking. We, Danielle and I, we started talking
to other people who sold to
sure swift our own due diligence on the company like on the company that would then acquire
on the company, like on the company that would then acquire us, they of course did their due diligence on us.
So that happened. Then we actually got to an agreement and transitioned the company out.
It was all extremely easy and extremely painless.
But that was because we had all these optimizations and all these automations and all this making yourself sellable in place.
Also, I'm a German, so I keep tight records of everything because that kind of taught to do this in a way.
And we had every every document in place.
I did a lot of documentation just because I like it, which I guess is kind of masochistic if you think about it.
But documentation to me doesn't just mean like documenting a code.
It's also documenting processes and building systems and then making it easy for somebody else to transition into them.
All that allowed us to just really make it super easy to transition the company from us to Shoreswift.
And we had a great time. We still have a great time. We talked to them. It was wonderful.
I met Kevin for the first time at Microconfure in Dubrovnik just a couple of weeks ago.
So we did all this pretty much without seeing each other.
But it worked out super well because there was a connection from the beginning.
And of course, the story that goes way back.
Yeah, that's crazy to hear that.
I'm glad that Indie Hackers Podcast could play a role in at least you recognizing who Kevin and Shoreswift were.
Hey, you're pretty responsible for it if you think about it.
Where's my cut? Where's my cut, Arvin?
Yeah, no comment.
So what are you up to now that you sold your company?
I mean, a lot of people compare their company to their baby.
And I guess in a way, selling your company is like selling your baby.
What do you do after that?
Well, the first thing that Danielle and I did was to take a vacation.
Because that's the one thing that we couldn't do in running a company, running a bootstrap company,
SAS, that had global customers for two years.
We were working 24-7 every single day from the first day.
From the first day we had paying customers. We were always there for customer support.
We always had to maintain the integrations that we had.
We always had to fix bugs when they happened and help people out and react to the market,
react to our customers' needs, all these kind of things.
So we never really were able to take a vacation.
So that's the first thing we did a couple weeks ago.
Went to South Africa, finally, for 10 days.
And that was a lot of fun being surrounded by wild animals for a change and not just computers.
So that was really cool.
Got us an opportunity to relax a little bit and just to center ourselves again.
Because if you work on business for two years or more, I guess, without a break,
you kind of have blinders.
This is something you could stare at whatever you've been doing and you kind of want to repeat
and improve and grow and these kind of things.
But you never really stop and look into yourself.
You don't reflect where you are, what your goals are.
The goal that we set for FeedbackPanda, funny enough, the goal that I set, I guess, for myself,
for FeedbackPanda in the beginning, was to get to 50K MRR.
That was the biggest thing I could imagine.
It was like, oh my, that would be the most wonderful thing to build a business that does 50K in MRR.
And we hit that.
And then we didn't have any goals anymore.
We didn't set them.
We reached it and oh yeah, that's kind of cool.
Let's just continue.
So that at least was my goal at that point.
So what we're going to be doing now is do some reflecting, do some relaxing for a change,
and then just see what happens.
Because having built, having run, I guess, and sold the company,
allows us to help other people do the exact same thing,
both in a consulting way, I would guess,
and just informing people, telling people.
I've started a blog called thebootstrapfounder.com,
on which I just try to distill whatever I learned
and all these things I learned into articles that can help other bootstrap founders
just get to where I got and further
and just see perspective into a successful business
that actually worked and why it worked and how they can apply it to themselves.
So that's what I'm doing.
Danielle is also finding herself again,
and then we'll do the exact same thing,
find a meaningful way to help other people.
Yeah, it's interesting how when you're working on a company,
it's kind of like going for a long swim or something
and you're just underwater the whole time
and things come to an end and you finally come up for air
and the whole world is different.
You're a different person, the times are different
and you've just sort of missed a lot of it
because you've been so single-mindedly focused on what you've been working on
and it's really, I think, refreshing to get to the end of that process.
Yeah.
The kind of self-reflection you can do when you're out of this is very intense
because you notice, oh my God, I had all these anxieties.
I had all these fears all the time and they were driving me into doing this,
into not doing that,
like all these things that I now can just retroactively figure out about myself
and never really had the time to while I was working on the company.
And that's the thing about a bootstrap founder.
I mean, there were two people.
That's already splitting everything in half.
But if you're a sort of entrepreneur,
you are both responsible for keeping stuff going
and then responding to people who complain about stuff not going
and fixing it, all these kind of things at the same time.
Like, of course you really have a hard time figuring out where you are
because you're always wearing all these hats
and in between all these kind of seats.
So now, finally, I have some time to figure stuff out
and yeah, that's a big benefit of not having to work on the business anymore.
So let's talk about the business itself.
I want to dig into the early stories and how you started this
which oftentimes when I talk to somebody who sold their company,
like we're going back five years ago, 10 years ago,
but since you did this so quickly,
we only have to go back two years for you to talk about the beginning of your company.
Why did you start Feedback Panda in the first place?
Danielle is both my co-founder and my partner, my life partner.
And we were living, well, we are still living in Berlin,
and we were living together in Berlin in a small apartment.
And I was working half remote, half present software developer job.
And she, being a trained opera singer,
was singing in Berlin and doing these kind of things.
But as art is a very seasonal kind of thing,
she needed to make some money on the side.
So she was teaching English online.
And the way she was teaching English online was for Chinese companies
that would hire Americans, like North American teachers
or people who are able to speak the native language, like English,
and they would then teach Chinese children
English as a second language over the internet.
So that's what she was doing.
And she was doing that quite a bit because we had student loans to pay
and these kind of things.
So she was working 10-hour days.
And these Chinese schools are essentially the same.
China is a very rigid kind of regiment there.
And you would teach a student one-on-one for 25 minutes.
And then you would have five minutes to take a break,
get some coffee or do whatever.
And then you would teach the next one.
And that would happen all over the day, right?
10 hours of working is essentially 20 students that you would need to teach.
After that, the parents of the student, they expect some sort of feedback.
And that's where the name feedback band that came from
because that feedback writing process took forever.
If you teach for 10 hours a day
and you have to write student feedback for every single lesson that you taught,
which is 20, and you take like five to 10 minutes to type out some stuff,
what did they do?
Like, did they do well?
What should they be doing in preparation for the next lesson?
And what was actually being taught and did they understand?
You take like five to 10 minutes for each of these things.
That's two hours a day in just additional work.
And that was not being paid.
Like, they were only paid for the time they taught.
The schools expected them to do it in the five minutes between lessons,
but you can't really do that.
You can't spend five to 10 minutes in five minutes
and still have a bio break or get some coffee or whatever, right?
Just doesn't work.
So then I was working two extra hours a day,
which is after 10 hours of teaching is 12 hours.
So we essentially didn't ever really see each other.
And at some point she just built her own little system to fix this problem.
She started writing templates to then use for the repeat lessons
that she would teach because she would teach the same lessons over and over
just to different students.
So the content would be the same.
And she would have a Word document here and an Excel sheet there
and all these kind of things.
At some point she just asked me,
can we do something about this?
Like, can we build something here?
And being a software engineer, the answer is always yes, of course, right?
If you see some kind of system that could be automated
as a software engineer, you just jump at it like,
oh, yeah, I don't want to do it twice.
I'm going to automate it right away.
So under her guidance, because she knew exactly what she needed,
I built a little prototype.
She also knew exactly what the market is because there is,
at that point there was like 15, 20,000 teachers just like her
doing the exact same job, having the exact same problem.
This is not just like randomly guessing who might have a problem
and what it might be.
This was exactly the same problem that everybody had.
So we knew if we figured out a solution to this,
because we knew the problem, the most painful problem that teachers had,
they would really, really like it.
And two hours of writing feedback unpaid,
turning that into what is at this point five minutes of using feedback Panda,
that's substantial because every single day that's saving you two hours.
And if you are an online English teacher,
you could just teach for two hours more.
You could just make more money.
So at that point it was like 10 bucks a month, a subscription as a SAS,
just teaching one more lesson would already pay for the month's worth
of saving your time.
So that's where the product came from.
And we did some marketing and by marketing,
I mean one Facebook comment, like a comment on Facebook on the thread
that was in one of these groups that these teachers have.
And it just snowballed from there.
It was word of the mouth all the way.
I love so many things about how you started
because it's so different than I think some of the common mistakes
that ND hackers make when they get started.
I think the most common thing is,
oh, I've got a great idea for this product or the service.
I'm going to build it.
I'm going to code it.
And then I'm going to figure out who's going to use this
and what problem it's going to solve and why they're going to use it.
Whereas you did it the other way around.
You started off by identifying a problem.
It's like, hey, my girlfriend is working 12 hours a day.
Maybe it would be nice if she only had to work 10 or 11 hours a day
or she could get paid more.
And she's doing the same thing over and over again.
And you also understood not just what the problem was,
but who had this problem.
You had a very clear profile that it's these people who are teaching
for these Chinese companies and having to do these lesson plans.
And so you had a problem and you had a market
and then you worked backwards with somebody who was actually feeling that problem,
Danielle, namely, to figure out a solution.
So I think it's not shocking that you've had so much success with Feedback Panda
when you started it off in such a great way.
It was a revelation to me in retrospect understanding what we did
because we didn't really do it consciously as like,
oh, we're going to follow these steps and then we're going to be successful.
It just happened to be a perfect situation
where we understood exactly who we were going to sell something to.
And from there on, we kind of figured out
what is the best way of solving their biggest problem.
And now in retrospect that I think about it,
that is actually a great way of getting a product
that at least has some sort of validation built in.
What you said, most people who post their great product ideas on Product Hunt
are essentially hunting for an audience.
They're hunting for an audience that may have a problem
that could potentially be solved by the project or product that they built,
which like I said, is the wrong way.
You want to find the amount of people
that can reliably sustain a business
just with their biggest problem
that you then solve in a way that actually makes them want to pay for it.
And there are very interesting concepts.
I've been reading a book by April Dunford recently about product positioning
and she was also talking about competition and these kind of things.
And if people have a system in place
that is maybe like self-built with Excel or with Word
or just like notes somewhere that they actually manually write,
that is already validation.
You don't have to have a competitor in the space,
like an actual company that is like you.
Actually, somebody writing down notes on a notepad
is already validation for at least a problem
or at least the potential of the solution to a problem.
And that is very interesting
because since then I've looked into a lot of my friends and family
and see where they solve problems that way.
And there is a lot of potential to build good services
on what people already do manually,
but it still has to be their biggest problem.
I think that's a qualifier that you have to put in there.
So just any problem that they solve with notepads.
You know, people still write notes when they do a shopping list
and they don't really use their phone
because that's just not that important.
They just don't want to get their phone out and it's not their biggest problem.
So to pay rent is more important than installing it in another app.
But if you find an audience that's big enough to sustain you
and find their most painful problem,
then you're really halfway there essentially.
And only then do you want to go and look into the actual solution to the problem
because you just want to reduce it back to the audience
and then go audience problem solution.
Exactly.
And the audience that you're building for,
the market that you're targeting, that's the hardest thing to change.
It's the thing that you have the least control over.
If you build the wrong product, you can kind of change that.
If you have the wrong business model or pricing plans, you can change those.
If your distribution channels are working out, you can change those.
If your team is not right, you can hire new people.
But if the market that you're targeting doesn't exist
or if the problem you're trying to solve isn't a real problem,
then there's really nothing you can do about that.
You can't conjure a bunch of people out of thin air
who have the problem you're trying to solve.
So that's kind of the weak link in the chain
and that's where you should start, I think, if you're going to start a business.
Do you remember the early conversations that you and Daniel had around this,
around what the product was going to look like
and how it was going to address the needs of other teachers?
Yeah.
Well, it was like, how much can we actually solve with software here?
Because it is still teaching.
It's still something that is between a teacher and a student.
It's a very relational thing, right?
You have a student you want to build a relationship with.
The student wants to be respected and also taught sensibly by a teacher.
So you can't just really automate everything
because computers don't have a soul, I guess, at that point
and they can't really be relational in that way.
So we were always trying to figure out how much of the work
that the teacher needs to do is actually tedious and automatable.
And that was a lot of the early conversations
because it was all about, like, we can do a lot with templating,
but we can't template everything.
We can't automatically generate everything for the teacher.
And that shouldn't be how a teacher then talks to the parent either, right?
Because it's still about being personal
and being just accurate,
correctly telling people what happened in the lesson.
But the thing is how much the content would never change.
So having a template for the content was perfectly fine.
So the templating system behind feedback panel
that was in the beginning the most important thing
and it is to this day the most important thing
because not only did we build a templating engine,
but we built a collaborative templating engine
because we figured out teachers really like sharing information.
So it's not a big surprise, I guess,
but teachers really love helping each other.
It's one of these industries where people are not envious of each other's success
because if you're a good teacher,
then you are a teacher to another teacher, you're inspiring.
So that made our marketing quite easy too
because we kind of triggered people's willingness
to share good information about how they became a better teacher
and then get them to refer people to feedback panel,
build up on the kind of referral system
that we then also built in the future.
But people were already doing this without incentivizing them
because they really love sharing information.
And we built that intro system as well.
We made our templating system collaborative
we allow people to share templates with other teachers
to them to be able to import templates
and all these kinds of things,
building a network effect into the product,
which then also exploded growth.
This is really good stuff.
I hope people are listening closely.
Yeah, it was how we thought,
how can we make this an actual usable solution
to the problems these people have
that the teachers are so desperately fighting every single day.
And then the ideas just came
and then Danielle has been amazing at understanding teachers,
being a teacher herself.
She's been amazing at designing a product
because I have not a designer.
I'm a good developer, I guess,
but I'm terrible at good UX phrase it like that,
but she's been amazing.
She's been building a tribe of teachers around herself
and around the product as well,
allowing us to do marketing that is almost hands off
because once you give information into a community
that is willing to share,
it just gets disseminated automatically.
You don't have to like trigger people,
you just have to provide and they will, yeah,
share the good news, I guess, about the product
and about how it helped them and these kinds of things.
So while I have always been a technical part,
like making it technically possible,
all the ideation, all the product management,
the product design came through Danielle,
because she was the person who had the problem, right?
It was her product to dog food, I guess,
because she needed the solution
and then she also knew what solution she would need.
I love how much we're talking about the market
and the audience,
and we might be getting a little bit repetitive here,
but I just want to keep talking about it,
because it's so important and it's so overlooked.
I think especially if you're the stereotypical founder,
you're focused on the thing that you're building.
What's that going to look like?
How are you going to build it?
What tools are you going to use?
What's it going to be called?
What are all the bells and whistles
and features you're going to put into it?
And that's what gets you excited.
And I think you need that creative energy.
Like if that gets you excited, that's great.
It's probably something that should be celebrated
because even having that kind of creative energy is rare,
but also you should probably take some time
to do some research and sanity check your idea
before you just jump into the product,
because the market is just so key to your success.
Like you're saying,
the fact that you're targeting teachers
and teachers are a group of people
who talk to each other frequently
and who aren't super envious and competitive
and who will therefore share the new tools
and tricks and tactics that they learn,
that allows for you to grow through word of mouth
if you build a product for teachers.
And that's not true for every market,
and that's also something that you can kind of figure out
before you even get started building your product
if you sit down for like five or 10 minutes
to just think about who is my customer going to be.
So I think it's kind of a shame that so many people
will just jump in and start building without asking questions
like who is this for and what do these people like
and where do they hang out and what do they read
and what problems do they have
and how do they learn new things and share information
and what do they pay for, what problems do they find valuable.
There's so many questions you can ask
before you even get started to figure out
if your company has a chance of succeeding.
Yeah, I guess it's a big problem with software development
in general because I guess most people who are in the hackers,
at least the hacker part of them, they are software engineers.
And if you're classically trained through a university,
they don't really teach you anything about business,
they don't really teach you anything about people to begin with.
If you're coming from a self-trained kind of place
or if you go through a boot camp,
it still is focused on the technical skill.
And the thing is, if you have this tool,
it's like the nail hammer kind of thing, right?
You have the hammer, everything kind of looks like a nail,
and if building a product is what your hammer is,
then whatever you see, the first thing you jump to is,
I'm going to build a product.
Because again, then you're going to think,
oh, I'm going to use this kind of software this time
because that's kind of cool.
And I'm using this platform or I'm using these kind of services
and you start building it.
You scaffold your thing, you build an API and all these kind of things
instead of reflecting on the business side
because you're never taught.
As a software engineer, if you come from the background,
you just don't know about these things until somebody tells you,
oh yeah, and you want to make money, right?
And it's not just integrating Stripe,
although that's a big part,
but getting people to come to your product,
these kind of things that you never learn
unless you're actively engaged in the community,
on any hackers, on diverse range of platforms
like Twitter or Medium, whatever,
if you're actively looking for this information.
But that already presupposes that you know that you need to know
these kind of things and nobody ever tells you.
So I think that's the problem.
We just look at everything through a product lens,
which is why there's so many products looking for a market.
Product market fit to me is a weird phrase
because you shouldn't fit a product into a market.
You should see a market and then go figure out a problem.
It's like market problem fit or something like that.
The product is a result.
It's not something that is on the same level as a market or an audience.
Yeah, I couldn't agree more.
And I think you're kind of similar to me
in that you like to research and analyze things and plan ahead
and try to prevent making certain mistakes.
And a lot of people are the opposite.
They would rather just fire from the hip.
They're really big on intuition.
And my personal opinion is that if you're a founder,
you don't want to leave things to luck.
If you decide there's an entire area of your business
that you don't want to think about,
that doesn't mean that it doesn't matter.
That just means that you've left it to luck.
You might as well have just hired luck as your co-founder
and given him an entire set of responsibilities
while you go off and do this other fun stuff.
And for me, I used to be more like that
until I failed at a bunch of businesses.
And I looked back and I was like,
wow, these were entirely preventable.
And if I had just asked a few questions,
I probably wouldn't have made these mistakes.
So I wonder what it was like for you.
Hey, that's exactly what I was thinking
because I also started and failed a lot of businesses before.
FIFA Panda, to me, has been an overnight success
many, many years in the making.
I started my software career here in Berlin at a small software agency,
worked while I was doing my studies,
my IT studies that I never really finished,
dropped out at some point.
But while I was doing that,
I was working on the type-03 back-end module kind of thing.
Back then, when PHP was still extremely bad,
it has improved or so I hear.
And that was my first job.
And then I kind of stopped studying this.
I went to a different university and studied political science
because I wanted to do something completely different.
And at some point, I get a tweet
by a company in Silicon Valley in San Francisco
if they had looked at my kind of profile
and thought it was kind of interesting if I wouldn't want to work for them.
A couple of weeks later, I'm in San Francisco meeting these people
and then I got a job there,
like working remotely from Germany for them as well
and worked for a VC-funded company and saw how that worked
because that was also very insightful
just to see what can happen at scale if there's a lot of money,
but also what does happen if there's a lot of money.
And we've just been having this big discussion on Twitter
about one password and the VC kind of money and all these kinds of things.
You see a lot of positions there, some very positive,
some extremely negative looking at what VC money can do.
That was also very interesting.
Back for me back then,
I started working for the company at some point, went back to Germany,
or still in Germany, I guess, but went to Berlin,
and started another bootstrapped company with a friend
that didn't really go anywhere because we didn't do any marketing.
And then I started another bootstrapped company with another friend
that didn't really go anywhere because we didn't have any payment system
integrated into our marketplace platform.
So I've been part of a lot of projects that didn't go anywhere
because we were not prepared.
And once you have an experience, you kind of have your takeaways from it.
And I'm an avid reader. I read a lot. I read whenever I can.
And for that reason, it was great that I had two years,
five hours, three days a week of just reading and taking in information.
And if you just take in enough of the correct kind of information, I guess,
it just sticks and it changes your way of thinking about things.
So yeah, I also come from a lot of failures,
but they all had their little golden nugget of information and insight.
Let's talk about how you grew Feedback Panda early on
because that's something that a lot of founders struggle with.
How do you get that first paying customer in the door?
Once you have them, how do you get a second and so on and so forth?
What was your game plan for finding customers in the early days?
So our hope was in the beginning that we wouldn't ever force it on anybody
because we knew that even though it is a community of sharing a lot of information
and that is really good, if you do the wrong thing, they share that too, right?
So we were really careful never to push our solution onto people.
So we never did a, oh, this is our product kind of post
in any of these Facebook groups.
And Facebook groups, they were because that is where a lot of the people
who turn out to be online English teachers that were from home are.
Most of them are female, most of them are from the southern states
in the United States, and there's a lot of stay-at-home parents there.
And they just from, I guess, the age group and who they are, they hang out on Facebook.
So there was a lot of Facebook groups.
And in these groups, we really, really carefully just put the link
to our product into comments.
We never put it in the post.
We just responded to people who already were interested in feedback
and how other people dealt with it.
So our strategy was to really slowly, really carefully talk to the right people
in a location that was essentially their water cooler,
where they hung out to just chat about their work.
And we didn't really have an acquisition strategy other than,
let's see if people bite.
And they did bite, and they started sharing it,
and we just amplified their voices as well.
We responded to their questions.
We responded to their comments.
We just allowed them to communicate with us, particularly with Danielle.
She wrote blog posts about the origin of feedback panel.
She wrote blog posts about teaching English online.
At some point, our marketing strategy was always very social media focused.
We started doing the VI Panda, which is this week's most important teacher,
where we would find a teacher that is interesting from our user base
and just interview them every single week.
And we would do that for the whole time.
And there was this catalog of interesting teachers that come from all over the world
that teach maybe from home, or they are in Thailand.
They're just like expats somewhere, and they teach from there.
And these kind of stories were so engaging
that people just found their way into our subscriber base, I guess,
through engaging content that they could relate to.
So relatable content and being careful not to push stuff on people, I guess,
would be what we did as a strategy.
And the engagement happened because Danielle was already in these groups
and had been there for the whole time she was teaching.
She'd been working her job as an English teacher for, I think, three or four months
before we had that epiphany that we could actually solve this with software.
And leading up to that, she was already part of all these kind of communities.
And she was a normal member, like a participating member of these communities.
It's not that she would jump in a community that she was never in before
and would say, hey, look at this.
But she was already there.
She already had been part of discussions.
She already had communicated and shown that she really loved teaching.
So people were, I guess, not expecting the marketing,
but they just expected, yeah, word of mouth marketing
because that's how people share other things in these communities as well.
Good webcams to use, like good microphones, these kind of things.
So there was already some sort of exchange about products and services going on.
So we could just really latch onto that and put our product in there too.
But in a way that was not threatening or pushy.
Yeah, it's fascinating to me how much of your thoughts around growing feedback panda
were around things that you wanted to avoid doing.
It wasn't just, you know, we've got this plan and it's great.
It's also, here are the things we have to make sure absolutely to never do.
We can't force our product on anybody because if we step on the wrong toes,
then word of mouth becomes a double-edged sword.
And you don't really want to be on the wrong edge of that sword.
And you're also cognizant of the fact that you had these Facebook groups
that were these communities and they're lively and vibrant,
but every community has its own set of rules and customs and traditions and norms.
And if you come in and participate in a way that's not authentic
to how that community normally works, then people are going to know.
You know, you're going to stick out like a sore thumb and you're not going to,
your growth strategies aren't going to work.
So I think a lot of people could learn from what you did
and taking the time to understand who you were targeting and how to best get in front of them.
To me, it's important being a software developer that was not a teacher
to also understand who we're selling to.
And I kind of wanted to really get how these teachers worked,
like worked in a sense of how they worked internally and how they worked,
like how their work day was, like how they did what they did.
And being able to be a part of the community,
or at least I guess watching Danielle be a part of the community,
gave us and myself a lot of insight into the psychology of our audience.
And going back to what we said earlier, like if you think audience first,
the psychology of the audience is of utmost importance.
Because that also determines how an audience actually solves their problems.
There are audiences where people think they know everything already in their job
and they would never use any different kind of system
because what they have in place is perfectly fine.
You see this a lot in restaurants where people don't want to upgrade their technology
because they feel this is perfect, that's exactly what we need.
And if we get a new system, then our waiters are going to be confused.
And honestly, in Dubrovnik, we were having dinner at some point
and there was this waiter with his phone, Android phone,
and he had this app where he would need to take the order.
And it took like five minutes for him to actually get the order of six people in
because it was so complicated and it was so weird for him to use the system
because it was brand new and he didn't know how to do it
and he didn't know how to add potatoes instead of fries, these kind of things.
It was super complicated.
So people seem to forget that their audience has a certain way of doing things
or at least has a certain way of approaching change.
And knowing that, knowing how these people in a certain audience,
in our audience, teachers would react to change,
how they would react to other people suggesting things that they didn't know yet,
allowed us to really carefully word our marketing material
and allowed us to focus on alleviating fears that people would have,
that it would sound like too mechanical
or that it would be machine-generated, these kind of things,
that online English teachers, they already are somewhat technical,
but then there's a big variety within the rest.
There's people who know everything about computers
and then there's people who you have to tell to turn it off and on again.
It's a variety of skill levels.
So once you figure out what these are,
it makes creating content for these people in the audience much easier.
It allows you to build automation systems
that hit the people who need it most at the right moment
with the exact correct information
and word it in a way so they understand it.
Because if you tell somebody to reinstall their browser extension,
to us, yeah, okay, then I go to browser extensions
and I'm uninstalling it and installing it again.
But to some people who don't even know what a browser is,
how do you communicate that?
And that allowed us to build self-help systems
that would speak to everybody on different levels
in the same approachable way,
because we knew what the lowest common denominator was.
So audience research to me is the most important thing in a business,
because it will show you what problems there are,
it will show you which are the most important problems,
it will show you how people will react to you,
how they will react to your product, how you have to engage with them.
It all starts with the audience.
That is, I think, one of the most important learnings
that I had for Fitment Panda.
It made us so clear.
I love how your knowledge of your audience
was something that affected every part of your business.
So it helped you come up with your initial idea,
it helped you decide on different features,
it helped you decide on your marketing messaging
and how you phrase things.
Something that suffuses throughout your entire business.
I wonder if you ever saw anything
when you were researching your audience that gave you pause,
because so far it sounds like it was all sunshine and rainbows,
it was all good news all the time.
Was there anything about your audience
that made it particularly challenging?
Yeah, I think so.
There's a couple of things.
There's always volatility in a job like this, I guess,
because it was essentially like Uber drivers,
you were a contractor.
The people that we sold to were contractors
to these Chinese companies.
They were not employees, but contracted out.
And these Chinese companies had gigantic hiring sprees
where they would try to get as many people as possible,
because in the Chinese way of doing business,
you want to be the biggest,
so everybody else just starves in the market,
and then you get the whole market.
So that was the approach that they were doing
with hiring the contractors as well.
So they were scaling up the hiring intensely,
which was great for us,
because we started with 15,000 teachers that were our market,
and two years later it was like 70,000, 80,000 teachers
that were our market.
So the market was scaling for us as well,
which was kind of cool.
But there's risk in that.
There's risk that in this kind of predatory market,
the company that you support,
or the companies that you support through integrations
or to target as your customer base just evaporates.
So there was always a risk that the market could just implode.
And China is very well known for imposing regulation
that destroys whole parts of the economy.
So while they did impose regulation,
they didn't really restrict the companies that much.
So it's actually good for the feedback panel,
both in the past and in the future.
China, it's funny, they actually imposed regulation
that limits the time of day
that your child can take online English classes,
because Chinese parents and the whole,
our child has to be the extremely,
the very best of all children in China.
They were pushing their kids to go to school,
after school tutoring,
and they would stay up until 10 or 11 at night
being taught English online.
There was a lot of kids that just fell asleep,
and I saw that through the video and stuff.
They just worked through, that day was over,
and they still were supposed to do English online courses.
So they enforce the regulation and say,
okay, after APM, no more teaching children online,
which is interesting,
because that has an effect on the companies, right?
The Chinese English schools.
So now they need to shift their whole hours in the day
towards the morning,
and then teachers who are in the United States.
In China, when it's the evening,
it's like the early morning in the United States.
So you have the time zone difference as well.
It's actually perfect for us in Berlin, in Europe,
because it was a nine to five day for us,
where it was a two or three a.m. to 11 a.m. day for the Americans,
and I guess six p.m. to 11 p.m. for the kids in China.
So we were right in the middle in many, many ways.
So that worked out for us.
But that was one fear, that the market could just collapse.
And the second one that is also very important,
I think particularly for a bootstrap business,
the teachers really don't make much money.
And no matter where you go, teachers are always underpaid.
They're always overworked and unsupported,
which is a great market if you think about it from a business perspective.
It's a really bad market if you look at it from an employment perspective.
And that also means that it is very likely that some of the teachers
could really not afford 10 bucks a month.
They wouldn't even have Netflix because they couldn't afford that.
So that's why we priced it quite low,
even though it was a tool that would allow you to make,
I guess, like 30 additional dollars every single day that you would teach,
which for most people would be like 20 days a month.
So we could have priced it way higher to still provide value.
But we were really careful not to overprice it
because that would leave out the people who would need it most.
And we were always quite lenient
when it came to credit cards bouncing or these kind of things.
Because in a low-income market, you want to be supportive.
And that also was important branding for our company, to be quite honest.
We helped people when they needed help.
When their credit cards would be overdrawn,
we gave them a lot of time to fix it and help them out, these kind of things.
And that helped us with our branding as well
because it was just genuinely helpful.
We just wanted to help these people.
That's where we built the product to begin with.
But yeah, market shift and people not being able to afford it,
but it worked out in both ways.
You have all these different puzzle pieces that fit together.
You've got a market where people talk to each other
and so your reputation matters a lot.
And you also know that teachers don't make very much money
and so you're super lenient, understanding and supportive and affordable
and so people talk about that.
And word gets around and that just makes your business
an even better, friendlier option for people in your market.
And there's also Chinese laws, regulations and culture that play into things
where I guess one factor we haven't really talked about
is how that affects the size of your market.
The fact that there are these huge Chinese companies
that are pushing to hire more and more teachers means that
the number of customers that you can sell to is growing.
And that means that your business is easier to grow.
And a lot of people start businesses and markets
that are either stagnant or dying
and they wonder why it's so hard for them to grow.
They're like, oh, I just want to capture 5% or 10% of the market.
But if the market's only like, I don't know, a few thousand customers,
5% or 10% of it's not that much.
In your case, you had many tens of thousands or hundreds of thousands
or maybe even more teachers who you could sell to.
And so I have to imagine that played a huge role
in you being able to grow so quickly.
I think the important part here is that the market still had a cap.
Like it was both large enough and small enough
to be good for a bootstrap business.
Because the moment you have a gigantic market,
you have these gigantic players, right?
Because obviously there's a lot of money to be made.
But if you are in a market that has, I guess at this point,
there's like 150,000 online English teachers in this particular niche,
like online English has a second language for Chinese children
at the age of like 4 to 15 or something.
That would be like maybe 200,000 and it's still growing,
but it is, there's a limit.
And that limit keeps the gigantic corporations away from you.
So for an indie founder, that's amazing.
Because you know exactly, there's not going to be, I don't know,
IBM just like throwing a product in there.
Because it's not worth it for them, but it certainly is worth it for you.
So the audience, the market being both large enough
and small enough for a bootstrap business,
that was luck for us, I guess.
But we found it, we saw these properties
and then we knew we could do something with it.
So if you know what to look for, it makes it easier
at least to dismiss markets where it's not like that.
That are either way too small, just a couple of thousand people,
couple of thousand people.
If you have one or two people that are competing with you
and all of a sudden nobody gets to make money.
Because you're just like outspending each other into Google ads or whatever.
And even just marketing is super expensive
when you have to fight for these low volume kind of terms.
But if it's too big, then you have competition that you can fight.
You might want to join them, I guess at some point, hope to be bought.
But I don't think bootstrap businesses start with that in mind.
You don't want to be bought by a big company,
not by a gigantic company necessarily.
You may want to exit, but maybe not that way.
I think you're connected with the audience of your market
as a bootstrap founder.
You don't just do something because it kind of makes money.
If you're going to throw yourself into this for years to come,
you better do it for something you want to do
and that you actually care about and you connect with.
And that was true for Danielle and me with online English teachers
because we saw their plight and her being one herself.
And it was also true for the other projects that I started before
but failed at, to be honest.
It was a local food startup and a startup for a photographer.
I kind of was interested in it, but not as much as this time.
Because this time I knew exactly that there was a problem that we could solve
and not just a product looking for a problem, looking for an audience.
You mentioned something that I think is super interesting,
which is that you kind of want to be in this Goldilocks zone
where the market you're targeting is not too big, not too small.
It's just the right size where you can actually make money
and be profitable without having to worry about some huge company coming in
and getting interested because there's too much money
and they just want to take all of it.
And so if you look at products that target all teachers everywhere,
you have these huge companies like Blackboard,
which are just massive and would be very difficult to compete against.
But you had a niche.
You were only targeting English-speaking teachers
to work for this limited number of Chinese companies
teaching English to these Chinese students online.
And so your market was the right size for you.
If someone else listening is an anti-hacker in their targeting market,
how can they know whether or not their market is the right size?
There's two answers to that.
For a market that has no competition, like in our case,
you just try to figure out how many people have this problem, essentially.
And it was fairly easy for Danielle, I guess,
to continue exactly from her research
in all these online communities of teachers
that everybody who would teach a certain amount
would run into this problem.
There was a class of people that had a shared problem
and would have a shared pay.
So for a market that has no competition, that's the only way you can do it.
Because the moment there is competition,
you can kind of figure out what size is my competition.
And if the competition is a gigantic corporation,
then the market may be too big for you.
If your competition is a couple of scrappy bootstrap companies,
you might actually be in an interesting niche.
That would be my suggestion here.
Because we've also targeted way too big market
that had venture-funded competition,
like the local food kind of startup that I was talking about.
At the time that we were trying to go for that,
there was just a company that was being funded by
this big German venture fund.
And they just rolled us out of the market in a way.
We never really got in there because they had everything,
the connections to everybody, and they were just doing everything.
So it was too big for us.
Didn't know that before, instead of checked.
But now I would just say, we look at the competitors,
and again, in April Dunford's words,
it's not competitors just as companies,
but also competing alternatives, the solutions that people use.
And if there is an air table solution that people use
that deals with 100% of their problem,
it might also not be a perfect market
because there is a solution in place that already works perfectly.
But if you see that people even struggle with their self-built solutions,
I think that's a good indicator.
But you have to do a lot of research.
I think I have a post on my blog about how to determine
the size of your SaaS market, just released that last week.
And I just try to go through B2B, B2C, and B2BC,
which is, I guess, our market, like business to business consumers,
which is individual teachers that are both kind of end consumers,
but also businesses, essentially freelancers and contractors,
these kind of people.
And there's a number of ways you can actually deal with that.
You can find the information about the market.
I list a couple of things like going to conferences
or figuring out how big conferences are for B2B
or trade publications that still exist.
People still read paper magazines and stuff.
And just figuring out a couple of things about these things
will allow you to understand if the market is the right size for you.
And B2C is always complicated
because there's a lot of people that could be potential customer,
but a lot of people that will not be,
won't ever really be interested in your product.
You have the whole life cycle
and these kind of things where people are located,
like early adopters and these kind of things.
So you never really know.
It's hard to figure it out.
There are some ways of finding that information,
but it's kind of more complicated.
But the moment you know who has the problem
and that these people are actually already looking for a solution,
that is the moment you want to act.
Let's talk about, operationally,
how you and Danielle were able to run Feedback Panda.
Because most people I talk to who grow a business of this size,
they have a full team helping them out.
Yeah, you and Danielle never hired anybody full-time to help you out.
How were you able to make that work?
Well, I think I should have hired.
That's one of the things that I noticed in retrospect.
I should have hired somebody for customer service way earlier
because we were always doing the customer service together in our company
from the beginning, Danielle and I.
We just take all the incoming things on intercom that's what we used
and all the messages that would come through the live chat
and we would respond to it.
Then we would build a knowledge base article
if anybody ever ran into the problem again
and would post it to our knowledge base.
It would be automatically suggested
so that building an automated system,
Danielle would deal with every single incoming piece of feedback
that people had, like questions or these kind of things.
So we dealt with that from the beginning.
We dealt with that the first day and the last day,
but it turned out if you have 5,000 more customers
amount the volume of incoming information.
That can be kept under control, but the time when it happens does not.
If you have, I don't know, 20, 30 people reaching out to a team of two
every single day, they're prone to be interrupting you at some point.
They will interrupt you while you're doing development work
and they interrupted me all the time.
I was trying to build features, couldn't, because there was always somebody,
how do I delete a student or these kind of things
and then I would have to respond to them and then would go back
and in being interrupted while you're doing software work,
you're going to need half an hour to get back in.
34 minutes later, somebody else would send another question
or these kind of things.
So it kept me from actually being a software developer.
That's the thing I like. That's the thing I love to do.
I love helping people too, but in the end, writing code is what I love.
So we didn't hire, we managed.
We managed to deal with it, but we should have hired much earlier.
I was responsible, like I said earlier, for all the technical things
and in the end, most of the customer service
after I guess like 16, 17 months turned out to be technical
because we solved all the non-technical things through automation,
suggesting articles with videos on how to do stuff.
So all the things that would come through that would not be solved by the articles
were technical questions.
Can you merge my data? I don't know how to log in.
What's my, these kind of things, right?
Where you need to have somebody who can look into an SQL database somewhere.
So I would do that and the development work.
And Danielle was always responsible for marketing,
for actually leading the company, for leading the tribe of teachers around it,
for doing the content work, for doing the product design,
the product management, all these kinds of things.
That's how we split it.
You mentioned that, I mean, you were having trouble getting work done
as a software engineer and you were the only developer
working on Feedback Panda.
How did you get around that?
Is that a problem that you were ever able to solve
or was it just always inefficient the whole time
with you doing customer support and software development?
It forced me to do as much automation as I could possibly build.
I had to build every single part of the software stack
to be completely automated.
That means deployments are automated.
Failovers are automated.
Alerting and restarting the system needed to be automated.
Quick look into the tech stack, I guess.
I built everything on Elixir, on the Elixir Phoenix platform.
Put that in Docker containers
and threw that on the Google Cloud, on the Kubernetes.
That is the whole stack of Feedback Panda.
There's Vue.js in the front
and then the couple adequate-based apps
for integrations in the browser extension.
But the whole core of the product was an Elixir Phoenix cluster,
I guess, that was running on the cloud.
Every single step, on every single level,
there was automation.
If something would break, it would automatically come back up.
If there was errors, it would be automatically reported.
It just could not deal with stuff manually anymore,
which is great.
Turns out that having a lot of automation
makes your company extremely sellable
because you don't need to be there anymore.
I think we made a lot of mistakes.
I think we made mistakes every single week,
maybe every single day,
because that's just what being an entrepreneur is.
You make mistakes and you figure out what it was
and you try not to make the mistake again.
You do that a couple thousand times and you succeed, I guess.
But all these mistakes added up to us building a really solid,
really reliable, resilient system
that we could hand over within a couple minutes.
Once we did.
Because that was what the whole hand over face
when we sold the business was.
Here, log into Google.
It's still running.
Enjoy.
Because there's not much you need to do
if everything is automated.
And not just automated, but also documented.
Because as you said earlier, you'd already written down
everything someone needed to do to run your business.
Written down is not it.
I actually recorded an 11-hour session
of me walking through my code base
and just talking to myself as if I was the next developer
that would work on that code base.
And just explaining all the concepts.
And the thing is, once we sold the company
and we did the transition phase,
the first thing we did was hire our replacements.
And it was so fun to actually give my then-hired replacement
just the links to the videos I did.
Here, enjoy.
This is your first couple days.
Just listen to what this is.
Because I then didn't need to do it.
It was available for all the developers
that would work on it in the future.
And it made very clear to myself as well
what the breaking points were,
what the things that could potentially lead
to trouble down the line were to communicate that in a way
that if I hadn't done that,
yeah, there might be trouble somewhere in the stack.
But I was able to just explain everything in a way,
in this video series I did.
I don't know why I did it.
I just felt like I really need to document stuff.
That was the best way of doing it.
It was a lot of fun.
The German NU art.
I guess, yeah, must be.
Certainly a lot of forced documenting.
It was always fun.
It was always enjoyable for me.
Because if you write code,
you document it for yourself, your future self,
that doesn't know what the hell you just tried to do
in this kind of code two years ago.
So you put that in.
And if you look at it from a business perspective,
you document it for the people
who are going to run the company in the future.
That might be yourself.
That might be somebody else.
I think if you're a bootstrap entrepreneur,
you want to be able to hand over the reins of the company,
but not the ownership.
That at least should always be the goal.
You keep it.
You benefit.
Because you've built this.
This is your accomplishment,
your value that you provide.
But other people can do the work
because you might be off doing something else.
You have another project or you just need a break.
So having all of this in place,
yeah, made it sellable,
made it easy to hand over.
It was just a blast.
Why didn't you ever hire any full-time employees
to help out with Feedback Panda before the acquisition?
You know what?
I just didn't know how to hire.
That's one of these things I was never taught
in any of the jobs I did before.
And I think Danielle also never hired anybody.
I kind of was afraid to hire.
Because I didn't know, how does this work?
Do I talk to them?
Do I have to do that interview thing?
How do I know that they're good?
I was scared of hiring.
And so I never hired.
It was a big mistake in retrospect.
And I guess the next project will not have that mistake included.
Again, one of these things you kind of learn.
But I just, really, yeah, I didn't know.
Didn't know how to hire.
You know, I think there's things like this
at pretty much every business.
Daniel Gross, who I've had on the podcast before,
wrote a blog post called Dread Tasks.
And my brother calls them UG fields.
Because when you run into them, it's just like ugh.
But it's basically just things that you don't want to do as a founder.
Stuff that is hard to do, or there's a lot of uncertainty.
You're not sure how to get started.
Or you're afraid of it for some reason.
Or it's just annoying.
And so you just put it off.
And you never do it.
Or you do it really late.
You procrastinate.
And sometimes it can kill a business.
Like I had a friend a few years back
who ended up doing a round of layoffs at his company.
And he could trace it back to basically a decision
to put off enterprise sales.
And he's like, yeah, I didn't do enterprise sales
because it was scary and hard.
And we procrastinated.
And I can trace these layoffs all the way back
to that decision two years before.
And at IndieHackers, for example,
I'm basically adding groups to the community forum.
And I know that growing these groups is going to be a ton of work.
It's going to be like starting a bunch of little new communities
where I need to post every day.
And I've just been procrastinating
because it's annoying and not that fun to work on.
But I think in your case, you're able to compensate.
You're able to basically survive because you didn't need to hire.
You could just automate everything, which is great.
Well, I guess it was a result of that.
It was a result of me being unable to hire.
Then I thought, OK, well, I need to deal with this now.
Because if I had known how to hire, I would have just thought,
I'm just going to pay somebody a couple thousand bucks a month
and they're going to deal with this.
And then they're going to do it manually all the time.
And I would have forgot about it.
But that would have added additional cost to the business in a way.
So I'm happy I didn't know.
I mean, now that I know because I had to hire somebody after all,
I know both things.
I know that you can avoid it, but you also shouldn't.
So it's a win-win, I guess, win-win-win for the business, I guess, as well.
Yeah, but the one thing about tasks like this,
and everybody tells you that, don't go for the low-hanging fruit
because everybody goes for the low-hanging fruit.
Go for the most dreaded task because that's the one thing
that nobody will go for.
So I tried that in many ways,
but hiring is just the one thing that I didn't want to do.
I think I'm more like an introvert inside, I guess.
And I don't want to interact with people too much,
at least not in these confrontational kind of situations.
And hiring is, in some ways, shouldn't be.
But it feels like, okay, new person, what do I do?
I hope I do nothing wrong, these kind of things.
So I avoided it.
I avoided all the kind of personal things.
And hiring is a very important person thing,
and I never did it, and I would now.
But yeah, that is the one scary thing I didn't do.
We did a lot of scary things.
We did a lot of experiments.
We increased our prices by 50% at one point.
That worked out, but it was scary.
Scary to do, making stuff almost, yeah,
like 50% more expensive for a customer base like ours.
It was a risk.
But we introduced the referral system at the same time,
so that kind of was a give and take at that point.
So that worked out.
But we had a lot of these scary moments
with the product that we had no problem going into.
But once people were involved, that's enough for me.
I guess one of the downsides to not hiring,
even if you can't automate everything,
is that it kind of erodes your work-life balance.
Because one of the best things about hiring
is you suddenly have this other person
who can actually make decisions on their own.
And sometimes they make better decisions than you would have,
and they can catch little things that you don't have to worry about.
And so you end up finding yourself with these giant chunks of free time.
Whereas if you're automating stuff,
that takes a lot of time up front
where you have to write that code to automate things.
So I think it's valuable to learn both, as you eventually did.
What's your advice for another introverted software engineer out there
who's also not had any experience hiring
and who maybe needs to confront that choice at their company?
The good thing is most of the people
in the software development community are like this.
So both the people that are hiring and that are being hired
are essentially the same kind of person,
are often enough, right?
I don't want to generalize too much.
But most people who are looking for a job
may also be the same kind of introvert.
I don't think this is changing,
and I think communities are getting more diverse.
Obviously.
But the thing is, if you feel like it's a challenge,
just think about how much of a challenge it would be
for the person on the other side,
the person that is trying to find a job,
the person that is trying to get into your product,
because they may already be interested in being part of it.
And so I would tell my old self,
which is like my six months old self,
or six months younger self, I guess,
not six months old, that wouldn't talk to that guy,
to just talk to people.
Just reach out and talk to people
and try to find somebody who really loves
this kind of dreaded task,
because as much as I like talking to teachers
through Intercom, through our chat system,
it was not the job I loved.
The job I loved was software development, right?
So that was the job I couldn't do,
because I had to do all the customer service with a nail,
but still, there was a lot.
It impeded us both to get to where we wanted to be.
So try to find somebody who really loves talking to people
and loves helping and solving their problems
when you're looking for a customer service person,
and just jump off your own shadow, just reach out,
just talk to them.
Mathematically, it's always clear that paying somebody
a couple thousand bucks a month for doing a job
is better than forcing yourself to do the same job
at the same time you're doing your own job,
getting anxiety, becoming super stressed,
not being able to sleep anymore, all these things.
Obviously, you don't want to do that,
but you have to just really overcome this inhibition to hire.
I guess that's what I would say.
You mentioned another difficult thing that you and Danielle
ended up doing was raising your prices,
not by 10%, not by 20%, but by 50%.
So looking at your pricing page now,
and Feedback Panda costs $15 a month.
So I assume it was $10 a month before that.
You have a very price-sensitive audience.
Tell me about how you actually did that and how it turned out.
You know what?
We started out with two pricing plans.
Well, maybe three.
No, maybe four.
Two basic monthly pricing plans.
Five bucks a month and 10 bucks a month.
That was our initial pricing.
It's even cheaper than now.
We scrapped the five bucks a month plan pretty quickly.
That was literally the first big move we made
was to just turn that off
because the people who choose a five bucks a month plan,
on average, not every single one,
but are quite likely to be very, very complicated.
They reach out with a lot of customer support messages.
They are very price-sensitive,
so they think they are owed every single bit of your attention.
We noticed that the people who would go for that plan
and not go for the 10 bucks are almost unlimited plan.
The five bucks a month plan we had was limited to,
I guess, 150 students that you could have in your system.
Most teachers never really reached that number anyway
because they may not teach as much.
But yeah, most teachers said,
okay, this is the professional plan.
I'm going to pay 10 bucks a month
because that's the pricing psychology there.
But the people who bought the five bucks a month plan
and then complained to us all the time,
we just couldn't handle the workload.
There was just so much going on.
There was a lot of chargebacks.
There was a lot of people complaining about us
not adding more features at the same time.
They want to sound too negative,
but we had a lot of negative experiences there,
so we scrapped that.
Then we were at a 10 bucks a month plan
or a 110 bucks a year plan.
We had discounted yearly, which is also great.
That is one of the best things we ever did,
was adding a yearly plan from the beginning
because the capital influx,
it comes from having a yearly plan
where people pay $110 instead of 10 every single month.
Just really adds up if you want to invest
in better infrastructure,
if you actually want to pay somebody
to work for your company,
having a couple dozen people
who give you a couple thousand dollars ahead
allows you to scale much more
in a sustainable way, obviously, but still.
It allows you to do much more capital-intense stuff
than if everybody is on a monthly recurring plan.
Also committing to a year is a pretty good indicator
that you might be onto something with your product.
If people think I'm in an almost temporary job
because online teaching is temporary for most people
and I'm still committing for a year of this product,
that is a pretty clear story at that point.
After a year, we noticed that we added
a lot of features to our product,
but we still charged the same price
after we cut it off at the 10 bucks a month plan.
We had the cloud, feedback on the cloud,
which was a collaborative template sharing system,
but we also had added a machine learning system
to work in the background
to do some fancy pronoun translation stuff.
We had snippets with text expander-like stuff
where you could add quick text manipulation things.
We had built a product that was much better
than the product that we sold for 10 bucks a month.
It was clear to us that we should probably charge more.
Then we did the thing that Patrick Campbell will never accept.
We grandfathered all of our existing customers
into the 10 bucks plan.
We should probably have done that on a limited time scale,
grandfathered for a year and then increased them up to 15.
But again, price sensitive customer segment,
lots of goodwill, lots of good community around our product.
We didn't just want to flip a switch,
make, I don't know what it would have been,
like 60, 70,000 a month instead of 50 or 45
or wherever we were at that point,
but have people hate us for forcing them to pay more money.
It really didn't vibe with our kind of audience.
So we made the choice to grandfather everybody.
And we announced it like a month in advance.
We told them for everybody who signs up after
or who subscribes after December 31st,
the new price will be in effect.
But if you subscribe before you get the old price,
we had a lot of spike around Christmas.
That was kind of cool.
And then we introduced a referral system,
which to this day has been extremely successful.
Teachers love referring other teachers
for all different kinds of things.
So that has been like 40% of incoming signups
come through the referral system, which is great.
Says a lot about working referral system right there.
Because we did it with a dual incentive in the beginning.
So would you say that that referral system
is now the most significant thing you've done
to sort of grow feedback Panda
or other things contributed more?
You know, that is a very interesting question.
I think the most important thing to contribute
to the growth of feedback Panda
was the fact that we built a collaborative tool
that had people talking
and sharing with other people built in.
So I think that is the main driver of growth
because it's the network effect in action, right?
Everything you add to the product
multiplies the value of the product,
such as in addition to multiplication.
But the referral system has been instrumental
to at least sustained growth.
So yes, it is very important.
And the great thing is teachers like ours,
they already knew how referrals worked
because they were for companies that have referral systems
built into their own system.
So it's not just teachers referring feedback Panda
but teachers, they actually get paid by the schools
to refer new teachers.
So their friends and family, that kind of stuff, right?
Their old friend from high school.
Yeah, they want to teach English online for Chinese kids.
Here's my referral link.
And then they get onboarded
and they make like a couple hundred bucks in referral.
So they knew exactly that there's value in referring.
So it was super easy for us to build it in.
So that was a low hanging fruit, to be honest.
And we did it like a year in.
Should have done it much earlier.
That kind of works.
So yeah, I think building a network-based system
is very important to growth.
We talked about this a little bit a few weeks back.
We're both fans of this book called Hooked
written by Nir Yall who's also come on the podcast twice
to talk about his books, including Hooked.
And I use Hooked to sort of determine how I build Andy Hackers.
It's informed a lot of my product decisions.
But you guys also used it to help you build feedback Panda.
And so I know we're pushing it on time here
but I would be remiss to let you go about
diving into a little bit of how you did this
because I think it's so helpful for founders,
especially who are building apps where there's
some social components, some sharing component,
to really think about this.
So how have you used the model from Hooked
to build feedback Panda and make it collaborative?
Yeah, the Hooked cycle has been instrumental
and I'm really, really grateful to Nir for thinking of that
because the fact that the last part of the Hooked cycle
is like trigger action variable rewards
and the last part is investment.
And at some point I figured out that investment, in our case,
means actually putting a template that you would use
as a teacher into your own database on feedback Panda.
And by having that, then be shared to other teachers,
it would trigger them.
And it would allow them to import the template
and it would allow them to get a new template
that they wouldn't have to write for themselves.
And then they would use it.
And when they wrote a new template,
they would invest it into the platform.
And it would go back and trigger action variable reward
and investment that the cycle was an integral part
of our calibration tool.
And I guess it's also an integral part
of our referral system, every referral system
has that built in too.
But we made it the core of the engine of the product.
And that has just left network-based growth
from the beginning, from when we built it in.
So I'm extremely thankful for Hooked.
And it's an amazing book just explaining
how we can build habit-forming products for good.
It's not just necessarily getting people hooked on your product
because we wanted to build a product that people
would use every single day and would benefit
from every single day.
You just want to drain money from their bank accounts
and not have to deal with it.
We wanted to build something really meaningful
that enabled them to make more money, have more free time,
spend time with their kids, that kind of stuff.
So Hooked is my number one book that I recommend
to every single founder because the mental model
of the Hooked cycle is just extremely valuable.
It's crazy how deep you can dive into every aspect
of your business.
So if it's the product, you can read books like Hooked.
And there's just, I don't know, years and years
of courses and classes and trainings and books
you can read and take to get better at building products.
And if it's the market, there's a whole bunch of stuff
on market research and talking to customers.
And if it's the business model, you mentioned Patrick Campbell.
He's got a ton of information out there about monetization
and how much you charge.
Distribution channels don't even get me started.
It's just an endless array of information.
But I really like what you said about Hooked
and about the fact that you can build a habit-forming product
that helps people develop good habits.
You did that with Feedback Panda and helping teachers.
And it's what I'm working on at Indie Hackers as well,
trying to get people to develop habits that help them
build better businesses.
Yeah, it's about enabling people.
And if you can habitualize a good thing,
like going to the gym or reading a book
or writing in your journal every single day,
that actually changes the life for the better.
These kind of things, if you habitualize them,
they make you a better person.
So if you can build a product that has habitualization built in
and provides value every single time people use it,
that to me is a net positive.
Well, listen, Arvid, you have a wealth of experience,
not just from growing and selling Feedback Panda,
but also from starting businesses that didn't work out
and from reading a ton of books.
What would your advice be for the average Indie Hacker out there
who's just listening in and wondering whether or not
they should start a business too?
Well, I think everybody should try.
Everybody should start something that they really, really care about.
I think building a business has never been as easy as today.
You don't even need to be a developer to build a software business.
You just have an episode on No Code
and this kind of situation a couple weeks back.
You can build a viable business
without touching a single line of code.
You don't need to.
Eventually, you might want to.
At least that's me, the software engineer, talking.
You kind of want to get into the specifics at some point.
That is also just a perspective.
It doesn't have to happen.
And if you have an idea,
or at least if you have an understanding of an audience
and their problem and then have an idea,
that is actually, it's important to just enable and help other people.
That's, I think, where all business should come from.
Of course, it has benefits for the people who run the business, who own it.
We sold our company. That's great.
It's life-changing amount of money, that kind of stuff.
But the most important part to me is that we help tens of thousands of teachers
do their job better.
And if you want to do that, if you want to impact the life of other people
and if you want to impact the value that they can create by enabling them,
then you should start a business and then you should build a product
and then you should find the problems and solve them
and make people more capable than they were before.
I think that's the purpose of all business.
All entrepreneurs should really go for that.
I would hope that everybody tries and starts their thing.
I mean, not everybody will succeed, but everybody could.
Everybody could succeed.
Arvid Kahl, thanks so much for coming on the show.
Can you tell listeners where they can go to learn more about Feedback Panda
and also about the new blog and newsletter that you're working on?
Yeah, feedbackpanda.com is the website of the product.
You can also find them on Twitter, I guess, at feedbackpanda.
You can find me on Twitter at Arvid Kahl, which is A-R-V-I-D-K-A-H-L.
That's also my handle on indie hackers, so you can also follow me there.
And the blog is thebootstrapfounder.com, where I also have a newsletter going on.
I started the newsletter because I want to write every single week,
so I want to help hold myself accountable.
So that's why every single week there's going to be a post
and there's going to be an article and there's going to be a newsletter
from the Bootstrap work that I found that I found interesting, my learnings,
all these kind of things that I want to share.
Yeah, all these kind of things.
Very cool. I'll be subscribing. Thanks again, Arvid.
Thanks so much.
Listeners, if you enjoyed this episode and hearing from Arvid,
I would appreciate it if you gave him a shout out.
He is Arvid Kahl on Twitter and his website is thebootstrapfounder.com.
Feel free to subscribe to his newsletter and show him your support.
Also, if you're interested in receiving the newsletter
for the Indie Hackers podcast, I send it out every Monday with each new episode.
You just get my thoughts on every episode, my takeaways,
and what I thought was interesting.
So that's at indiehackers.com slash podcast.
Thanks so much for listening and I will see you next time.