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Transcript

MICHELE HANSEN
Hey, Michele here. Just a quick note before this week's episode, in the second half [NOTE: starting @ 12 minutes] I talk about a controversial topic and use some strong language. So just a heads up in case there are little ears around. 

MICHELE HANSEN
Welcome to the software social podcast where we invite you to join our weekly discussion about what's going on in our businesses.

MICHELE HANSEN  
I'm Michele Hansen. 

COLLEEN SCHNETTLER
And I'm Colleen Schnettler.

MICHELE HANSEN  
So Colleen, tell me, what's going on with your business this week?

COLLEEN SCHNETTLER
So Michele, last week, I told you that I am building an image management service. And you asked me if anyone wanted that service. Do you remember what I said?

MICHELE HANSEN
You said maybe but at the very least you want it [yourself]...

COLLEEN SCHNETTLER

Right. And also, I haven't really asked anyone if they want it. So I kind of think, what I want to start doing this week is in conjunction with building the service -- which is pretty much almost done -- I want to start finding out if anyone wants it. So, right, it seems like such an obvious step [Michele: Magic words!] that I should be taking. So my commitment is to spend one hour a day trying to figure this out. First problem. Who are my customers?

MICHELE
And where are they?

COLLEEN
And where are they? How do I find them? So since I'm building this as a JavaScript plugin, my customers or other developers, probably developers like me who do consulting so they want to optimize for time. I don't know how to find these people and ask them.

MICHELE
Have you looked in places yet? Like what have you explored?

COLLEEN
So here's what I've explored I put something on indie hackers literally no one okay. That's a good start. That's what I thought but literally no one responded.

MICHELE
No, I you know, I so I love any hackers but also I find that it can be very much like unless you get to one of the bigger threads there, it can be kind of a drive by with like people just putting their projects and there's just like so much and a lot of it's really good. Yeah, that it can be a bit tough to filter.

COLLEEN
Yeah, I've really I've, I've posted on Indie Hackers a few times, and I've never gotten any kind of engagement. And maybe it's if you I've noticed that the posts that are like, here's how my business was so successful, like those get a lot of engagement.

MICHELE
I wrote one of those (laughing)

COLLEEN
But there's nothing wrong with that, like, everyone loves those, right? Those are inspirational, like I love those posts, and I love getting advice from successful founders. But it feels like there's just not a lot of engagement with people who are just starting out. So that didn't work. So I tried Indie Hackers, I think I put something on Twitter and I had like three people respond, which is better than no better than no people. Right? What do you think? Like let's say I'm starting from zero and I'm also like, open into seeing what other ideas are out there as well. As we as you know, I've kind of been plugging away at idea generation for quite a while now. I'm definitely making my image management service, because I'm almost done. I'm going to use it for my clients. But I'm also open to hearing about, you know, other problems and other ideas. I like targeting developers, because I like using existing marketplaces, to try and sell what I'm building.

MICHELE
Have you looked at Reddit?

COLLEEN
So Reddit confuses me...

MICHELE
It is one of my favorite places to recruit is it really can be a little bit. Yeah. Because if you find the right niche within Reddit and Reddit has, I mean, there are so many weird corners of Reddit, right? Which I think is part of what makes it a little bit intimidating from the outside. But there's so many great niches within Reddit that are so great to recruit from. There's also some really big communities. So there's, for example, the webdev community. There, but there's also some really small ones. You know, for example, when we were launching a HIPAA compliant geocoding service couple years ago, we wanted to do some usability testing. And there was a health GIS subreddit with like, 5,000 people in it. And I posted something saying I wanted to do some testing with people. And I'd give them a $25 Amazon gift card if they participated. And I got 70 responses. Wow. Like all from our target market customers. Like it was -- I was floored.

COLLEEN
Wow! That's amazing.

MICHELE
Yeah. And so I think if you find the right, you know, the right community within Reddit, and you have, you know, a good, genuine post, explaining who you're looking for. And you have some sort of incentive there. I think even $10 to Amazon, or whatever, is, is probably good, you know, because people's time is valuable, and they're giving you something valuable, so I feel strongly that there should be something there. But you know, you really only need to talk to five people just as a baseline. So you're looking at $50 worth of investment plus your time, which could, you know, save you weeks or months of dev time that, you know, ends up getting wasted, because it wasn't what people wanted.

COLLEEN
So how would you recommend? This is like, this feels like Cold Calling Strangers like this feels very awkward, which is fine. I like people. But how would you like even recommend going about that?

MICHELE
Yeah, so if I found a community...so let's, for example, say you doing web dev, though, that might be too broad of a community and I'm not super active on it myself. So I can't really speak to community norms. Some for example, don't allow you to, to post various things, so just always check their rules. Okay. Um, but I would say something to the effect of, you know, I'm building an image management service, blah, blah, blah, blah, blah is your -- you know -- and I need feedback. That's your post. And then in your, sorry, that's your title. And then in your posts, say something effective, you know, Hi, I'm building the service, like, here's what it's aiming to do. And I'm looking for some people to give me some feedback on it. If you can give me a half an hour of your time, I'll give you a $10 Amazon gift card, just send me a PM with some details about, you know, what kind of work you do and what interests you in trying the service and, you know, and make it very clear that it's not a sales call or anything like that. It's strictly for the feedback, because people sometimes are, justifiably wary that that it's not what it purports to be, right. Also, I would recommend creating a Reddit username specifically for this, whether that's your real name or your company name or whatever. Just so some weird post you made 10 years ago doesn't mean that surfaced with your name attached to it, you know. Yeah.

COLLEEN
Okay, that's great. Okay, so that will be my, my weekly goal this week will be to actually talk to people who might be potential customers and see what they have to say.

MICHELE
Do you know what you want to ask them?

COLLEEN
Well, I guess I'd kind of want to drill down on is this really -- to me, it's a pain point. And like I said, every client minus maybe two has had this problem. And there's so many different ways to solve it. And they're all kind of none of them are super easy. So I guess the answer to your question is no, I don't know what I want to ask them.

MICHELE
It sounds like you want to find pain and frequency.

COLLEEN
Yes. Right. I mean, how big of a problem is this for them? Yeah.

MICHELE
And how frequent Is it because pain and frequency are a good guide to whether someone is willing to pay for something, something isn't frequent, and it's not painful, then, you know, they're not gonna be as aware of the problem. And when they do encounter it, it won't be very annoying. But if it is something that happens often, then they might be willing to pay for that. I do normally recommend that people do this kind of research upfront before building something, but considering this is something that you needed yourself and would use regardless, you know, you can kind of kind of skate by if you're, if you're okay with the idea that you may end up being the only user for it.

COLLEEN
Yeah, I'm okay with it. I and I think yeah, if nothing else, like I think this is a tool that could really help newer developers who don't have the time or energy to like, learn about Cloud Storage. And so even if it's just something that like, helps some new people and they they roll on the AWS free tier I provide. I'd still be at this stage in my journey like obviously, eventually, I want to build a business but like for right now i'd be okay with it. Because it's something that is a frequent pain point for me. The thing is, if you are an employee, and you only work on one app, this is not a frequent problem at all, right? You set it up once, and you're done. I'm kind of unique because I work on so many different applications. I don't really know if there's a lot of people who do what I do, who have a lot of different clients in this space, because I have to do this all the time. Like it's like, every couple months, I feel like someone needs to set up. Oh my gosh, again.

MICHELE
There are a lot of agencies out there. And a lot of developers out there like yourself. The problem with agencies, the problem you might run into is paying for it, right? So when you're an agency, or when you're working on clients, if you have to pay for a service to help you with the project, you want to be able to bill that to the client. You don't want to have to eat that as overhead. And so how you build for this is going to be very important, I think that's something you would want to ask your your customers is or you know, your potential customers in your interviews is, you know, would you be willing to pay for this if it's a flat $5 per month for your entire company? Or what if it's $5 per project? And then they get to pass that cost on to their customer? Are they more willing to pay for it in that scenario? And I think this is where a lot of mismatches happen between companies and then client-serving companies.

COLLEEN
Well, the ideal, right, so my ideal solution is they can upcharge it and pass it through to their customer, right?

MICHELE
Mm hmm. So then that that's your your, your pricing model could be make or break here.

COLLEEN
Yeah. Okay. Okay, that's definitely something I have to I have to think about. Because the nice thing of if I offered as an add on to an existing deployment solution or like an existing CDN solution, then it will bill through almost like it's part of your web hosting. But then again, if they bill hourly, they are probably not incentivized to decrease their hourly load, right? Does that make sense?

MICHLEE
Well, but they may they may have, you know, done a done a flat project cost that is -- so it's if it saves 10 hours of development, you know, up to 10 hours of development time for you know, X number of dollars and...

COLLEEN 
Yeah, okay. This is great. So I think I think I love the idea of going through Reddit because like I said, my Twitter I got a couple people, Indie Hackers, I got zero people. I think I need to find agencies and other people like myself, and I know a few of those people in real life that I've actually met at conferences before. So I actually have a few real life people I already know I can reach out to, and I can you know, I'll pursue that avenue so that I think is going to be my goal this week is to talk to five people. That's a measurable goal. Talk to five people about this and look at my pain and frequency chart.

MICHELE
Awesome.

COLLEEN
I love it. All right. So that's enough about me, tell me what is going on with you.

MICHELE
So something that the two of us have have talked about a lot in the past, on the benefits of running your own software company is autonomy. Right? Right. Like not only are you -- you're your own boss, right? You get to decide who you work with. You get to decide what do you work with and, and what you want to do. And, and that's one of my favorite parts of my job.

And I'm thinking about that a lot the past week because of something that happened last week. We had a customer -- potential customer, reach out to us and we rejected them off the bat.

COLLEEN
Ooh, that's interesting.

MICHELE
This has never happened before. You know, we've definitely had situations where we've sort of quote unquote "fired" a customer. But normally those were only situations where someone was being rude to us or they were being way too demanding and even then it's you know, we're always polite to them, right? Like we just simply recommend that they use a different service or we tell them that we're not a fit and quite frankly, if you were to compare the emails we send them to ones for customers who were perfectly nice to us but weren't a fit like those emails look the same right.

But so so yeah, the the autonomy is something that I think about a lot and especially because we are completely customer funded, right? Like we don't have investors. We don't have you know, loans from a bank or anyone. We don't have anyone else who is putting goals are metrics on us that we have to meet. You know, we don't have a certain sales goal. We have to every month that's pressuring us into making decisions. Yeah, so it's a benefit that I've that I've always thought about but really became starkly in focus last week because ICE reached out to us.

COLLEEN
Wow, really?

MICHELE
Yeah. Yeah. And it was not only ICE, it was their enforcement and removal division.

COLLEEN
Oh my gosh.

MICHELE
Now, I don't think I'm betraying anything other than, you know, by saying that they simply reached out, right, I guess I'll find out right. Um, you know, and we didn't even take the call. I mean, I got the email. And they didn't even describe what they're doing, just you know, we want to reach out to you and get an account representative see if we can talk to someone about using your service. And my first thought was, abs-so-fucking-lately not. And you know, my husband is my co-founder, and that was his reaction as well. And you know, the hardest part about it was was finding a way to politely phrase the email that telling them that we didn't even want to take the call. You know, but if I was, you know, at a large organization, you know, for example, this has been a big issue for Microsoft and GitHub, right, because they have a contract with ICE. Yeah, I wouldn't have the choice here. You know, if I had a sales goal every month, and this was the way I was going to meet my sales goal. You know, the incentives would would back you into a corner to take that contract. But we don't have that over our heads and, you know, I can say, I'm going to reject this customer, and purposefully work harder to get more to replace whatever that revenue would have been, but being okay with that.

COLLEEN
That's wow -- that's amazing. Yeah, but I was just gonna say I've always really respected that about you, since I've known you, is you really seem to lead your company with what your moral footprint. And there's so few companies that do that nowadays. Like, that is something that is incredibly attractive about getting to make your own decisions.

MICHELE
Yeah, and it, you know, I was reminded of a favorite quote of mine from DHH, one of the founders of Basecamp, and of course of the creator of Ruby on Rails, which you code in, but one of my favorite quotes, I think this was him was, "What's the point of having a f-you money if you don't say a f-you?"

COLLEN
Yes!

MICHELE
Like, you know, that is, you know, that is incredibly right, you know, and I don't certainly have DHH level of f-yoo money, but you know, I don't have a sales goal over my head and, and when there is a decision like that, where I can make a decision that aligns with my conscience. You know, I mean, it's it's not hard to put two and two together of what ICE's enforcement and removal division would be using geocoding and like location tracking for Yeah, I mean, of course, and then seeing this week [week of July 20] what they're doing in Portland, because those are ICE officers apparently. There are very, very, very few organizations that I would reject off of the bat. They might be the only one. Yeah, it's just it's just wild.

COLLEEN 
That is wild. Well, the great thing like you said, you don't have investors, you don't have to answer to anyone. Like you can do what you want. That's amazing. Now I do have to ask you...

MICHELE
We answer to our customers.

COLLEEN
Right, like so I do have, you know, friends that work at GitHub and other companies that have been embroiled in this ICE controversy and how do you deal with the argument that well, they're just going to go to one of your competitors anyway. So it may as well be you?

MICHELE
Nah, I don't want their money. Yeah, you don't care. I don't care how much it is, I don't I don't want their money.

COLLEEN
Well, good for you.

MICHLEE
Who knows now maybe they'll knock on my door or something else and I'll have problems with them because I disclose this, but I hope they're getting used to it. You know, I think that's something that we, we have a responsibility to do, right. Like we see things that are so drastically going wrong. And you said, you know, we'll, they'll just go to one of our competitors, and I've almost had thoughts this week of, I should post on Twitter that they reached out to us and that they're looking for a vendor for this and encourage all of our competitors to publicly state whether they're going to take that contract. Because if ICE doesn't have location data, can't track people, right? They can't remove them. You know, of course, they can use an open source version or something. But I don't want to make, you know, I don't want to make anything easier for them. I want to make everything harder for them, I want to make them go away.

COLLEEN
So are your competitors public or private, or a mix?

MICHELE
Combination. So our competitors range from Google and Apple and Bing, Microsoft. So who knows maybe they'll end up there. To two really small companies, another bootstrap company called geocode.earth, Smarty Streets, which is a small company out of Utah. But we all kind of do different things as well. And so what's interesting is there really isn't like a one to one competitor for us. So when we do recommend people to go to competitors, it is often because they are genuinely a better fit. There's enough differentiation which is a little bit weird because we're in a commodity industry. So it's kind of unexpected, but we all do something slightly different.

COLLEEN
Well, awesome, good for you. Like, I'm glad, like you said, it's nice that you have the freedom and autonomy to be able to do that.

MICHELE
Just keep thinking about the, "There's no point in having a f-you money if you don't say f-you."
 
COLLEEN
I love that. 

MICHELE
Not that I plan to make a habit of this, you know, we have tens of thousands of customers. And normally we, you know, we never, you know, get involved in anything like this, but you you're presented with these situations sometimes in in your professional life. And if you work for someone else, whether whether that's, you know, as an agency like we were talking about beforehand, or in a bigger company, if there's a client or a customer that you disagree with, you're stuck with it. I mean, maybe you can try to lobby the company to drop them but you know, good luck getting a raise or a promotion after that. Yeah. You know, if you want to be able to really speak your conscience, you have to be able to have your own company and not be beholden to external powers, whether that be, you know, attempting to get acquired by a big company or investors or, or your boss.

COLLEEN
Yeah, I think that's one of the underrated things about having your own company, even as a consultant like, obviously on a different scale and a different level. But I, I have turned down two in particular, companies that were just doing things that they just, it just wasn't what I wanted to do. Like I just didn't agree. It wasn't quite as dramatic as that, but I just didn't agree with like, kind of the fundamentals of their business. And I was able to say no.

MICHELE
Yeah, so when you have your own company, you can make decisions not only about the specific companies you want to work with, but also the kinds of customers you want to work with. So for example, we fairly often have people reach out asking us for data on individual people, so the kinds of things that a, you know, a credit agency might look for, you know, data on specific people and their income and data about them. And we say no, and that we have no plans to ever add that data because I don't believe in selling data on individual people. We sell, you know, data at the Census level, which is basically at the neighborhood level for an address. But that's a conscious decision that we have made that is another example of, you know, if we had investors or a boss breathing down our neck, we might have to make a different decision and maximize your revenue, rather than what feels morally right to us.

COLLEEN
I mean, you can get it get up every morning and go to sleep every morning like feeling good about the choices you've made, not feeling pressured to work with someone you don't want to work with or do something you find morally ambiguous. I think that's huge, especially in tech, especially in this day and age. When so many things seem like they are teetering on being just a little bit shady. I think that's wonderful. And I think actually may have already said this, but um, since I have known you, that has been the way you have run your business, and I have always really respected that and admired that about you, because, honestly, if you guys sold individual income information, you would, I mean, I imagine that's very valuable, right? Like...
 
MICHELE
We would make a lot of money. 

COLLEEN
So the fact that you were like, Nope, I don't believe in that. We're not going to do that. I think that is inspiring. And it also shows again, in this day and age that you can run a tech company with values and morals and not being beholden to making as much money as possible. 

MICHELE
Absolutely. And especially when you don't have any sort of huge goal that you are beholden to, you know, like going public or getting acquired. You don't have to make as much money as possible like, right? Like we only have to make enough money to sustain our family. And that gives us choices, that gives us the freedom to make decisions like this that align with what we believe in. Yeah.

COLLEEN
Yeah. Awesome.

MICHELE
I think that's about it for this week. But that's the big thing I've been thinking about.

COLLEEN
I love it. Thank you for sharing that. 

MICHELE
Sounds good. All right. 

COLLEEN
Well, we'll catch you next week. Thank you for joining us.