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BONUS: Alex Hillman Joins Our Table
Michele Hansen Welcome to the Software Social podcast. I'm Michele Hansen.Colleen SchnettlerAnd I'm Colleen Schnettler. Alex HillmanAnd I'm Alex Hillman.Michele Hansen And we have a special guest with us today, which is very exciting. Alex has recently released a book called The Tiny MBA. Colleen and I have both read it and we are super excited to talk to you today, Alex.Alex HillmanUm, thank you for having me. I've been enjoying listening to this show. And I feel like I got invited to the the cool kids lunch table to hang out and and talk business. So um, thank you.Michele Hansen Yeah, so let's dive in. So so the book, I really like how you structured it with a bunch of sort of a bunch of nuggets of wisdom, many of which you get the sense that those were hard won on your behalf.Alex HillmanYeah, the hard won is a good way to describe it. And I think talking to folks have since read it, a lot of folks find themselves nodding along nodding long and going, "Oof, ouch. Yeah, I've been there for that one. I wish I had heard that one sooner." And so I think for folks that haven't encountered it yet, there's maybe some warning signs. And then on the other side, it's it's stuff that I think people do know, including myself, but don't necessarily hear or hear often. And sometimes they just need a reminder or to hear it in a new way. So one of my favorite ways I've heard this book described so far was from a friend of mine, who is a pretty storied entrepreneur and has spent time in sort of all different categories. He's done the big venture back thing. He's done small bootstrap stuff. He's done publishing, he's done software. And he really, really enjoyed he's even been involved in reading books with entrepreneurs, so he's sort of seen behind the scenes. And he, he's like, this book is so different from other business books and there's sort of three kinds of lessons: There's one third is stuff that maybe you've heard before, but it's in kind of a new way. You know, the constraints of these, you know, everything about a thing is kind of on one page. And you don't even have the whole page in really any case, it's really a couple of sentences. There's another third, that is what he called next level thinking. And I'm not super comfortable calling it that, but what he was really describing was more, you know, a different way of seeing a thing that people have a sort of a commonly held perspective. And this was an alternative that is maybe equally true, but less commonly heard. And the third part was a kick in the ass, and something that he's heard before but needed to hear or needed to hear in a different way and to challenge himself and go, why am I doing this the hard way? And, yeah, I mean, it's, I think there are books out there that do each of those things, but it's been really nice to hear from folks that are at lots of different stages of their business, that it can do one or all of those things kind of in one sitting.Colleen SchnettlerSo Alex, you talk a lot about psychology in the book. One of the quotes is the most valuable books aren't business books. They're books about human psychology. So, you know, my background is engineering and development. And I know a lot of your audience I believe, as well. And I, I was just like, man, now I gotta learn about humans? That sounds really hard.Alex HillmanYeah, I'm curious, like, Why? Why does that seem hard to you? Because I hear that and I feel that and look, people are frickin weird. So I get it. But like, from your perspective...Michele Hansen I love how weird they are!Alex HillmanI do too. I do too. From from you, like when you say? Like, what's, how does that read for you? Like, what it what actually makes it feel hard to you?Colleen SchnettlerWell, I already feel like I'm better with humans and most developers, but still like they're just humans are tough. I mean, they're just irrational. And you know, they don't make logical decisions. And so trying to get in someone's head and find out like, like, what I took away from the book is I really need to figure out how I'm providing value to my customers. And you know, you really just want to make them happy, which is something I've talked about with Michele before too, like you, you want them to feel like they're winning. But then I just, I just really struggle with like understanding human psychology when you get people who really aren't logical thinkers.Alex Hillman Yeah, yeah. Well, I think there to your point, there's, there's the rational behavior and the irrational behavior, and which one someone's gonna be deploying at any given moment is not always consistent. One of my favorite ways to think about psychology is -- because I come from a software development background as well. I didn't explain, I kind of said that in the book, I guess. But one of the reasons I find psychology fascinating is it's kind of like having a debugger for people because people break in wildly unpredictable ways, but they do it at wildly predictable times. Or sometimes it's the other way around, they break in unpredictable times, but in relatively predictable ways. Or no, I say break. It's not always bad things, they respond positively, consistently, just not always in the exact same way. So, you know, for, for me programming kind of clicked when I realized, "Oh, this is about patterns, right patterns and, and systems." And if you start thinking about people as patterns and systems also, I don't, I mean, I think you can get pretty far into the weeds with psychology and things that are useful, but maybe not instantly deployable. If you really just think about what are people's behaviors as patterns, like it's not just what do they do. And it's, it's also why do they do it? And then is there any consistency to why they do things or is there inconsistent consistency? And if there's inconsistency is there consistency within the consistency, so you can start to see how when you sort of pull apart the layers, it really does start feel like debugging a person. And, you know, I think one of the other pieces is sometimes you're debugging yourself. It's like, "Am I making a decision or not doing a thing because of my own psychology?" I think that in some cases is even harder. However, I also think, you know, one of my favorite books and it's recommended in in the Tiny MBA is a book called Just Listen by an author named Mark Goulston. And Mark is a clinical psychologist. But the reason he's famous for -- famous enough to write a book that I would be recommending in a business book -- is he's a lead hostage negotiator, trainer for the FBI. And in the book, he talks about sort of the neuroscience of why we, why it's hard to listen and and why it's hard to get other people to listen to us in a really, really systematic way. And he teaches you some really specific techniques for, and he uses, he teaches these techniques to hostage negotiators. And he also uses them in his private practice with, you know, husbands and partners and wives and families who aren't talking to each other. It's all the same basics, you know, brain science, but he does this, this interesting thing where, you know, it's not a good idea to teach somebody a psychology tool, and then have them go use it on their friends and family. Bad things are likely to happen. But instead he teaches you how to use these tools on yourself. And by practicing them on yourself, you start recognizing your own internal voice, your own internal conflict when you're not listening to yourself. And you get to sort of practice the techniques in the book on yourself before you ever take it to your partner or your kid or your teammates or a client, whatever it is. So it's really, really hard. Really treats it like debugging. He frames the process. It's a 10 step process called from "Oh, fuck" to "Okay." And step one, before you do anything with the other person is figuring out where on that process of conflict they are. And you can't get somebody from oh fuck => okay if "Oh fuck" is a 10, you've got to get them to a nine, then from a nine to an eight and eight to a seven. And if you don't sort of go through those stages, it becomes difficult if it's possible at all, to get somebody to do a thing. And he's all like, you can't get somebody to do a thing they don't want to do you have to figure out what they do want to do, and align your interests with theirs. And that's where I think things come back to business. You can't make somebody buy something they don't want to buy. What you can do is figure out what somebody's interests are, what they care about, how they think about it, how they communicate it, earn their trust and prove to them that you're aligned and then you're not convincing them to buy anything, you're showing them that you are going to help them do a thing that they already want to do. And these are the steps to do it. Michele Hansen I'm totally gonna have to read that book now.Colleen Schnettler I was just thinking that I'm definitely reading that book.Michele Hansen You know, so when I was reading the book, I also highlighted that quote, Colleen. But when I saw that there was a reference for a book, and in it, my first thought was, oh, I wonder if this is going to be Thinking Fast and Slow, which is one of my favorite books about irrational thinking and understanding when people are making these sort of rational irrational decisions, how contextual those are and the psychology of it. And so actually, I like flipped to the to the to the end of it being like, Oh, this is like totally Thinking Fast and Slow, and it wasn't and I was very surprised. And now I'm delighted and definitely gonna go check out that book. I'm curious, Alex, if you've read that I haveAlex Hillman Thinking Fast and Slow is an absolute favorite. I was kind of intentional about picking my book recommendations, too. To try and give folks stuff that they might not come across in another another setting, they think Thinking Fast and Slow is a common recommendation among business books, even though it is absolutely yeah, yeah. And so, you know, Just Listen, I don't think is positioned as a business book at all. But my actual my favorite interaction, I recommended it to my brother in law who's in, he's in advertising sales. So like, maybe and he would be okay with me saying this, maybe some of the slimy sales that exist some on the planet. And, but he's, he's an honest guy, and he's really good at his job. And he loved the way this book broke down. The psychology of what he experiences in building sales relationships. So I think it's an uncommon business book. But I think it's useful to to lots of different kinds of business people.Michele Hansen Yeah. And so speaking of sales, and marketing, one of the quotes that I find myself thinking about is, if done well, teaching and marketing can be nearly indistinguishable from one another.Alex Hillman What does that show up for for you? Like? I mean, sounds like that's it, you said it resonates with you and you think about that? Is that how you approach your marketing? Or what? What about that quote landed for you?Michele Hansen I think there's a lot of truth in it. And earlier this week, I came across a tool for the first time called Bubble, which Colleen might be familiar with, since it's a no code tool. And what was so impressive about it was, you know I went to their site bubble.io, and a lot of their marketing is, like tutorials on how to create other sites. So it's like how to create Uber with with Bubble and no code or how to create Netflix or how to create like Hulu like all of these like different things I didn't even think would be possible, and it's just a tutorial guide on how to do it. And it was so cool because I came to that site for the first time and I was like, What is this? Like, what can I even do with it? And then it's like, Okay, this seems really powerful but it's kind of intimidating. And then getting to that point with all of those different use case tutorials was like, wow, this is like super cool. Like I could do this if I wanted to. And it really was education as marketing and you know, meeting someone, someone where they are and marketing not having to be this, you know, slimy thing that like some people have to engage in but it really just being genuine education about a tool, helping you do something you already want to do, but do it better.Alex HillmanYeah, that's such a really great example for a couple of reasons. The first thing that stands out to me is, you know, anytime I'm I buy something new, or like a new piece of software, a new piece of technology, a new really anything, or if I'm trying to do like home repair the like, I almost never go to Google anymore. I go to YouTube. Because YouTube is like the biggest searchable compendium of how to do literally anything, like I needed to figure out how to diagnose a problem with my dryer, right? I was able to find a video not of how to fix it, how to figure out what was broken, I was able to learn that in like seven minutes on YouTube, and you know, that was a DIY person doing it. But if you think about that is a really common pattern for a lot of people, is to look up how to do a thing and if I'm looking at how to do a thing, I'm not necessarily looking for a product but if I learn a thing...if I have a problem and you teach me how to do it. The next time I have a problem even kinda like a guest who I'm going to think of you because you helped me last time. I built a deck this summer, turning quarantine. I've never built a deck before, I'm not as handy as I might be making myself sound, and I'm the -- before we built the deck, I was doing some research on YouTube, you know, techniques, process materials. And I watched somebody who, there's no way that person was smarter than me, build a deck in very similar scenario with like, uneven ground. And here's the thing. Home Depot and Lowe's also had videos about how to build a deck. And I watched these very polished, professionally shot videos, show me how to build a deck in perfect conditions, with all the right tools, and everything comes out perfectly. And I watched them and I go, no way. I just don't think it's gonna work that way and like, and so I went looking for others. And meanwhile, I find another video from a person who runs into problems, solves those problems, I get to kind of watch them go through it. I trust that video more. In effect, I was selling a guide or have referral links to products I would click those links because he earned my trust. So I think about what is the job of marketing, why do we do marketing, I think there's two two reasons. One is to get the word out about our thing, right? That is the sort of the top level, the top line goal. But once somebody has heard about your thing, is that enough not to make a sale, even if they really want the thing. People are looking at their money, they're looking at their bank account, they're looking at the thing going, how badly do I want it? Do I want to spend that money? Do I? Is this really going to do the job? But if you've earned their trust, with a tutorial video that makes them believe, "Oh, I've now seen it done by someone who's not any smarter than me, if they can do it, I can do it." If you've got somebody in the mindset of if they can do it, I can do it. And their wallet is anywhere nearby, you're so much closer to a sale than if they simply knew you existed. So the last piece about that is you know, we're sitting here talking about it, right. And so when somebody learns something, and they get a win, they trust you they feel good about themselves, and they're going to talk about that experience. And that's that elusive word of mouth marketing that people want. How do you generate that? You get people to talk about their wins, not your product. And that's kind of counterintuitive to figure out, like, how do you engineer that? There's no shortcut to earning trust and making that happen. But the closest thing to a predictable path to make it even possible, I think is is teaching people something that they already want to learn.Michele Hansen Yeah, absolutely. Colleen SchnettlerStill talking about people. I feel like we're doing a lot of talking about people, which is an interesting, you know, outcome of this book. So you have this question about money psychology. And I know we already talked a little bit about human psychology, but you said, if I gave you this same assignment to make $5,000 in the next seven days, how would that make you feel? And so I read that and I thought, how is that supposed to make me feel?Alex Hillman Well... Colleen SchnettlerTerrified! It makes you feel terrible, Alex. Alex Hillman Excellent. I think that's, that's I mean, the goal of the question is not to make you feel terrified. The goal of the question is to make you aware of how you feel, however that okay, right. So somebody read the Tiny MBA and said, "You know, this was really great. But I have a question. I paused for quite a while on page 12, where you said money, psychology impacts that how does that make you feel?" And they said, "It would terrify me," literally using the exact same word you did. "Do you have any advice for how to go about learning about my money psychology?" So that's the reason for that question is not to teach you a thing. It's free to identify what your money psychology might be and interrogate that and go, Well, why does that scare me? Is that is that a rational feeling? Is that an irrational feeling? Is that something that that fear is keeping me from doing something that maybe could help me make those $5,000 Whatever it is. So I gave him the following assignment. I said, you know, try to spend some time just you with a journal or whatever it is, and answer these questions. The first one was, what exactly are you terrified of? Is there something that happened in the past that would make you feel that way? The second question is, what's the worst case scenario if you tried? The third question is, what are the facts about your situation? What resources do you have that you might not be thinking of in that moment of terror, but that if you step back and go, I actually have these resources. I have knowledge, I have the email list, I have professional relationships, I have the ability to create things, you know, what resources do you have that could be useful in reaching that goal? And the fourth question was, what resources could you create now so that next time you get this challenge, it's less terrifying. There's no right answers to any of those. It's more of a self evaluation exercise. So, you know, I'm curious if there's, as I was asking those questions, are there any, any of them that made you made your brain go to a place? Or, you know, now that I've kind of explained the goal of sort of interrogating that terror, do you have an idea of why that's terrifying for you?Colleen Schnettler My initial instinct is like, okay, like, I actually thought about it. I was like, okay, based on my hourly rate, if I work this many hours, like, I could do that, but that sounds miserable, right? Because I would just be working, working working. And so it kind of made me try to like, reframe it into, wait, I should try this. And I should not, you know, work my consulting hours, I should do something else. Alex Hillman Yeah. Colleen SchnettlerAnd I think one of the cons, I guess there's a lot of pros to starting a little bit later in that, like, you already have an established network and you already, you know, have established skill sets. But like, one of the cons is there's a huge opportunity cost for me to take a week off. Alex Hillman Mm hmm. Colleen SchnettlerAnd so that's been a consistent challenge for me and you talk about this in the book about being comfortable, you get really comfortable, even though you know, you want something else, like, you know, you want to diversify your income streams. And you know, you want to have a different maybe life experience in your business like, man, when you're working as a developer, it's comfortable. Alex Hillman Yeah. Colleen SchnettlerAnd so that is always that's challenging. For me, that's kind of this time, I'm, I'm not gonna fall back into that comfort. But I've kind of been on this journey for many years. And I keep just kind of falling back when it gets hard, or when it gets scary. I mean, I think scary is a good word, which I haven't thought of before this conversation.Alex Hillman And I want to sort of pick apart one other thing there. I think your point about, you know, the opportunity cost of taking that week off is, is real and calculable. Right? So I look at a problem like that in a couple of different ways. One of them is all right. "What if I don't need to do a week in order to get started?", right, what could I do in a day or maybe I can't do the whole thing in a day. But if I were to take four Fridays in a row, if not Friday, whatever day it is. And you know, if I now I've got timebox, like, what could I do over those four Fridays? So that's -- where that fourth question is, is what could you do now, with that week so that the next time it's a little bit easier, right? That's where the business that that Amy and I run is called Stacking the Bricks. That's kind of the metaphor is, like if you don't have an advantage now, what can you do now to build the advantage for the next time through? Because your your point about comfort, I think is a real one, especially when it comes to these kinds of business income streams that are not trading your time for money. Time for money is super powerful, because to your point, it's easy when you're doing it. But the trade off is as soon as you stop working. There's nothing happening. You are not building any sort of asset, you can't resell the time. Where things I think get kind of interesting is where you go -- like starting to look within your work. Obviously you can't sell work that you've done for clients, but other things that you're learning on the job that is sellable. Even if it's not, you know, I think so I'm talking to two software folks as well. So like, I think people with software skills think that in order to start a business, I need to sell software. You can, if you want, but that is one format, one mode and selling software, you know, starting software and having $5,000 worth of sales at the end of the week is, you know, it's not a hill to climb. That's a vertical line. It's it's near, honestly, it's impossible because some folks have certainly done those sorts of things, you know, a tiny app or something like that. But if you're starting from scratch, you know, to work to use those constraints and say if I've only got eight hours, every Friday for the next four weeks, what could I be doing over those over those times to build advantages that I don't have yet. So could that be you know, trying your hand at scoping, like a really small workshop to teach some skill. And that could be a technical skill. It could be if you are, if you're a freelancer, that could be a business skill to teach other programmers some, you know, client related thing. If you were in a job, it could be, you know, a team related thing. So like, I think it's widening the scope of what it could be, and narrowing the scope of how big it needs to be in order to be a thing starts to allow things to take a little bit of a different shape and sets up an opportunity to build with build which you can with the time that you have, rather than building the idea in your head with the time that you have, which is like that's, that's a that's a road that stretches off into infinity. A lot of times for a lot of people and it's where it's easy to get discouraged and feel like this is hard. The tech consulting work or a job is easy. Why am I doing the hard thing again? To say one last thing on that is, every, everything comes in difficulty modes as well. And so I think like building choosing to build software as your first product is on hard mode. It's like the analogy I use this and one of the lessons in the book is like, you play a video game on hard mode it is way harder to beat, you can beat it, and the game is going to award you extra points for it, but when it comes to business, if you make a choice that has you playing on hard mode, instead of easy mode, the trade off becomes, you know, is the game going to give you more points whether it's you know, internet points or real money? No, it's not. The game doesn't care how hard you're working, it's how well are you serving them. So I think choosing a difficulty setting when it feels hard, I think that's a real feeling and it is a real reality is there an easier version and I guess believing yourself that an easier version is not a lesser version, it might just be the best version that you can do now to set yourself up for, again, the advantage you need to do the slightly harder version in your your next pass through.Colleen Schnettler That's great advice. Thank you.Michele Hansen So I have a question that's a little bit of a different track from things that are specifically in the book. It's about something that isn't in the book. Alex HillmanCool. Michele HansenSo the book is called the tiny MBA. And one of the big values of an MBA in addition to the learning and especially the system's level thinking and and the practical level learning, which is all in this book, is community and being with people who are excited about the same things as you but coming at it from different perspectives, different industries, different roles, and then also getting access to people who are more experienced whether they are running their own companies or touring factories or things like that. And you're a big community guy. I mean, you run Indy Hall like, like, how does community factor into this? And like, can you can you give us any insights there? Alex HillmanI love that you asked this question. And I want to come back to the, the MBA component to it as well. This is one of the things I wanted to talk to you about because you do have an MBA. Michele HansenYeah. Alex HillmanAnd I was, there was a slight hesitation in calling this that. Because I'm friends with Josh Kaufman, who wrote The Personal MBA which is an excellent book, and I you know, I know Josh, I know the book. I know people love the book, and Josh has negative reviews are, "This isn't a replacement for an MBA." And he's like, "Of course, it's not that's not the point." And so, you know, I was really good. Not with not with trepidation, I think a little bit of trepidation, really curious what people who have gone through the MBA experience how they see this as a compliment and what are the things that this does that are different? So we can talk more about that if you would like. But to answer your question about the community side of things, this is something, that there is a reason there isn't. And I will caveat that with there isn't there, it's not there yet. So one of those sort of... Michele HansenI was hoping that was the answer. Alex HillmanYeah, so one of the core philosophies of our work and I think work in general is to, you know, is to ship a tiny product first. And this is not my first product naturally. But that lesson kind of carries over to ship the tiniest version of the product first. So this book is tiny. I -- this is not my first attempt at writing a book. It's my first time finishing it. So getting, like having the book product finished also taught me that writing the book is not the hard part of publishing a book, everything else that comes after the, the core of the book is done is actually took way more time. Knowing that I was going to have a bunch of things I had to learn, I wanted to focus on making the product great. I wanted -- this is our first time doing a physical product we're working with this new print and distribution partner, had to learn that, we were using the Kindle Store on Amazon, I learned a lot about that. And but I was thinking the same thing. I was like, if if this book is read the way that I hope it's read, there's sort of two versions. One is where it sits nearby. It's you know, near your desk, it's at arm's reach, and you flip through it, you know, once in a while and sort of almost like a magic eight ball, see what comes up. And the other is using it as a tool for sparking conversations like this one. And I feel like you know, a mastermind group or a community setting being able to sit down everyone having either read the book or pick a few of their favorite of the pages and come up with a couple of prompts to say, you know, what did that remind you of? If you were -- if you experienced that differently, why do you think it was differently? Again, it's sort of an interrogation tool. So that lends itself to a community experience. I just think doing it at launch was just, it was just one more thing that did not fit in the scope. And I've been doing community long enough that I know better than to do it unless I'm going to take it seriously. For as hard as it is to ship a book, building and running a community is way harder. I've seen so many people launch communities alongside books and products, that just kind of like you know, they're really exciting at the beginning and they kind of flounder off. And Indy Hall, the co-working community you mentioned, we just turned 14 years old. The subtitle of this book is 100 very short lessons about the long game of business. If I'm gonna build a community around this book, I want to do it in a way where it has the best chance of lasting. And doing that, while also launching the very first version of the book and a bunch of new formats just wasn't practical. But this is not the first time I've gotten the question. Sort of two things that have come up one that is near term because it requires very little of my immediate energy and effort. And that is some tools for helping people run, run book clubs and masterminds and stuff that they might already have, to use the book as a tool for sparking discussions and doing this again, this is sort of interrogation. But I think an online community space where people can discover each other people, you know, the book is an alignment tool. So if people are aligned, exactly like you said, knowing who those other aligned people are, create some really exciting, you know, things far beyond what the three of us could imagine. What I know from Indy Hall is, there is incredible potential on that. I want to build the foundation first. So yeah, a tiny MBA community is certainly on the horizon. I, I'm hopeful we launched something along those lines before the end of this year.Michele Hansen It totally makes sense. And you know, when you were talking about how you want to launch the book first and then get it out there and how writing the book, while difficult was almost the easiest part of it. And then there's all the other stuff to actually get the book in people's hands. It reminded me so much of what Colleen is going through right now, with her image management service. Like we were just talking about this recently.Alex Hillman Catch me up, tell me about that. What's the what's the, what's the correlation, here?Colleen Schnettler I am in that phase where I'm so close to shipping something and I'm just trying to ship it right. Like I am just right there. And it's feature. I mean, it's, it's what you just talked about a little bit ago about like, like thinking about your idea. Well, I have. I'm cutting features aggressively and I just want to add one more thing. And so I'm trying to just stop and just just ship it, right? That's all that's where I am right now. Got it? Alex Hillman Yeah, no. The discipline, it's hard. It's hard, but uh, I mean, even we're working with the designer to finish the book. And one of the last things that we added to the book was the how to read this book section. And I had, so the designer that I work with Hannah is amazing and she I've been so happy to be able to pass along compliments from people who love the design, love her work. But there were definitely periods where I was like, doing that last little bit of fiddling, like just one more thing. And I could tell where I was like, I was pushing up against some of the boundaries where I was like, I promise this is the absolute last thing but this how to read this book section I think is important. So she helped me get it in but yeah, that if you don't have... it's, I guess for me it's the line is like, if it was something I wanted to add, versus something that I felt so strongly that the customer would have a significantly better experience -- like they will get more out of the book. This is not a ooh that will be nice when we have it, this is a step function improvement. Where if somebody goes through this and doesn't have the guidance to pause on a page, reflect and go, what does this actually mean for me, and they just read it cover to cover? That's not the experience I want them to have. So that was my my final scope creep. Books can have scope creep, too. Yeah. So I feel you.Michele Hansen I'm curious, when did you finish the text for this book? Or you know, sort of 99% done. Alex Hillman The stuff is on the the numbered pages, like the actual lessons was finished in December.Michele Hansen Wow. And then so it went from December to August to do all of the, the get it in people's hands.Alex Hillman Well, and I mean, I can break that down a little bit. If it's interesting to you what happens so real And also wrote the all those lessons in public. The original drafting happened on Twitter. That's why their Twitter length. And the feedback loop of writing and public was a big part of the creative. I wasn't writing a book at the time, I was writing a Twitter thread, where my goal was to write 100 things that would be useful business advice, perspective lessons, things like that. And the instant feedback loop of what people were responding to read, tweeting, liking, but also commenting asking for clarity and things like that. Writing in public is its own kind of terrifying. But the value was astronomical when the thread was done, it was Christmas basically. And I went offline and went on vacation with my wife and came back a few weeks later, and it was some six or seven weeks later that those tweets were still getting quite a bit of action. And that was when I made the decision to say, maybe there is a way to package this up into a book. And so that was like mid January or so. Maybe late more like late January, and so the turning the effectively the manuscript that I wrote in public on Twitter into a book was everything from hiring and talking to the designer, figuring out the the details of what it was going to contain, getting that going, what was the additional editing that was needed (those tweets were written on Twitter, so they need to be edited a little bit). Everything I wrote stayed in, they were just cleaned up a bit. Figuring out who I wanted to ask to write the foreword. And my friend Nilufer graciously said yes, so framing it for her, getting the response from her. Her first draft was incredible. It's pretty darn close to exactly what's in the book. Doing the book recommendations, all that so it was like everything after the core took that long. And you know, there was a pandemic happening in the middle. So like, Indy Hall was in kind of a funky state. So that took my attention for a while and Hannha was dealing with some of her life stuff. So we I'd say we pressed on pause for a solid six or eight weeks somewhere in the spring, pick things up again, intensely in June. And the like the final design stuff was basically done mid-to-late July. The final production, all this stuff for getting it ready for the Kindle Store, getting it ready for the the printing and fulfillment, setting up the Shopify integrations, building the landing page, that all happened over the course of maybe three weeks or so and then and then you get to the actual marketing. Right and so it's the, there's a marathon. Absolutely. And I was not you know, working on it full time. Because I have other other projects, other businesses, other products within the businesses, but for the for a effectively a side project within the business all the way through. If this was the only thing I was working on and everybody else I was working on it with it. I still think that this would have easily taken three, three months minimum. Because...Michele Hansen It sounds like that that extended timeline was actually helpful, because it allowed you to reflect on the content of the book and make sure that people had everything they needed to really get a lot out of each page so much more than they would in a tweet of references and understanding how to really get the most out of the book.Alex Hillman Yeah, the I sent out about two dozen early reader copies, like advance reader copies. It was a pretty even split between people that I knew and people that I didn't know. The people I didn't know I was most scared of. The people you know will always be nice to you. The randos on Twitter, they found me through somebody retweet. They might be a nice person, but they might say a mean thing.Michele HansenDid they?Alex Hillman Nobody said anything. mean, I got one message. And this was after launch, I got one person who said, this was the most disappointed I've ever been in an ebook. Colleen SchnettlerOuch.Alex HillmanAnd all I could do is think to myself, what did you expect from an $8? ebook? And what's going on?Michele Hansen I guess they've read a lot of really good ebooks?Alex Hillman I don't know, I don't know. But like that that person was like, Here's your money back, I really hope you have a great rest of your day. The closest thing to a negative wasn't a negative, it was folks saying that they were surprised, which given the kind of strange format is a completely reasonable response. There's something about a book that people sort of have an expectation, especially a business book, you get an idea of what a business book is going to be. And so you buy a business book and you open a business book, and it's three sentences on a page. "What is this?" And then you actually read through it and they were like, I got a lot out of it. I really liked it. But I was just kind of confused and disoriented at first and that was the feedback that made me go, strangers who don't know me don't know my work are going to read this book them telling me about me isn't going to help them at all. Me telling them what I know about the way that people who are reading this book and getting a lot out of it. That's the thing that will set the expectation. That's what sets the stage. I watched a comedian. Oh, Hannah Gatsby. Have you seen Hannah Gatsby, she has a new comedy special on Netflix and she does a bit at the beginning. It's called Douglas is the name of the show. It's brilliant. She spends the first 15 minutes of an hour long special telling you how the show was gonna go beat for beat. And that's part of the joke. She's like, I'm going to tell you how the show is going to go. And you're going to see it coming. And then you're going to forget and that will make it even funnier. And she tells you what, she's telling you that she set up the show in a certain way and that she's explaining the show. Like the metal layers to it were unbelievable, and I didn't even think about it until we were talking about this just now, I might have been like subconsciously inspired by the way, she spent 15 minutes of an hour long special in the same way that I spent, you know, five to seven pages of a 110 page book, telling you how to read the book. She told you what came next. And her explanation for why she did that was because her first -- it was not wasn't her first special, but her previous special was a massive runaway hit. And it was it was a kind of genre breaker and comedy. And she's like, well doing a follow up to that show is weird, because I don't know what you all expect from me. So I figured the easiest way to ease you into this, I want to tell you exactly what to expect that way you can't be disappointed. And I think I'm thinking about that now and going. That's definitely what I was channeling when I wrote this book when I wrote that intro is I want to tell you what to expect because I know this is weird and that way when you get to a thing that is unexpected. You can't be disappointed. You can be challenged, but too disappointed unless you're that one person who said this was the most disappointing. they've ever read. Can't please them. All right. But yeah, I mean...Michele Hansen Yeah, I mean, like a few minutes ago, you're saying how you would have some hesitancies around using the phrase MBA in the title. And I'm wondering if that relates to what you're just talking about here right now?Alex Hillman I think so. I mean, I think there at the end of the day, I think like, nobody likes surprises. I mean, people that people like, you know, good surprises, but even good surprises, like, sometimes I would have liked to have known right? And so I feel like if you can help people avoid feeling disoriented, especially in a book where my goal is to challenge your thinking a little bit, if by putting you on guard with a weird format, you don't feel safe enough to really do what the book intends you to do. So I think it's helpful to make it clear, like I what I want for you and if that aligns with what you want for you, this goes back to our sales conversation before, then, like, come on a ride with me, this book might be a good time for you. And the response has been, overwhelmingly that. Which is which I'm really, really, I've enjoyed so much hearing.Colleen Schnettler Yeah, I loved how it depressurize the whole reading of the book.Michele Hansen Yeah. And you were, of course, you know, tweeting about the book, and I had, you know, downloaded it and, and I was excited to read it, very, very curious what your take on it would be. And then somebody tweeted out, like, "Oh, you know, I read this over my lunch break." And I was like, oh, like, I don't actually have to, like mentally, like, carve out time for this in between all of the other, you know, two 300 page books I'm reading right now. Like, this isn't one of those? Like, I was kind of expecting that. Like, it was actually pretty refreshing.Alex Hillman I love to hear that. Yeah, I mean, does the world need another one of those 200, 300 page books. I don't know. And to be fair, I mentioned before I've tried to write books before. And they fail, I failed to finish them in part because they were heading in that direction, where I kind of saw it coming in. I was like, "No one wants to read this. I don't really want to read it. I barely want to write it!" And so like, that's not a good place to be starting. It's also made it really fun to, you know, back to like the marketing and promotion, when you're asking people to do you favors. You know, I'm reaching out to for two people to review the book early and busy people, people I admire. Actually, this is one of my favorite stories so far, and something I'm pretty proud of. I've been pretty heavily inspired. And actually, this book and a lot of ways was also inspired by Derek Severs. You know, Derek's, I think most famous for his like mini TED talk about starting a movement, that crazy person dancing in a field turning into a dance party. Derek, I find is such an interesting, interesting person. And his business books also are kind of mold breakers and a bunch of his recent books are these. They're not books, they're like short essay collections. And I've kind of always admired his confidence to do stuff that's like, this is the way I did it. If it's useful to you, cool. I wrote him an email and I was like, Hey, your books have have been really helpful and inspiring to me over the years. I also dropped the Brian Eno, you know, reference the Oblique Strategies, because I know he's a musician, and that would would resonate. I said, Look, I've got this book. I know I'm sure people ask you to read books all the time. And I do not expect you to say yes, but this book takes about 30 minutes to read. So if you'd be interested, I love to you know, send you send you a copy. And the guy who's famous for the "hell yes or no" modality of decision making. He responded with "hell, yes. Colleen SchnettlerYes!Michele HansenNice!Alex HillmanBut how like, that's the it's the, Yes. I was like, I was just, I mean, I literally stood up in my chair and you know, yes. And so you know, you know, Derek's a busy dude and he can do things on his own time. I'm excited to hear what his response is when he reads it. But to be able to approach someone who I know is busy, who I know gets hit up with books all the time to say this is, I don't know if you're gonna like it and I think you will. But most importantly, I'm not asking you to invest four to six hours. You can read this over lunch and, and, and maybe even faster.Colleen Schnettler So Alex, I feel like my main takeaway of the book, if I had to distill it down into one was, it's really not that hard if you just get out of your own way.Alex Hillman I'm glad that that's the takeaway for you. There's, I think, a large portion of difficulty and failure are our own doing. And sometimes it's just because we don't know better and sometimes because it's variations of pride and perfectionism and self sabotage. And I think the mistake is to feel guilty about it. The professional move is to acknowledge it and try something new. Even if it is a little terrifying and uncomfortable. I think you to your point before Colleen, about being a professional, who's been doing what you're doing for a while, and you're good at what you do, to trust yourself enough to do a thing that you know, you're good at what you do, you're used to feeling good at what you do to trust yourself enough to do a thing that doesn't feel good instantly, I think is a gift we can give ourselves that maybe we don't give ourselves often enough. And this happens to be a gift that quite literally pays. So it's a good one. But no, I'm really happy that that's your takeaway that's theirs. And I would be super interested to hear what if like if that takeaway changes or what that takeaway looks like in six months or a year, you come back for a skim through when the process out, you've got some customers, you're working on the next like, whatever, wherever you are in six or 12 months. How does the book look differently then? I mentioned before I like email. I would love for you to email me. Colleen Schnettler Yeah. Alex Hillman Tell me tell me what that looks like.Colleen Schnettler I will. Cool.Michele Hansen Yeah, I think I mean, talking about how how it resonates with us, is something about the book, right? It's very small pieces of wisdom. And I found out you know, I, I sort of whipped through it on a lunch break. And then it was a week later, as I was thinking about that marketing quote, or is thinking about the ones about psychology. And I think that's something that's really, really interesting about the book and about the short format is that you're not taking two to 300 pages to make a point you're giving yourself one page for each point. And it's interesting to see what sticks out with individual people at different points.Alex Hillman Yeah, and I you know, I think your point about something kind of warms way into your brain. And, you know, shows up again later, now. You read 400 pages of a book and the, then you hope that that lesson is useful now or that you remembered in the future when it will be. But the ability for, I feel like, I feel like a kind of get a chance to plant some seeds. And even if you don't know exactly what it means yet, or how you're going to use it, or, or even how you feel about it, it's like it's in there. And it will show up at some point and you're gonna be like, Where's that damn book? I got it. What was he talking about again? And so like, I don't know, that's for me. That's really exciting to hear. So I love hearing that that's, you know, a few days after you read it, there's, you know, something kind of, really, you know, still resonating in your brain or a question that you're still asking yourself to me, that's, that's yet another version of the book doing its job. So that's super cool to hear. Thank you.Michele Hansen This has been really fun talking to you about it, and I really enjoyed reading the book. I love how you're trying to make business education accessible for more people. I think that's one thing about an MBA is that it is not accessible to everyone, but there there's value in, in systems level thinking and challenging your own thinking. And I really like how you are approaching that even in a tiny way in this case.Alex Hillman Brilliantly said. Thank you. Uh, yeah. You know, and one of one of my hopes for folks to, you know, to read through this, even people who are brand spankin new, right. So there's a bunch of folks that... I got a message from somebody who they said, I just started my LLC yesterday, and I'm signing my first freelance client tomorrow. I did not expect this book to be useful to me today. And it was so useful. And so you know, that's just like, you know, we've got...Michele Hansen Amazing Alex Hillman I was like, that's the cool. And for somebody to read it and feel like a sense of confidence going into their first client project, like that confidence is so much more valuable than a lesson I can teach you. Because you'll build on it, and you'll make mistakes anyway, because that's unavoidable. But when you make a mistake, you'd be like, "Oh, that's what Alex was talking about." Instead of thinking that you are an idiot, or something is wrong with you, you'll be like, "Oh, that's the thing that happens when you do this other thing," because it is!Michele Hansen This is something that every business owner experiences, and you are not wrong for experiencing that.Alex Hillman Exactly. And to your point, Michele, it's all systems, right businesses or systems, not magical boxes where you put an effort and money comes out. Some I think some people are just like, you know, confused about what that is, and just to show give people an idea of like, oh, there are systems here that I'm a normal person, I can understand them. I can practice them and I can get good at them. This book isn't going to teach you all the things but it gives you sort of those, those shapes for you to grab onto and go, Okay, now I know what this is, I'm going to go find an expert in that thing, right? And go deep on that. And you know, find your areas of expertise, where you need to grow and find that expert on the internet, go search YouTube for the How To Video find the podcaster, or the writer or the other independent author and fill in those gaps. Yeah, no, it's it's been a blast. And I've super enjoyed talking with the two of you as well, this is, you know, the different places that each of you are in your businesses is, like I said, it's been fun to hear that myself, but it hasn't all been in one conversation. So it's kind of neat to have it all packaged up and I hope that's useful for people to hear. And yeah, thanks for you know, thank you for taking the time to read it. I'm glad it was helpful. And thank you for inviting me into your coffee chat show. Feel feel very honored to be here.Michele Hansen So if people want to buy the book, where should they go?Alex Hillman tiny dot MBA is the website. You can buy the paperback, it ships worldwide, and get it delivered anywhere you are. That paperback includes the ebook. So while you're waiting for it to be delivered, you can give it your first read. Or if you like to just get the ebook, you can grab that there as well. And keep your eyes peeled for the Yiny MBA community down the road as well.Michele Hansen Definitely will. Colleen SchnettlerI'm super excited about that, by the way I'm already playing in my head with that's gonna be like, cool. Well,Alex Hillman I look forward to seeing both of you in there before the year is out.Colleen Schnettler Great. Thank you so much, Alex, we loved having you. You can find us on Twitter at @softwaresocpod and we'd love to hear your feedback and comments on this week's episode.
The Drudgery of Launching and the Difficulty of Hiring
Michele Hansen Welcome back to Software Social. I'm Michele Hansen.Colleen Schnettler And I'm Colleen Schnettler.Michele Hansen So what's going on, Colleen?Colleen Schnettler I have so many things I want to share today. Yeah. I, yes, yes, I am super excited. Because I have finally finished my image management widget. I need a better name. By the way. Image management widget is like the worst name. I need something snappy, like cool image uploader. Anyway, I'll work on that.Michele Hansen Naming is one of the hardest parts honestly, like, naming and pricing.Colleen Schnettler So I have finally finished what I ended up doing was, I think I was listening to a bootstrapper podcast years ago, and I remember the host said something about how he was like, Well, you know, sometimes you need to just go to a hotel for four days and finish something. And that's entirely impractical for people, you know, who are responsible for spouses and children and other things like that. So I wasn't actually able to do that, but I did manage to block out like three solid days, and I got it done. Michele Hansen Nice!Colleen Schnettler So I'm super pumped about that. Yeah, I'm super pumped. So that's exciting. So my next steps are, you know, kind of, not kind of my next steps. My next step is getting it deployed. And I've already deployed an app in the Heroku Store before so I know the process. So hopefully that will not be too painful.Michele Hansen So when you say it's done, is it the product itself is done? Or is also like the commercialization of it done in terms of making it something people can pay for and have accounts for and stuff like that?Colleen Schnettler What do you think, Michelle?Michele Hansen I'm just asking!Colleen Schnettler if it was funny, you say that because I was literally thinking as I was finishing up, I was like, Alright, so now the real work starts. This was like the fun work. Now I actually have to do the real work and my plan is to deploy it in the Heroku App Store. So there is some glue, I have to work with the Heroku API, and things like that to make it available to customers. So my plan is to start using it for my own projects and my client projects immediately. And, you know, maybe after I've been using it... I think the way that Heroku App Store works as you'd have to put something in the App Store, and then you know, you have to it has to be free. And you have to get like a lot of users, I forget how many, but you're just in this alpha stage. So that's, that's kind of my plan to kind of get it out there. But like, really, the hard work behind this now is documenting how to use it and figuring out how to use it for different use cases and all of that kind of stuff. Which yeah, like I said, that's probably the real hard work, right? Michele Hansen I mean, that's the work that never ends right? Like so much of marketing is here is how you use this and here's when you would use it and...Colleen Schnettler I just -- and I could be wrong, but I feel like I am uniquely equipped to handle that because I think a lot of developers who do things specific like this, especially something is technically, you know, unique, I guess, they don't really do a good job of making it easy to use. They're like, Oh, here's this thing, but you also have to go get an AWS account and set up your own IAM account. And you have to, you know, put it behind a CDN, and you have to do with all this other stuff. So, so I hope and I think that one thing I am good at is I'm really good at taking complicated processes and distilling them down into simple explanations. So that's really my goal. SoMichele Hansen if people wanted to use this to add images to their project, would they only need to use your image management service for this? Would they also need their own AWS account or because you'd mentioned a couple weeks ago that it would just be under your AWS account?Colleen Schnettler Yes. So it's one service. I thought about doing it as to services. It would have actually been easier on me to do it as to services, but I don't think that's what the customer ultimately wants. Especially as we talked about is if I put this into even less developer, you know, friendly terrain and start to try to use it in a no code tool or something like that. You've got to extract that away, because like the AWS console is a bear, especially if you don't know what you're doing. So yeah, so it's just one service right now.Michele Hansen And so you said that for the time being in the Heroku marketplace, it'll be an alpha that can only be free.Colleen Schnettler There's yeah, I actually don't all the details yet. Because I wanted to finish it, but it's something like that, like you put it in and it has to be free for a while. And you have to have -- I think it's a lot I forget, there's a certain number of people you have to get trying it. So I'm going to beg all of my friends who ever used a Heroku. Michele Hansen Listeners...Colleen Schnettler Yeah, if you use Heroku, please, please, please send me an email or a tweet or I will let you know when this is in the App Store. Please download it!Michele Hansen But hold on. So is there a free tier from AWS for what you are effectively reselling?Colleen Schnettler Yeah, so that's that's the rub. Um, there's not really. Michele Hansen Oh no. Colleen Schnettler So it's not it sounds bad, but like, it's not that bad because I can rate limit everything. And so what I did was I got a new AWS account. And with new AWS accounts you get -- I forget how much -- but you get a certain amount of free stuff that first year. So under my new URL, like URL, email and stuff, I got the new account, so I get X amount free. But so this is like a really interesting, this will be a really interesting kind of pain point, right is because yes, if it's required to be free, Cloud Storage generally isn't free. I don't really know how it's all gonna play out. But really, I don't actually expect to get a whole bunch of people that it's going to become a problem yet. So I was reading this blog post by Amy Hoy, the Fine Art of Flintstoning. I don't know if you've ever heard of it or read it. And she talks about -- like so sometimes you just she talks about how it took her six years to ship something, which by the way makes me feel way better. And she also talks about how there's a point where you just you just have to ship something, right. So she uses this term "flint stoning." And she uses it to mean some stuff you're going to do manually. So she was talking about when they first launched Freckle, like, if you wanted your email reset, like you, they had to do that manually. And so there were the certain steps she had to do manually TO ACTUALLY SHIP her product. And that's kind of where I am right now. Like, there's a lot I want to do on the AWS side to monitor this and, and, you know, watch the billing, but I started to get like lost and all of that. And so at least for the first couple months, like I'm just gonna have a simple script that runs independent of the app, or I'll just look at it with my own eyeballs to kind of keep track of where I am.Michele Hansen Yeah, I think that kind of custom monitoring and all of that. We were doing that all manually for quite a long time. Time I want I want to say like three plus years.Colleen Schnettler Really?Michele Hansen We had various services that we used, you know, for, for in terms of having a one central dashboard where we could observe everything. At least you know, specifically where you're talking here in terms of server health and those sorts of things. Yeah, we didn't have like, you know, a full dashboard with all of the different metrics on them. I mean, of course, with AWS, you want to keep an eye on what you're being charged. So yeah, that's important. I mean, even just manual things in general, like she, you know, she mentions changing an email address, and I think for Geocodio, do we, we didn't actually add a way to delete your account on your own through the dashboard until like, last year, or two years ago, and it wasn't because we are trying to be evil dark pattern people. It was just, we just hadn't designed a flow for it. And there wasn't enough people asking to do that, that they could just email us and we always responded promptly.Colleen Schnettler Yeah, so I'm, I'm going to take on so there's a certain amount of risk. And it's interesting like going into this, because I, as we talked about last time, like I started to, there's so many things I can do with this. So I started to aggressively cut features. And I'm just basing the feature set on what I personally need right now. So I'm aggressively cutting features, and this was this, this AWS thing was a big one for me, because I really wanted to have a cleaner like interface for myself, you know, just to manage everything on the AWS side, but I read that article and I got all inspired and I was like, you know what it's done. Like, I can manage that myself, at least for the first couple weeks. And I mean, honestly, like, I don't anticipate -- people are not knocking down my door for this product. And I'm not saying I don't think it's gonna succeed. I just don't anticipate I'm gonna have a whole lot of people in the beginning. So I feel like the first couple months, especially since I'll be using myself, will be a great time for me to do this stuff on AWS and figure that all out. And, you know, kind of see how people are using the product, if they're using the product, what features, you know, are important or aren't important. So, things like that. Michele Hansen So what are those specific thresholds that let you out of alpha and then allow you to charge for it in the Heroku marketplace? Colleen Schnettler Okay, I don't know.Michele Hansen I would be very interested to know what the thresholds are.Colleen Schnettler So that's a good idea. Um, I will have that information for you next week. I will let you know. Um, so yeah, right now, you know, it's interesting, because like, I'm just kind of like riding my high of letting of having this thing working. But like I said, like, I know, the real work is now kind of, it's a little more of the drudgery work, right? Because it's like hooking up hooking it up getting in the marketplace writing all the time... Michele Hansen It's making it a business!Colleen Schnettler Yes, exactly. It's making it a business.Michele Hansen So It's interesting that you describe that as drudgery.Colleen Schnettler Is that bad? Does that bode poorly for my future?Michele Hansen I didn't say that was bad! I just said it was interesting.Colleen Schnettler Well, yeah, we'll see. Maybe I'll love it. Maybe I'll hate it. I don't know. Michele Hansen yeah, we'll see something that seems to really drive you in. This is the frustration that you feel with facing this problem repeatedly. And I think that once you get that groundwork laid, you get it in the marketplace, you've got some documentation, you've got a little bit of copy around how people can use it, and then you actually start getting people using it. I find that such a huge motivator to keep improving something and keep going and get you through all of the drudgery is seeing somebody else, use something that you made and seeing the impact that it has on their work and in their own frustration with it and when and when they you know, express to you how much frustration it's removed for them.Colleen Schnettler Yes. And I think that'll be like my energy cycle. Like building it is a lot of fun. But there's a lot of like lows and highs and in that cycle because there's things you know how to do, things you don't know how to do. And I think that the documentation stuff like, that's a little bit of a, you know, a little bit, a little bit boring, but important, but I also think like, I love people, right. And I love talking to people. And I think to your point, like, if someone actually if literally one person besides myself, uses it and is like, Hey, this is exactly what I need. This is awesome. That's all I need. Getting to that point, we're actually going to talk to people again, and everything is mostly in place, and I'm just improving. Like, that is my goal. My goal right now. That's kind of where I'm trying to get to.Michele Hansen We'll get you there. I think you can get there.Colleen Schnettler Yes. Yeah. So another thing I wanted to tell you. So I have another great idea. And I am, this is my thing, right? I think I just get a lot of energy from ideas and I have tons of ideas. So as we had discussed again every week, my focus right now is on the image management stuff. But I have another idea. I'm not quite ready to talk about it yet. But I actually had a person tell me he would pay for it...Michele Hansen Oh...?Colleen Schnettler Which is more than I've gotten. Yeah. How about that? It's more than I've gotten from anyone, any of my other ideas. So, so that's kind of in the back of my mind. So I'm just trying to like, you know, marinate on that a little bit. But I do have two people who have already agreed to talk with me about this other idea. So I'm going to get to, I'm going to get to practice all of my customer interview skills, hopefully, get those scheduled in the next couple weeks.Michele Hansen Sounds like you're really on a roll.Colleen Schnettler You know Michele, I think this whole process is managing your own energy levels. Like I went on vacation, and I came back and I'm like, Oh my gosh, I'm gonna take on the world.Michele Hansen You know, we always find that like we have our best business conversations when we're on a road trip.Colleen Schnettler yeah, it's just there's something about not being in I don't know not being in your house or like, I went on vacation and what I didn't say at the beginning and this makes me sound like a super nerd but because there are a lot of demands on my time at home with the kids. On my vacation, I actually took three days and ditched my family to finish my image management service. Now everyone who listens to this podcast knows what a nerd I am. But it was a boy -- you know, right. Like the kids have been home for six months, it is almost impossible to to get the kind of deep focus you need. And I am like, a deep focus person, like put me in a basement. And like, like with no sound like I'm like, Oh my gosh, that's my like, happy place. So yeah, so I ditched my family for three days on vacation. It was and I just worked and it was, I don't know, it was glorious. It like really made me happy.Michele Hansen I think that's a pretty normal feeling, especially, especially with side projects, right where and if you're not getting a whole ton of fulfillment out of your day-to-day job that the side project itself like feels like a vacation from the things you're normally doing because you have you have total flexibility and independence and latitude to do what you want to do -- which whether you're consulting or you're working for a company, you're rarely in that scenario and if you genuinely enjoy your work -- which you definitely do -- be at the side project even though it's work it's it's it's also a break from work at the same time. It's a very weird thing.Colleen Schnettler Yes, totally agree. And the only other thing I wanted to say on this me having all these ideas all of a sudden, is I did want to share with with people who are struggling with idea generation because I know in a lot of the groups I mean, this is a common problem. I started a habit, like two and I used to never have any ideas. I started a habit like two years ago, where every morning I would write down two ideas like with my coffee before I turned on my computer. And there's so bad. I mean, 99% of them are terrible. But it kind of got my mind engaged in a different way, where I just started seeing things more often than then before, like just changing my mindset.Michele Hansen Yeah, I think once you start looking at the problems in the world, not as problems but as different opportunities to be solved, it's hard to turn your brain off from thinking that way.Colleen Schnettler Yeah. So anyway, that's my very exciting news. I hope next week to have -- to stay on track and have another great update. So Michele, what's been on your mind this week?Michele Hansen So I was thinking back to some of the episodes we've done so far. And you have been so open and vulnerable with us about all of your struggles with launching your new product. And the things I have talked about have not exactly been struggles. So, so I wanted to dial in on something that we do struggle with, and we do talk about that we haven't figured out yet.Colleen Schnettler Oh, okay, what, what is this topic? Michele Hansen Hiring? Colleen Schnettler Oh, I've always wondered about this with you guys. Please tell me more.Michele Hansen So it's something that comes up fairly often. Actually, that other people will ask us about, you know, I feel like there are these ideas that you're not a real company unless you do X, right. Colleen Schnettler Mhmm.Michele Hansen Like how many of us have heard you're not a real company unless you take funding, or you're not a real company unless you have employees. And so this is something that we, we hear fairly often, but honestly, we really like the simplicity of not having any employees of it just being the two of us.Colleen Schnettler So I know people who run bootstrapped businesses of comparable size and almost all of them have employees.Michele Hansen Yeah, I think something is a little unique about our business, though maybe not so much for a bootstrap company, is that since it was a side project for three and a half years, which I think actually is a little bit long for a side project to be a side project, we definitely waited a lot longer than I think many people would, like we were well past the replacement rate of our of our salaries, mostly because we were terrified of paying for our own health insurance. Um, and so during that time, things that other people may have hired for, like customer support, we found ways to automate them away or handle them with our design. You know, so things like resetting passwords or cancelling plans or all sorts of other things. Whenever we had repeated questions, we just designed our service better so that people didn't have to ask us those questions, right? Because no one really wants to talk to customer support, like, it means you have a problem. And so we try to preempt all of those things. And then once we went full time, it became so much easier for us to handle things and to make improvements and reduce the number of tickets and, and all that kind of stuff. So that that kind of moves off of the radar. Of course, there's many other things you can hire for besides customer support, though.Colleen Schnettler This is interesting to me because I had a friend who listened to our podcast, the episode on the HIPAA stuff, and he runs a venture backed company, and he had like a whole business plan set out for you. He was like, Oh my gosh, she's doing it all wrong. She should hire all these salespeople and like, he had you guys like a $500 million company in his head in like 20 minutes. So it was interesting, like, you guys haven't hired anyone, like you don't even have one salesperson. I mean, tell me more about that decision.Michele Hansen Something that's really important to me, is incentive design in a company. And I think this is something that can get overlooked. So, for example, when you take funding, you're creating a set of incentives for yourself, you now have investors that you, you know, you need to impress them and and meet their expectations, right? You're, if you have employees, you're giving them shares. And so everyone is having incentives towards specific outcomes. And something that I really treasure as being a bootstrapped business owner is that we can make decisions that are in the best interest of the customer, that are ethically aligned with what we believe, and that we don't have to chase growth at all costs, or we're not struggling to meet metrics that may be externally imposed on us. And instead, we have our own metrics. And some of those are financial and many of those are not. And so designing an incentive structure is a really important part of scaling a company. And I don't feel like I have figured out what is an incentive structure that aligns with what I believe in and how I want to run the company and how I would want to run the company in the future that satisfies sort of all those different concerns I have. You know, I do a lot of reading on ethical business, like people may be familiar with the book Conscious Capitalism by John Mackey written before Whole Foods was acquired by Amazon. There's also The Lapsed Anarchist's Guide to Building a Great Business run by the people who founded this little deli and Ann Arbor, Michigan called Zingerman's. That's such a fantastic book. And both of those books really talk about this incentive design and how having goals like, you know, aggressive sales goals or you know, having a huge team and you need to pay their salaries, like that creates incentives. And are they always good? The answer is probably, often not.Colleen Schnettler So why is this a touchy subject for you? Do you feel a lot of pressure amongst like your peers to hire, to grow?Michele Hansen No, we don't. We don't feel pressure to grow. We certainly have people expect that of us. And then they get confused when we tell them that we don't have any growth ambitions. And even though we are growing, I mean, I shared those numbers a couple of weeks ago. I think something that we we really enjoy is yes, it does feel like it's that next step, right. Sometimes I think about it in terms of you know, people will often ask couples like when they're going to have their first child or when they're having another child as if this is like sort of a, like, normal non-invasive question you can just ask similarly, you know, how did you you know, enjoy the weather today, right?Colleen Schnettler Pro tip: like don't ask that question.Michele Hansen Yeah, just for anyone asking, like, that's not a friendly question. Like, don't ask. I feel like it's kind of a similar vein because people ask Oh, so what are you guys hiring and you know, you don't know what that company situation is, you don't know what their perspective on things is but quite frankly, I think something that I I also really treasure about our business is just how simple it is. Right? So my husband and I created the business together. And it's always funny talking about that with people who don't work with their spouse because I find there's very polarizing reactions to that like, like the people who don't work with their spouse. Give me this like deer in the headlights horrified reaction that's like, "Oh my god, like, don't you guys fight all the time. That must be horrible." Like, or they're just like, oh, how do you like disconnect from work and like, and, and they assume it's terrible. And I'm just kind of like, we wouldn't have done this for six and a half years if it was terrible. And then on the other side are other couples who run companies together. And they're like, isn't it so great? Like it's just so easy. It's amazing. It's actually this is one of my favorite things about being MicroConf last year was meeting other founder couples and us talking together about how like, nice it actually was compared to how chaotic people assume it is. Which is kind of a funny thing. But it's just so simple with the two of us because we work so well together like we met at work. Professional respect for one another is one of the foundations of our relationship and we just work so well together and it's so easy. And yes, we could grow more if we had, you know, people doing marketing or we would grow a lot faster if we had a sales team or you know, things could run smoother if we had engineers, but we feel like it runs smoothly enough and we grow enough that we don't have to bring in those other elements. Colleen Schnettler But isn't the whole point of building a bootstrapped business so you can hire someone and only work four hours a week, like Four Hour Workweek? Michele?Michele Hansen I've never read a Tim Ferriss book.Colleen Schnettler Really?Michele Hansen Yeah, I don't know if I'm the only one. Um, no, I don't see I don't even know if that's the goal, right? Because I enjoy what we do. And I think this also confuses people. I think a lot of what I do confuses people, because we, we like serving the customers that we do and and helping them and doing what we do. You know, I'll have people ask me "Oh, like, Are you trying to get acquired? Like, you know, what if I gave you..." you know, I was giving a presentation to some business students, probably about a year year and a half ago. And I was talking about how we don't have any plans to get acquired and actually how we just offhandly reject offers to to get funded or get acquired because we're just not interested in it. And they're, and they didn't believe me. And they're like, what if I gave you $10 million, hundred million dollars? And I'm like, What would I do with that? Like, I would just have to go figure out another company to start and I already have one that works. And I don't necessarily aspire to work four hours a week. Like I enjoy working and maybe that is confusing to some people. I can certainly understand how that would be but I don't know.Colleen Schnettler It just seems like you guys work a lot and I know you love to work. But you do work a lot. So it seems like if you could find the right person to bring on board, it would take some of the, you know, the pressure off of the two of you and give you a little more breathing room.Michele Hansen That's something we've thought about. You know, I mean, it's, we had someone actually reach out to us this summer to be an intern, and she seemed so awesome. And she actually lived nearby, so we could have even had sort of over the fence meetings with her. She sort of got like, we actually took it seriously. We even looked into you know, how much we would need to increase our workers comp by and stuff like that if we took on a part time employee. You mean, it's sort of as an aside, I think it's the highest compliment you can pay a business owner to tell them that you want to work for them and work for their company like it just it's incredibly moving every time. I consider that a huge responsibility. I know there are a lot of companies that you know, they hire people and they delay them off or... They don't feel like they have a responsibility to the employees, they feel the employees have a responsibility to them. And I feel very strongly that it goes both ways. And if we were to hire someone, I would not only want to make sure that we had a job for them six months or a year from now, but like, five years from now, 10 years from now, because I feel like you're making a commitment to them, and their family, that there is going to be something for them, there's going to be a role for them that they're going to be able to move up in that role, which is another thing I have questions about because it's the two of us running the company and so there's a set ceiling for someone going going into that role and someone's like, you know, how good of an experience would that be really if they knew that they could never move up like that, that would be a very frustrating scenario for them. And then there's the other element of Okay, you know, the the kind of person we would need to bring on would need to be very highly skilled. And so we're probably looking at least $100, $150,000 a year including benefits. And then how would, going back to incentives? How would that distort my own incentives? What I feel like we need to grow more aggressively? What I feel like we need to change our tactics? I'm really proud of the fact that we don't have an aggressive sales team. But if we had a staff would I feel backed into a corner? And like we needed to, you know, to do things. And I, and I feel very strongly that we should run the company in a way that is in the best interest of the customers and I question whether I would be able to do that if I had salary pressures on me.Colleen Schnettler Yeah, that makes sense. I tried to hire someone maybe two years ago, but all of the things you just said that's the reason I never built a consultancy. Because hiring trying to hire someone was incredibly painful, like especially engineers, trying to vet engineers and then I felt the same way like... you know, I've had a pretty good stream of income. But if you're responsible for someone else's livelihood, like it kind of changes the whole game. When you look at, when you validate contracts, and you try to figure out what kind of business you're going to take, because you are now responsible for someone else. And that is a huge responsibility. So I definitely see where you're coming from. But I think there's a lot of opportunity for you guys, you could have an incubator, you could have like a cool internship program. I mean, there's so many people trying to start businesses in this space. I feel like there, you might find other ways. If you had more time, you might be surprised, you would find other really cool ways to use your time.Michele Hansen So I'm actually participating in something soon that relates this because I do love mentoring people and helping other business owners and I feel very, very strongly that I have a responsibility to help other business owners try to do what we have done. And so I'm actually going to be a leading a cohort group with Founder Summit later this fall. This is through Earnest Capital. And I love doing that. Maybe it's because I get all of that the fun part of having employees and helping helping them grow and nurturing them without all of those pressures of being responsible for their family's livelihood.Colleen Schnettler Awesome.Michele Hansen But yeah, I you know, we haven't ruled it out. I imagine that we will take baby steps in the future like hiring consultants -- like we've never even hired a freelance designer for anything. I mean, we have really never hired for anything. And I imagine we will at some point, but I want to share that as a genuine struggle that we have. Something that we we haven't figured out in the business, less it less it sound like we have figured everything out, which we certainly haven't.Colleen Schnettler It sounds like you're pretty happy with where you are right now. In the choices you've made so far regarding hiring.Michele Hansen Yeah, I think the the idea is sort of we want to be able to keep doing what we're doing for as long as we can. And we know that's going to change in the future. But where things have been for the last, you know, last three years, it's been oh my gosh, because my full time anniversary is coming up in October. We, yeah, we enjoy it. It's simple.Colleen Schnettler Awesome. Well, that's gonna wrap us up for today. You can find us on Twitter at @SoftwareSocPod, and we'd love to hear any feedback you have about this week's episode. Until next week.
Don't Rearrange the Desks On Your Users
Michele Hansen Welcome to the Software Social podcast. I'm Michele Hansen.Colleen Schnettler And I'm Colleen Schnettler .Michele Hansen So Colleen, tell me what's going on this week.Colleen Schnettler So I unfortunately have not had a whole lot of time to work on my side project this week, because life has been crazy. I've been swamped with client work and family stuff. So I didn't really do anything. Michele Hansen That happens! Right? Especially during COVID times.Colleen Schnettler Yes!Michele Hansen How much free time does anyone really have right now, especially if you have kids?Colleen Schnettler Yes. Balancing the kids and the clients and the work and the side project work has definitely been quite a lot.Michele Hansen You've basically got two sets of clients because the kids themselves are, you know...Colleen Schnettler Yeah!Michele Hansen ...Pop in every 15 minutes and need things.Colleen Schnettler Yes. And I'll work for three hours. And then they'll be like, Mommy, why aren't you spending any time with us? I'm like, only worked for three hours. It's because you're here all day. You're not at school where you're supposed to be! Anyway, anyway.Michele Hansen So the small amount of time you didn't get to spend on your side project.Colleen Schnettler So the small amount of time I did get to spend on my side project, I was chatting with a friend of mine about some of the technical challenges I'm having. And I'm having this really one specific problem where uploading multiple images is not working the way I want it to. And he suggested I ditch that -- he thought that having a multiple image upload was beyond the purview of an MVP. And I should just get it working with one image just to get something out there. Right just to get my foot in the door. Michele Hansen Hmm. Colleen Schnettler What do you think about that advice? Michele Hansen I was gonna ask you what you thought of it first.Colleen Schnettler I think it's good advice. Because one of the things I've one of the problems I always have is taking that first step and getting something out there because I just continually -- as I've been going through this, I continually want to add features, I got totally distracted with my lambda API gateway stuff last week. And that stuff is really cool, but totally beyond the initial scope of what I was trying to build. And I think for me, like I kind of got to get in the game, like, I've just got to get something out there to keep me motivated, and to get people using it and see if people want multiple image support.Michele Hansen And also to get you using it right, because you've mentioned that you would use this with your clients and your time is at a premium. And so if you can start using it, that will be a form of feedback on on the product.Colleen Schnettler Right? Like I am going to be hopefully my own best user of my own product, because I will get to use it and see like where the errors are. I know I want multiple image support. But what I can put out now is still better than what they're using. And I can still use it, you know, adding one image at a time, if I want, or I could use my part for the single images and use something else, a custom solution, for multiple images. I just feel like this is something that is taking me forever. And it's not really taking forever, but it's just something I need to get out there. And I was reading this article about like, what makes a good MVP and it wasn't about having a ton of features it was but it was also not about having a crappy product, like you need a tight product, you need a really good product with the minimal amount of features to make it viable.Michele Hansen It's a tough concept, right? Because there there's this graphic that I I'm gonna have to share it because I'm gonna totally butcher it. But basically it's you know, the MVP of a car is not, you know, four wheels with a platform. The MVP of a car is a scooter because it still gets you from A to B like that's the the job of the product is to transport you from one place to another. But it's a very simple version of it, you know, it doesn't have features like a roof or, you know, multiple seating support, right? But it still gets you there. But there's very often when you see MVPs built, it's, you know, something that is a shell of what the product was supposed to be and isn't actually useful. Colleen Schnettler Right! So that's my goal. Michele Hansen So I think there definitely, there is that temptation, though, to sit on it until you've built you know, a Tesla, right? And you need to get it out there sooner than that and get feedback and I think there's also a certain pressure to not put things out there until it's perfect because I think we get afraid that it's gonna, it's gonna be criticized and people aren't gonna like it and they're gonna tell you how it's incomplete in ways that you already know. And I think it's really easy to build up a lot of fear around that, I mean. I'll tell you that like, features that people told us were boilerplate when we launched, we still haven't launched them, and we may never launch them. So...Colleen Schnettler Oh, wow.Michele Hansen Yeah. Like we don't have global support. And it has not been a problem for us. But that was something that people asked for on day one. And if we had waited until we had global support, we never would have launched. Colleen Schnettler Right.Michele Hansen We launched with just what we needed, which was coverage for the US, and honestly was not that great when we launched it either. But we launched with that, which was very simple. It was what we needed. And then we took it from there. But we didn't wait until it was totally perfect mirror image of major competitor products out there.Colleen Schnettler Yeah, so I think for me, what I have now for these guys is single file, upload one at a time, and so I can build it as a single file upload one at a time. And I can utilize it on my existing application. And it could still be useful for people. And then I could, I mean, I could get that version out there. And then I could work on the multiple file support. And some of the other things if I decide that I need it.Michele Hansen Yeah, and if there's demand for it, and, you know, of course, there's always the complication of when you build something, it's not always easy to build other things on top of it that it wasn't built for. And so, you know, something to keep in mind that you know, at some point, you're going to want batch support, and so making architectural decisions that won't inhibit that, but also not committing yourself to that and the architecture at the same time is a tricky thing to do.Colleen Schnettler Yeah, I think I can do it with this, with this setup that I have now. So I think that'll work. So I think that's my new plan is just to finish it. Just to finish. So that's my short but sweet update for this week. So what have you been doing?Michele Hansen So I've been thinking a lot about customer research which, you know...Colleen Schnettler This is my favorite topic.Michele Hansen This is MY favorite topic![laughter]So we are going to be launching a new version of our dashboard. So our dashboard is where people can, you know, update billing settings, create API keys, look at their usage history, sort of administrative functions like that. And our dashboard. Speaking of when we launched on Bootstrap was super cool at the time. So everything was Bootstrap. And the dashboard is still Bootstrap and I think we upgraded it at some point a couple of years ago, like maybe two years ago, and I don't even know what version it's on, but does it even matter because it's still on Bootstrap. And that has really inhibited a lot of the functionality we've wanted to add and and usability improvements we've wanted to add like so for example, on our billing page, it's just one long, massive page because there's no like good support for a sub menu in Bootstrap. And so it's like, we can roll our own but, do we really want to do that? And like so? The answer is no. And so we're moving everything over to Tailwind has been awesome. Colleen Schnettler Of course! That's the hotness.Michele Hansen It is and, you know, and our marketing website has been on Tailwind for a long time now and it's been so great and it makes it so easy to add new elements like I was mentioning last week how I was working on adding landing pages. And like I actually finished all of our all of our landing pages have content pillars now, which is something I have been working on since last fall, which were...Colleen Schnettler tell us what a content pillar is, please?Michele Hansen Yes. So this is something I learned about from a mutual friend of ours, Michael Buckbee, who helps me with some SEO on our site. And one thing he mentioned was content pillars, which is basically just related links at the bottom. So, for example, on our website, someone might be looking at a customer page about real estate. So it talks about why people in real estate use Geocodio and then it has some customer logos, and then it has a testimonial, and then there's a call to action. The content pillars are at the very bottom, and then they link off to related content. So maybe it's like creating an API key or fetching FIPS codes at the same time. So like other things that that type of customer might want. And then you go to any of those pages, and you see the related content to the bottom. So for example, on our security page at the bottom, the content pillars are going to our privacy policy going to our terms of service, stuff about infrastructure, things like that. So everything is all linking together, which really helps with SEO, because it gives those other pages visibility. And it also helps when customers are coming into the site for the first time that they can see related content. Anyway.So after I had I had talked to our friend about this, I asked Mathias my, my husband and co founder, if we could add these and because we were working with Tailwind on the marketing website, it was like super fast at it. And I was totally blown away. Because normally when I asked for features like that, it's kind of difficult, right? Especially if it was on Bootstrap. So that's the case on the on the dashboard. So even though it's only a cosmetic redesign, it's not we're not actually changing or removing any functionality. I really want to do user testing on it. Colleen Schnettler Okay.Michele Hansen And It's always good to use your testing on it, though, I think. I've noticed that, when you're doing cosmetic redesigns, it's pretty common for people to not really warn users in advance. But early in my career, I got burned from this. We made some cosmetic upgrades to a website that had been the same for a very long time. And the users were not happy about it. And I really don't want to go through that again. And you know, if you're using a website every day, and all of a sudden it changes. that's pretty disorienting, right? Colleen Schnettler Yeah, it's pretty annoying. Michele Hansen Like, it's kind of like, I don't know, like, remember, like when you're in high school, and like, you'd go into a classroom and like, the teacher, like, rearranged the desks and everyone is like, WHAT HAPPENED?! Colleen Schnettler Yeah, right. Michele Hansen So like, it's kind of like that. And you know, I don't want to like freak out our users so I'm excited too, though, because I haven't done any user testing since the pandemic started. Colleen Schnettler Oh, wow. Michele Hansen Like Yeah, like or interviews. Um, I had the last one I did was Monday, March 6, I think it was like the Monday before school shut down and everything. Um, because as were talking about earlier, you know, when you've got kids running around at home and everything, it's really hard to get into a state of focus. And I find that the, the level of empathy required in order to do a good customer interview or usability session, like do you really have to, like submerge yourself into that person? It's very Being John Malkovich. Less creepy. But, you know, it's like you really have to get into their brain and understand how does the world look from their perspective and how do they perceive things and where were are difficulties, where are they spending a lot of time, what do they like, what don't they like.Colleen Schnettler Okay, so I know a few questions about this. Michele Hansen Okay. Colleen Schnettler Question is I feel like you are approaching this differently than your typical developer. What are you going to do? A/B testing first, are you going to talk to people first?Michele Hansen No talk to people first. Colleen Schnettler Yes, that's interesting. Michele Hansen So AB testing is good for when you have a very clear difference between things. And you've already gotten the feedback leading to it. So for example, if we did, like sales landing pages, for example, we don't really do but this is a good use case for AB tests, where you have one landing page. And then let's say you have the exact same sales landing page, but you want to test whether you add more call to action buttons throughout the page, rather than just at the very bottom. Does that increase or decrease conversions? You have a very clear change between the two. And you have a very clear metric for measuring that. When you're doing anything that involves qualitative changes, there's multiple changes involved it, and I think a B tests are a bit messy and I think over-used. Like there should be a lot of tools in your testing toolbox and AB tests are a great one to have in there, but they are not the right fit for not only every every question and also the life cycle of every question, right? Because it might come in at a later stage. But no, we're not gonna AB test it.Colleen Schnettler Okay, so now you're going to discuss this change with your users before you make this change. What kind of questions do you ask? Because I feel like the aesthetics of a dashboard are so nebulous, qualitative, right? Oh, there's no good metrics to tie in there.Michele Hansen Yeah, so what I'm going to be doing is basically what what UX people would call a top task analysis. Colleen Schnettler Okay. Michele Hansen So this is when you have like maybe 10 different activities that you know, someone should be able to complete on a website. And you want to see how easy it is for people to complete it. So you're testing how easy it is for people to understand what they can do on the website. So that's called discoverability. Right? See, so can they discover what they can do on the website? And then you might have different pieces of or different features that help them do those things called affordances. And you want to see, do those? Do they help them right? Or do they need them to function in different ways? So for example, one of the things on the dashboard is, we have seen that people don't realize that the clicking on their email address in the top right hand corner is actually a menu that pulls out things like adding team members to your account and or deleting your account things like other features like that. And because of the elements we're using with Tailwind, it's actually moving to the bottom left hand corner. So first of all, I want to see if they can even find that account menu. And then if I were to ask them just looking at the dashboard itself, you know, I would say for example, "Can you show me where you might add a team member to your account?" And then I will give them some time to do that. Don't prompt them, don't lead them in any way, and you're testing the website, not them, it's always a very important thing to stress. And then if they can't, then I take notes and be like, okay, we need to make it more obvious that you can do, you know, adding a team member to your account, for example. And so I'm going to make a list of about 10 different tasks. The number of tasks that you might have for top task analysis may vary. So where I worked previously, we would send out surveys asking people, what are the different kinds of things that you want to be able to do, we would look at, you know, website traffic data, seeing which pages are getting the most traffic, you know, and use that to determine what the top task list was. We're a much more simple operation than that. So I'm just going to come up with a list myself based on our understanding of our users. There's, and there will probably be something that we don't test for. Um, so you know, there will be opportunities for free, you know, expression in the interview and then I would also like to send out a sample clickable version of the dashboard to all of our paying customers before it launches as well just so that they know what's coming, and we're not going to do that whole, you know, teacher-rearranges-the-desks thing on them.Colleen Schnettler So earlier, so the way I envisioned this away, you're describing it as you get on a call, like a Zoom call with one of your customers screenshare and you just watch them. Is that what you actually do?Michele Hansen Yes, yes. So I have video off so this is...Yeah, so and we will have a demo clickable version of the dashboard they can go through.Colleen Schnettler So earlier, when you when we started this topic you were talking about how you need a lot of empathy and what would you say melting melting into them or emotional? Like, like it seemed like it was really explained that? That was a little confusing to me.Michele Hansen Feelings mumbo jumbo!Colleen Schnettler I don't understand feelings.Michele Hansen Right? So, basically what I mean by that is that you have to submerge yourself into how they perceive things. And you have to leave your own perceptions of something at the door, and you're going into it trying to just understand how things look from this person's perspective. So whether that's a usability interview and understanding, how do they use their computer? How do they use the service like, right, like, those are all different from person to person. I mean, it's fascinatingly different, right? Like, right um, and I think there definitely is a perception sometimes that especially, you know, people in the tech world have that everyone is as tech savvy as us, even our customers. And that is often not the case. Colleen Schnettler Yeah.Michele Hansen And so these are really great opportunities to expand our own understanding of how other people use technology. And by being empathetic and how we develop and design things and understanding that other people have different skill levels and different comfort levels and different ways of processing information, we can create products and services that are better able to serve people, because I doubt there are everybody out there is building a product that is just for, you know, tech people under the age of 40, who are all digitally native, like maybe that's who you're starting out with. But hopefully if you're successful, your market is going to expand and you're going to need to expand beyond thinking like yourself and understanding how other people who are very different than yourself think. So whether that's in a usability session where you're trying to understand how they use a website or a service, or an interview where you're trying to understand how they get through a process and how how they feel about that and and how long it takes them and where they're struggling and where things are spending a lot of time and why they're even doing it in the first place.Colleen Schnettler That's really interesting. I feel like as an engineer, I really struggled with that. I've done probably 15 customer interviews in these various products that I've been trying to build over the past couple years. And I always have a script -- well, not a script. I always have a list of questions, which is good because I don't forget anything. But I think I've really missed that nuance because like I asked the question, and they give an answer. And then I asked the next question and something I noticed when we got on the call today is I was telling you about how I might change my image thing, and what did you think about it? And you said, What do you think about it? And I was like, Oh, that's an excellent question. And so I kind of I feel like that kind of empathy, empathy for other people's thought processes or other people's like emotions tied to things. It's a challenging, it's challenging for me to really tap into that. Do you have any advice?Michele Hansen Yeah, so people are always looking for, you know, verification or confirmation from others. Right. So that that happens fairly common in an interview where someone say, don't you think or right or... Colleen Schnettler Yes!Michele Hansen Yeah, so they'll use some phrasing that you makes you want to agree with them. And you have to deflect like, you have to say, what do you think about that? or can you tell me more about why you do it that particular way? or How did you come to do it that way, right? If you're very, very careful in phrasing things in a way that is not judgmental. I was fortunate enough to learn from two incredibly skilled and talented user experience researchers, one of whom has a basically has a PhD in this and getting to observe them for my couple first couple of dozen interviews. And, and having them in the room with me when I was learning really helped because there's so many times when people will not only ask for your opinion on things, they'll ask for your perspective on things. They also might insult you or say something that you personally find offensive or more often they'll say something that you think is ridiculous, or it sounds overly complicated and you want to jump in and be like, Well, have you thought about doing it this way? You can't do that, right? Because this whole purpose of it is to understand how, how they do it, what their process is, and then your job is you afterwards when you've had a chance to process it, take that later and say okay, they told me that when they're trying to accomplish this, they're doing these certain steps. And if I can target them with some marketing, when they're in this step, they might be interested in switching to using my product, because I know that they're doing these steps, even though those steps do not make sense to me and seemed very complicated to me, there's a whole reason why you have built whatever it is you have right to make something easier for someone else. Colleen Schnettler Right. Michele Hansen But in order to understand how to get them to understand that it's easier for them, you need to know the kinds of words that they're using their kinds of phrases using and then the whole process that they're going through. Otherwise, you're just targeting yourself, which is really useful in the beginning when you're building but not if you want to sell to other people.Colleen Schnettler Right. Okay. Yeah, that's really good advice. Like that is definitely something I I have struggled with and I'm I'm working on I'm working very hard because I think that's how you connect with people, especially if it's someone you don't know, like some random user random person on the internet. You want to form you want to form like a level of connection by being an agreement on things, because it forms I feel like a level of trust. But I think if that goes too far, we're just, you know, echo chambering? Or like, Yes, I totally know what you mean or Oh, do it this way instead, it it does not enable you to actually find out, like how they could be your customer or where in their process you can help them.Michele Hansen Yeah, and learning how to interview has taught me a lot about conversation in general too like, my natural conversation style is very enthusiastic, I really want to, you know, tell people when I agree with them and share my own experiences and build that kind of rapport, right. And what I have learned through doing this, actually is that people will have more affinity for you when you let them talk more, which is really surprising that it's doesn't actually come from sort of proving to them that you have, you're in agreement with them, but just being listened to is so powerful. And I think, especially these days, people aren't used to being listened to by companies, right? Like, I mean, how many amazing customer support experiences have you had versus how many have you had that were really disappointing and frustrating, and you felt like you weren't being listened to by the company?Colleen Schnettler Mostly frustrating.Michele Hansen And so when you're really listening to a customer, you can you can build that affinity by simply listening to them, and then you're going to do your own work with it later. And you'll have notes and you can use that for product development, marketing, you know, what have you. But in the moment, the strongest thing you can do to build affinity is, is just listen and let them talk. As much as possible. I think there's even some psychological studies on this that when people talk about themselves the parts of the brain related to enjoyment and pleasure and all those kinds of things and also social connection light up more than they do when they're hearing someone else talk. It's wild, I've noticed that users we do interviews with tend to become our most vocally supportive customers, even though that's not the intent of it at all.Colleen Schnettler Wow. That's amazing. I mean, is are you a customer interviewer or are you a therapist? It's kind of hard to tell. Kidding. So this has been really great. Michelle, thank you so much for sharing.Michele Hansen I am always happy to talk about this. The irony, right? You know, talking about listening to other people, it's not lost on me. I just want to say how much we've appreciated everyone's positive feedback. So far, the number of nice tweets and emails and DMs and everything we've gotten has been really, really surprising and incredibly nice and really motivates us to keep going. So thank you to everyone who has reached out to us or posted a review. It means so much to us.Colleen Schnettler Yes, thank you so much. All right. Until next week.
When should you give up or pivot?
Michele Hansen Welcome to the Software Social podcast where we invite you to join our weekly conversation about what's going on in our businesses. I'm Michele Hansen. Colleen Schnettler And I'm Colleen Schnettler. Michele HansenHow's it going, Colleen?Colleen Schnettler I'm doing well. It's been a pretty exciting week for me on a tech front. So I haven't had as much time this week. I'm really trying to commit to talking to more people. I mentioned that. Michele HansenYeah!Colleen Schnettler And it's kind of funny, because I've been talking to more people and they don't really care about my image management solution. Michele HansenOh :(Colleen Schnettler Well, it's okay. This this kind of interesting thing has happened, where they care at there. They don't care about that, but they're really excited about the work I'm doing with AWS and Arc. I'm, I'm moving my tech over to go from kind of a monolithic Rails app to like AWS, Lambda serverless functions and everyone is really interested in that? Michele HansenReally? Colleen Schnettler Yeah, it's kind of been a funny thing where I've wanted to talk to people about image management. And they want to talk to me about how I'm using lambda functions to do manipulations on images. Michele HansenReally...Colleen Schnettler And so, yeah, and so I there's a few things I'm trying to be wary of here. One is, I feel like it's not a good idea to use new tech on a new idea. Because you're, it's like a double uphill battle. You have to both build something, ship it and learn some new tech. But this AWS stuff is really cool. I love learning it and the architecture with it really is better. It just feels cleaner. I'm I'm not a huge microservices person, but this particular, what I'm building really lends itself well to these lambda functions. So that's been really fun. But it has been an interesting thing to find out that people are more interested in that. So as you know, one of the things I struggle with is jumping too quickly from idea to idea. But I'm seeing this opportunity where everyone wants to learn how to write lambda functions in the cloud with Ruby. And I'm like, Oh! Well, that's interesting.Michele Hansen Did you course business at one point? I forget.Colleen Schnettler I thought about it. I know that would be, that would be no, I thought about it. And I started doing video courses. I think I did like three or four. And it just got, I mean, it's kind of a slog to do that kind of thing, especially if it's not, it was I was building something that was more geared towards beginners. And so it was pretty boring for me to actually make them because you have to really go back and I felt like there was a lot of beginner course content out there already. So I never I never really gave that a good shot. But this is an interesting thing, because I am really when you hear these people who are successful, they're like, Oh, I was interested in this thing. And I blogged about it everyday for a year. And then boom, I'm the expert in this thing. And I have a product and this thing. I don't know, it's just I don't want to be jumping, right? This is I need to really focus, which is one of the things I struggle with. But I'm really tempted, I'm really tempted to like, get more into this AWS in the cloud serverless functions stuff. That seems to be more interesting to my developer friends.Michele Hansen Maybe it's not jumping if you just hang out on a particular stepping stone for a little bit. Maybe there's like a mini course here or something or even if it's just a blog post and people get excited about that. But maybe there's, you know, a little a little stop along the way here.Colleen Schnettler So I'd really like to get the image thing done. Because I think as we've been talking every week, I feel like I'm just so close.Michele Hansen And you need it. Like for your sanity. On the projects you work on.Colleen Schnettler Yes, I need it, I'm going to use it on my clients. And I just want to finish something like I just want to finish a side project. That's just where I am. It's like graveyard of abandoned side projects. So I want to finish it, and I'll use it. And I think it'll make my life easier. So that's great. But I wonder this is something I'm kind of like putting in the back of my mind and kind of tabling as people are interested in this, they want to learn more, they want to learn, you know, how you can use it. And the other thing, there's, I feel like serverless is huge, and there's so much opportunity for growth. And I don't know if there is like, I know, AWS has a marketplace, but I don't know anything about it. But so for example, this one serverless function I have all you do is if your images in my bucket, you can just send query parameters for the size you want of the image and it returns the image already resized and optimized and things like that. Wouldn't it be cool if you could have like a suite of little serverless functions that you could somehow bundle together? Like a whole bunch, I don't know, you'd have like, I don't know what it would look like you'd have like five different API endpoints you as my customer could hit that would handle all of your different image manipulation, like, or I could have one for video and one for images. I don't know. I feel like there might be something there. And I don't know what that looks like. But it's definitely like tucked away in the back of my mind, like what I'm working on. Now. I want to finish first. That's important. And it's so close. But I think after that might be a good time to start blogging about all this stuff I have learned in the AWS ecosystem. And once I don't forget it, but also, you know, to see if people are interested in that kind of information as well. Michele Hansen It sounds like they are and like, I can't tell you how many projects and products come out of setting out to do something else. Like just earlier this week, Adam Wathan did a huge thread on the development of Tailwind. I don't know if you saw it. And he mentioned how they were working on another side project, but like the CSS was driving him nuts. And so they just he just made that. And then he open sourced it. And people were super psyched about it. And they were really surprised by that. And then it like led to this whole thing that is Tailwind. I mean, that happened with Geocodio too. To to like we set out to make an app that told you grocery store and coffee shop opening hours and ran into problems with geocoding. And you know, we got some good, good traction and some excited users on the grocery store app. But man, when you find a problem that developers have, and you solve it for them, people get really, really excited about that.Colleen Schnettler Yeah. So when you guys launched Geocodio did you do that through some kind of existing marketplace, or were you just out in the free world?Michele Hansen Hacker News. That was the place to launch in January 2014. Product Hunt like wasn't even a thing. Yeah. And we did a ton of, you know, posting on like StackOverflow and Reddit.Colleen Schnettler And how did you know when you were ready to put it out there for other people? Had you guys been using it for your grocery store app for a while?Michele Hansen Yeah, I think at least six months or so.Colleen Schnettler That's quite a while.Michele Hansen Yeah. And it took a good friend of ours to be like, hey, like, you should just slap a paywall in front of this and see if other people will pay for it. And then at least you don't have to pay the server costs for it. And like maybe enough people will use it that that server is effectively free for you. And we're like, oh, yeah, that would be amazing. It was we -- were making three or $400 a month in ad revenue off of the app. And so we thought that was an amazing, huge success. I remember we had these conversations about how like, this is what's making money. We should focus on this, like, this geocoding thing is a distraction. I mean, I can't tell me how many of those conversations we had over the years. It's like this is the thing is making money. And this new thing is shiny and a distraction. And we need to make sure we focus on things making money. And this is, you know, the only thing that really ended up being a thing. Yeah, so many things come out of, you have another idea and you run into this foundational problem. And it turns out that everybody's more excited about that.Colleen Schnettler I and I've always felt like there's something in the AWS ecosystem.Michele Hansen It's so complicated. Colleen Schnettler Yes, it is so unnecessarily complicated.Michele Hansen Like, I don't know why we pay what we do for AWS. Like I literally like basically, there's no way for me to figure out why we are being charged what we are, and there's like third party websites you have to go to to even know what their pricing is? It's insane.Colleen Schnettler Yes, I agree. And so it feels like it's a huge that's always -- that has also been a pain. For me like this whole, this whole images, of course, but also all of the AWS stuff, so people are seem to be more excited, I have to say, like just talking to people and not that I've talked to tons of people, but I'm just trying to engage more in the communities I'm already a part of. And the image thing, as we've discussed, for most people, it's not frequent, it's painful, but they set it up once and they're done. Most people don't consult, so they don't see a lot of different clients. So they don't have to set this up over and over and over.Michele Hansen If you work for a big company, like you said, right, you said then you're done. Colleen Schnettler Yeah, exactly. But the AWS stuff is always evolving, and people seem really interested in the serverless stuff. And maybe that's just because it's a cool new hotness, but it seems like it's gonna work really well for me, and so, still focused on finishing what I'm working on, but I could see maybe getting -- writing a little bit about some of the struggles I've had with that and what I've learned with that once this image thing is complete. Michele Hansen Yeah, why not? Sounds like there might be something there.Colleen Schnettler Also, as a side note, our podcast has launched since we had our last episode. And so my non technical friends, my non technical friends have listened to the first episode, and they're so excited. And they say to me, Colleen, what is your idea? And when I tell them, they are so disappointed, like this huge. They're like, expecting me to be like, Oh, I'm gonna build the new Facebook or cure world hunger. And I'm like, Oh, I'm gonna help you put images on the internet. They're not impressed. It's been funny. It's been a funny response. So anyway, I think my goals for this week, I'm really, I'm really deep in the technical stuff. And I just want to get like I said, I'm just trying to get that done. So I think that's my goal for this week and just to keep engaging with people and talking to people.Michele Hansen Yeah, that's what you gotta do. Talk to people. See if your idea has interest.Colleen Schnettler Yeah, definitely. So what has been going on this week with Geocodio? Michele Hansen Gosh, well, you know, today was actually a really good day. I got two landing pages out which...Colleen Schnettler Nice!Michele Hansen Is it kind of work I enjoy. It's kind of weird though, because it defined scope. So it's good for if I want something I can knock out in an hour or so. But I don't actually find out the results of it for like, another month. So it's kind of funny to see Oh, wow, that landing page I wrote three months ago is actually doing really well. Like I should do more of those.Colleen Schnettler That's because it takes that long for the SEO to get back to you.Michele Hansen Yeah, it just takes time.Colleen Schnettler Yeah, so when you're doing a landing page, what do you use for that?Michele Hansen Uh, we just have a very basic Netlify CMS. And it's just, you know, it's just text and some screenshots. It's nothing fancy. But hey, that was just today, so I wasn't really thinking about. So I was just I just like enjoyed my work today. It was just kind of fun. So what I was really thinking about this week. You know how a couple weeks ago we talked about projects that failed, products that failed, right? Like, we were like, Oh, we should do that another episode. So what actually ended up thinking about this week was products, like almost failed and then came back from the dead, but they didn't really die. And I don't know if that makes any sense whatsoever. I feel like I should back up here.Colleen Schnettler So maybe I'm a little confused. Michele Hansen So okay, let me. The high level where I got to what I've been thinking about is, recently I saw this Wall Street Journal article talking about how companies after the pandemic hit in March, they pulled back their software and r&d spending to the tune of 27% on an annualized basis. So software, r&d, etc spending is negative 27% since March, and I used to work in investing and one of the things I absorbed from that was that you should, you know, compare yourself to the market, right? So, you know, any, you know, portfolio manager or a fund you look at, it's always what what is their benchmark, right, like the S&P 500, or whatnot. And so I looked at that, and I was like, Oh, interesting, like, looks like a benchmark. I wonder how we did over the same time period just for accountability. You know, I always look at our numbers every day every week, but it's only once or twice a year that I really step back and look at like growth rates and what our customer portfolio looks like and think about goals for diversifying into different customer areas. So which is maybe a topic for another podcast, too. So anyway, I was inspired to run the numbers this week on our growth rates so far for January through the end of July of this year. And I gotta say, like, I love being knee deep in a spreadsheet, like it has been, it has been kind of like refreshing and kind of fun to be able to really like focus and just nerd out on the data like that, like, I really love it. Okay, so where this gets to like dead products. So, you know, I calculate over our growth rates and everything, okay, really got me thinking about this was, somewhere we've seen a lot of growth this year is in our HIPAA compliant product. So, you've been to the doctor's office, you've probably signed a form about like, data and how they can, you know, access information and there's like HIPAA Privacy Practices and stuff like that. You've probably signed this form with every new doctor visit you've ever gone on?Colleen Schnettler Yes.Michele Hansen Yes. So this is this is basically, you know, GDPR for healthcare data in the US. And so two years ago, yeah, August of 2018, we launched a HIPAA compliant version of Geocodio thinking that it was basically the same product we were doing but a new market and there was a lot of potential because there weren't really any good HIPAA compliant geocoding options available. And so for example, if a doctor's office wanted to put their patients on a map, the coordinates are considered personally identifiable information under HIPAA and so they can't just use an off-the-shelf service for it. And so kind of like 2017 actually, right after I'd gone full time, we were thinking about like big projects to chew on. And it was either, do we go worldwide, or do we do HIPAA, we had gotten requests for it for years. And we decided you know, we're small team the world is big complicated place it's probably more straightforward for us to go into a new market but we already have the product all built out and everything at least from a you know, a UI and functional perspective and we had some interest. So we spent about a year rebuilding the product from the ground up working with a security consultants like we, like you know, it looks the same to the to the customer but it it everything under the hood is different, like data centers are different because we have to have special data processing agreements with them and all this stuff. So anyway, so I spent, you know, months and months and months on this, from the customer side of things, you know, gathering interest in it. Running surveys, figuring out pricing, like generating interest, all of this stuff. So we're feeling pretty good about it, we launch it and August of 2018. And after like a month, no one signs up for it.Colleen Schnettler Oh, wow. Michele Hansen And this is a problem. Not only have we spent a year of our time on this and, and hours, like an hours of work. So the way our service works is we basically for the most part, we have two separate ways of accessing Geocodio. We have this public cluster, which if we have a pay as you go plan, the requests go there. And then we have unlimited customers who each have their own dedicated server. And they can basically run as much as they want on that for a flat rate. And it's also we pay a flat rate for that, so it works out for everyone. And what we really wanted to do is launch a pay as you go option for HIPAA and make it like super accessible and easy for people to do this. But that requires us to be paying for this public cluster. And we didn't have any customers.Colleen Schnettler Oh, I see.Michele Hansen And what is the first rule of bootstrapping? Always make money. You always have to be cashflow positive, you're not burning somebody else's money. You are burning your own money if you are losing it. And so we're like, oh, god, like what happened? And, you know, I ran some testing on the homepage, because I was like, What happened here? Like, like, where did we go? Like, we talked to all these people. We've done these surveys, like, where, you know, we had years of demand from people, like what happened? And so it turned out that, you know, I'd go through the website with everything, everything was fine. Okay, what would your next step be if you wanted to sign up? Like, oh, I would go talk to my legal department. And then it was like, Oh, no. So this is what I had underestimated, was that the sales cycle is not, somebody just signs up and they and they get going. It's it has to go through security reviews, it has to go through legal reviews. It has to go through lots of phone calls. And so I didn't realize this at the time, but it like it can take us a year to 18 months sometimes to sign on HIPAA customers.Colleen Schnettler Wow. That's a long time.Michele Hansen And when normally our average time from someone signs up to add a credit card is like less than 12 hours. Colleen Schnettler Right? Wow. Michele Hansen But the median time to first add a credit card is less than 12 hours. So that sales cycle is really long. And this is something that can kill you. And I think this is something that the founders of Binomial have talked about quite a bit too is like sales cycle can be killer, especially for a small company. So anyway, we were like well, alright, so we had basically we had to shut down the pay as you go option for the product. We didn't have any customers on the Unlimited side, so the product was basically dead a month after we launched it because we couldn't burn money on these servers.Colleen Schnettler Sure that makes sense. Michele Hansen Yeah. So that's two years ago. And, but we kept it open sort of as an option, someone reached out as an unlimited option, which, you know, we only pay for the infrastructure, if somebody is actually using the product is actually, you know, has a subscription. So that works out for us. So, so, you know, it's sort of been very, very slowly growing over the past two years, but in March, we had a big uptick in interest in it. Understandably, there's a lot more interest in health related data. And so when I was crunching the numbers this week, one of my first thoughts was, what percentage of this is HIPAA related? Like and what would our growth numbers look like, if we didn't have that product? So do you want to dive into some numbers with me? Colleen Schnettler Yeah, let's do it. Yeah. Okay.Michele Hansen So compared to January to end of July 2019. Our growth this year so far was 59% Colleen Schnettler 59%?!Michele Hansen Revenue growth, that's revenue growth came. Colleen Schnettler Okay. Michele Hansen Bear in mind, this is not, I'm not talking about net income, right. I'm not subtracting costs from it, and it's more expensive for us to run, you know, HIPAA, but this is just sort of...Colleen Schnettler Sure. That seems great, though.Michele Hansen Yeah, right. I was like, No, that's break really weirdly good. And I almost feel guilty that we're like, doing well and everything is terrible. So I was like, okay, that's so that's really good. Like we're comparing your benchmark is negative 27% like that's... That's good. So that's I was like, what would that be like without HIPAA? Like, like, has the pandemic really like and like how much has that contributed to this growth? Like, because we had one customer who signed up who -- whipped through everything and they got started in a day, which never happened before. They were like, We need this right now. Like get us set up, like somehow everything got approved, like overnight and it was it was that... you ever hear people talking about, you know, you have product market fit when people are literally taking the product out of your hands. Colleen Schnettler Yeah.Michele Hansen I was like, wow, okay, I've never experienced it quite like before.Okay, so if you take out the HIPAA customers we have gotten since March, our growth for January to end of July is 41%.Colleen Schnettler OkayMichele Hansen So it dips but it doesn't go all the way. And then I was like, let's go back all the way. Colleen Schnettler Right. Michele Hansen So like we launched this product. You know, there are these issues with sales cycle where like, Oh, this is a colossal mistake and a waste of a year and and we are full of regret and angst about all that. So last year just for this was just the same time period, it's not full year. So our revenue would have been down 7% last year [ed: 7% lower] Colleen Schnettler without HIPAA?Michele Hansen Without it right. Without those numbers, I'm trying to like what happens if I pull out all of those customers basically, okay, in the data. So and then, so then if I took them all so if I took them all out entirely, then looking at 2020, our growth would only be 27%. Colleen Schnettler Wow. Michele Hansen So without this product that we thought was a colossal failure when we launched it, and was a waste of a year's worth of work. Actually, has made a huge like 32 point percentage difference in our growth this year.Colleen Schnettler That's amazing. So my first question for you, you have a background in economics, don't you? Michele Hansen Yes. How could you tell?Colleen Schnettler So isn't the first rule of economics... Michele Hansen The dismal science!Colleen Schnettler Isn't the first rule of economics, the sunk cost fallacy, like, Michele Hansen Oh, God, yeah. Colleen Schnettler Why did you guys walk away after after did not like what -- how did you make the decision once you were so far into it, to not walk away and to not give up on it?Michele Hansen Well, we basically did.Colleen Schnettler Right, okay. Right, because we shut down your public pay-as-you-go.Michele Hansen Yeah we shut down the public cluster. And if anyone wanted to sign up, they had to be on the unlimited level, which is still the case today. I mean, we maybe we could launch a pay as you go, but I'm just just given the sale cycle it's not... I feel no urgency to do that. I'd like to make it more accessible. But yeah, I mean, sunk cost fallacy is you've put a lot of time into something you know, the first rule when you're in a hole, stop digging. Colleen Schnettler Right.Michele Hansen So after a month, we pulled the plug on it.Colleen Schnettler Because it didn't cost you anything. Michele Hansen Yeah. Colleen Schnettler So so because it didn't cost you anything to have those two because you only pay for the private servers if you don't have the clients, right? Customers. Michele Hansen Exactly. Yeah.Colleen Schnettler Well, that's amazing how that worked out for you guys.Michele Hansen Yeah, it's just kind of like wild to see like something sometimes something fails. But, like timing is a huge part of that. Like, it reminded me how people talked about companies like Blue Apron and whatnot where I mean before I guess I haven't looked at them recently, but like before the pandemic I mean their expenses were out of control, like they're the unit economics on it, which is you know, the taking into account the what they spend on each customer in terms of the product but also in terms of marketing and then how much money they get back. were terrible. But now, things like Blue Apron or food delivery, right? Like people are seeking out those products much more frequently than they were before, like the need for those products has changed. And so instead of having to market all the time and give a lot of stuff away for free people are seeking them out and their unit economics are improving. And so it's like sometimes like the product is not necessarily a bad idea but the timing for it isn't right and it's a question of, if you can survive until the timing is right you know, it's kind of like that stock market quote what the market can stay irrational longer than you can stay liquid. I think I butchered that. But you know, so yeah, I don't know if you like the product like came back from the dead or what happened.Colleen Schnettler That's really interesting. Because it's so hard when you get started, or probably at any point in your business career to figure out when you've given something enough, because you hear so much, you hear so much advice that says you have to know when to walk away. Right? You have to know when this was a bust. Don't sink any more time in it. But then you hear stories like this where it took you guys two years to actually see a return of an entire year of work. If you didn't already have a successful business before that. You probably would have been even more upset when it didn't take off.Michele Hansen Oh, for sure. Yeah, I mean, I think the only thing that really kept it alive was that we could, you know, sort of throw it in the deep freeze for a while until some customers came along. Colleen Schnettler Well, that's great. That worked out.Michele Hansen Yeah, yeah. I mean, and you know, now I need to, you know, make sure I'm double checking all of my net income numbers. I'm sure they're, they're not going to be nearly as amazing because a big part of that is AWS probably.Colleen Schnettler Those jerks. <laughing>Michele Hansen It's wild to think about it. And we launched it basically exactly two years ago. And it just it took, it took a lot of time for that product to grow into its own.Colleen Schnettler And I think that's something that I struggle and I think I've mentioned this before, and I think other people struggle with is things take time. Just in general, like, things take time.Michele Hansen And that's okay.Like it took us right, three and a half years to go full time on Geocodio -- just me. Colleen Schnettler Yeah. Michele Hansen But the key thing was is that we were not burning money through that time. Like we were always making money, even if it was only god -- I think our first month our margin was $10.Colleen Schnettler Wow.Michele Hansen Like, as long as you're not spending as long as you're not spending...I know, it's very impressive.Dude, as long as you're not spending more money on it, then you're making and you're enjoying it. Colleen Schnettler Yeah. Michele Hansen ...Then you can keep going. But if you're losing money, and it's your money. That's, that's, that's there's some tough, tough decisions to be made there. Yeah. Well, I guess that's about it for this week. Thank you so much everyone for listening, by the way, as Colleen mentioned earlier that the podcast just went live this week, and we're pretty floored that people want to listen to us. I think me I'm speaking for myself, like, I'm pretty surprised that it's more than just a couple friends of ours listening. And so if you enjoy our show and want to help other people find it. We'd be incredibly grateful if you tweet about it, or can write a review for so it would mean so much to us.Colleen Schnettler Yeah, thank you so much everyone for listening and we would love to engage with you. So please feel free to reach out to our podcast Twitter handle which is @softwaresocpod, or either of us [@leenyburger, @mjwhansen]. We're both on Twitter and we'd love to hear what you think and any questions you have about the show.
Selling to Big Enterprises as a Bootstrapped Company...and Figuring Out Who to Sell to In the First Place
MICHELE HANSEN Hey, and welcome back to software social. I'm MicheleCOLLEEN SCHNETTLERand I'm Colleen. MICHELE HANSENAnd we're inviting you to join our conversation about what's going on in our businesses.COLLEEN SCHNETTLERMichele, do you want to get started today?MICHELE HANSENYeah, so something I'm thinking a lot about is the golden goose of software: enterprise software.COLLEEN SCHNETTLEROh, man. Okay.MICHELE HANSENYeah. So I mean, you had mentioned a couple weeks ago how you have this dream that if you had a SaaS business, everything would be roses, and amazing. And there wouldn't be any problems. Right?COLLEEN SCHNETTLERCorrect.MICHELE HANSENAnd so the next level of that dream that a lot of people have is if they could just sell enterprise software, where, you know, the companies would never cancel. And they have these giant expensive contracts and like, everything is amazing, right? COLLEEN SCHNETTLERYep. MICHELE HANSENYeah. So I'm thinking about this a lot, because I feel like there's a lot of different ways to do enterprise and there's a lot of granularity in it that gets lost. And at a high level though, what I want to talk about first is how, one of the reasons why SaaS and especially small customer funded SaaS works and a company like ours, which only has my husband and I running it, but we have tens of thousands of customers is because our work has a one:many relationship. And so if you can picture that, every time we do work, we add a new feature, we add a landing page, you know, anytime we're doing work on our service, most of the time that work has a one:many relationship, we add a feature and it helps tens of thousands of people simultaneously, right? Or we add a new landing page and that helps us attract thousands of customers simultaneously. COLLEENSure. MICHELEThe thing about enterprise work on the other hand, it has a one to one relationship. There's a lot of custom work that has to be done. And so in that way, it's almost a little bit more like freelance work.COLLEENOkay.MICHELEAnd so that's important because when when looking at enterprise software and serving enterprise markets, there's all these different things that companies have as requirements. And very often those things can be things that maybe only that one particular customer has, or if you're doing something like on premise, that's a one:one relationship. And as a really small company, we need to maximize for work that has a one:many relationship. If I'm sure any sense at all, stop me.COLLEENYeah, no, you're making great sense. I just, I am curious why you're even thinking about enterprise software. And I say that because I used to work for a Fortune 500 company, and, man, we bought really expensive software, but you probably had to sit in 20 meetings before we agreed to buy it. So I know that there's, I guess, like, why are you even thinking of it? Is it is it just to have a different revenue stream?MICHELE We reached out to buy big enterprises.COLLEENOh, I didn't know that.MICHELEThis is my next sort of thing, that there's different ways to serve big enterprises. And so the traditional way, as you mentioned, is 20 meetings, you know, three golf outings, you know, five fancy dinners, right, like all that kind of sales cycle, right? So there's that level of it. We're not doing that level. But we do have people in large organizations who reach out to us but this has some different flavors. So one of my favorite ways of serving enterprises is basically when someone within a team has something that they need to get done as part of their everyday work. And for whatever reason, they need to do it faster or they need to do it better. They don't like the tools they have and so they go off and find something themselves. And then they make the case to their boss or to their leadership, that you should use the product. And this either gets put on that team's credit card, called a P Card in most places, which might have a say a $500 monthly limit per service, which is why people like Patrick McKenzie, recommend that price point so often, $499 or $999, because those are sign off levels for price points, actually. So enterprises have a word for this, they call it "shadow IT" which is this kind of like derisive name, because they're implying that it hasn't gone through the big procurement process and the security reviews and everything, but it's a great way to sort of shortcut into a big organization that has reliable ongoing needs, that's going to keep reliably paying you. And then the other way that we often get it is people reach out to us and they do need to use it across the entire organization. And we have to go through security reviews and contract negotiations and whatnot. And this is all my mind because I realized the other day that I probably spend about a third of my time on this kind of work, whether that's having phone calls or negotiating contracts, or any of those other details that go into it. But that I don't think we've ever had a single customer with a custom negotiated contract cancel on us. COLLEENAh, yeah. MICHELEBut you don't necessarily have to have a big sales force to get that kind of thing that kind of plan levels through, but it does, it does take a lot of specific work. And the thing is, is when I'm doing that, when I'm having a call with one huge customer, or I'm negotiating contract with them, that's work that's going for just that one customer. It's a one to one relationship. And so, this is where this really comes into play for a small SaaS company like us, is when we're talking about things like on premise where it's a one to one relationship. But so any work that we might do on that, or like help, we might need to give them with their installation of it, that's all one to one and needs to be priced accordingly. But the thing is, is customers who request that often have these, you know, compliance requirements, you know, whatever industries they're in, that they can't get around it. And so they have to pay a lot more for something. So I'm thinking about all this, but there's a there's a great site that I found recently called enterpriseready.io. And it goes through a lot of the features that enterprises might require. And it was interesting looking through this, you have things like Single Sign On, audit logs, integrations, things like that, because absolutely, these are things that big companies require. But we don't have all of them. And we're selling to big companies all the time. And so my point here is that you can be selling to enterprise without necessarily doing that whole enterprise song and dance on the sales side. And you can say like, you know, we'd love to work with you, here's what we have. We don't have single sign on, or we don't have, you know, SOC2 audits, or we don't have audits of our financial statements every year. And if the buyer in the organization loves your product enough, maybe they've gotten to try it for free or on a lower plan with their boss's P Card, they can advocate to their legal department and actually get through those things. And you don't even need whatever those requirements are. Doesn't happen all the time, but I think it's really helpful to look at a list like this, and then also remember that it's not necessarily all requirements that you might need before you try to launch into that space, which I think is a headspace that people get in in a lot of different ways of, "My product doesn't have every single feature that someone could possibly ask for. So I'm not going to launch it yet." COLLEENSo So do you guys ever reach out to enterprise? MICHELENo, we do not do any cold sales whatsoever. COLLENWow. Okay. So what would you recommend? So I feel like in the bootstrap space, most people avoid enterprise because of that list you just described. So like, what I'm hearing from you is, is if you have a great product that they really want, there might be a way around kind of going through their formal long sales process.MICHELEYeah, so if you have a product, that is something they really need to get their work done, you know, as long as I'm talking here, specifically things to get a process done right. Rather than say if you have process change software that's selling them a benefit, but not necessarily a need that they have that might be a lot harder, you might have to go through the regular channels. But yeah, since we started, I want to say within six months after launching, we had people at big companies signing up to use us. And sometimes I mean, their usage is really low like somebody, someone and a huge company, and they just have a small project they need to get done. And they pay us, you know, $40 once and that's the end of it. But what we've also had scenarios where it's it's a specific team within a huge company, and we're only dealing with that specific team. And for some reason, the security people have just never cared or found out about us, or legal. And then we also have times when we seem to meet with, you know, every department in the company. And the other thing is, it's not necessarily huge companies, like we have had security reviews and legal reviews and all those kinds of things for really small companies, but but they had compliance reasons why they had to go through all of those processes.COLLEENSo do you think you said you guys have done some on premise work, which I didn't realize you do?MICHELEA little bit. We try not to. COLLEENYeah, do you find as a team of two that is a good investment of your time and resources.MICHELEWe try to avoid it because it has that one to one relationship, right? So it's, it's not as scalable for us to do that. But we understand that there are scenarios where a company may have to have an air gapped solution. So we don't even put it on our website. And we don't really talk about it unless people really need it. Also, we, because it's so much more expensive for us to provide it from our time perspective, we price it much, much, much higher than any of our other plans. And so we always like to run our business in a way that is in the best interest of the customer. And so we don't want to steer them into something that's more expensive than they actually need. If there's a way for us to avoid that.COLLEENYeah, I just I've always just, it seems like a huge red flag. Like from my perspective, it always just seems like oh, enterprise, it would be terrible. But the fact that you guys don't do cold sales like that's a big determining factor, you'd probably have a whole different experience if you were reaching to them, right?MICHELEYeah. Oh, yeah, that's a lot more work. And my broader point here is there are a lot of ways that people write on the internet about how a business should be run a lot of assumptions they make. And not just in this specific regard, but there are a lot of unspoken rules about running a business that you might think like, oh, if I want to sell to enterprises, I need an enterprise sales staff that you know, full of professional golfers who can land these deals for me...when you don't actually need that. You can still sell to companies of any size, it'll be more difficult and that you know, they have requirements that are not just features but are you know, compliance related that are much harder to meet but you can find scenarios or you know or find ways around those things. If your a buyer is motivated enough, if your product is good enough. COLLEENAwesome.MICHELEBut i but i think you know, a lot of the startup literature, right like it implies that or it assumes that you know, you've got you've got a salesforce, you've got a whole engineering team, you've got, you know, all these resources, you've just got to burn them all to grow as fast as you can. And that just doesn't apply to small companies like us. And so it's important to break down those those assumptions and realize when they really don't apply and then there's more than one path to selling.COLLEENVery nice.MICHELEI find it it seems to intimidate people, you know, when they when you see startup writing written from the perspective of unlimited resources. Anyway, that's, that's what's on my mind this week. What about you?COLLEENSo, I kind of had an interesting week in the world of side projects. I thought I was done. Okay. Like I thought I was almost finished with my project, and I was really excited, and I log on a Monday and I was like, I just got to wrap up a few more things. And at the timing is really, really perfect because I have a client that basically needs what I'm building. MICHELENice!COLLEENYeah, so I thought this would be a great opportunity for me to get this deployed, and then use it with my client. But of course, I come in Monday full of energy and enthusiasm and hope. And I just started running into some technical roadblocks. That were very frustrating. And, you know, eventually you always solve your technical problems, right. I think the thing about business, especially if you have a background in software is, eventually you'll figure it out. But man, it was kind of an emotional roller coaster being like, I'm almost done. I'm gonna get to use this on production to "Ooh, nope, it's not ready." So yeah, I've just kind of had to manage my mental energy with that excitement and then realizing I had a potential issue that I had to fix. So I'm trying not to let it get me down. But because of this, I actually started in like kind of learning a little bit more about one of the big players in the space, their product. And I actually got to use their product and play around with it. So that was actually good experience. On one hand, it was like, "Wow, their product is so good!" But on the other, I have the perspective that I'm kind of trying to attract a different audience than they are. They're looking, you know, they serve big businesses and, and things like that. And I'm kind of trying to make the simplest solution for a common problem. So there was just some, you know, technical challenges, like I said, and just kind of managing energy with not having that done. By the time I thought I was going to get done. So there's that. But also, I've been thinking a lot about what we talked about last week, which was customer interviews and talking to people. MICHELEYay! COLLEENRight?? And so, I got a Reddit account, and I started posting a little bit of it on Reddit. I didn't get a lot of engagement. But I think with these communities like you kind of have to build engagement. I don't think it's something that just happens.MICHELEMaybe depends. I mean, yeah, what what did you post?COLLEENI was asking people what they do with their images, like how, okay, I basically went into the rails forum and the Heroku forum, and just put up posts to be like, hey, how do you guys handle it? And everyone that responded, which wasn't, but a handful of people was rolling some kind of custom solution. And then it got me thinking about what we talked about, another thing we talked about was pain and frequency. So I think, for at least the people I know, this is painful, but it's not frequent. So if you work at a company, like a standard, you know, mid-sized company, this is something you really only have to set up one time. Now people like me, like we talked about who work for a lot of different organizations, a lot of different applications. Yes, you have to set it up over and over and over. But as a consultant, I don't know if there's an incentive because if you bill hourly, like, what's your incentive to purchase an add on that takes out, you know, takes away five hours of your, of your billable hours.MICHELEOn to the next project?COLLEENWell, for me, it is like, I like to finish things, right? So for me, yes, I could roll this for every client. But I like to provide -- so much of consulting is about your relationships with your clients. So whenever I can say, Hey, I can put you on this plan, that's 50 bucks a month, or, you know, I could spend however many thousand dollars billing, creating it myself, I feel good about when I feel like I'm providing them value. I'm saving them money. And I like to get it done. Right. So it's, it's always for me, it's a win win, but I don't know. I don't know if other people will feel the same about that.MICHELEEAs a former project manager at a web development agency, something that saved us half a day's worth of work that would be billed directly to the customer as part of building the website. That sounds like a clear win because I mean, you know, at any given time, I mean, this was a while ago, so things are probably structured different now. But like we had a one to two back end developers, one front end developer, one to two designers, and if I could cut off half a day of development time for something we were doing with every single site, that was a huge win because then we could do more sites and make more money. And if we just bake it into the project costs or the hosting cost for the customer and tell them you know, you're going to pay this much per month on for you know, what does that WordPress hosting site [note: was thinking of WPEngine] and you know this for your image hosting and, and whatnot, then the customer is like, okay, yeah, whatever, fine. And we say five hours that would have been awesome. COLLEENAwesome.MICHELEBut it sounds like midsize companies are not your customer, but maybe, maybe agencies are?COLLEENYeah, so one of the things I've started doing -- which I think might be the smartest thing I've done yet -- is this big player in the space like they have a really active forum. So I've been kind of hanging out on their forum to see what people are complaining about.MICHELEMm hmm. You know, that's great, that's the Amy Hoy Sales Safari approach!COLLEENThank you. Thank you. So I'm kind of trying to figure out like, what kind of frustrations people are having with their product. So I can, you know, kind of incorporate those fixes into my product.MICHELENice.COLLEENYeah. So that's probably the best thing I've done. I do have. It's interesting, because I have a lot of other consultants in my network. But I have not really started interviewing them yet. About if this is an actual problem. I think the real people I'd want to get a hold of would be one of those conflict consultancies, right like businesses that are consultancies. So I know a couple people that work in consultancies, so there might be an opportunity to talk to them. But this is something else I wanted to talk to you about. Because you probably remember six months ago -- I've done two rounds of customer interviews with previous ideas -- Okay, so the first round was for the kind of the childcare thing that I was looking at. And that was determined to be a bad idea. And that worked great. The second set of customer interviews I did was with small SaaS founders. And at the time, I was trying to kind of come up with a Google analytics dashboard solution. MICHELEYeah, for content auditing, right?COLLEENRight! Content. Yeah, it was a content audit. I was I was kind of the idea was like content, content audit for like site SEO and stuff like that. And, you know, I talked to a lot, I don't know, maybe five people, but I've been reading more about how when you talk to someone, you're supposed to, like, just listen and let them tell you their problems. And I must not have been asking the right questions because everyone told me they had no problems. Yeah, like example, can I give you an example? I'd be like, hey, like, people were just like, Oh, we don't use analytics. And I was like, Don't you want to grow? And then people, you know, we're like, No, not really. It's like, maybe so I, I feel like when I do this next senate interviews, I need to either work harder on my questions or not talk. I didn't think I was talking too much. But I was really having a heart -- even with with you. I think I interviewed you. And I had a hard time pulling problems out. And I just I don't not quite sure why that was.MICHELEMaybe you were baking assumptions into your questions.COLLEENYeah. Or maybe I was like, pushing my thought like -- maybe I was pushing too much in terms of what I thought they should do. As opposed to letting them just tell me. But it was just odd because I distinctly remember that people weren't sharing a lot of frustrations with me. And maybe because I was focusing on analytics, and like, they just literally didn't care.MICHELEMaybe there weren't frustrations there.COLLEENYeah. And well, maybe that's it right, I was really focused on content and analytics. And maybe that just wasn't the right place to be focused on maybe they were not too stressed about analytics. MICHELEThe other thing about interviewing people is that people will rarely tell you explicitly that something is a problem, which is kind of funny, because all of the literature and I say this, you know, is "find the problem," right? And then find the main and writing and frequency, right, right. People will rarely say that. And usually when I am listening for a problem, it starts out with, talk to me about your process for understanding what content is working. And then I just have them walk me through the entire process. And then you deduce where the problems are, and the problem may be in the form of, they're spending 12 hours manually creating a spreadsheet, that's a problem, that's a lot of time. Or they have to use a vendor for something. And they really don't like that vendor for some reason, or that vendor is really expensive. Or there could be a whole host of other things, that they may not articulate as a problem, but is something that is costing them time or money or is genuinely causing frustration. And they have to, you know, hit three different analytics API's to get this one number, right, like those things are all problems, but someone may not articulate them as a problem. Yeah. So you just have them walk you through their entire process. And just in that process of saying, Okay, tell me more about that step. That step you were creating that that spreadsheet for 12 hours, why were you creating that spreadsheet? Who was it for? Where did that come from? What are you getting out of that? What do you wish you could do instead? They may, it may have never occurred to them that there could be another way to do it.COLLEENYeah. Okay.What are your thoughts on? So like I said, I'm building this image thing. I'm excited about it. I'm learning a ton. I'll use it. But I don't actually know if it's like a business-business. So I'd like to keep my eyes open for other opportunities as I'm talking to people. So what are your thoughts on just talking to people when I don't even have an idea?MICHELEYeah, talked to them about their processes, if there's a specific type of process where you want to solve things, and you can just hunt for things. I think what you're doing with going on competitor websites, and seeing where people are frustrated with their products, that's an awesome way to find a niche product. If there's an area where you have a particular interest in a type of technical problem or a solution space or an industry vertical, whatever that is, just hunting around in general for those frustrations, and again, they may not be verbalized as my problem is that I spent 12 hours making a spreadsheet. It's, you have to get them talking a little bit more and understand the entire start to finish process to see where those pain points are, and those points, maybe multiple points as well.COLLEENYeah. So I was listening to a different podcast and they were talking about a book called The Mom Test. Have you read that?MICHELE Oh, I hate the title of that book. I've never been able to get past that.COLLEENI hate the title too! MICHELEI just... isn't the the idea of that book is that you shouldn't share your product idea with your mom because she'll be nice to you?COLLEENI mean, that's what I garnered from the podcast.MICHELESo many stereotypes about mothers and about relationships with mothers and women as these docile people that... I've heard great things about the actual content of the book, but the framing of it is -- whew! COLLEENYes, I agree.MICHELENeeds to be updated! <laughter> YIKES.COLLEENTotally agree. But one of the things they were talking about was, in the book, he talks about kind of what you were just saying, which is just like pulling, pulling the pulling information from people without pushing too much of like, here's my great idea, and you want to use my great idea, and things like that.MICHELEYeah, you're not going to get honest feedback. If you say, hey, do you like this site I made? "Sure, yeah, it's great." But, and, yeah, that's just a terrible idea to do testing like that in general. And even then, if you're putting something in front of someone, it's usability testing, and there's a whole field of user experience devoted to specifically to that and how you frame questions in that kind of a context rather than a exploratory interview like we're talking about here, right here. COLLEENAnd that's the phase I'm in. I'm in the exploratory interview phase like I'm not in terms of the how do you use this phase yet.MICHELEIt sounds like you're looking for a direction right now, your rudder is kind of changing.COLLEENI'm always looking for direction! So here's the thing. here's, here's the thing is, in the past, I think I have let go of ideas too quickly, because my time is so valuable. And I mean that in terms of like, especially now with the pandemic, right, I got it. I have so little time I have clients, I've kids at home, I have a family that wants to hang out with me. And so I'm terrified of making the wrong decision and not because I'm scared to fail -- like I'm okay with the failure. I'm not okay with putting in 40 or 60 hours or months and months of work for whatever I build to be a disaster. Not a disaster, but a huge flop because I feel like I just don't have time for that like. I'm not 20. I'm in my late 30s. I'm ready, let's go! MICHELEDo you need to be productive, right? And there's that very real pressure of like, if you're spending this time on something. And so use that high responsibly. I feel that.COLLEENThat's exactly that. Yeah, that's exactly where I'm coming from. So, but but on the other hand, I feel like because I'm, I'm so scared of wasting time that I don't feel like I have. I drop ideas really quickly. Like, I'm not going to lie to you on Monday, when I hit this other technical hurdle. I was just like, man, and then when I tried the big, you know, the big company solution, and it's pretty good. I was like, man, I should just throw my stuff away. And so, yes, you know, I think that's been one of my struggles is like quitting too quickly. Tell me your thoughts on that.MICHELEI think the way to prevent that 60 hours of wasted development time, is doing what you're doing now, which is doing the research. You were irritated. I don't think it's the medium or large size company. Maybe use this big industry standard competitor out there. But maybe there's a space to make things better for, for agency developers or for freelancers. And now it's "Okay. I know these aren't my customers, but maybe these people are." So you're just on to the next step. It's not. It's not failure. It's not spinning your wheels, you're just getting more specific. That's progress.COLLEENYeah. And this is something I was thinking of is like, I don't know what I don't know a lot about the no code community. But something like this would be perfect. Like a drop in thing for the no code community would be awesome. Like, there's all these forums out there, like you can integrate in your no code, and they just email you stuff. So there could be a way -- Yeah, I don't know enough about it. But when I really think of where this could be useful, because that's what I'm trying to build, like, server side cloud image management with pretty much no code. So on your end, so yeah, I haven't given it up and even this idea, and this is why I didn't quit on Monday. Because even if no one uses this, I'm going to use it. And I have learned so much while going through the process that it has felt good, like, it still felt good. But yeah, sometimes it's just exhausting. MICHELENo matter what, you've saved yourself five hours per project, and that's a huge one.COLLEENThat's huge, right? Like, for me, that's a huge win. Like, that'll be great. And it'll be consistent because that's like another thing when you switch from client to client, they all have different things. It's like, which one is it's, it's exhausting. I feel that this is kind of an inflection point in the past where I would have just thrown up my hands and been like, yeah, this was a terrible idea. No one wants it. This time, I want to commit a little harder to talking to people and getting in the community and seeing what's really going on.MICHELEYou're learning.COLLEENYeah, so much!MICHELEYou've learn that it won't be a fit for one type of customer. Now you can learn if it's a fit for another type of customer.COLLEENYes. All right. Well, That's all I got for this week. MICHELEAll right, well, we'll catch you next week. COLLEENThank you for joining us.
Finding and Firing Potential Customers
Follow us on Twitter at https://twitter.com/SoftwareSocPodTranscriptMICHELE HANSENHey, 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 HANSENWelcome 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 SCHNETTLERAnd I'm Colleen Schnettler.MICHELE HANSEN So Colleen, tell me, what's going on with your business this week?COLLEEN SCHNETTLERSo 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 HANSENYou said maybe but at the very least you want it [yourself]...COLLEEN SCHNETTLERRight. 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?MICHELEAnd where are they?COLLEENAnd 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? COLLEENSo 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.MICHELENo, 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.COLLEENYeah, 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. MICHELEI wrote one of those (laughing)COLLEENBut 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. MICHELEHave you looked at Reddit? COLLEENSo Reddit confuses me...MICHELEIt 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.COLLEENWow! That's amazing.MICHELEYeah. 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.COLLEENSo 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?MICHELEYeah, 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.COLLEENOkay, 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?COLLEENWell, 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. COLLEENYes. Right. I mean, how big of a problem is this for them? Yeah. MICHELEAnd 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.COLLEENYeah, 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.MICHELEThere 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.COLLEENWell, the ideal, right, so my ideal solution is they can upcharge it and pass it through to their customer, right?MICHELEMm hmm. So then that that's your your, your pricing model could be make or break here.COLLEENYeah. 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.MICHELEAwesome.COLLEENI love it. All right. So that's enough about me, tell me what is going on with you.MICHELESo 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. COLLEENOoh, that's interesting. MICHELEThis 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. COLLEENWow, really? MICHELEYeah. Yeah. And it was not only ICE, it was their enforcement and removal division.COLLEENOh my gosh.MICHELENow, 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.COLLEENThat'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.MICHELEYeah, 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?" COLLENYes!MICHELELike, 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...MICHELEWe answer to our customers.COLLEENRight, 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?MICHELENah, 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.COLLEENWell, good for you.MICHLEEWho 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.COLLEENSo are your competitors public or private, or a mix?MICHELECombination. 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.COLLEENWell, 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.MICHELEJust keep thinking about the, "There's no point in having a f-you money if you don't say f-you." COLLEENI love that. MICHELENot 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.COLLEENYeah, 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.MICHELEYeah, 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.COLLEENI 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... MICHELEWe would make a lot of money. COLLEENSo 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. MICHELEAbsolutely. 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.COLLEENYeah. Awesome.MICHELEI think that's about it for this week. But that's the big thing I've been thinking about.COLLEENI love it. Thank you for sharing that. MICHELESounds good. All right. COLLEENWell, we'll catch you next week. Thank you for joining us.
Building What You Need & Figuring Out Pricing (Or: Our CDNs Episode)
MICHELE HANSEN: Welcome to the software social podcast where we invite you to join our weekly conversation about what's going on in our businesses. I'm Michele Hansen.COLLEEN SCHNETTLER: And I'm Colleen Schnettler.MICHELE HANSEN: So tell me, Colleen, what's going on with your consulting/transition-to -product business this week?COLLEEN SCHNETTLER: So, I have been stuck in the idea generation phase of trying to start a small business for quite a while. And I've had a lot of different ideas that I've chased down and they really have not amounted to much. So I've decided instead of continually searching for something, I'm going to build something that I want that I know I will use with my clients and throw it out in the world and hope it sticks. Exactly.MICHELE HANSEN: Dogfooding!COLLEEN SCHNETTLER: This, really, for me like a lot of the literature, I read about startups -- and I read a lot of literature about startups -- says not to code before you have an established market. But the truth is, it's something I want, it's something I know my clients will use (because I am their developer!), and I'm sick of kind of spinning my wheels. I feel like I need to take more action.MICHELE HANSEN: So, Colleen, what is this idea you're working on?COLLEEN SCHNETTLER: So I am working on an image hosting platform, I hate to use the word term platform, it's not really a platform. Basically, what I'm trying what I'm building is something that's going to be a JavaScript widget that you install into your site that's going to provide you with a drop zone UI, and then your users can drop their images into your drop zone UI. It puts them -- it's going to create cloud storage for you, and it's going to save them to the cloud, and the cloud will be under my business. I don't know if I explained that well. Well, it'll be in the cloud. I'll put them in front of a CDN. Because I think the CDN part's really important. And it's just going to return the URL. So that's my plan. And there's a lot of image management software out there. Actually, there's a ton of image management software out there. But there's nothing that's just really easy. Like when you're working on a small SaaS app, in my opinion, you just want to move forward as quickly as possible and you want to make progress and the stuff out there isn't bad... but I just want to make it dead simple, especially for like newer developers or developers who don't want to deal with a lot of image management or they don't want to figure out how to use AWS. When you're a newer developer, you're just learning how to develop, you don't want to then have to go spend hours and hours figuring out AWS, in my opinion. So it's just gonna make the process simple. It's gonna be a five minute install. You just drop the snippet in, you put the button on, and it will provide your users their drop zone and all you have to do is save the URL of the image. So now you automatically have your image hosted on the cloud. So you don't have to worry about that. Like I said, I have not yet, but my goal is to put in front of the CDN so you don't have to worry about that. And then you can use the image, you know, like you would any cloud image.MICHELE HANSEN: So have you talked to other developers who have talked about their frustrations with other image management platforms?COLLEEN SCHNETTLER: No.MICHELE HANSEN: Colleen! COLLEEN SCHNETTLER: So here's the thing I know. So here's okay. I know but like, I have come every client I have, I have this freakin problem and it really irks me that there's not a better solution. MICHELE HANSEN: That's worth something.COLLEEN SCHNETTLER: That's worth something! And so when I do talk, okay, that's not fair when I first started to talk to people, and there is -- I did talk to other people.MICHELE HANSEN: Before the pandemic, we talked to other people, right? In general...COLLEEN SCHNETTLER: Yes, before when I could TALK to people. So I have talked to people about this. And a lot of them use big. So so the people I know like they use big powerful solutions like enterprise-level solutions because they work for enterprise-level clientele, right. So a lot of my friends work for big, you know, fancy companies. And so they have these big enterprise solutions. And so I have looked at those solutions. And they're not bad, but they're a pain to set up. It's way more like there's one that's really popular in the Rails community. And it's fine, but like, it's just way more overhead when you just want your user to be able to add a couple images, right? Like it's a huge overhead to import this third party library and configure it, it's a whole thing. You got to figure out how to use it. It's a whole thing. Like, it's just too hard for what you're trying to do. So I am trying to take this thing that almost every application needs, your user usually has some kind of avatar most applicant. Most applications use some kind of images. So I'm just trying to take this thing that everyone needs and make it really, really easy. Like, just simplify the heck out of it.MICHELE HANSEN: It sounds like this is something that you experience frequently and is pretty annoying for you, which is a great place to be for a potential product is something that a user experiences frequently. And is something painful, you know, if you had if you had an idea, and it's something that isn't very painful for people and doesn't happen very often, that's usually kind of a red flag. But if you can find something that's pretty frequent and pretty painful, that can be promising.COLLEEN SCHNETTLER: Yeah, so the first iteration of this I built was just for public images. So it was like for your static assets. And I built that because like images are just a pain point for me because they're just annoying, right? Users -- they take these like they have these huge files, your designers give you these huge files. And you have to, you know, compress them and resize them and all this stuff. But the first thing I kind of built, which is this, the building blocks to what I'm working on now, was just public image hosting amongst teams. And that was cool. And I like that. But like, no one was really interested in that because no one cares so much about web performance. Very few people care so much about web performance was my experience that they're actually going to, you know, resize all of their images that are just their static everyday images, or they're just going to throw them behind a CDN anyway, so they don't care. But this problem, I think the thing about this problem is, it's a common problem. And there's many, many, many different ways to solve it. And I have seen as a consultant, I work for a lot of different companies over the past years, and I have seen all these different kinds of ways to solve it. And there's just no, but it just doesn't feel like there's an easy, consistent way like you'll have one app that uses this gem then one app and you and then one app that does it this way. And I feel like we're taking this problem that doesn't have to be so hard and making it harder than it needs to be.MICHELE HANSEN: And you know, as I hear you talk, what I what I think about is you were mentioning earlier how you consume a lot of startup literature and talks and advice on starting a business. And something that always comes across in those kinds of venues is how, you know, you should be passionate about it, you should be passionate about the business and you should be passionate about about what you're solving and whatnot. And, you know, I don't think there are any, you know, eight year old kids out there saying, "Mom and Dad when I grew up, I'm gonna solve image management software." But what does drive someone is experiencing a problem so often, that you are passionate about solving that feeling of pain, and I think this is something that really gets lost in that, you know, startup literature, hustle porn, whatever you want to call it -- is that the pain of something, and really the empathy you feel for yourself and for other people who are experiencing that same problem. It doesn't have to be the specific problem itself. But the idea of taking away some amount of pain, whether that's for you or for other people, that is a huge motivator. And I think that's one of the great things about dog fooding is that you're solving a problem for yourself, so you are motivated to fix it. And like worst case scenario, if nobody else uses it, you have solved a problem for yourself. And you have eliminated a frustration in your life and you just have more brainpower that you can focus on things that you would rather think about rather than this super annoying problem that you're facing all the time.COLLEEN SCHNETTLER: Right. And I feel like this idea like, I think I said, I mentioned that I got, you know, I kind of was stuck in this Ferris Wheel of ideas without really getting anywhere. So the other thing that's nice about this idea is it's a it's a small thing. I don't see this becoming like a business like, you know, that grows into like a big thingMICHELE HANSEN: It doesn't have to be!COLLEEN SCHNETTLER: Who says, right? I mean, I mean, I'm at the point. Well, I guess no one gets, like, you know, and I'm at the point where I just wanted to put something out there because I feel like I've been, I've just been spinning my wheels for a while now. And I just need to kind of get back in the game. And yeah, you're right, this is a frequent problem I have I all I would like to just have a consistent way to solve it. So next time I come up with something, because I get a lot of these applications that are halfway done or almost done or need to be fixed in what I do. I'd like to just be able to like, Alright, I don't know what this architecture is, but I'm putting this little little widget in here and it's gonna solve all our problems. And I don't have to do the one of us dance again.MICHELE HANSEN: One less problem you have to deal with in that specific area..COLLEEN SCHNETTLER: And I really think to like, the beauty of, of a marketplace for rails developers like Heroku is, it helps people that are new to coding get get up to speed quickly. And I feel like image storage in the cloud can be a really challenging issue for people who are new to coding, because they just learned how to write a Rails app and deploy it. And now they have to figure out you know, cloud storage and how to manage that and how to resize their images and, and how to put them in front of a CDN, and it's just a lot. So I really do feel like this is a real problem. I don't know that it's a real problem that people will pay for. But it feels like a real problem to me. So my challenge now is twofold. Like, I'm gonna do it. I'm like, 90% done. And you remember what they say about like the last 10% takes 90% of the time or whatever. So, of course, I you know, I've just onboarded a new client that I'm really excited about, and they just announced that the kids aren't going back to school. So I have a lot on my plate right now. And so really my goal is to to prioritize this because this is really where I want to be like. When I look at my life, this is...MICELE HANSEN: This is giving you satisfaction!COLLEEN SCHNETTLER: This what I want to do! YES, so much satisfaction!MICHELE HANSEN: Hope! Hope that you will solve this problem -- which is lacking in a lot of other elements right now. COLEEEN SCHNETTLER: YES! I have hope! l I have hope. And so, my goal this week is my goal this week is really to prioritize getting this done. I'm so close. But of course, like everyone, like, I always want to add one more feature....MICHELE HANSEN: Don't do it! Just get it out there. Bare minimum. You know, the, as you said, like stuff like, you know, creating an account or creating an API key or all of the stuff that actually lets you launch something like that will probably take more time than you realize and we'll have more complications than you realize, but at that point, as you said, you're so close to being over the finish line that you can just bang it out.COLLEEN SCHNETTLER: Yeah, and that's my goal. Like I really like it. Well, I do need to, I want to finish it right now my goal is just to finish it, right. And I know that again, and then I don't know if anyone's gonna buy it. But I'm so close to getting it done. I just really want to get something out there. So, like my goal for this upcoming week, and like, my priority is going to be to try and give myself the time. It's so hard as you know, a human that has children and a spouse and all these all these demands on your time. It's so hard to like, prioritize that time. And so my goal is to find a way to prioritize this time the next week because I'm so close to finishing it and I just want to get it done. So that's what's going on in my life. Let's talk about about what's going on with Geocodio. MICHELE HANSEN: Yeah, so something I have been thinking a lot about this week is pricing.COLLEEN SCHNETTLER: Ooo, pricing?MICHELE HANSEN: Pricing is the hardest part of having a business like can, time and time again. It's the thing that we're banging our heads against the wall to figure out. And I think it's underappreciated as a difficult element. But it's every time you launch a product or doing something new, or get a unique request from a customer. Pricing is always the thing we spend the most time on.COLLEEN SCHNETTLER: So what is so hard about pricing? Like, that's a serious question. I don't know. Can't you just be like...?MICHELE HANSEN: So there's a lot of stuff that's tough about pricing. I mean, the the big thing is that, right, like from a very basic level, you want to not only cover your costs, but you want to make some money on top of that, right? So you have your costs and then you know off the bat, whatever the price is, you're going to lose, I always just ballpark 40% to taxes and other various expenses like that. So then just figuring out where your breakeven is alone, like, that's just the first step of it. But the hard thing about pricing is you need to price it for the value the customer is getting. And that may not always be clear to you. And the value that a customer gets from it may not be entirely apparent, it may be difficult to parse out. But also, you need to figure out how the customer perceives the problem, and what they understand like what they express as the problem and how they would want to solve that. And that has to be expressed through the pricing. So like a really basic example of this, for example, is Slack where they charge you per user if you're on a paid plan, which makes it easy to figure out, Okay, we have 20 people in our organization. And it's, I think it's like $5 a month or something like that, we'll just say that. And so we're going to be charged $100 a month, I have 20 people, I can very easily calculate what it's going to cost me to use this, right? This is a metric that I understand and I can see the value of having all of these 20 people be able to talk to one another on this platform -- ostensibly, even though Slack is, you know, a huge problem for my own productivity. COLLEEN SCHNETTLER: Yeah, so um, and me too.MICHELE HANSEN: So you know, so I was struggling with pricing a lot this past week, because a customer came to us with a, a problem that's adjacent to what we do, and it's something we actually have an internal tool for, but we've never productized but we've considered it and they asked us to productize it because they were really frustrated with their existing options and due to some limitations and the pricing of their current vendors for it, they weren't able to use those tools with as many customers as they wanted to. And they wanted to really expand that and they were like, you know, we really love your terms of service and your pricing and how you guys do things. Like is there any way that you guys can help us with this? So, you know, we're kind of looking at it and and as we... One of the first steps looking at pricing is always like looking at competitors. So how are the competitors pricing. What kind of structure are they using? You know, very often you see the kind of starter/professional/enterprise like tiered pricing, right? That's, that's pretty common. And so I just find it helpful just you know how how to competitors. frame the pricing, because that helps you see how they understand the customers problem and the kinds of features that they are launching for specific customer problems. So for example, with Slack, you only get compliance reporting at their highest paid plan because the people who need compliance reporting are able to pay for it. Those are banks, those are, you know, regulated organizations that have to report on it. Right. So it's only at the very highest tier, they're capturing that value there for that feature. But something else I was looking at was, you know, how, how do they perceive the customer's perception of the problem?COLLEEN SCHNETTLER: How do your competitors perceive the customer's perception? MICHELE HANSEN: Yes. How do they understand the customer's frame of reference, like I have just heard myself on the phone from the customer, how they understand the problem? How is this being then expressed by the competitors and what I noticed which is really strange, actually, was that all the companies out there for this specific service, were pricing it basically based on their costs. So all of the pricing was based on their own bandwidth costs and then effectively a markup on top of that. And so this is for for map tiling, which is you need in order to load a map on a website, whether you get it from, from Google or from from somebody else. And most companies charge based on the number of interactions that a particular user has with the map. And so that's basically the number of tiles that have to be sent from the CDN. Since our CDNs episode, I guess. From the CDN to load, load the all those little squares on the map, which is why when you're like zooming in really far in a map, sometimes you like see, like squares loadings, it's literally squares of the map loading. Right? And so how they charge for it is the number of tiles that load and so how much the person interacts with it. The problem with that: do you know how many map tiles you required to load last time you were looking for a dentist or trying to locate the nearest grocery store, right? So somebody can go, you know, they do their analytics, they can see how many users they have. But they don't know whether one person is going to be 15 map tile loads, or 50 map tile loads, right? But the way these things are charged is based on the map tile loads. And I was trying to ask our customer, you know, are you even able to tell me like, like, how many users you have, or, or you know, what you're currently paying for anything, and they weren't even able to, like translate those numbers very well, because these companies made it so hard for them to figure out even what they're being charged and why.COLLEEN SCHNETTLER: Ah, much like AWS!MICHELE HANSEN: So the hard thing about that was like, wow, we know the customer is frustrated by the fact that they can't even predict right? It's not like that. We have 20 people and that's gonna be $5 a month and those are terms that I understand. This is like we have 10,000 users, and if they have 10 maps, higher loads, or they have 50, map tile loads, and we actually have no idea, companies don't like when their pricing is unpredictable. They really like stability. And so it was taking that and figuring, okay, we know the customer likes away for stable pricing. So technically, how can we figure out what a stable, consistent monthly price is? But then how can we figure out a way to price this that is, in terms of the user understands, that is not charging them for this metric that they don't use in any other scenario, that we're basically marking up bandwidth costs on top of it. How do we how do we frame it as something that they understand? And so that's something we're thinking about a lot this week and, but just keeps reminding you that pricing is so so hard, and it's so easy to get to get wrong. It's also easy to change it and test it...COLLEEN SCHNETTLER: So what do you guys do now for pricing?MICHELE HANSEN: We have a couple of different pricing options. So this product I'm talking about here, we haven't launched it yet. And we're...COLLEEN SCHNETTLER: oh yeah, this would be for a new productMICHELE HANSEN: For Geocodio, in general, we have, we have a freemium model, which actually people describe, it's not a pricing model it's a marketing model, which is totally true. So we have a free tier, which is actually something we basically inherited from Google, when we launched, they had 2,500 free lookups per day, free address lookups. And so we're like, if that's the industry standard, we have to do that. So we did that. But then what really frustrated us was that you couldn't just pay for whatever you needed on top of that. It was either 2500 free per day, or like 100,000 a day for a like $10,000 a year enterprise contract. And we're like, that's not us. Like we just need 5,000 addresses per day. And actually, so pricing was something that that encouraged us to start Geocodio. And so we have, we have the free tier and then we have pay-as-you-go on top of that for people who have lower volume usage, then we have an unlimited tier, which is for people who have much higher usage, usually about 5 million per day. And then we have all sorts of customizations on top of that. So we have people that we're running custom clusters for, because they need to process 20 million a day. We have on-premise customers -- like we kind of have a, a wide mix. And then we also have our Geocodio Maps product, which is monthly subscription only, but we're probably going to change that in the future and merge it in with the main product. And then we're gonna have this map tiling product and that that's also maps and so what are the names of things -- naming and pricing? Honestly, like, we like the pricing we we, we suck at naming. I think everybody thinks they suck at naming.COLLEEN SCHNETTLER: Yeah, naming and pricing. There are hard.MICHELE HANSEN: Sometimes harder than anything technical, quite frankly.COLLEEN SCHNETTLER: So have you come to anything -- Are you still like working it out? Have you come up with an idea? MICHELE HANSEN: For the most part? Yeah, I mean, we sent the customer proposal, we spent the whole weekend talking about it, which our daughter loved. And...COLLEEN SCHNETTLER: she's gonna be so business savvy now ---MICHELE HANSEN: or she's gonna rebel and be like a communist artist who doesn't believe that business should exist. Because, you know. Yeah, so, we send them a proposal. Actually, I need to get back to them. It's, you know, you were talking on the last episode, or no, was it this one about how you feel like you're 90% of the way there and it's just like some polishing touches, like, have you figured out the pricing for your product yet? COLLEEN SCHNETTLER: Oh, gosh, no. But mine will be like, like, I haven't even thought about that. But mine will be Cloud Storage. So I mean, I was just gonna go with mark up whatever cloud storage cost you are using.MICHELE HANSEN: I mean, and that works. I would almost consider you to be like, Is there a -- We can charge for like the number of images someone has, even though you're going to be paying by the storage size, yeah. Which is, you know, measured in gigabytes, right, right. Like if you can somehow charge for a metric that the customer understands, like 10 images. Yeah, they understand that they may not understand how their images translate into size into Yeah, into bytes. They may not get that.COLLEEN SCHNETTLER: No, you're totally right. And I hadn't given it any thought. But now that you say that, it makes way more sense to be like, you have this many users, each user gets to upload five images, that's your fee based on you know, the number of images because the customer understands thatMICHELE HANSEN: and if they need more, like, always be like, yeah, email us.COLLEEN SCHNETTLER: That's a great idea.MICHELE HANSEN: And then you'll you'll probably have some customers who, you know, if you like mentally decide, okay, I'm going to, you know, I have this many, you know, gigs on my plan. So this is how many each customer gets, you will have some customers who will go over that, but you'll probably have some who are below it. And as long as it all averages out, and you've calibrated that, then it'll be okay. And you can just have tier and be like, then, you know, here's the tier where you are.COLLEEN SCHNETTLER: That's a great idea. Because you're right, like, like pricing something in a way they understand is that makes so much more sense.MICHELE HANSEN: And make it easy for them to explain it to their boss to write, like, I always try to picture it, like how would my customer go to their boss and explain, you should pay for this service, we've determined this is necessary, you know, it's better than what we're using right now or the other competition. And you know, we've got this many page views per month or this many users or this many, like transactions we're processing or whatever that metric is that your customer is using internally, that they would talk about with their boss to sell their boss on buying your software. Try to figure out what that term is. Talk to your customer. And try to find a way to price it in a way that matches the language that they're using. And but not only the language, the mental model they're using of why they need to use the service in the first place.COLLEEN SCHNETTLER: Yeah, that makes great sense.MICHELE HANSEN: And it's hard. Like I will not undersell it, that it is difficult to crawl inside other people's heads and other people's you know, sort of organizations and try to figure out how they think about things. That's very difficult. But if you can get it right, it's it's very powerful and and you don't have to get it right the first time you know, you can keep iterating it you know, companies change their product, their pricing models all the time. You know, Amy Hoy has some some great content on that. It's possible but it deserves a lot of time.COLLEEN SCHNETTLER: So for your, your new product, I don't know if you can, you can share, but did you decide to charge based -- did you find a metric? That set you apart?MICHELE HANSEN: I think what we're gonna do is, we are going to we are going to charge by bandwidth. But it seems like pretty much all of the companies out there right now are only charging as paid as you go even on like enterprise tiers. So you might end up paying Google like $6,000 a month. Yeah, but on a pay as you go model, so it's going to be variable. So we're gonna do it tiered and we're going to start out with just one tier. And then we've set it you know, we've set a price for if you need more, here's a, here's an additional cost, and we'll just kind of see how that goes. And, and we're, we want it to be clear with the customer: it's like we may change this in the future, but we'll make sure that whatever we change it to you're not going to pay more. Like if those tiers end up making it so that the the amount you're getting right now is more expensive, you know, we'll keep you at the current cost, okay, which is always a good thing to do always, always let people keep legacy pricing.COLLEEN SCHNETTLER: Well, thank you for sharing that. That was really illuminating pricing. Very hard.MICHELE HANSEN: And by the way, I want to mention that Stripe has a good guide to pricing as well. And Patrick McKenzie wrote it in the in the Stripe Atlas guides and that's something that I consult often on, like thinking about pricing, and he kind of dissects a couple of, of different pricing scenarios for some companies so you can see real life examples of pricing critiques. Well that covers this week's software social podcast. We hope you enjoyed sitting at our table at the virtual coffee shop this week, and we hope you'll join us next week.
Hey, why don't you join us?
MICHELE HANSEN: Welcome to the Software Social podcast, where we invite you to join our weekly conversation about what's going on in our businesses. I'm Michele Hansen, COLLEEN SCHNETTLER: and I'm Colleen Schnettler. MICHELE HANSEN: And this week we're giving you an intro to what this podcast is about and who we are and why we're doing this and why we're hoping you'll join us. COLLEEN SCHNETTLER: So Michele can you start by telling us a little about your software business? MICHELE HANSEN: Yes, so I am a co-founder of Geocodio (https://www.geocod.io/) which is a software as a service company. We do geocoding for US and Canada as well as data matching, and my husband and I started it about six and a half years ago now as a side project and we have run it full-time for the past three years. COLLEEN SCHNETTLER: So you're basically living the dream, is what you're telling me?MICHELE HANSEN: Some people would say that, I bristle at that a little bit, there's definitely a lot more dream to be had. But yeah, people do say that to me, especially people who are looking to create their own software businesses. Which is kinda the boat you're in. COLLEEN SCHNETTLER: Much like myself! I am a Ruby on Rails developer, I've kind of had a varied career. Always in tech. I started as an electrical engineer, stayed home with my kids for a few years, and then I started learning Rails and I built up a really successful consultancy. And that has been amazing, and a really wonderful journey for me, but I have always wanted to start a product business. There is just this dream of having a product business that you are in charge of your own life and your own business, you get to make your own decisions. That's something I've always wanted. And man, it's hard! MICHELE HANSEN: It is hard!COLLEEN SCHNETTLER: Right? You know, I read a lot of startup content. I have read a lot of books and I follow a lot of successful startup founders and there's so many stories out there that make it seem like -- I mean you don't hear about it until they're successful, so it makes it seem like it's easy, and I'm at the very beginning of this journey, and you know, I'm just getting started! So part of my impetus for doing this podcast with you is obviously to learn a lot about what you can teach people who are in the early stages of their business, and also to stay inspired and to share with people what it's really like to start a business.MICHELE HANSEN: I don't think you give yourself enough credit, Colleen, in saying that you're just at the very beginning. You have been working intently on this for over a year now -- I remember it was last summer when you came to me and you were so excited about an idea and this passion you had that was leading you to toward that idea, and you started doing user research on it, and having something that you're passionate about, and doing the work to see if there's legs to it, and then realizing that there aren't -- that is work. That is valuable productive work.COLLEEN SCHNETTLER: I hope so! Because it was quite a lot of work. And so just a brief overview, I had an idea to do something with the childcare industry. And I had a founder, someone I was going to work with, and she and I interviewed quite a few people who would have been in our target market. So we kind of took the steps you learn about with idea generation and honestly the truth is -- we put in a lot of time and effort and found out it really was not a profitable business idea. So it's hard to get really excited about something and climb that mountain and then realize -- up! no one wants to buy it. MICHELE HANSEN: RightCOLLEEN SCHNETTLER: You know? At least we found that out before we started writing code.MICHELE HANSEN: RightCOLLEEN SCHNETTLER: Didn't you guys have some side projects before Geocodio?MICHELE HANSEN: Oh, many. And we had many projects in between that, too, that we've launched in the interim. And it's -- there's no lying that it's hard to find something that sticks, and as you said, no one cares about something until you're a success -- which is a really really lonely place to be for a very long time. You know, our first month we launched Geocodio, we made $31. We thought we were a ridiculous success because we were shocked that anybody wanted to pay us. We thought our product was pretty terrible. And we were we were truly -- we were so shocked that we hadn't even written the code that would tell Stripe to bill people. That was how surprised we were that anyone wanted to pay us. And we worked on it as a side project for a very long time. And it wasn't until just before I went full time, that people started kind of noticing what we were doing and asking us to talk at conferences or, or being a podcast. There's that was a very long time. Where Yeah, exactly like you were saying, you don't hear a lot of those stories. You only hear the stories when people are successful. And I think what we're hoping to capture here is some of that granularity that goes in week by week when you're launching something. And then also the kinds of things you face on a daily basis when you have launched something and it's gotten to the point where you can work full time on it, what what are the kinds of things that you might be facing at that point, and and how do we tackle them COLLEEN SCHNETTLER: So you guys had the business for a few years before you went full time, right? MICHELE HANSEN: Yeah. Yeah, three, it was like three and a half years until I went full time. And then my husband went part time, six months later. And then full time, six months after that, like, honestly, we were terrified of paying for health insurance on our own. And that was a big thing that kept us from going full time. We probably could have gone full time a lot sooner. But given the experience I had just a couple months ago trying to buy health insurance, I'm glad I put that off. But it's possible -- not to scare anyone. But there's a very real fears that come into it. Even when you do have something that works and you have customers and your revenue is increasing. You're going to have a whole new set of anxieties to face so -- congratulations! Yeah, no. Everything is solvable. COLLEEN SCHNETTLER: I think when you're where I am in this process it seems like so far away right like like it seems like "Man, if I could just make a product that people want to buy my life will be rainbows and sunshine and easy every day!" MICHELE HANSEN: I can see that and also you know our everyday is we've got something that's that's launched that, you know, has recurring revenue and you know supports us and everything and every day there's still people who are upset with us. Every day we discover things with our product that we're like, "Oh my, that is so obviously bad. Like we need to fix that. Like how is that been like that for so long? This is embarrassing." Like that, that happens to happened... today. It happened yesterday. And the same time you know some of the things you were talking about earlier that the dream so many people have for having a product business. Being able to be your own boss, getting to make decisions, getting to have that level of autonomy and authority and direction over your own work. That doesn't go away. And that definitely keeps me going. And really, what makes it worth it when not everything is rarely otherwise. COLLEEN SCHNETTLER: Yeah, I imagine you're a parent as well as am I? And I imagine it goes both ways, right? Like I imagine the flexibility you have with running your own business is amazing to help you parent. But on the other hand, can you ever take a vacation? MICHELE HANSEN: Yes and no. You know, I mean, like, we started this as a side project, right? And, you know, we both had, right, you know, full time, like tech jobs, but in the early years of the business, like I remember the first time that we like took a vacation with money we had earned from the business, which was I think about two years, two and a half years in. And I remember we were driving on these beautiful roads on Cape Breton Island in Nova Scotia. And it's just like these rolling hills and it's just, it was so gorgeous. And I was replying to someone on Intercom at the same time. Because, you know, an issue had come up. And that's just been the case the whole time. And my perspective on that has always been, we're only able to have the life we do because of the business. And so yes, like, very often one of us is dealing with something for work at the dinner table, or when we're on vacation, or when when when we have life going on or especially with the pandemic and being at home with other things going on all at the same time. And that has pros and cons. At the same time, you know, working in a corporate job I think all of us can speak to there's always some issue that's blowing up on Slack off hours that you have to deal with. And so it's not really that different. The only difference is that when you are responding to that customer, or, you know, once we took a call with a potential large customer while on a road trip through Belgium, was that we, we got all of the money from that, right? Like, it wasn't that like we would have to prove to our boss at the end of the year like, look at all this time I did when all this work I did when I was on vacation, all this time I put in on the weekends and at night, like so hey, like, you know, give me a 2% raise, right? Like, you don't have to do that. Like if you land that contract and you sacrifice a part of your vacation. You got the money. It's very clear cut. And so that makes it worth it for me. I feel like my daughter might have a different perspective and sometimes she's like you guys need to Stop talking about Geocodio at dinner, let's talk about something else, something else is not boring. So. So you know, I always joke that if you know, maybe our business talk will either make her adept at business herself or she can totally rebel and not want anything to do with it. I mean, you've got clients. I mean, that's not like, you don't ever get to fully log off either, right? COLLEEN SCHNETTLER: No, I really don't. So as you know, in my consultancy, I am a single point of failure. Like I have one really large contract really big client that I share with another developer, which is nice. But yeah, it you know, if something goes down, or you know, they, they want something I'm usually relatively accessible. It does make it hard to I mean, you know, it's interesting, it does make it hard to really take a vacation. And it's interesting because I have never been a good office employee. I don't like Working for other people. I don't like sitting in meetings. I don't like other people to tell me how to do my work or when to do my work. So consulting has really been great for me. But there is this this joke that like you spend all your time trying to go from employee to consultant and then as soon as you're a consultant, you're ready to jump to something else. Sometimes it feels like you have multiple bosses, right? Because you have like several different clients, they all have different needs are all contacting you. So it has given me immense flexibility with which, you know, I couldn't work an office job right now with a pandemic. And now apparently, we're homeschooling the children because they're not going back to school. So I have to have this flexibility. But, you know, it does feel like I'm always it does feel like I always have to be plugged in, like I always kind of have to be on top of it. And if I am a single point of failure, so if I can't figure it out, or I can't get it done, like it doesn't get done. So sometimes that does pressurize the situation. But I imagine much like having a product business. I still like consulting more than I liked a traditional office role. MICHELE HANSEN: Oh, absolutely. And so I guess you know, in, in closing with this podcast, what we're hoping to do is bring you in to our conversations, conversations like this, that Colleen and I are having regularly anyway. And considering the different stages that we are at, and how that plays off in one another. Maybe you'll find this helpful. Maybe you're looking to start your own business. Maybe you're looking to branch out into other things. Whatever that might be, we want to invite you to sit at the table with us. We take the name of the podcast from a great little coffee shop in Arlington, Virginia called Northside Social where we used to meet up before the pandemic and, and so we're inviting you to Sit at our table and and listen in and hopefully share your own thoughts with us on on all of this.