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Two founders talk about how to build software businesses that are meant to last. Each episode includes a deep dive into a different topic related to starting, growing, and sustaining a healthy business.
00:00.70
tylerking
Was going on Rick is recording here I'm keeping this I'm keeping this.
00:04.91
Rick
Oh you did you? we are recording ah come on ah Tyler. Ah I'm on vacation. So I'm in a giddy mood and I'm annoying my little son who's two and a half years old and he thinks I'm being annoying because I'm excited. Like who are you Um, no I just this is my first day off. Ah but i.
00:22.12
tylerking
Um, have you been off all week you you've had literally. Oh no, it's 8 a m where you are. You've had zero business hours of vacation and you're already refreshed that's incredible.
00:35.60
Rick
Ah, it's it's incredible and what I'm doing a better job of is making sure I get my stuff done the day before vacation so that I can be fully president. That's like 1 of my goals this year which we should recap at some maybe in the next episode we should revisit our goals.
00:42.40
tylerking
Move.
00:48.23
tylerking
Yeah I was thinking about that too. All right? Let's do I'll put that on a list.
00:52.91
Rick
Anyway, that's yeah, anyway, that's that's all I got going on I got vacation and so I'm happy we're going down to st george Utah which is a little town on the border I think of Nevada maybe um, but ah, it's where my nephew goes to school at Utah tech.
01:06.88
tylerking
Ah.
01:11.11
Rick
And so the whole family rented a house down there to kind of give go visit him and let him show us around and um, you know, hang out I assume we'll do something like that. But it's it's not exactly the most fun thing to do with ah an eighth month old
01:18.60
tylerking
Nice you going to zion while you're down there National park. Yeah.
01:30.18
tylerking
Fair makes sense. Um, cool. Well I'm not on vacation but I will be next week I'm going to Japan for eleven days so I guess we're both getting some leisure in here.
01:38.97
Rick
Yeah, some karaoke right.
01:44.44
tylerking
No karaoke. But ah, the goal is to gain you know 10 to £15 so going to eat everything possible.
01:51.60
Rick
We have the exact opposite goals on vacation. My goal is to reset my workout routine so that I'm actually like ah a decent human being again.
01:59.55
tylerking
No yeah, we this is um, the second time now. But the first time for like a trip that's just me and Shelley where we hired a travel agent have you have you done this before they absolutely do first of all and a lot of them use my software.
02:08.63
Rick
No a travel agent. They don't exist anymore.
02:16.50
tylerking
Ah, but secondly so this is incredible I I thought a travel agent was just like they helped you buy plane tickets and it's like I can buy my plane ticket. You know that type of thing they do so much I maybe I don't know Maybe it's just good ones or whatever but like where with the the total trip is like.
02:17.92
Rick
Ah.
02:34.62
tylerking
It's a more expensive trip relative to other ones I've taken but not like way more It's like in in the same range when we land at the airport like someone will be waiting there to take us to the hotel we have like half of our meals already planned and paid for and the ones that aren't planned are because we didn't want to overbook. Um, we have private tour guides for tons of stuff. We have light. They're like oh we're going to take you to a tea ceremony and then we're going to go to aake brewery and then we're going to do an is a kaa tour and like the amount of planning and like giving us access to stuff we could have never found on our own pretty incredible. Yeah.
03:07.34
Rick
That's awesome hold on my coffee delivery is coming one moment. Thank you, Let him know how much I had to do that because because I bought this through coffee machine. Um, it's ah it's called a Tk zero two. Ah by.
03:11.91
tylerking
Ah, this is this is the most amateur podcast we've ever done. Ah.
03:24.44
Rick
Tara cafe shout out. Um, but they it I ordered it two years ago on Preorder and it finally came ah it makes strip coffee um by the cup. Yeah.
03:25.39
tylerking
Shout out Terra Cafe. What's so fancy about this coffee machine just stop I Hope you that's it. It makes strip coffee to your waiting period.
03:42.20
Rick
But no, it's like it's like ah it's like a kind of a fancy machine that you press a button. It's got smart features and it grinds the bean and makes the perfect cup of coffee I was getting I was on espresso. Do you know what? espresso is an espresso is like those pods that you put in. Yeah you know.
03:55.25
tylerking
It's like a really strong 1 or something oh Nespresso I thought you said espresso I don't drink coffee at all. So I'm like ignorant about the whole thing. But.
04:01.15
Rick
Yeah, so anyway I I was going through like a lot of those pods and I felt guilty about it for the environment looks like it kills turtles or something and I yep so I ordered this two years ago and it just came.
04:06.50
tylerking
Yeah, think of the turtles.
04:15.48
Rick
And it takes 5 minutes to brew one cup of coffee but it is a really good cup of coffee. So I I started the coffee 2 minutes for the podcast ah was starting um and it was not done so I asked able to bring it to me and I had to give her a little bit of of trash talking because I'm on vacation.
04:19.71
tylerking
Nice, um.
04:29.76
tylerking
Um, all right cool. Well enjoy your coffee. You're on vacation Rick you like seem like a whole different person right? now you have so much energy and this is your first day I don't get what's going on here but I like it.
04:42.40
Rick
What's up what's up with you.
04:44.32
tylerking
Um, yeah, not much just kind of business as usual trying to get stuff ah wrapped up i. My main topic is kind of the same as last week which is this like talk to sales thing which for anyone who isn't caught up basically trying to capture leads when they hit our website and like if our if Alex our sales guys free just being like or if you well. That's the new thing. The old thing was try to get them to book a time with Alex the new thing I've been working on is I'm building um a tool for him to it's kind of like what we talked about last week but a little different. It's um, when someone clicks the button to book a time with him in that moment we're trying to know if he's free or not. And if he's free. It's just going to take him right to a call with him and if he's not free. It'll take him to a scheduling link so that we can get people like right at the moment that they're engaged hopefully um so that's what I've been working on this week
05:32.35
Rick
Um, that's awesome. Any any like wins from the last episode.
05:37.84
tylerking
Um, it's so okay, the update there is because we there's two weeks between episodes last week the volume of people who booked calls went way down I think there were only like two or no, there were like 4 for the whole week whereas there were I think 17 the week before it.
05:53.90
Rick
And there was no change.
05:55.44
tylerking
Um, no so I was a little worried at first I was thinking. Maybe there's like pent up demand where you know sometimes when you're buying something like go to the website over and over and over so I was wondering worried that maybe like four per week is the steady state but we kind of got a surge when we first added this, we're back to I think we've had 10 or 12 this week. So. We're still trying to figure out what the steady state is I don't know what what it will end up being.
06:17.10
Rick
Um, and and are these calls turning into any like signed deals yet or is there more is it a longer sales cycle than you anticipated.
06:25.10
tylerking
Um, it's not a long sales cycle in the sense. It doesn't take more work from us. But because we have a thirty day free trial for everybody. It's not like let's sign the docu sign right now like that's just not what the process is. It seems very likely that ah.
06:43.90
tylerking
I'm almost 100% positive this is bringing in new customers and more new customers than what Alex was previously spending his time on like I I don't have like hard data to back it up at the qualitative evidence is pretty overwhelming. Yeah, um, it's also kind of exciting for me because in the past you've kind of pushed me to.
06:55.20
Rick
It's awesome.
07:02.44
tylerking
Think more about growth and I've kind of been like no I want to work on products and I think the reality is like in a perfect world I can work on producty stuff that helps with growth. Um, but I didn't have ideas on how to do that and now I do like this is a thing I'm not saying I'm going to work on this for the rest of my life but like. There's all kinds of little things I can do to say oh when someone's in a a live demo push them to a call with Alex when they click this button to talk to Alex do we route them to callendly or do we route them to or savvy calagas or do we route them to demo desk which is what we used to do the calls There's a lot of little area here for me to build good user experience for the. The customers while funneling people to Alex and kind of achieving both goals I think.
07:45.99
Rick
Yeah I I go back to our days at same benefits and then also what you're doing at leg up Health and it's like you you just have to shift your mindset a little bit like the constraint becomes improved user and like at least not a degradation of user experience. Ah for the end user but the. Customer that you're serving as an internal user. Um and and and trying to help them hit their individual goals and I think you can build some really cool software that way, especially if if you're if you're doing both both and improving the user interface which is probably your your you know, kind of constrained on this um and helping.
08:05.69
tylerking
Yeah.
08:18.75
Rick
Ah, the the person do their job better. That's pretty exciting.
08:21.93
tylerking
Yeah I love it. I think you and I often land on different sides of the like build versus buy question. Um, when we work together I think you correctly for that company. You were 100% right? like we should just been buying off the shelf like rather than me building an email marketing tool or a crm or whatever. Um, but I do think if you want a a there's 2 things you don't get if you just outsource this by saying like oh like I looked around I I thought do I have to build this or can I is there a tool out there that does what we're looking for and there's a million like. Intercom style chat things where you can say oh this person's in a demo pop a chat widget up, but there's none of it was as good as what I want which is like I want to be able to really control the u I of what pops up and I don't want to chat with them chat suckcks everyone hates chat I think early star customers. Do I want to like have this demodesk savvy. Demo Duck Sevi Cal experience and I want to give Alex a dashboard that they don't quite have so I have been struggling a little bit with should I buy the thing that's close or should I build the thing that I really want sure. Yeah.
09:24.94
Rick
Do you want my opinion on this, you should absolutely be building this and repackaging it for your customers Once you figure it out. This is very much in your lane as what you do as a company and it'd be like ah like leg up.
09:32.30
tylerking
Ah.
09:38.34
Rick
Outsourcing Health insurance. Service would be the equivalent and you would tell you would never let me do that.
09:39.90
tylerking
Yeah, that's interest. Yeah, you're you're 100% right about that the repackaging it thing I think someone would buy this I don't know that our customers would buy this.
09:55.19
Rick
I'm not going to argue that point because you may or may not be right? The point is if you don't try to build this stuff and figure it out and you and use yourself as a guinea Pig you you don't you won't ever like make progress and so whether whether you package what you're building now or it leads to an innovation for your customers.
10:04.18
tylerking
Yeah, yeah.
10:11.87
Rick
Like in 5 years it doesn't matter the fact that you're going down this road and trying to build it and explore and experiment is very very positive. It's ah this is a very natural extension of a crm.
10:21.46
tylerking
Yeah that's fair I like that. Um, yeah I'll have to think more about that it it would certainly be exciting and also I don't want to like fall into shiny object syndrome like you can use this as an excuse to kind of do another moonshot when. My goal this year is to not do moonshots. It's to be like let's just execute on the course yearm. So I will put thought into that and also it's going to be too tempting and I'm going to have to hold back I think.
10:42.70
Rick
Yeah, well I'm going to step back for a second and just kind of call out what I'm seeing happen which is you're saying out loud I enjoy building stuff that makes a crm end user successful for less annoying crm I e Alex. And I just I'm curious like how much of like that type of question like making your end-users successful in their jobs drives your your engineering team. Um, like if you have you interviewed the users who are like hey what are you trying to do here like.
11:00.35
tylerking
Um.
11:15.37
Rick
I Know we know that you're using this to track deals and contacts and that sort of thing but like is there something that is getting in the way of you doing your job that we could have make easier like that could be another source of innovation here.
11:15.84
tylerking
Ah.
11:27.81
tylerking
Yeah, yeah, I think we do have a lot of that feedback coming in but um, not I don't know there's different ways to talk to users I don't think we're doing what like a Ux researcher like true research. But um. Do think we have a pretty good understanding of what our customers are trying to do and what functionality they need to do it is.
11:47.96
Rick
Yeah, this is the problem with the podcast like we we we are like basically Moonshots are what's interesting to talk about ah the the basic blocking and tackling that you need to focus on right now is is what you need to do. But I'm what I'm calling out I think is that like I think your your blocking and tackling right now is correctly focused.
11:53.10
tylerking
Um, yeah, yeah.
12:04.87
Rick
And if you do it enough time a moonshot like becomes obvious.
12:08.53
tylerking
Yeah I if nothing else so like maybe we can try desperately to pull something interesting to a listener out of this. Um I think ah a thing that every experienced entrepreneur knows is that ideas don't come from sitting around in your apartment thinking about ideas. Ideas come from doing stuff and seeing oh huh I need this thing and it doesn't exist or my customer needs this thing and I looked around and it doesn't exist and so you know the the really douchy term that Silicon Valley is is for this is like being in the arena kind of what I'm hearing from you is that like I'm more in the arena now because I'm working on new stuff and. Maybe it'll give me ideas or new opportunities. Maybe it won't but you just got to be out there. Yeah cool, um, cool. Yeah I appreciate the sport and ah it's it's fun I love I get to build one of the things I don't like about working on the product of lessening serum is it's.
12:50.29
Rick
You're in the right place yes, hundred percent exactly you nailed that.
13:03.61
tylerking
More mature now and like you have to get code reviews done and this stuff and it's all good. It's all for the best because you don't want to ship bugs to 26000 people, but this is an internal admin tool with one customer and it's Alex and I'm just writing the absolutely like. Dirtiest laziest code possible and that's that's what I like doing so it's a lot of fun for that reason too.
13:21.90
Rick
ah ah I'm glad you like to sling dirty code. Um I have ah a win to celebrate. Um, we so February context here is that leg up health we we we budget on a calendar.
13:27.60
tylerking
Ah, yeah, what's going on with you cool. Let's hear it.
13:38.95
Rick
We we run the business on a calendar year from a tax perspective but like our real fiscal year if we were going to be official like that would be February first through January thirty first to capture ah sort of what happens in that last month of like our kind of push season which is january. And so we're in our we're we're wrapping up effectively our first month on our new year um right now and so we set a goal of being profitable this year and and increasing revenue. Um I'm happy to report February was our first profit of month. Um, we had ah a $2000 profit almost um. And our revenue is on a one hundred and twelve k run rate so it's pretty exciting. You're going to get a beer paid for this this month.
14:17.63
tylerking
That's awesome. Nice. So so let me ask some questions partially so the audience can understand this better and partially because despite me being a partner of the business I don't know the answer to these questions. Ah so.
14:30.53
Rick
Um, the.
14:33.58
tylerking
1 point or yeah you say here 1.8 k almost two k profit that's like paying j d ah and enough for him to get by but not like what his long term Target Comp would be right.
14:45.82
Rick
Yeah, so he did Jd has a ah base kind of comp that is let's just call it digestible for him. Um, and and then he is incentivized to drive increased profit. Um, and so basically that 1.8K will get divvied up. Um, according to a number of sort of predetermined rules. The first thing will happen is on the roughly nine point six k top line will take I think it's is do we say 1% I can't remember the percentage but like we'll take 1 % of that and give it give it to partners. So Jd will get a little bit there. It's not going to be that meaningful. It's a couple hundred bucks
15:10.59
tylerking
Yeah I think so I think is one.
15:22.19
Rick
Ah, if that ah split you know three ways based on on the science that we have and and then and then you know there's profit from there based on the expenses we we set aside some money for taxes. We set aside some money for ah, increased budget you know discretionary spend like marketing and then Jd takes. The bulk of it until it gets to his full target salary. So um, this is good for Jd. It's good for the business. It's good for partners. Um, and you know it's a really good start to the year
15:49.16
tylerking
Yeah, awesome and then you said 112 k annual run rate the the the very simple numbers I have in my head is that like coming out of open enrollment. We were at a hundred k and the goal is to hit 200 k or more. Is this like we actually came out of open enrollment with 112 or is this like February's been good and we added another 12 k to the revenue.
16:14.72
Rick
Tbd. Um, one of the challenges with reporting revenue. Um in this business is. It's not a contract It's not contract revenue for the most part. It's commission revenue. So it's we we see the money when the carrier pays it and. Ah, carriers are insurance company. So when the insurance company decides to pay us could be different by insurance company. So we might be getting paid for January by by atna in February for February by blue cross blue shield and then December from a dental company and so there's there's definitely like this wonkiness to it so we could see this number go down in. Um, in March ah, and then up again in in April and so we'll just have to watch it I don't know the answer.
16:55.92
tylerking
But okay, cool. Well that's exciting is this what you you expected is this better than you expected.
17:02.32
Rick
That's what like it's pretty much right on what we expected. Um, ah the ah you know I think probably february' ' is a little higher this is better than what we expected in ah in some ways because um, we still are paying Jd some commissions on the previous year in this month which are which is decreasing profit. Have a lot of annual subscriptions. For example, our front subscription our um webflow annual subscription hit this month and so it's just still have two k profit you know after like these these one time expenses that aren't going to continue in March is is pretty exciting. We've got it.
17:33.92
tylerking
Um, yeah, awesome cool. Yeah, let's do it. Um, what else.
17:39.00
Rick
We just got to go get more employers. Um, so so we had our part. Yeah, we had our so so kind of shifting into wake. What do we do now? Um, we had our partner meeting was that this Monday or last Monday last Monday seems like a year ago um anyway we we we.
17:50.55
tylerking
I Think last. But yeah.
17:58.71
Rick
I thought you added a lot of value in that meeting. Um Jd and I mostly Jd had been working on like here's some ideas on how we can get from 100 k to 400 k which is our stretch goal and annual revenue and I thought you came in and said this is like all really great but like what if we just focused on this one. Really simple goal. And um, basically we we agreed with you and so Jd is ah we're basically doing 2 things 1 is we're we're trying to get up and running in Texas which is um where Jd lives and so we can get unblocked in terms of local networking there and I'm happy to say that we are.
18:19.41
tylerking
Fish.
18:34.56
Rick
Ah, 99.9 percent unblocked. We're just waiting on one more insurance company contract but we have our first Texas client which is another exciting thing. Um, and then the other thing that um, we're going to focus on which I want to I kind of want to spend some time with you on today is ah free focusing on getting more free customers. Um.
18:38.97
tylerking
Nice, awesome.
18:54.12
Rick
Ah, so ah, particularly we have a free product. Ah where an employer can invite their employees to our awesome health insurance concierge and so the hypothesis is that if we can go get 20 or so more of these free business customers. Um, the the employees alone that we. Are able to service from that from a commission standpoint is going to be really really nice and then we'll be forced to figure out how to acquire these 20 customers by trying to go get them and I assuming we can get to 20 customers. We should be able to go get to 40 and 60 and 100 from there. Um, and so I wanted to talk a little bit to you about like ideas on how to get to 20.
19:21.24
tylerking
And. Yeah.
19:31.93
tylerking
Yeah, um, you want to do that right now just dive into it. Okay can I real quick just I think what you just said makes sense to me. But um, let me say it again for anyone who really doesn't have any context here and that is I think there's 4 ways for legup health to make money one is.
19:32.81
Rick
Free customers? yes.
19:50.17
tylerking
Help individual people buy individual insurance and get a commission from the insurance company. The second is there's this leg up benefits program where we go to an employer we say add your employees to this. We'll help them get individual Insurance. We don't charge the employer but we get commissions off the individual Insurance. So. It's basically the employer's lead Gen. For the individual insurance. The third way is the same thing but we actually charge the employer for the employees. So It's more like a benefits program plus the insurance commissions and then the fourth way is sell group insurance to an employer if we have to so all 4 of those are ways that.
20:21.24
Rick
If we have to.
20:27.54
tylerking
Current current revenue streams for leg of health but but the second one which is basically give the the benefits product away to employers for free as a way to get lead Gen of these individual insurance ah products that we get commissions on.
20:30.33
Rick
Ah, we are making money on all four streams right now.
20:47.29
tylerking
That's the one we're talking about here.
20:48.60
Rick
That's the one we're talking about and that's the hypothesis there is that if we focus on that it will lead to the other things happening it will lead to leads on the first stream it will lead to upgrades to this third stream and if we you know in our efforts come across a group health insurance client that we need to help.
21:04.52
tylerking
Yeah, cool. Yeah I'm I'm as you know I'm a huge believer in this approach So where do you want to start? where do you want to start talking about this.
21:05.29
Rick
Ah, we will help them.
21:10.81
Rick
Yeah, it was your idea. Um well I just I just like so um, there's a corollary windfall my my day job where um, we have this really cool product. Um on the nonprofit side that's heavily discounted. Um and when when back in the day there's a kind of a you know. 1 of those tribal stories that floats around the company where you know we tried originally at windfall to give away the product to nonprofits but because it was free. They like didn't believe it and so we said okay well how about $1000 you know and like um and they were like yeah ah so charging money actually makes it easier to sell in some cases.
21:38.00
tylerking
Um.
21:43.46
tylerking
Yeah.
21:45.58
Rick
So I kind had this like thing and in the back of my mind where maybe free is going to be harder in some ways because it's like what's the catch. Um, but I just I wanted to just get like I have some ideas on on how to um, how to go about this and I just maybe wanted to like get some feedback from you and then if anyone else out there is.
21:51.97
tylerking
Ah, have.
22:05.60
Rick
Ah, creative and listening and has ideas on how to like get a free product in front of a business. Um and have them seriously consider it. Ah I'm I'm very open right now like j d's open Tyler's open I'm open um, ah here are some ideas that we are currently working on the first is like the the grind and cold outreach like we were building out. A. Ah, target a count list of of small businesses and their owners who who um, who meet our our our icp criteria and so um j d's like doing like cold outreach there. Um, the thing I mentioned to him this morning in our meeting was like hey like. If I were doing this what I would probably do is I would go through my network and identify all the people who in my network who are Icp fits and or but I believe no icp fits and I would just like rank them based on like affinity in terms of like my relationship strength of relationship and I would just try to do like 30 minute calls with those people. Um, and I would just basically say hey I just want to catch up with you I would say um you know one I want to share my goals for the year and see if I can get your help and 2 I would love to hear what your goals are for the year so I can help and I would love to just catch up in general and then you know I would share my goals I would tell them my goal is to triple quadruple this business. We believe our main lever for that is ah our free like no brainer service for bit of business owners but that meet this criteria. Do you know anyone that you could introduce me to I can send you you know a template and I would try to get 2 or 3 introductions for person that would be how I that would probably be how I would go about this? Um, and then the third idea is like.
23:28.38
tylerking
Ah.
23:33.98
Rick
Just like kind of coming through our our list of existing users. Um, one of the features that we added in the platform is when someone logs in we ask them like who their employer is and going through our current list and identifying Utah employers or Texas employers. That are already already had at least 1 user on the system and focusing on expanding that account.
23:52.70
tylerking
Yeah, yeah, it'd be really interesting if there's like a flywheel of first you get an individual not if like not through an employer then you get their employer and then you get the rest of those individuals because I what what we said earlier is you get the employer so that it's lead Gen for the employees. It's and it'd be interesting if an individual is lead Gen for the employer who's lead Gen for the rest of the employees. Yeah.
24:16.79
Rick
That's the ideal right? Um, and so I have those are the 3 ideas like I'm do you have any that are like on the tip of your tongue that you can't help Bashir.
24:27.39
tylerking
No I think that. Ah yeah, that makes I have very little experience with actual sales and stuff like that. But it just feels like Jd had some success last year getting group insurance and this paid benefits software. Clients last year not like a ton of success but some it just feels like if the offer is oh and it costs you nothing it, whatever worked sort of last year should work even better this year but maybe I'm missing something there.
24:54.62
Rick
Well, what's interesting just this is a data point that this is the right approach is we were doing our February recap this morning and all of our enrollments 100% of our enrollments for individual health insurance. This month came from employer clients.
25:07.86
tylerking
Wow has he been trying to get other types of clients. No okay so that sort of explains it. But yeah, there's not like lead flow coming in for not employer like individual insurance clients.
25:11.29
Rick
Now He's totally dropped you know reaching out. But.
25:19.72
Rick
But the but but but what's cool is like if we 10 x our employer base which isn't that many we 10 x our lead flow most likely in offmos.
25:25.30
tylerking
Yeah. Yeah, okay, great. But yeah, so that's that's great. Validation. Also the more people like people leave jobs and you could imagine the way like I don't think so I have this with less knowing serum where if someone asks me, how would I if I could go back and grow it from scratch. How would I do that. And I don't know the the the 0 to 1 is so hard. But like once you have a base a whole new set of options open up for you and once we have 10 twenty thirty employers their employees are going to be quitting keeping us as their agent going to other companies and then that's the the way we get the next round. So how do we get those ten or twenty s
26:05.99
Rick
Exactly exactly so anywayll I'll update you on this in a couple weeks. This is gonna be a focus for a few months.
26:08.32
tylerking
Question Yeah I know you wanted to brainstorm sorry I don't think I had anything instructive there. But yeah I I feel like direct outreach. Do it until it until we find out. It doesn't work feels like the right thing.
26:22.57
Rick
Yeah I Really do think like I think our networks are are what we need to leverage I Just I think that's the quickest path to um, warm pitches. Um, versus like I think cold outreach is a really hard approach.
26:30.42
tylerking
Yeah, now has j d exhausted like that was we already knew that six months ago his JD exhausted the network. Do you think? Okay, but.
26:38.90
Rick
Um I don't think we've taken this offer to the network like how many yeah.
26:44.67
tylerking
Ah, different offer has been like at some point are your is your network like this is the fifth time you've tried to set up a call with me. Okay.
26:49.65
Rick
Um I have not used my network on this. Um I I would imagine that JD has not used his network on this. So I think that there's there's a huge opportunity here and there's like I would say there's tiers of people in your network. There's tiers of people who are like if there's the first tier which is like if someone asks you for something in that tier. You jump.
27:00.20
tylerking
Um.
27:06.33
tylerking
Yeah.
27:07.61
Rick
Like you don't ask like any questions and that tier one is the one I think we need to exhaust um where it's like this is like this is our livelihood. This is what matters most in our lives if our tier one relationships aren't like don't know about this and aren't you know trying to help us. We're We're really like leaving a Stern a big stone unturned.
27:25.36
tylerking
Yeah, yeah, yeah.
27:27.29
Rick
Um, and so that's what I'm talking about I'm not talking about like the tier three who like I haven't seen since you know high school like I'm you know like that. That's not what I'm talking about here. No no.
27:34.65
tylerking
You're not turning into an mlm here. Yeah, that sounds good I mean I'd love to hear updates on like let's just go do some of that and see where it leads. But again the challenge is just finding a company with multiple employees. That doesn't have health benefits right? That's kind of the Icp here. Basically um, yeah, that sounds exciting. Um I've kind of brushed on this before but ah, we're kind of doing a little more outsourcing.
27:54.99
Rick
Um, thank you? What's up. What else is going on your world.
28:07.73
tylerking
Of certain kind of specialized things than we have in the past. So one of these I've mentioned is conversion factory is like a marketing marketing agency specifically like product marketing I guess whatever that means um, that we have been working with um and then another one is we need to upgrade Mysql. Like the whole world has to go from myql sql 5.7 to mysql eight because the end of life for five point seven s going on right now. Um, and like we were right about to push the button and then we were just like it's touching the database is so scary because you know if something goes horribly wrong. It's hard to It's not like code with code you can just be like oh ah, go back to the old version of the code. But if the data gets messed up. You can't do that so you want to be very very careful and we decided just for peace of mind. We hired this consulting agency called perkona they're like this giant database consultancy to just kind of come in and like look over our shoulder while we push all the buttons. Um. So yeah, we've been doing like normally I'm very much like do everything in house and I'm trying to branch out a little bit on that. Um, yeah thoughts. Yeah, maybe although I also like in doing it I'm running into all of the challenges that.
29:13.52
Rick
Interesting that says ah you're evolving.
29:22.45
tylerking
Oftentimes have scared me away from this type of approach in the past, but there's a lot of upside too.
29:23.73
Rick
Um, well yeah I mean I the Paddle experience lightly has has definitely like is a cautionary tale. Um, for this like is like what's the downsides of like what have what is your framework for outsourcing like like.
29:32.15
tylerking
Um, yeah.
29:40.38
Rick
Like there's probably like ah it has to meet certain criteria.
29:41.60
tylerking
Yeah, so at at least 1 of them I think is well I don't know different different companies. Do this differently. There's a type of outsourcing that doesn't appeal to me at all really. But I I think partially just because I don't have a need for it which is like low skilled work. There's a type of oh I need 10 people in the Philippines to do a thing. Um I just don't I don't think we have any kind of like humans need to grind away at this thing type work aside from customer service which you need tremendous expertise to do so so it's not low skilled. Um. So that doesn't appeal to me at all. There's another type that's like the exact opposite of that which is like we need an expert in this thing and like a company a 20 person company like we are. It doesn't make sense to have a database expert. So maybe the once every five years you have to do a giant migration like this. You just hire percona so that's currently one of my ways of thinking about it is like ah we don't have to develop that. Yeah right? And then I think the other one is but that I'm kind of coming around to this is more what conversion factory is is like we could build that that skill set in house.
30:38.51
Rick
1 time cert. Yeah one time surge of expertise required.
30:54.41
tylerking
But it's kind of like a way to just keep the team a little bit leaner um, especially because our model is we're in St Louis St Louis does not have a lot of experience people with expertise in building a saas company. Ah, which means we tend to hire entry level people and then train them up.
31:12.55
tylerking
This is challenging if either the skill set is something that it doesn't fit the Dna of the company or it's something that we can't really train someone on very well so like we could like the amount we're paying conversion factory we could hire a full time marketer. Um, but the thought is like we get kind of. Ah, group of people you know they're not just 1 person with different pieces of expertise and we can just kind of like keep our team small and just manage them a little bit more. Um and if if it doesn't work. We can like I'm a coward and don't fire people or I wouldn't fire someone because we don't need them. I would fire them if they were doing a bad job but like with a consultant I feel very comfortable being like we don't need you anymore the the contracts over you know.
31:48.32
Rick
The.
31:55.38
Rick
Yeah, it's it's more. It's more like contracted terms versus like ah you know and indefinite ah infinite employment. Um the the um so I heard 3 things there which are it's pretty interesting like this is a pretty good blog post in my opinion. Um.
32:01.49
tylerking
Yeah.
32:09.96
Rick
You know the the the 3 things you could consider outsourcing are it's recurring low skilled labor. Um, it's 1 time like sort of ah high skilled you know high expertise labor. Um, usually related to a project. Um, that is non-recurring in nature. Um, and then there is ah sort of pre-hire work. Ah, you know you you don't want to work that doesn't require a full time job. But you you need the skill set for which is what the conversion factory would fall into. Um, it's now that's pretty.
32:38.79
tylerking
yeah yeah I think that I think that's right, that's the one I feel least like if it's recurring work that you you need to keep doing and it's high skilled like that does feel like when I hear you say it I'm like well yeah, you should have that in-house. Um, not that not that I'm second guessing what we're doing here but that's the one that I think has the most nuance around whether it actually makes sense.
32:57.32
Rick
Well when you're hiring skilled labor for the first time and it's critical to your business. Ah, but you don't know know how to do it. Um, it's outside your like sort of competencies. Um, it can be really like risky to to try to hire for that. Um, and so outsourcing is a way to de-risk it. You could you could hire a person on a.
33:09.17
tylerking
Um, yeah.
33:17.13
Rick
On a contract basis or you could hire a firm but it sort of is a way to educate yourself on whether or not. But although the do's adults. So I totally support that outsourcing. The database thing seems like a good idea too. So both of these ideas seem really good within that framework. We just discussed.
33:22.82
tylerking
Um, yeah, yeah.
33:29.57
tylerking
Cool, yeah, the the database one I think at the end of the day we would have done the migration fine on our own. So. It's really buying peace of mind. But yeah, it's it's a 1 time thing. It'll be over. It's costing like in the ballpark of $10000 which for a small company. That's a whole lot of money to pay for that for us. It's like the cost of the database migration failing would be. In the millions potentially like paying $10000 as an insurance against that is ah is worth it. I think but the the downside to all of this and like I want to be very clear. This is not me criticizing any of the the people we've hired or anything like that. This is just fundamentally a challenge withouts sourcing if you follow people like I'm going to.
33:51.29
Rick
Um, in a.
33:53.36
Rick
Cool.
34:08.48
tylerking
Like names some names here like so hill from gum road and ah Josh Pickford from originally bare mettrics and now maybe are 2 people who and and there's others out there like this I think a lot of the indie hacker crowd really is kind of like if you outsource stuff you just get really high quality work without having to do any of the management stuff. And that has not been my experience at all like just because they aren't w 2 employees does not mean you don't have to manage them First of all, right.
34:34.15
Rick
Yeah, and I would just say that like if they're if they figure that out I Want't learn from them because I have never been able to experience this like if I don't manage someone especially if they're external like it gets off the rails fast. Yeah.
34:41.52
tylerking
Um, yeah.
34:47.26
tylerking
Yeah, you have to manage them way more because like with conversion factory they are more domain experts than we are at that like we're doing kind of a website redesign kind of not a rebrand but like it started as a rebrand and then we pulled back a little bit. Um. And there are just a million things where they do something and I'm like that looks amazing. That's not how we do it. You know like you don't know anything about us and what you did for a generic sas company was great work but you don't do that whereas eunice our full time marketer would she knows that she's been here for like 8 years or something. Ah there's like way more doing the wrong thing due to lack of context I find with outsourcers versus in-house. Maybe the expertise isn't quite that quite as good because like everyone who works lessening serum's a generalist, not a specialist but they there's just a lot less me having to be like. Sorry, that's just not how we do things you know and I saw I really hate that type of conversation. Even the the guys at conversion factor have been great when I go back to them I'm like sorry that's not how we do things are like ok, no problem but it it costs an emotional burden on me to be like.
35:41.78
Rick
Yep.
35:56.84
tylerking
This person just did work and I'm about to throw it away and I had to pay for it and they don't feel good about it I don't feel I just sharing that information I personally hate doing that you know.
36:08.23
Rick
So I know what you're saying that this type of project which is like ah a core branding exercise with a third party I've been through it a couple times at the last previous company you have to be egotistical about this tyler. Their their job is to extract the essence of less knowing Crm from you and build a system that you can manage or a framework that can build that can lead to a system that you can manage and if they're unable to do that. They're failing and so okay.
36:21.67
tylerking
Yeah.
36:34.51
tylerking
No no I I totally agree and what happened is I I got a whiff of this is going in the wrong direction and the coward in me was like but it was really good I looked down like damn good work. It kind of smells off but it looks really good and so then.
36:47.29
Rick
Yep.
36:51.17
tylerking
Let it get too far and then I had to pull back and be like throw out the last two weeks worth work. So I did correct it like you're saying it just took me too long to do it.
36:54.20
Rick
Good. Yep yeah, and it I did the same thing I two weeks is great I went three months without doing it and and then and then it like started to seep through the company I was like oh god this is bad. Oh you made a mistake.
37:02.50
tylerking
Yeah. Yeah I mean the biggest thing that happened the the way this went was like in our early conversation. They move super if anyone's thinking about using conversion factory like I don't have limited experience with them so far but like 1 of the great things they move super fast. They move at the pace of a small bootstrap company. Not like a big three month type thing.
37:24.24
Rick
That's cool.
37:25.13
tylerking
But because they move so fast. They're like oh we can do a rebrand in like a month like I went to them saying can we just polish up the homepage and they're like we can do a rebrand very quickly so I was like oh great if it doesn't take long. Let's do it and then we got far enough in that I was like whoa why rebrand you meant like change what like like we actually like our brand. We just want like our fonts to be a little crisper and our border radius to be 8 pixels instead of 10 because like like I realized when we got into it I actually like our brand quite a bit I just want it to look like a professional took our brand and and designed like a truly professional looking site.
38:01.17
Rick
You want you want the brand to be refreshed. You don't want the brand to be redone. Yeah.
38:03.14
tylerking
Based off that.
38:06.77
tylerking
Yeah, exactly so that that was the kind of crux of it kind of was going in that other direction I waited too long to pull back. But yeah, the the good news is it moves so far the the kind of iteration pace that that they work with is so fast that. You know we lost a couple weeks. Not a big deal and I think we're back on track now. Yeah, Um, so yeah, outsourcing.
38:25.50
Rick
Cool. Um I mean I I you're dealing with some really like I feel like this year is like the year of like you learning how to like make really different decisions. This is very different. You're dealing with different things than years past like outsourcing to paddle I guess was kind of last year but like. These outsourcing conversations are interesting this like you're dealing with brand strategy. You're you're trying to like do sales. Um, it's like it's it's interesting.
38:53.91
tylerking
Yeah I I agree and also what's what's so funny about it. There's some irony here because the theme of all of this is back to basics um like.
39:01.14
Rick
E.
39:05.70
tylerking
I don't I'm loving work right now I'm I'm feeling super energized and stuff but like in the early days the first couple 2 three years of the company I was working on hacking away at tons of internal marketing and sales tools. Um I we have a whole suite of reports that I built we have this whole like. Someone clicks an ad and we do attribution and track it all the way through the point of paying and tells us the roi of each ad I built a ton of like marketing automation stuff in the early days. Um, so this isn't it's new over the last decade but it's not like this is how the business was operating in the early days and I feel really good about that.
39:36.17
Rick
You should. It's it's it's powerful. So.
39:41.68
tylerking
Cool. Well thank you? Um, speaking of which before I hand back to you? Well we got 10 minutes you got anything you really want to talk about? Yeah yeah, yeah, take it away.
39:49.18
Rick
Ah, 1 thing um but 2 things I just shout these out real quick. Um, they're there a breath quick. Um, our friend Chase Murdoch is starting a ah local professional group which I'm really excited about joining I haven't joined a kind of ah accountability group in many many years um but but I've always found them super valuable. So that's going to be super fun. Um shout out to chase and ah his firm. The dakcata group who's who's kind of facilitating this whole thing but it's it's somewhere between ah 6 and 10 people all local Utah kind of ah entrepreneur entrepreneurial people who are going to meet up once a month um talk about life talk about business ah share goals help each other hit goals I'm really looking forward to you know, developing the relationships I'm also looking forward to help hopefully getting some um some ideas um on on how we can go faster at leg up health and then I'm also just like looking for some fun.
40:43.31
tylerking
Yeah, yeah, that's great. Do you expect this to be more like kind of a meet up group or more just like networking hanging out every once in a while sorry I said meet up I meant mastermind.
40:52.89
Rick
It's going to yeah much more like mastermind group. It's like ah yeah, once a month for 3 hours you know you know, be there on time. Be present. Yes.
41:00.12
tylerking
And there's like an agenda like here's your 15 minutes talk about what you want to talk about okay, cool. Yeah.
41:06.21
Rick
I don't know the exact format yet but like that is the I think that's the intent and it's a 1 year sort of commitment and then you I think that everything will be reassessed in a year if it's if it's going well now.
41:16.10
tylerking
Yeah,, that's awesome. Yeah, Ah, this is sounds similar to what I get out of the big snow tiny comf thing which like you said have a little fun and it's it's like. Ah, sometimes I'm in the car with my wife and I'm just like I would love to talk about and Mrr with you and you don't care and it's nice to be around a group of people where you can just you know nerd out about business without being ashamed about like you don't have to talk about hobbies and stuff you can just be like business. Let's talk. Let's go. But.
41:45.44
Rick
Yeah, yeah, exactly um the the other the the other thing that I think is interesting I think for listeners here is like I think it's very easy to say oh I'm gonna go join a group like it's very easy to find a group but like what makes the right group is the harder question. Um, and like I have very limited time.
41:57.74
tylerking
I.
42:01.82
Rick
Right now I have 2 kids under three I have ah a side venture I have a very demanding full time job and so like for this to to work like it had to check a lot of boxes and so like I wouldn't um, but the the takeaway here is go join whatever group. You can find it's you know, find a group that fits within your. You know what your goals are and then also your mindset and 1 1 thing that really worked for me here is like the people are of similar age and sort of similar mindset. Not I'm not saying that it's okay, not okay to be younger or older I'm just saying like stage of life is is similar um second timing is right like ah are my youngest. Ah. Kid is kind of reaching that point where it's like not 100% like intensive um, and then the third is like it's a local networking group. Um I have a local business. Um, it aligns with what I'm trying to build and the relationships that I will build through this will help me grow leg up health and so.
42:49.89
tylerking
And.
42:55.59
tylerking
Yeah, awesome. Well when does it start when are we gonna hear hear some updates on it. Oh Wow Oh okay, great start. Okay.
42:55.85
Rick
It checks a lot of boxes.
43:00.51
Rick
The first one is tonight and I'm missing it because I'm on vacation. Yeah, so so I recorded a loom video and introduced myself. But I you know I I had scheduled vacation before I joined the group and so everyone I but.
43:14.38
tylerking
Are you like going somewhere or just like you're in your house right now. Oh you said that? sorry first 3 I'm spaced. No.
43:20.20
Rick
Um, in my house. Yeah, we're going to st george yeah for vacation and then um, but but but this this is a in-person meetup thing that's gonna happen downtown and so I will miss it but I have a 2 minute loom video appearance and then ah I don't know if I've told you this yet.
43:27.92
tylerking
Yeah, all right sounds good. What's your other thing.
43:38.75
Rick
But I definitely have not announced on the podcast but my previous business which is now called people keep um, but was originally za benefits where you and I first met sold to a company called remodel health um, and it was announced this week so I just wanted to share that it's ah, an end to a. Ah, very long part of my business career. Um, and I think investors are are pleased with the outcome. The terms are not public so I can't go into into details. But um, you know it's ah it's it's a it's a big It's a big win for me and an end of a chapter and um.
43:59.79
tylerking
No.
44:16.10
Rick
Feel really good about it and the people who bought it are our friends So it's ah it's It's kind of cool. So just want to share that. Yeah.
44:19.99
tylerking
Yeah that's awesome congrats so the the history here. So yeah, you and I both were hired fresh out of college at a roughly 8 person startup grew through the venture model 2008 layoffs happened and. You basically were in charge after that because everyone senior to you got laid off basically and then you ran it as not originally as a Ceo but you kind of grew to the Ceo role and then ran it as Zane benefits rebranded it to people keep built out a whole new product. Whole new team grew it to what 60 people.
44:43.14
Rick
Yep.
44:56.50
Rick
Ah, it's 75 people at one point. Yeah yeah.
44:56.62
tylerking
at one point seventy five at 1 point um, fair to say kind of a lot of ups and downs. It wasn't like straight up into the right type of story.
45:07.50
Rick
Lots ups and downs. You know revenue grew every year. Um, was kind of one of those things but like there were lots of like attempts to grow faster that failed. Um, but but at the end of the day like I think like what what is a venture backed company measured on. It's the ability to return sort of money back to investors and. I think ah with you know this this sort of outcome investors are feeling good about you know about going from like you know I think Paul put us in a room in 2008 and said I probably get around the company through bankruptcy um, you know, ah to you know.
45:38.99
tylerking
Ah.
45:40.55
Rick
10 years you know fifteen years later the you know the earning a meaningful piece of a new company and it's a pretty cool.
45:42.46
tylerking
Yeah, yeah, that's very cool. Yeah I didn't realize it at the time but when they laid off everyone except like you me and 3 other relatively junior people I was like at the time I was like all right. It's our job to bring the company back and now looking back on. It's like oh they gave up.
45:59.44
Rick
He.
46:01.51
tylerking
They just kept to the people like the 5 cheapest people so we could keep the company running while they sold it for parts the fact that it actually turned into a real company after that's got to be a pretty rare occurrence in that type of situation.
46:07.73
Rick
Yep.
46:13.39
Rick
Yeah, yeah, so anyway and I like anyway I feel good about it. Ah I don't know if it gives any more credibility to me than I have it feels good to like kind of have that comfortable circle. So I feel like I can talk about it now and say like hey that was up in the past versus like this un.
46:15.54
tylerking
Yeah Congrats man.
46:28.41
Rick
Sort of like this ongoing sort of nightmare that I've been a part of um, so yeah, not he didn't just work there. He worked there for he he he was a lead vp there and he was a huge part of growth for 10 years and so yeah, what does this mean for like legup health is probably a more interesting question like.
46:31.78
tylerking
Yeah, and j d the other person at Leg up health also works there. So um, that.
46:47.54
Rick
I think ah you know one of our values that leg up healthismamamentality and I feel like this is more earned confidence for me and Jd to like go out and be a little bit egotistical about legup health um and and like basically we've done this before we've built a very valuable business.
46:58.14
tylerking
Ah.
47:02.91
Rick
Um, we we if we build a fraction of what we did at people keep like we're going to be very happy with the outcome we achieve at leg a belt.
47:08.50
tylerking
Yeah, cool. Well, that's a that's great. Good job. Do it again. Please minus Venture Capital Yeah, that happened before you joined So ah, that was a little outside of your control.
47:10.61
Rick
Thanks! Thanks! No more venture. What minus venture capital.
47:22.93
Rick
Um I added to the pot. Ah by raising and 2015 yeah it's oh yeah.
47:25.53
tylerking
Ah I'm of the opinion once you have if you raise money once it's over like that. But not, there's There's the calm fund tiny seed in DVc. There's a few exceptions. But if you raise traditional vc one Time. You can't just be like well that was enough I'm going to go back to the bootstrapping mentality.
47:41.32
Rick
That is probably the number 1 mistake I made as ceo of people keep was like trying to get away from the venture model while I was instead of just like embracing it and going out and raising money like that was probably the biggest mistake I made as a leader there.
47:52.11
tylerking
Because you were never in control like you were the Ceo but the board of director. It's not like you had majority control or anything like that.
48:00.30
Rick
No, so yeah, that was yeah, that's a good point like once you take once you raise money unless you at post raising money still retain control of the business like once you lose control as a leader it does not make sense not to raise more money.
48:12.33
tylerking
Yeah I think even if you don't like normally after the first round you still have control. Ah, but even then you've got these commitments to these investors and yeah, it's I'm not familiar with very many examples of that going right? But anyway.
48:24.39
Rick
No yep.
48:27.47
tylerking
Ah, cool. Well I got a run get to my next thing but good talking to you. We're going to be off next episode because I'll be in Japan so it'll be a month before our next one. All right? Thanks man talk to you later. That's the worst ending ever by.
48:36.93
Rick
Yep I have a good have a good day bye.