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Spencer Fry built his first product when he was 19, and now’s building a new product called Uncover. It’s a big risk: it’s an HR product, which is a difficult vertical. Listen to hear how he plans to succeed.
Show Notes
Spencer Fry built his first product when he was 19, and now’s building a new product called Uncover. It’s a big risk: it’s an HR product, which is a difficult vertical. Listen to hear how he plans to succeed.
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Notable quotes
“Uncover gives employers the ability to give perks and rewards to their employees.”
“Companies are too quick to iterate. You have to look at the broader picture. You have to set aside time for bigger wins.”
“Take time away from the everyday grind, to try something big.”
“When do you know when you should throw in the towel? That’s something I don’t like doing. It’s one of the reasons I choose to bootstrap. If your raise money you have to throw in the towel a lot sooner.”
“One criticism of the HR space is that it’s difficult to sell products to that niche.”
“Small companies get their best applicants through referrals and employees.”
“Longterm, what we want to do is educate companies around employee happiness.”
“Sales or die. Sales is important: the internet is saturated with startups. You have to go after customers.”
“You live and die on your potential customer list.”
Show notes
Pros and cons of iterative development
Creators and Guests
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Product people would not be possible without the fine folks at sprint.ly. Go and check them out and sign up for a free account for you and your team. If you're doing software development, there's no better way to manage the software development process. We're getting into part two with mister Spencer Fry, where he talks to us about his new startup called Uncover. Beauty.
Speaker 1:Spencer, do you want to keep going?
Speaker 2:Yeah, I'm going another Okay.
Speaker 1:So Spencer, with Uncover, company sorry, I'm going start again. So, Spencer, with Uncover, the idea is that you're providing companies the ability to give perks to their employees.
Speaker 3:As well as rewards too, which I failed to mention last week, but you can basically reward your employees for staying late or spending the weekend at work or seeing the sales team hits a big milestone. You can kind of send them a one time reward.
Speaker 1:Oh, interesting.
Speaker 3:And that's actually a feature we launched about a month after launching for the first time.
Speaker 1:Are these eventually going to be things that you can set up? Like you could put up kind of a challenge or a goal and then have people achieve it and then automatically receive an award? Or is it done manually right now?
Speaker 3:It's done manually manually right now. I guess the answer is I don't know yet because we are so early. We are getting a lot of user feedback and suggestions for features and so on, but we are trying to go slow and kind of get a broader sense of or larger sense of kind of what's going on. Is I think something I actually just wrote about the other day which I think companies are too quick to iterate a lot of times, especially companies that raise a million dollars in financing. They think they need to spend all the money on day one and it actually ends up biting them in the ass.
Speaker 1:Do you mean too quick to iterate?
Speaker 3:So I guess two things on that. Iterative development is the hottest topic right now in the last few years on the web. It's like if you don't iterate quickly, add this feature, add that feature, polish this, clean up that code, then you're going to miss an opportunity. But a lot of these companies that get into this kind of iterative development cycle, they look up six months later and they that they've Or they see that they've basically not built anything new. Products kind of need to have large release cycles every once in a while.
Speaker 3:Like I'm all for iterative development and I think you should do it two, three months at
Speaker 2:a time, but you have to look at
Speaker 3:the broader picture and kind of make more impactful choices with your product.
Speaker 1:And one of your points in this post, we're discussing this post, the pros and cons of iterative development on spencerfry.com. One of the ideas you had there is that sometimes you need to set aside big chunks of time for kind of big, bigger things, bigger projects, bigger wins. And can you give us an example of that? Like, what would be an example of like an iterative kind of development versus a bigger win?
Speaker 3:Well, I think for us right now, we're kind of in the iterative development stage, we're working on a larger update to the product that will be kind of more game changing in a sense. Guess I would define it as something that users are gonna log in and be like, Woah, this is new. It almost redefines your product. Because I think a lot of companies, they release their app and they're just going along, going along, but they never actually really hit on a product market fit because they're too busy doing these little iterative changes and not doing more experimenting. That's something that we're beginning to start now after about two and a half months of launching is to start working on the bigger things.
Speaker 3:Because we're new, we're doing well, but we're not hitting it out of the ballpark yet.
Speaker 1:And a
Speaker 3:lot of that has to do with the product is just not right yet. And I don't think that a thousand little changes will get us there. I think that we need to take bigger bets and build kind of more changing things.
Speaker 1:Gotcha. So that's part of the idea is you guys want to increase growth, want to earn more revenue, and you think the path to doing that is to sometimes take some time away from just the everyday grind to try something big.
Speaker 3:Yeah, it's so easy to stay in that iterative grind where it's like, oh, okay, today I'll focus on building this little thing or tomorrow I'll focus on refactoring this code. It's so easy because you're getting all these little wins and they feel really great. But it's much harder to step outside of that, spend two, three weeks figuring out what's the next major shift of the product, like the version two or the version 1.5 or whatever. Spending two, three weeks product planning that, spending a couple of weeks mocking it up, a couple of weeks designing it and then a month coding it and then releasing it and figuring out the release schedule and the marketing around that and everything. That's just much harder to do.
Speaker 3:And I think a lot of startups kind of waste their first six months to a year on these little iterative changes that don't really have big impacts.
Speaker 1:Yeah. And the other thought I had while you were talking about that is sometimes that big bet has nothing to do with the product itself. It has to do with marketing and kind of playing with the marketing. And the example is I knew of this app that had kind of a low priced consumer prosumer product, 19 a month. You know, things weren't really going very well.
Speaker 1:And, you know, they were thinking, well, maybe we should just, you know, do something else. Then one day they thought, well, what happened if we raised the price and went after a different market? And it was essentially the same product, but they raised the price to $100 a month and went after a different market. And all of a sudden, that was kind of the sweet spot. And then they were able to start iterating on the product for that market.
Speaker 1:It's interesting. Sometimes you can kind of throw in the towel. But how do you know when you should throw in the towel then?
Speaker 2:When do
Speaker 1:you know if you should give it?
Speaker 3:Just like a major iteration of the product. That's just like a completely different thing. Different market, different price point. So yeah, think that's great. Throwing the towel is something that I don't like doing.
Speaker 3:And that's one of the reasons why I choose the Bootstrap because I feel like if I did have investors and I did raise a million dollars pre product market fit, then you basically have to throw in the towel a lot sooner because you raise for twelve to eighteen months and if the product's not going how it should go, then you kind of have to give up. But the nice thing about bootstrapping is with enough TLC and enough time, you can kind of tend to overcome the challenges of user growth and you can sort of figure it out eventually if you stick with it. Yeah, don't really like throwing in the towel, personally.
Speaker 1:Have you had some projects that you've started that you've decided to not continue?
Speaker 3:I have had some small things. Uncover actually is interesting because the uncover from 2012 was we sold it for like a couple thousand dollars. It was kinda like a thing we were planning on shutting down and a buddy was like, I'll take it. But we had started as like a hiring app because both Mike, my co founder and I wanted to do something in the HR space and we wanted to focus around the employees. While I was learning to code in 2012, I learned to code while building a higher tracking software.
Speaker 3:You know, we kind of, by the 2012, I think we had a few dozen customers, but ultimately I was way more enthusiastic about current employees rather than employees that were, or people that were applying to be an employee. So, that was something that I ended up shutting down. And I think it was more because I wasn't passionate about it and it was more of like a learning exercise to learn to code rather than kind of like what I saw was a business opportunity.
Speaker 1:Yeah. Now, now, one criticism of the H. R. Space is that it's difficult to sell it.
Speaker 3:Oh, yeah.
Speaker 1:So what? First of all, why were you willing to take that challenge on of working in the H. R. Space? You know, and as an example, I built MVP of applicant tracking software.
Speaker 1:Yeah. I because I'm I think when you've worked with people and processes and you've hired people, can see that there's all sorts of holes in the system and that there's you know, that software could really help those things. But when I took it around to business owners, kind of what I realized is a lot of especially small businesses, they don't think about hiring until they need to hire. And then they don't really want software. They just kind of have this like just, you know, put out an ad and put out and just kind of they almost don't want a process that's just not
Speaker 3:Especially those smaller companies like, you know, I did a lot of market research at the time and like customer development and all that. And the smaller companies, they also tend to get very bad applicants through their job stages. Where they get their good and best applicants are from referrals from current employees. So it's almost like they're getting zero success from this application tracking thing that they're paying for.
Speaker 1:Yeah. So why were you willing knowing that and having done some of that research? What made you feel like and to be fair, there's been some other startups in the reward space that have tried to kick the can, too. Given everything that you've learned, why did you decide to stay in the space and now move into rewards? Like, what made you feel like that was that was a place you could win?
Speaker 2:So I think a couple of different things. For one thing, the hiring app that I was doing earlier was while there were some unique features to it, it was basically the same old thing. Every company either had one or they knew what it was. It was just very difficult to sell it because it was either replacing something or it was selling it to someone who didn't make the purchasing decision because they didn't want the thing. So that was very frustrating.
Speaker 2:But with Uncover today, which is personal rewards, a lot of companies just don't have it. If they do have something, they have something really terrible, like the coupon book, which is just basically not having it at all. So what we wanted to do so short term, what we're doing right now is, you know, here here's an awesome system for you to set up perks and rewards. But long term, what we wanna do is help educate companies around happiness and employee satisfaction and wellness and all that kind of stuff, but in a much different way than it's currently done because it's either not done or it is done poorly. It's something way more unique that we're building.
Speaker 1:Yeah. Now, I understand the perks part about it. So $5 per employee and people buy these things online with your platform and they're delivered to the employee. How do you plan on making money through the education part that you're thinking about long term?
Speaker 2:So that's something we're kind of, as we spoke about before, like the bigger iterative cycles or the non iterative cycles, but the bigger cycles. That's something that we're currently working on right now. So we we've actually been thinking about this portion of it for, like, the last nine months to a year, but we kinda led with the perks stuff Mhmm. You know, just to see if we could make money and so forth. Then when we were successful with that, we decided to kind of look more at the broader picture.
Speaker 2:So what we're trying to build now is, you know, one of the common complaints that we see from people that during the sales process is, like, how do I know that this is actually going to increase happiness and make my employees better at their job? And so we looked at that seriously and we said, how can we figure out an ROI for you? If you use Uncover, your employees will be 10% happier and 15% more productive. So that's what we're kind of looking to measure now going forward. So if we can figure out those things for you, then how can we help address them without giving away too much?
Speaker 1:Yeah. No, that is really interesting. It's something I've thought about quite a bit, because I think one thing that's happened in the software world, specifically in development, is that what happened in software development used to be a black box. You never really knew what developers were working on or how they were working. But now we have a lot more transparency into that system.
Speaker 1:We know when we can look at GitHub, we can look at commits, we can look at a lot of project management software is tracking what people are working on and what they might be stuck on, etcetera. But the rest of the world and the rest of kind of corporate culture is not really in that. You don't know if someone an employee is sad and isn't working very much.
Speaker 2:Yeah. I think it's really interesting because there's a lot of process based software that's been built over the last five years around kind of people's jobs. So like time tracking and invoicing and project management and developer tools and designer tools and all this stuff. But none of it's actually taking the time to look at how the employee is actually feeling and how their work's going and all that. So no one's actually looked at the human side of things.
Speaker 2:You know, the software has been really about process. And what we're really interested in is kind of the other side of things, like the actual human element to it.
Speaker 1:Yeah. Now, I understand this idea and I actually I get really excited about it because I think it kind of anecdotally, you know that if you've got a lot of cognitive load on yourself as an employee or a lot of stress, you know that you're not as productive like you kind of know that for yourself. Is there some stats around that are kind of saying that this is true? Like this is actually a global truth that the way employees feel impacts a company's bottom line? Yeah,
Speaker 2:it's really interesting because Google is actually one of the first big companies to spend a hell of a lot of money kind of investigating this. So I read an article maybe six months or a year ago that really inspired me, which was that at Google, they have basically a team that's dedicated to looking at the data of their employees and trying to figure out ways that they can basically make them either more productive or happier or both. And one thing they looked at was that maternity leaves were kind of a standard three months. But what they found was that it wasn't long enough for a lot of the women that worked there and that they would quit after the three months. It would cost Google a lot to basically do the recruiting to fill those positions.
Speaker 2:So they were able to figure out that if they actually increased the maternity leave to nine months, basically no one would quit and would save them a lot of money because they wouldn't have to spend that money on recruiting new people. Interesting. It's really, really interesting stuff that's going on right now. I think a lot of it's on the data side and a lot of it's also just caring more. But a lot of it's on the data side, so it's really interesting.
Speaker 1:Now Sorry. Keep going.
Speaker 2:One of the other kind of interesting things, like, that I heard about heard about nine months ago was a friend of mine at their company. They asked all their employees, you know, kind of a series of questions about the company. And one of the questions they asked was, are you planning on leaving in sometime in the next three months? And I thought that that was just such a powerful question because, you know, if 10% or 20% of the company replies yes, and this was anonymous Mhmm. 10% or 20% of the company replies less, yes, then you know that there's something fundamentally wrong with the way that, you know, your company is being built and growing.
Speaker 2:So these kind of questions that just people haven't asked before and are scared to ask, they're so helpful and so impactful.
Speaker 1:Again, like, I love this idea. I think the idea of kind of dealing with the human side of companies is super important. But on the other hand, I also think this is hard to sell to people because it's extremely It takes a really long view. And I think something sometimes changes when you're a manager or an owner and you forget what it's like to be an employee. And how are you kind of overcoming that challenge of going to companies and saying, this is going to solve a pain for you that you actually want to hire us essentially to do?
Speaker 2:So I think today, our product very difficult to sell because, one, it does cost you more money, but also it's a thing that they don't have or they don't think they need sort of thing. So that's reasons one of why we're starting to explore this other side of the coin. And if I think that if we can go to these companies and be like, look. The companies that are currently using Uncover or whatever Uncover is, you know, three months now or six months now, they're seeing this ROI of 10% production in their companies or happiness is going up 15%. If you can take those hard numbers, it'll just be so much easier to sell because why wouldn't you pay the amount of money that's gonna increase employee whatever?
Speaker 2:So I think that's the way that we're looking to approach the sales process going forward. Right now, we're selling to companies that are doing pretty well. Like, they either have revenue coming in or profitable or they're looking to deep up their hiring, so perks are very important for recruiting and everything like that. So it's less of a sales challenge with our current app as I thought it might have been might be. But it's still very difficult.
Speaker 1:Yeah. And you were saying that right now this primarily appeals to the startup space, where it obviously solves a huge problem for them, which is attracting great talent. But are you thinking about moving to enterprise? Is that part of the thinking here is that there's a there's a bigger market there?
Speaker 2:Yeah. I mean, we're talking to companies in the 200 to 500 person range. It's just the sales process for those companies is just much longer because not only do you need to convince the HR team, but then they need to convince the CFO, and then the CFO needs to have a budget for it and everything. So it's you know, it's can be anywhere from three to six months to close a company of that size. So what we're kind of doing is focus more around the 50 to a 100 person companies right now, which is easier for us to land.
Speaker 2:Then as the product evolves, and then once we start to build it out more using that as leverage into these bigger companies. Because the bigger companies always wanna do what the small companies do. They just wanna do it two to five years later.
Speaker 1:How are you getting all of these leads?
Speaker 2:Think about a third of the companies are from my personal network of startup entrepreneurs in New York City. I've been now part of the New York City tech team for about seven years, so I build up a big group of friends. And then the reps are kind of word-of-mouth, and then, you know, we've been I've been doing a lot of content marketing. So, you know, writing for different companies' blogs, small business blogs, my own blog, and then for TreeHouse and a bunch of other places.
Speaker 1:And are you getting good feedback from that? Like, there actual leads that come out of those, like, specific content? Yeah.
Speaker 2:Two thirds of our leads are from either word-of-mouth or from our content stuff. We haven't started yet paying for any kind of marketing, so all of it's been free on our end. And the main reason for that is that we we haven't yet figured out who our, you know, ideal customer is yet. A lot of startups, day one, like, oh, I'm gonna throw a thousand dollars a week to Google Ads or Facebook or whatever, but they don't yet know who they should be targeting. So we're kind of taking a slower approach where we wanna figure out, okay, you're like a 65 person tech startup and you do X and you have raised this much money and you're in this market.
Speaker 2:That's our ideal customer. Then we'll start to pump advertising dollars into that.
Speaker 1:Gotcha. So the idea behind this blog post you wrote, Sales or Die, and I think we'll probably end on this. The idea, it sounds like, is that you need to get to revenue as quickly as you can. Is that right?
Speaker 2:Yeah. Mean, that's part of it. I think the biggest thing is just that if you're not doing sales, you're basically there's no good user acquisition other than sales for these young startups, especially ones that are trying to charge money. There's user acquisition on the consumer side of apps, but that's tend to be free users and, you know, free users can only get you so far. So for me, I think sales has become really important over the last year as just the Internet has become so saturated with, you know, startups that if you don't actually go after your customers, you're never going to get any.
Speaker 2:So I think that's part of the reason why I wrote that quote.
Speaker 1:Yeah. And what's your kind of tactic for sales? What do you do? What's your process?
Speaker 2:So I'm kind of evolving it. I've been evolving it, I guess, over the last three months. I didn't really have much sales experience before Uncover. I did a lot of marketing, but I never did much sales. So I've talked to some friends of mine who do sales at startups, and the biggest thing is, like, you basically live and die on your customer potential customer list, you know.
Speaker 2:So that's, like, the most important thing. If you don't have, you know, emails or phone numbers I don't do the phone thing. But if you don't have emails to contact, you're never going to be able to do sales. Right? So I think that's the first thing is setting up establishing that pipeline of top of the funnel customers.
Speaker 2:And then it's just a question of having a really good pitch and hopefully getting people interested and then over time being able to kind of close the deal.
Speaker 1:And your list, are these mostly people that you know? Is that who's on the list?
Speaker 2:So it started that way. It's mostly been it started first as a round of people I know and then it kind of went from people I know to people who are friends of my friends. And then it's beginning to start now, two and a half months later. Lists these kind of people that I don't know but are in potentially could potentially be customers.
Speaker 1:Are those cold leads? Like, they have no idea who Those you
Speaker 2:are cold leads, yeah.
Speaker 1:And where are you finding?
Speaker 2:I'm just now starting that process.
Speaker 1:Yeah. And where are you finding like, where do the cold leads come from? You just hear of people that might you think might be interested or you're buying a list off some shady website? Where does it come from?
Speaker 2:Well, yeah. So, I mean, there's there's a combination of that. I think if you talk to anyone who does sales and is any good at it, it's they basically live on LinkedIn. You know, LinkedIn has search if you pay for it, or you can search by type and size of companies and be able to find employees of their company, and then you can go after who is important for you. So for us, it's like we can search for, say, companies or ad agencies that are 50 to 75 people and are in your city and are hiring and blah, blah, And then you can go to their web page.
Speaker 2:You can usually find who the HR manager is. You can then find her name and email that person or his or her name and email that person. So that's like one way.
Speaker 1:Just before you go on, how do you email that person? What's that email look like? Know, sure.
Speaker 2:Yeah. I mean, the thing is, like, it's definitely a volume game. So it's like, know, you email 100 people, you hope to get five responses. And then of those five, you hope to close like maybe one. But that's the one great thing about Salesforce and hopefully us or whatever is that the contracts tend to be plus thousand dollars a year.
Speaker 2:So if you can kind of land a few a week, you're doing well. That's kind of Salesforce's motto anyway.
Speaker 1:Yeah. So you guys are really doing like scary, real sales where you're going out and finding people and then cold emailing them and emailing 100.
Speaker 2:We're starting to. I think for us, like a lot of we want to build so part of the reason we got into this is we wanted to build kind of some consumer software for the enterprise. So we want to definitely get into hopefully some sort of viral marketing sort of thing. But, yeah, at the same time, we have to pay the bills, so we have to get people to pay for the app.
Speaker 1:And sorry, for Uncover in its current state? $5 a seat Yeah. And prudent
Speaker 2:I mean, again, we were talking earlier about when you throw in the towel. If today we had two customers and we were making you know, $50 a month, like, I would have thrown in the towel. But we're doing, thankfully, a lot better than that. But, yes, it's it's important it's like more of a test. It's like, can you get to whatever important value you need?
Speaker 2:And then if the answer is yes, then can you start to go to the next big value?
Speaker 1:Is the level you're at right now, is that like you guys are paying yourself salary or is that just keeping the lights on?
Speaker 2:Yes. I mean, we're not paying ourselves salary, but it's giving us money where we can, you know, play with, you know, we can play with advertising, we can hire designers. We don't have a designer on the team, so we can get work done, we can get we can hire developers if we need. My partner's a developer and I do code too, but we just recently hired a guy for two weeks to help us sprint on this product. So that was all money that we had made from the product.
Speaker 2:Giving us more money to invest in the company.
Speaker 1:Yeah. And so how long did it take you to get to this point?
Speaker 2:Two months.
Speaker 1:Two months? Yeah. So you feel like after two months, if you're not kind of paying for costs outside of salaries, you think that's a good time to throw in the towel?
Speaker 2:I wouldn't necessarily say that. I think it depends on the startup. So, you know, if you're building something that no one wants and no one's paying for after two months, you either throw in the towel or you have a massive change to the product. Because as long as you've exhausted most of your network and people you know and so forth, If you're just kind of floundering at that point and it's time to kind of take a drastic change. If you're doing this for a living.
Speaker 2:If you're doing it as a side project and a lot of people launch small things, then it takes two years to get any traction. I mean, with Carbonate, took us two years to really start doing significant revenue. But I think if you're if you're doing this for a living and this is, like, your full time job and it's not going well after we started in mid January and it's now July. So, yeah, I think we would have changed it drastically if we hadn't been to where we are now.
Speaker 1:Yeah. I guess there's something like the the advice that seems to keep coming up on this show is that the sooner you can get to that point where you're staring someone in the eyes and saying, hey, do you want to pay for this? The better. And the longer you put that out, the longer you just have a bunch of question marks.
Speaker 2:Yeah, exactly. I think I will never and I haven't yet launched a startup that doesn't make money from day one because otherwise, you're like you said, you're just pushing that, you're delaying that to the future. And then when that day comes, you are you have no idea. Right? Mhmm.
Speaker 2:Whereas if you start charging from day one, then you have a sense of if no one's buying it, you got to change it.
Speaker 1:Yeah. Yeah, that I mean that and with a side project, I mean, same rules apply, obviously. Do you think it's any different with a side project if you're building a little app on the side and, you know, you're trying to figure out your process? How would the process be different, do you think?
Speaker 2:I think, like, for side projects, number one, you've got to just be really passionate about it. I think for most side projects, you should be building something that you want to use yourself. And as long as you're still continuing to enjoy using it and building it, then you should go forward with it. And eventually, maybe two years down the line, could turn into a real business. But yeah, think it's completely different, your standard side projects than trying to build a business.
Speaker 2:Yeah.
Speaker 1:Cool. Well, Spencer, thanks so much for coming on the show. I really appreciate you sharing your story and now all this insights on the things you've learned building Uncover. Where can people find you on the web these days?
Speaker 2:Either on Twitter, findSpencerFry or just my website, spencerfry.com.
Speaker 1:Beautiful.
Speaker 2:And if you want to email me, you can just email me at gmail, Spencer. Fryegmail dot com.
Speaker 1:Awesome. Well thanks so much. You can follow me, Justin, on Twitter as well m I Justin. And we even have a Twitter handle for the show at product people TV. Talking about Twitter, if you go on Twitter and thank our sponsor at Sprintly right now, I love you forever.
Speaker 1:And if you like the show, please give us a review in iTunes. It's as easy as clicking five stars. We'll see you next week.