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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.
00:00.00
Rick
Hey how's it gone.
00:03.13
tylerking
Pretty good I'm a little sick do I do I sound funny to you at all my little nasally now I we're we're gonna see if my voice holds out I might I'll do my best to mute. But I might go into a coughing fit at some point here I'm I'm getting over a cold just a cold. Um.
00:07.93
Rick
Ah, no, you sound but you sound fine.
00:15.54
Rick
Ah, ah, Covid or just a cold.
00:20.50
tylerking
I I personally I love being sick like I hate it in the way everyone hates it but ah normally my wife Shelly doesn't let me eat fast food all that often. But when I'm sick I have like carte blanche to get as much fast food as you want and so I kind of am living my best life when I'm sick I've been eating about one and a half fast food meals a day for the last week having a great time. Yeah, exactly like as a kid you drink all the soda. Anyway, you've got big news orange sherbert all right. We all got our thing. Nice nice.
00:41.77
Rick
It's like a yeah getting sick is an excuse to do whatever you want I always had I always had orange Herbert Yeah, that was my like I always got that from in Rainbow Sherbert That's what my grandma would give me when I was sick.
00:58.76
tylerking
Ah, well, you've got some big news. What's going on with you first personal news. Yeah.
00:59.59
Rick
I Talk about personal news. Are you talking about? Well yeah, we we closed on our new house and moved in and the amount of stress relief that I feel feel I didn't realize how much that was bothering me because that was going on for a long time.
01:12.12
tylerking
Yeah, so you and I would talk about it not while recording but I don't think like it really came up in our actual podcast episodes. But yeah when I talked to you before and after we hit record it sounded like that was the number 1 thing distracting you is that right.
01:29.00
Rick
I Don't think I would have said that before feeling what I feel today. But yes, it had to have been because there's all this uncertainty around when you I had never been done this before but when you we we kind of got into a house that was framed but not finished and when you do that. There's not like the the closing. Doesn't happen right away so you sign a contract with the builder you put a deposit down which is not insignificant. Um, and then you have to wait to close until the house is done and you know there's really Nothing. You can do to like the builder can do pretty much do whatever they want.
01:51.71
tylerking
On earth.
02:07.20
tylerking
Um, yeah.
02:07.37
Rick
And so you're you're subject to fluctuations and interest rates which was very painful for the last six to nine months and then you're also subject to like you know trying to time you know moving if you're in a current house. You're trying to sell a house. So ah, you know, whatever your your current situation is and.
02:21.38
tylerking
Um, yeah.
02:26.72
Rick
And so it's a pressure cooker and um the last month and a half was was really really stressful where it was like starting like our original closed date was going to be in July then it got pushed to August then September and then it was like are we going to even be able to move into this thing in October. Um.
02:43.76
tylerking
She yeah, we're we're trying to get some somewhat minor innovations done to our house and we're hoping to have them done by Thanksgiving and they haven't started yet. So ah I can kind of relate building an entire house sounds like a thing that's just like layered with.
02:43.91
Rick
And so what a mess.
02:58.30
tylerking
Traps like Booby traps waiting to get you.
03:00.59
Rick
Yeah, and you don't know I mean hope the way we structure like hopefully this is the house we're in for a very very long time if not forever and it's ah.
03:11.87
Rick
You don't. I'll never have an opportunity to apply the learning. Hopefully hopefully I'll never have an opportunity to apply all the learnings I had yeah ah.
03:14.89
tylerking
Yeah, it's like the wedding industry like hopefully you're only you're not doing that like over and over and over again and so you don't really get to learn anything about your experience.
03:23.15
Rick
Yeah, exactly I unfortunately I did do 2 weddings. Ah for unfortunately I should say yeah for yeah unfortunately I I meant to say fortunately very happily married now. Um, but yeah, the second wedding goes tiny man I did I had ah mean sayable.
03:27.79
tylerking
Well and you learned and that's why your psycho one was so small right.
03:36.22
tylerking
Ah, yeah, yeah.
03:43.18
Rick
Sable had a ton of people there. But I only invited my immediate family.
03:44.77
tylerking
I mean my takeaway from getting married is get married during a pandemic and you only have to invite 2 people as witnesses.
03:51.38
Rick
Well, that was really annoying though. You had the best wedding planned I'm still going to like we we we should We should You should throw a party.
03:57.25
tylerking
Ah, yeah, but I saved tens of thousands of dollars because it got canceled so it's okay.
04:07.27
tylerking
Um, yeah, might now we didn't know we might do it one day but um, well I'm glad your big housing headache seems to be behind you and so do you feel like you've got more kind of Bandwidth to focus on.
04:07.82
Rick
Ah, so we can have fun but I think you did didn't need to do like a local thing nothing oh man monday.
04:22.50
tylerking
Work stuff now or.
04:23.94
Rick
Not yet. Um I'm behind but you know moving and closing and all that stuff put me behind on my day job. So I've got to prioritize that before I can I'm digging out a hole I'm digging. Yeah, so I think like unfortunately it's kind of it's like the.
04:32.25
tylerking
But you're like you're digging out of the hole. It sounds like and.
04:41.89
Rick
It's November first is a week less than a week away and that's our big open enrollment season for our business. Um I think we've done what we can this year to like hit our hit our goal. So I think there's not much more to do anyway. But I would like to be more helpful to Jd than I have been.
04:44.82
tylerking
Um, yeah.
04:55.93
tylerking
Um, yeah, ah do you want to give any updates on kind of like uphelt stuff.
05:00.67
Rick
Yeah, do I do actually? yeah so um, the big thing I would share and you're you're up to date on this? Um, so I'm less telling you this a more sort of regurgitating it for you but like the ah you know we we built you you came out in July or June and built and then. Built this software platform. It just sat on the shelf for a while we we made a great decision to to do the consumer I had built a consumer app where all of our clients were using through nocode cobbled gobbledyookok and then you basically said that's terrible. We should just flip flip that right over and you rebuilt it in a week. Um, and it was way better and so. We switched everyone over there. Um, and we also built some employer features. Um that that weren't getting used um, dude in the last two weeks I think we've added 5 4 5 employer customers to the platform and and it's amazing. Just so many learnings? Um, ah, the big thing is.
05:52.31
tylerking
Ah.
05:57.73
Rick
Ah, you know we we we we know now that we had gone out with only a paid version of the employer product. Um, and it's definitely worth paying for. We have customers paying for us and and and it's it's something we want to charge we will charge for but but there's like 2 versions of it. There's like just the software support of like. Like organizing your employees. Um, so let's say you're a consumer you come into the you know, leg up health site. You become a client of leg up health the health insurance service as for your family and your business owner just like you and you have 20 employees. You're like why want for these people to leg up health and right what we originally started doing was going to them and saying hey. Ah.
06:27.59
tylerking
Ah.
06:35.94
Rick
You pay us $20 per employee so that you can add them to the software and they're like I'm a small business that can't afford health insurance. No why are you charging me for this. Yeah exactly so they're like um, can we like partner on like ah ah ah, a sheet of some kind that like refers them to you and anyway.
06:41.23
tylerking
Yeah, well and it's free if they just come and sign up for the consumer product. It's free. What like what's the point of paying. Yeah.
06:55.70
Rick
We we finally were just like how about this use the software for free. But if you want our health insurance concierge we're only going to help people that are actually our clients. We can't help you with job candidate that sort of thing and we'll give you a free version of it and that is just open the floodgates. Um, and so I think we've added I don't know how many like 40 people.
07:14.73
tylerking
Um, yeah I need a check I don't know.
07:15.98
Rick
I feel like we've we've we've got like yeah 40 or 50 people like that are already added or being added in the next couple days. Um.
07:24.20
tylerking
Yeah, and so the model just ah I think some people listening probably know this but some don't So The model is like we make money two ways. Potentially one is the employer pays us like you were just talking about and the other is if the employee become like makes us the agent on their Policy. We get a commission on that policy. So when you say 40 people are added. They're like they're free users in the system. They're not necessarily. They have not made us the agent but presumably some percentage of them will.
07:48.98
Rick
Yeah, exactly so you know the 40 people work for companies that don't offer health insurance that in some cases are giving them money to go buy health insurance in other cases they are um, already have health insurance and ah in some cases they don't and.
07:56.39
tylerking
Um, the hearth.
08:04.20
Rick
You know, ah you know once we know who they are we you know trigger some emails to them and then Jd can reach out to them and say hey your employer has partnered with leg up health to serve you. You know we are make a your agent.
08:11.87
tylerking
Yeah, this goes back to the the kind of recurring theme of you can't optimize nothing that so I just said some percentage of them are going to make us their agent I don't think we have any sense of what percentage that might be right? We have 1 client.
08:23.19
Rick
I.
08:27.68
tylerking
So pretty small number of users like I don't think we can draw too many conclusions from that we're about to have the answer to that you know a few months from now.
08:32.96
Rick
Yeah, yeah, and when we were talking about pricing and stuff. Um, we we had like debates around Strategy J D I were just talking about this like I go for a walk once a day with and call J D and just see how he's doing and um, you know we were We were talking about this and it's like. Every time I spendt a ton of time talking about Strategy. It's always wasted until it's based on like execution and then like talking about whether the strategy for the execution is most effective. Um, you can't really have ah ah ah, a.
08:53.65
tylerking
Ah, ah.
09:03.26
Rick
Productive conversation about strategy unless you have something that's already being executed. Well.
09:06.23
tylerking
Yeah,, it's so hard I mean on the less annoying side of things I've time and time again and I just had a big one of these where like man I was doing so much stupid stuff and you reach that realization you like now I see how I can put I can use my time effectively to actually get impact but you you almost have to make. You have to use it poorly and learn the lesson sometimes. But yeah I feel like getting people on the system getting amusing. It is such an unlock. So my question I guess is like where are you currently in terms of.
09:31.89
Rick
Yeah, and we waited too long in hindsight. But.
09:43.21
tylerking
Freemium's just going to be a part of the the go to market plan here. Let's get as many people on the system. Let's make most of our money by being their agent and getting a commission and then see if we can layer additional employer services on top of versus This is a temporary thing but we want them to be paying long term.
09:57.10
Rick
So if we had talked a week and a half ago. It said this is a temporary thing to unlock. But since then just watching the pressure relief on the like I can't explain it other than like sometimes you just create so much resistance and trying to sell something that it's like.
10:13.29
tylerking
Oh yeah.
10:16.72
Rick
Working against you and the the amount of resistance that we have eliminated just by saying just add your employees like nothing to lose here like it's just it's so different. Um, so I do think there is some permanent version of us going. You know.
10:21.84
tylerking
Yeah, there's nothing to lose here.
10:33.90
Rick
When when someone signs up, are you a business owner. Oh you are would you like to you know, like like giving them additional features out of the box and letting them sort of use this freemium version of our software but there's absolutely no way we can offer what Jd is to them from a health insurance concierge for free without you know, um without some sort of.
10:40.47
tylerking
Ah.
10:52.56
Rick
Comp for it because it's just it's just it's too valuable and it's too expensive for us. Yeah, absolutely like if if you know what? what? the we can tell the employer for the free version is like hey like we're not going to go out of our way to help someone who's on Medicaid navigate medicaid.
10:57.92
tylerking
Um, but as long as they make us the agent. We're getting paid enough right.
11:08.60
tylerking
Yeah.
11:10.28
Rick
But well absolutely like if if someone needs a marketplace plan serve them on the marketplace if they make us their agent. But if they're not going to make us their agent. We we're not going to help them like we can't like that's it. We don't make any money on that. But but if you pay us twenty bucks a month we will. We will fricking ah when they say like you know jump. We'll say how high.
11:15.21
tylerking
Yeah.
11:24.72
tylerking
Yeah I'll be curious to see if that ad on sale works or not but yet when you are describing like this I forget the language you use but like it was so hard and then it got easy. It sounds like when you have you ever listen to a podcast or follow someone on Twitter like the moment they hit product market fit. Where they're just like I've been doing this for a year and a half or however long it's been like just it feels like I'm pushing a boulder up a hill and then all of a sudden the the boulder's going downhill now I'm not even pushing it anymore. It's just rolling downhill.
11:49.35
Rick
Let's.
11:53.39
Rick
No, you're you're absolutely right? and I like if you hadn't call that out I wouldn't have actually like celebrated this moment but like this is absolutely one of those moments where it's like holy crap. We just changed the one little thing it cost us nothing and it changed. It's going to change the trajectory of our business.
12:09.50
tylerking
Yeah, it's it still remains to be seen like what do the you know economics work out to here like how many individual people can J D serve and like what's the cost of service. There's a lot of unknowns but it went from J D trying to sell this to people and then being like.. The whole point is I can't afford Health insurance I'm not paying you money to like? Oh yeah, no brainer like when like like let's get going tomorrow I met Yeah, ah so I I Love it.
12:31.55
Rick
Yeah, here's a roster of 40 people. Can you upload it for me. It's not just one like this is like it went from like there were 20 proposals out and we're kind of like getting ghosted to making 5 offers and then closed.
12:48.94
tylerking
I Love it I I Obviously like let's try make money. However, we can. But um, if I envision a world where no one ever pays us for the employer plan I Still think this is a pretty fucking good business. You know.
12:49.62
Rick
Now.
12:58.72
Rick
I know there's only upside on that other stuff. It's not necessary like our business is not dependent on it and that's that's 1 thing I'll just call out like when when I started this business I was like if we can't make this business work on individual health insurance alone I'm not interested because I don't want to feel pressure without any other product that we have.
13:11.41
tylerking
Yeah.
13:17.50
Rick
And so fundamentally this is a breaky in business on individual Health insurance commissions and everything else is gravy and I know that there's going to be gravy I don't know where the gravy's going to be I think there's some gravy in this employer. Ah concierge product. But like if it's not we'll find it somewhere else.
13:29.20
tylerking
Well now we've got something optimize instead of being like we're pitching them on something we have no idea if it's going to work. It's like we've already got the relationship with them. Let's let's let them come to us and say what do you need help with here's what it's going to cost. Yeah.
13:41.45
Rick
Yep I mean you saw that you saw the slack message from jd and about ah one of our customers. Um, and it's just like the the amount of things like the software could possibly help them with it's it's not small and that's just day one so um one 1 thing just related to this I want to.
13:52.76
tylerking
Um, yeah, okay, that's awesome.
13:59.44
Rick
Talk about um is it's you asked me like can I help more and I definitely feel guilty when I can't contribute at legup health because of my day job and but the reality is like with this unlock there is no, we do not need to do any sort of Net New marketing for the for this fourth quarter to hit our goals. Our goals are 200 clients to remind everyone.
14:17.32
tylerking
Just two two hundred individual like agents. Yeah.
14:18.60
Rick
And ah 20 employer customers. Yeah 200 consumer like families households and then ah 20 businesses. Um, and that gets us to ah like profitable profitability next year Jd is making money we have some optionality we can start playing a different game. Um, we we can hit those numbers with our existing pipeline and just going like we have 130 some clients right now. Just go like go go through that list and find all the business owners and say hey we have a new feature. Add your employees.
14:48.40
tylerking
Yeah, yeah, hell yeah I love excuse me I would now's not the time to talk about it but like in January I think we're nearing the point where the topic needs to be. When does J D Max out what he can do.
15:07.21
Rick
Absolutely, you're 100% right I was ah starting to write down 2024 priorities because like you know when you have ideas but you're like you can't opt ah act on them. So but like if you don't write them down. It's like frustrating. Um.
15:20.35
tylerking
Um, yeah.
15:22.40
Rick
And so I just I like I have all these ideas but I can't do anything about them. So I started right now. Our 2024 priorities the first priority for 2024 is to shift from this like ah unprofitable mindset to get to the like once we break kind of that past that point assume we hit our goals to like profit sharing mindset where.
15:38.90
tylerking
Her.
15:40.55
Rick
Even if it's a 1% like the 3 partners you me JD are are getting something every quarter every month whatever we the cadences. Yeah, we're going to buy. Ah yeah, we're gonna buy you a diet Dr Pepper or whatever you drink. It's probably right? Yeah yeah, um.
15:45.94
tylerking
Yeah, you're you're going to pay for my white castle.
15:52.74
tylerking
Regular Dr Pepperic I need high fructose corn syrup in my veins.
15:59.14
Rick
Yeah, we'll buy you one of those a month um but but then you know we're all incentivized to grow that and that's like number 1 um number two is um is is to address like continue to deliver customer service and experiment and like part of that is like experimenting with staff augmentation and I I don't want to wait until j d can't. Service everyone to do that like we have to start experimenting with with how that works. Um, and so that's like I look at that as pride number 2 um outside of the like the the natural the massive cultural shift that we're going to go through through profit the profit sharing mindset and then the rest is just you know how do we get more customers.
16:32.47
tylerking
Yeah details. Yeah cool. That's exciting I mean I got to say you know two weeks ago when we recorded our last episode I didn't think that right now you'd be saying oh yeah, like we're on track to hit our goals. It's all like we weren't like far off.
16:35.72
Rick
Um.
16:50.70
tylerking
But I thought it was going to be like a and we fall a little short. It is what it is and now it's kind of like well we're definitely going to hit some of those numbers. No question now of course it's different. It's different to hit numbers when you're not getting paid for it. It's different but still.
17:01.63
Rick
That the reality like our group health insurance deals are larger. So the assumptions behind those 200 clients and 20 employers is like we have revenue assumptions as tied to them are are.
17:14.73
tylerking
Ah.
17:16.34
Rick
Our client stuff is going to hold like this is like juicing our client numbers because we're getting so many leads for jd to go hit the 200 and we're already at one thirty something so like that's that in that holes like ah 500 it's about $500 a year per per client. Um, so that I feel really good about the.
17:29.62
tylerking
Um, the.
17:33.61
Rick
Ah, employer side is is is at two k the the assumption is two k per deal $2000 per year per deal our group health insurance commissions on the deals that we're doing on the group side are like 5 k average so we get 8 of those you know we we actually cover it and and then the rest is.
17:45.15
tylerking
Wow. Okay, so if yeah and so you're talking about add those together you get one hundred and forty thousand dollars a year in I don't know if it's called. It's a r I guess it's it's weird calling it that in the insurance industry. But.
17:52.72
Rick
Gravy.
17:58.33
Rick
Yeah, it's Ar So it's not subscription. It's recur. It's it's reoccurring I guess this is where you get into like I call it a R but it's yeah.
18:04.60
tylerking
It is recurring now. yeah yeah I think that's fair so you're talking end of the year hundred and forty thousand air are is kind of a reasonable target and that'll cover all the operating expenses and yeah.
18:16.10
Rick
Yeah, that'll be what like our starting budget is for next year and you know how we base our private sharing arrangement. It's on we'll we'll you know, just adjust our general managers. Ah comp comp to it and then start thinking about like where do we want to spend. Where's our like next best investment.
18:31.82
tylerking
Yeah, cool I like it. Yeah cool we get Well we'll talk more or later about that I guess Ah, yeah.
18:33.30
Rick
Which I think is staff staff augmentation.
18:39.80
Rick
Hey this is getting interesting people like I just like stay tuned I think this is a turning point until we but you know we have different problems to solve. It's never gonna be like I Just don't believe that like the the world exists where it's just like money starts getting printed.
18:48.85
tylerking
And um, oh yeah, it never gets easy. Do you even want that or maybe maybe you do I don't want that I you love it. But then you go you go make up new challenges for yourself right? like.
18:59.31
Rick
Yeah I would love it. Yeah yeah, do I think I could fight some things to do if if if money was being printed for me I would invite you to come along.
19:06.17
tylerking
Life would be so boring if you're just I don't know this is why I don't want to sell my business. Yeah yeah, ah yes so I don't have any like. So I think right as your business.
19:16.95
Rick
What's up in your world.
19:24.13
tylerking
Hour but really your business starts getting more exciting. Mine's about to get more boring because like the theme I've been talking about recently ah is kind of going back to basics and simplifying things. Um I've got another example of that. But through like I think I'm going to be talking about a lot of like concepts because the actual. Doing of running less knowing serum right now is just like yeah we just have to go build the build the things that we want to build and like it's very feature and just like execution heavy. Um, so we'll see how that what? what this means for the podcast but I bet I'm going to have some pretty boring stuff to talk about but in that topic of going back to basics. Um, I said last episode like what was I talking about the product strategy I guess like this is what ah a third grader would come up with if you asked a third grader hey we've got a company. It sells a product. We want more customers. The third grader would be like make the product better. Um. And that's not like the advice out there for the most part but like we're going to try that we'll see if it works I did another version of this actually let me go out of order here I was listening to a version of this on. Um, do you listen to rogue startups craig ah hewit's podcast. Um no podcasts. You're up.
20:31.54
Rick
I don't I listen to no podcast these days and I I miss them.
20:37.29
tylerking
I know a bunch of people who have just completely stopped listening to podcast anyway, ah he has it. It was with a co-host like like what we do and now it's mostly just him talking solo but he was talking about a thing with his business. Um, where so he's got like a podcast. He has a handful of kind of podcast related things. 1 of them is a podcast. Production company. So it's like a service that people will buy and it's basically yeah, it's podcast production and then I guess if I understand what he said correctly, he like came up with this idea for positioning it that was like the point isn't podcast production. It's like you're building a personal brand and we're going to like make you. Your brand successful and so he like repositioned everything around that kind of job to be done and apparently just sales tanked. Um and you switched it back and things are going going. Well again, that's just ah I heard that and I was like that's another version of like what would the third grader do the third grader would say well what is the service. It's a podcast production service. Cool. The h one of your website should be podcast production service. You know, um, we all have to like learn that like all of us in this world. We're reading books or listening to podcasts. We're following people on Twitter and we get all these concepts and we want to like outsmart ourselves and then it's sometimes like just just say what the fuck you do and that's.
21:39.30
Rick
Um, yeah.
21:53.90
tylerking
The customer will hear that and be like oh is that the thing I want yes or no well that specific positioning thing is different but I've got another so I was like I think we I think I've I have been and I also think I keep getting there's like the the siren call of.
21:57.14
Rick
Um, how does this translate for you.
22:01.99
Rick
I Think you're already really good at that.
22:12.71
tylerking
What if we tried this and get more clever. You know I'm always tempted to to go against my instincts. But I think my instincts are good. Um, the specific example I have here is financial modeling. So I've said before I don't have a very complicated financial model. But I simplified it even more. And realized I was so 2 episodes ago I was like we're in a great financial position and then episode after that is like oh no I stopped looking at increasing ourrpuo because we're doing a price change our user gross not that good. We're actually not in a great financial position then I saw this our? ah. The financial model had us transferring a certain amount of money into the treasury like basically our long term savings every month and I counted that as an expense just I don't know why. But so if we have a really good month. We transfer some extra money into the treasury because our treasury is meant to always be two months worth of revenue. So if we grow more we have to transfer more into the treasury so that makes sense I really ah played myself here I modeled in the price increase and our um mrr rockets up that one month because 2 thirdds of our users are going to start paying us 50% more. What I didn't notice is that had us. Making a $100000 payment into the treasury the next month to account for that increase in ah Mrr ah so I looked at the numbers I was like damn we're going to lose a lot of money next year we're not losing the money we're just moving it into the treasury.
23:42.50
Rick
That's hilarious. This is ah the yeah so how did you fix that.
23:49.65
tylerking
Yup, well so again, what would a third grader do a third grader just be like how much money did you have last month how much money do you have this month I don't care if it's in the treasury or not who cares and I actually I think what we did before was good before we had enough savings this forced us to save before spending. So I liked that. But um, what we're doing now. So we switch to mercury is our bank. They just have all your accounts combined here's how much money's in the bank I'm just tracking that number now again that simple.
24:17.82
Rick
Is is Mer is Mercury A side note is Mercury a great good experience. We're on Chase and it's so limiting in terms of what we can do.
24:24.16
tylerking
Yeah, incredible. Mercury is incredible. There's a couple minor things I have complaints about the biggest one is you can't write paper checks. So we have a different bank account to do that because we. The city of St Louis only accepts paper checks unfortunately, but ah, but sorry I keep muting myself to cough.
24:45.50
Rick
But can't you with Mercury write a a paper check but digitally.
24:51.66
tylerking
Yeah, but the the problem is like if we're paying taxes or something we we often have to do it like with quick turnaround time like our our counts don't have our taxes done until the fourteenth and we have to send it out the next day. Um, it's annoying. It's not a big deal. But ah so.
24:55.10
Rick
Oh. Cheese but you just thought but take a third party big account that you write so keep a chase account around for writing checks.
25:09.25
tylerking
Yeah, yeah, we set up Blue vine. It's just like another online bank that was easy to sign up for and they do paper checks. Um no I Love Mercury It's and in particular, let me call out a feature. They've got that I love that these like Auto transfer rules. So you can basically say.
25:24.34
Rick
Are.
25:28.90
tylerking
I always want one hundred and fifty thousand dollars in my payroll bank account I want 30000 in my like bill pay account I want this much in savings anything left put it into money market funds or whatever and it just automatically moves the money around for you so you don't even have to think about it.
25:42.42
Rick
Um, ah, especially with interest rates right now like.
25:46.88
tylerking
Yeah, we're getting like in the tens of thousands of dollars a year because a decent amount of our money is now they they call it the treasury that's like a feature they have and the money in there is getting a high enough interest rate right now that it's making a material difference for it.
26:00.70
Rick
And can you pull that money out in real time or is there like to get locked up in the money market fund for a period time.
26:04.35
tylerking
Now it's It's like any brokerage account where it's like it takes a few days to get it out, but it's fairly liquid.
26:09.10
Rick
Yeah, well thank you for I'm I'm putting that on the you know my 2024 priority list that's got Merrk switching to mercuries on my 2024 priority list.
26:18.93
tylerking
Yeah, mercury's awesome and they keep putting more stuff out. It's really great. Um, but yeah, that's just another version of this I'm I'm now looking around at other parts of business like what would a third grader. Do. I simplified our banking I simplified our financial model I simplified how we think about product strategy. What's next.
26:37.90
Rick
Can I ask you? what if they're grade or do about your business I want to ask you like what would it? Third greater. Do it ah to grow the business from a user growth perspective perspective.
26:40.21
tylerking
Why I mean I I I think the stuff I just I don't know like from a marketing standpoint. So I'd like to think that's what we did I think four months ago um if you recall I was kind of like we we had all these marketing ideas and all these like bets we were placing and then we would I don't know if I articulated it this well in the podcast because like maybe this is like after the fact I realized how to frame it. But when people buy a crm. What do they do? they Google best Crm or whatever. Where does that take them. It takes them to maybe there's 20 different websites. We just have to be there. Ah, that means Google adwords means advertising on g two and captera which are two big marketplaces means reaching out to people who write blog posts. Ah this is stuff we were doing. Seven years ago and not that we stopped but I just think we our plan right now is like let's just keep doing that excuse me sorry I don't think I got a lot longer in me here unless you start talking more.
27:42.17
Rick
I Love it.
27:47.93
Rick
Um, okay, okay, um, what's so what else you got going. Let's get let's get everything from you. You got oh tell me about the Mercury Auto Trans rules. Okay.
27:59.30
tylerking
Um, that's what I was just talking about with the ah the moving money back and forth. Yeah, yeah, exactly I was doing that with bank of America. Um.
28:05.85
Rick
But can you he say like once a count exceeds a certain amount transfer the the excess I do that Annually in Chase every month.
28:16.81
tylerking
It's even better than that you can say like it's not once it hits a certain amount. It's like every single day make it this amount. So if you go over it takes away from it if you go under it replenishes it from somewhere else. So there's 1 savings account that funnels into all the checking accounts and then there's the treasury which twice a month either. You sell from the treasury into savings or vice versa. But so it just keeps everything balanced. It's so cool.
28:40.40
Rick
And for like if we wanted to set up like the profit sharing account. For example, could we say like you know can you can you do things like how I want to know how sophisticated it is. Can you go like take a percentage of the increase during this period and transfer it to this account.
28:58.00
tylerking
I Doubt you can do that? Um I'm playing it up right now to see I know you can do like target amounts ah wants my ah my ubi key and that's in a different room I'm not going to be able to get in security Damn it. Ah.
29:11.59
Rick
Ah, that's a good thing.
29:14.64
tylerking
But no I don't think it could do what you are just saying but it could do the key thing for me is like I never want to excuse me I Never want to write a check and not have the money there. But also I don't want to have so much money piling up in my checking and savings when it should be going into the money market or wherever so just keeps everything in balance. Especially valuable because like I mentioned before Paddle I found out our new payment processor. They only pay out money once a month so we have to have a lot more money in our like available to Us. We're basically a month behind on Cash flow in a given time because of that. But again, this will just. Take money out of the treasury as we need it. So I don't really have to think about it at all. Yeah yeah, great. Um, and then yeah final note on all of this kind of simplifying things. So I I updated my financial model. It's simpler. It's better than I thought it's still you know we're not like.
29:52.95
Rick
It's great. Cool. Thank you on the 2024 priorities
30:07.66
tylerking
Set forever. But it's better and I thought I've just decided for the next year I'm not going to care about money like we've got a product strategy. We know what we want to do it could be wrong I'm not saying it'll work but I'm just going to give it a year before I even think about it.
30:22.75
Rick
That's smart. So let me just recap what you did you basically looked at the financial model simplified it and then made some very I don't know conservative assumptions around the growth of the business and you basically just said okay. I'll revisit I'll put ah a calendar item for a year from now and I'm not going to look at this again unless something bad happens.
30:44.47
tylerking
Yeah, yeah, I'll keep an eye on like if we're actually losing revenue or something but I have the model has 0 growth baked into it. So it's like if we don't grow at all. We're good for at least three years so I'm just not going to worry about it for 1 year yeah the bad news is.
30:57.00
Rick
Yeah, and you'll do it again in the year that's great that's I think that's really healthy.
31:03.10
tylerking
Thanks! I'm glad to hear that the bad news for this podcast is again. This is why I'm saying I think it's gonna be boring is my update every time is just gonna be like we're still working on the features that we're building I don't know.
31:09.81
Rick
Yeah, but you could still report your a or r.
31:15.51
tylerking
Yeah I can right now. It's not like we ah maybe an update on the ah so we announced this price increase to our ah all our legacy users we saw like ah not much churn right away we are down 300 users this month net so makes sense like someone's not going to cancel their serum.
31:29.88
Rick
Ah.
31:33.50
tylerking
The day of the announcement like it takes a little time to get your ducks in order but I will be interested to see how like are we losing 300 users a month for the next six months or is it like this is this is the main I have baked in I'm expecting 1500 users total that would be 10% churn from this but ah yeah, we'll see.
31:49.25
Rick
Yeah I mean the only thing that you just don't know right now is is if there's something else causing that.
31:56.41
tylerking
Right? Yeah, we can so ah, who is it I'm forgetting who someone wrote a blog post. It's kind of like for every 1 person who tells you something. There's like ten to a hundred people who thought the same thing but didn't bother to tell you a decent number of people been canceling being like. Already wasn't using you much. You're not surprise increase by so it's only been like sort of like 5 to 10 people who have said that this month. But if you imagine they're a representative of 50 to 200 or whatever other people I think that's a decent amount of it.
32:14.34
Rick
Um, ah.
32:27.60
Rick
Um, makes sense.
32:28.39
tylerking
So yeah, anything else on your list.
32:34.20
Rick
No, um I had something I wanted to ask you was it? Oh what's your next trip to Utah or might your next trip to St Louis
32:45.50
tylerking
I don't know ah ski time. Yeah because I'm not doing I'm going to Japan ah normally my I go skiing over spring break because my wife's a college professor. We're going to Japan next year not skiing and so maybe I need to work in some some ski time other times.
32:45.82
Rick
Ski time.
33:03.13
tylerking
Ah, in the winter. Yeah, let's talk you want to get J D out there too. Do a little partner meet up.
33:04.34
Rick
Be fine. Yeah I think we should like we should do it like February ish at the latest. Um.
33:11.65
tylerking
Yeah I think that that works the only yeah, the only thing I have planned right now is going to big snow tiny comp which I think is late January early February Yeah I'm looking forward to it.
33:20.47
Rick
Mark's gonna be fine I heard the yeah, it looks so much fun. Um, cool. Well um, if you don't have anything else like and you want to save your voice. Let's call it.
33:28.39
tylerking
Okay I will come back two weeks from now able to talk I hate listening to podcasts where someone has recipe voice. It's like just why did you even record today. Just skip it so I'm sorry to everyone who had to listen to this.
33:37.25
Rick
Um, you don't sound bad at all, you did a great job of muting yourself in between coughing fits and ah yeah, so um, if you'd like to review past topics and show notes visit Star Toast Dot Com see you next time.
33:44.25
tylerking
Thank you.
33:50.98
tylerking
See ya.