Product People

Pippin Williamson started out like a lot of us do: building websites for whoever would pay him. He decided to try selling one of his WordPress plugins. Now, Pippin's Plugins earns over $1 million in revenue a year. This Mega Profitable series aims to help founders, like you, get profitable!

Show Notes

Pippin Williamson started out like a lot of us do: building websites for whoever would pay him. He decided to try selling one of his WordPress plugins. Now, Pippin's Plugins earns over $1 million in revenue a year. This Mega Profitable series aims to help founders, like you, get profitable!

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Creators and Guests

Host
Justin Jackson
⚡ Bootstrapping, podcasting, calm companies, business ethics. Co-founder of Transistor.fm
Guest
Pippin Williamson
PHP developer, craft beer lover and brewer, cyclist, and founder and Managing Director of Sandhills Development, LLC.

What is Product People?

A podcast focused on great products and the people who make them

Speaker 1:

Hello, friends. Justin Jackson here. Welcome back to product people. Today, we have Pippin Williamson on the show, and this is a part of our Mega Profitable series. So if you're not subscribed to my newsletter yet, go to megamaker.co/profit and sign up on the email list there, and you'll get these case studies emailed to you.

Speaker 1:

And Pippin's story is amazing. He started, like a lot of us, just building websites for people. Just building them for whoever would pay them, charging way too little. And as he was doing that, started building little plug ins to add functionality to these websites. And eventually the plug in business took off, And he tells the story of how he went from, you know, making a a few $100 a month all the way to a few years ago, they broke a million dollars in revenue.

Speaker 1:

So let's get right into it. Here is my chat with Pippin.

Speaker 2:

Yeah, think I'd like to go back to the beginning and how all of this kind of started. Were mentioning that you started building web pages. Was that like right out of college? What's kind of the background there?

Speaker 3:

Yeah. So I originally started just being an HTML CSS developer, building websites for anybody that would hire me. Right about the end of high school is when I started doing it, so maybe my senior year. Then in my first couple years of college, kept doing it as just a little side project, make some rent money here and there. That's when I decided to go ahead and create the business called Pippin's Pages, which is building web pages is what I thought I was gonna be doing for a long time.

Speaker 3:

Then slowly transitioned into building products and building products inside of the WordPress ecosystem, which is where the Pippins plugins came from. And then that eventually transitioned into instead of just me building plugins, instead of Pippins plugins, it started turning into a team of people. As I started to bring on contractors, I would work part time and then we eventually started bringing full time people on and that eventually transitioned into us making a We basically just renamed the company from Pippen's Pages LLC to Sand Hills Development. I didn't really like the idea of the company being named after me. What if I walk away?

Speaker 3:

What if I want to sell it tomorrow? Well, personally branded company didn't really make sense to me at that point. And so we renamed it and so now we are Sandhills Development.

Speaker 2:

Gotcha. Now, so how old are

Speaker 3:

you now by the way? I'm 28.

Speaker 2:

You're 28. All right. So I guess that would have been let's about so nine, ten years ago

Speaker 3:

you were About 02/2007. Okay. That's it all about started, 02/2007, 02/2008.

Speaker 2:

02/2007, 02/2008, you're just graduating from high school and you're building web pages for anyone who would hire you. And where are living at this point?

Speaker 3:

At that time, I was living in Lawrence, Kansas which is where the University of Kansas is. Okay. I grew up in Central Kansas just about three hours from there and that's where I live now.

Speaker 2:

Okay. See, and I think one thing that will be interesting for folks is a lot of people can identify with this idea of building web pages for whoever will hire them. But how did you get from that to start like the How did you make the jump initially to building products? Like what was the first thing you did?

Speaker 3:

So it was actually Part of it was a natural transition, part of it was an accident. I had clients that would ask me to build something for their site and so then I would build it. There was a couple of them that they wanted these features and things for their sites that I recognized had possibility to reuse them. Yeah. If I could build them into say a little software package basically, at that time I had no intention of making money off of them.

Speaker 3:

But if I thought, if I can build this into a plugin that I can put onto multiple sites and I can reuse it and this will be great. Save myself some time, maybe save some other people some time. And so I did that with some of the features that people have been asking me for. And then with one of them, just decided, you know, let's just let's put it up for sale and, you know, if I make $5 a year, great. There's a there's a latte.

Speaker 3:

Yeah. And I did. And then it actually ended up working pretty well and sold a lot more than $5 a year. And that was the start of it. So I built one product for I I built one feature for a client, it it turned into a product kind of by accident, decided to sell it and it started I don't know.

Speaker 3:

After doing that, I then built another one and then I built another one and I built another one. I basically just built a whole bunch of these little tiny products that maybe made $15 $100 a month max, and that just slowly transitioned into building more. And then eventually I realized that I had built enough of them that I had a real possibility of saying, Maybe I'm not gonna do client work anymore. Maybe I'm just gonna build these build these little products sell them for 5 to $20 a piece and I can pay my bills. And so one one summer between my junior and senior year of college I decided to give it a go And I said, alright, this is my summer to experiment.

Speaker 3:

And if I can pay my bills with just these products, I'm gonna do it. I'm gonna I'm gonna quit my part time job that I have working at a theater. I'm going to try and see if I can do this and I'm getting married in a year, so this is my chance to do it. I'll never have more freedom than I have right now. Let's see what we can do.

Speaker 3:

It worked.

Speaker 2:

And it worked. So what what was the first product? What was the first thing you made a dollar on?

Speaker 3:

It was this little plugin for WordPress called Font Uploader. So I had a client that just they really wanted to have the ability to control the fonts on their website. Mhmm. And this was before we had before the web development world had any decent ways to actually add fonts to a site or use which fonts you wanna use. So I built in this little this little thing that allowed them to take a TTF or OTF file, which were your common font types at the time, and upload it to their site and then select a element.

Speaker 3:

So you could say, I want all of my blog post headers to be this font, I want all of my page titles to be this font, and I want my paragraph text to be this font, and that was it. So I called it Font Uploader and it allowed people to customize the fonts on their website without having too much technical knowledge. It required a little bit of knowledge, but not much and it worked.

Speaker 2:

Now, when you're deciding to make that jump, because you were saying you're making sometimes a $100 a month and then you know this gradually increased but then there was this point where you're like I'm gonna try this summer or whatever it was to really focus on this and make the jump from this is paying some of my bills to all of my bills. What was that journey like? What changed from you just making some money to more money? What did that kind of look like?

Speaker 3:

I think the main thing was a verbal commitment to myself that said, I'm not going to accept any more client work for this period. Up to that point, I was still doing quite a bit of client work for a couple of agencies and various clients around the web, again, anybody that would hire me, I had some consistent clients at this point. And they could ease I could continue to work for them and comfortably pay my bills. And so the first thing was just a commitment that said, I am not going to say yes to another client project. Instead, I'm going to take the risk.

Speaker 3:

I will probably struggle for a few months, but I need to take these these three months or so here and build out some more products that will fill the void left by saying no to the client projects. So I did and I built a couple more products. Continued working on some that I had had in the works or ones that maybe had been a little bit neglected because most of my time was spent on client work then. So I had to transition from billing hourly or billing project to I'm not billing at all. And all of my revenue was coming from the emails.

Speaker 2:

Was there one particular like big winner that you had released that gave you confidence or was it a bunch of just revenue coming from a bunch of things?

Speaker 3:

So it was kind of a combination. There was a a lot of, like, little bits of revenue coming from a bunch of different little products. I think at that time, I probably had 25 to 30 products, and there were two big ones. So in the last ten years, have seen the rise and fall of image sliders on websites. Mhmm.

Speaker 3:

So it became very, very popular to throw up this big slideshow on the in the masthead of your website and have your images or your branding or something like that go across. So I built one of the very first slider plugins for the WordPress world that allowed somebody to easily add that to their site. That was one of my first successful products that was earning $2,000 to 3,000 a month at that time. And it had grown to that pretty quickly. And then there was another one that I had called easy content types that would allow somebody to add these different content types to their website as well as like So let's say that somebody had a site built on top of WordPress and they wanted to separate out the sections of their site into relevant content categories.

Speaker 3:

So for example, if they're a publisher, they might have books, magazines, and I don't know, some other kind of content type that you would see in publishing business. Yeah. So I built this system called Easy Content Types that would allow a site owner to construct all of that without requiring any development knowledge. That was my second big one. It was the combination of that image slider and the content type system that made me realize, I can do this.

Speaker 3:

This is going to be enough to sustain me and my wife in a year and I think we can live off of it.

Speaker 2:

Yeah. And what were so let's say that one's you said one's doing two or three ks a month. What were your expenses like at the time?

Speaker 3:

Honestly, pretty low because this was I think by this point I was either near my senior year, graduating my senior year or just after, because this would have been six to nine months after I decided to take the plunge that summer. They were pretty minimal. My wife and I lived in an apartment. I think we paid $500 a month in rent. We had your standard utilities and maybe a Netflix account, that was about it, aside from your groceries and other standard living expenses.

Speaker 3:

All of your areas in Kansas, from Central Kansas to Eastern Kansas, are pretty economical when it comes to living expenses. We could live for less than $1,000 a month. Wow. We were living pretty comfortably. To living I used to living very, very minimally and living in low end apartments.

Speaker 3:

I remember renting a house and my landlord, the guy that we're renting it from, looked at us weird when we when we rented it because we I realized later on that we could have been living in a much, much, much, much nicer house and yet we were living in this little itty bitty like 500 square foot house and But it was great. So our expenses were very minimal and we were realizing that we could to make quite a bit off of it.

Speaker 2:

Yeah. That is one piece of profitability that a lot of folks don't consider is that if your expenses are low, that's the second part of the profit equation.

Speaker 3:

Absolutely.

Speaker 2:

Revenue is the first one and the second one is expenses. And if your expenses are low, if you are living in New York, in Manhattan, and you have six kids and two car payments, etcetera, it's going to be a lot harder to get to profitability than it is if you're in Kansas For sure. Your expenses are a lot lower.

Speaker 3:

Well, know, it's a

Speaker 2:

Go ahead.

Speaker 3:

That's an interesting point because when were right after I graduated and my wife graduated, we were contemplating where to go. And so we were at a financial position at that point because our expenses had been so low and our revenue was high enough that we had quite a bit in the bank, we realized that we could live anywhere we wanted. And we made the choice of, You know what? Let's go home. Let's go back to Central Kansas.

Speaker 3:

Let's buy a decent house that has a very low mortgage because living expenses are so low here and we don't need to go throw all of our money away just to live in a, say, a highly desired area. Let's go home with family. And that worked out pretty well for us.

Speaker 2:

So right now, are you over $100,000 a year in profit?

Speaker 3:

We are. Yeah. Right now, that has not been a consistent trend. So we've been profitable since day one. We have never had a year that we had a loss.

Speaker 3:

This year, we're currently sitting about 200 to $225,000 in profit. Previous years, we've seen anywhere from 30,000 to $60,000 in profit. That's after we became a non single member company. So it was a little bit different when it was just me because the first year of the company being successful, it was still just me and I just took my salary was whatever the company made. Yeah.

Speaker 3:

The year after that, which was still just me, I decided, you know what, I'm going to set myself a salary and I'm going to separate the company finances from my personal salary, my personal finances. Then that year we still had a set. I think we had maybe 50,000 in profit then 30 or then 60, then 30 and then where we are today which is sitting on $2.25 at the moment.

Speaker 2:

Yeah. I think this is the big question I got when I said I was going to do this series is some folks were like, well, does profit include disbursements and owner salary? And I said, yes, it should be after disbursements and owner salary. And so that's awesome. I think the maybe actually talk a little bit about that, about the move to just paying yourself a salary and what the pros and cons of that were.

Speaker 2:

Sure.

Speaker 3:

Well, so one of the things that I started to recognize pretty early on that I thought we had a good thing going. Obviously, I was a single person company and we were doing very well and I started to recognize that you know what, We're working on an in an online ecosystem. We have a lot of customers. At some point, I'm gonna piss somebody off probably. And if I get sued, I wanna be okay.

Speaker 3:

If the company goes bankrupt because we got sued, I hope I'm still okay. And so the first thing was to separate personal and company finances. Yeah. That way you can sue the company, but my house is okay basically. So that was the first thing.

Speaker 3:

Second was we had one year where I paid myself whatever the company made and it was very easy to see how that could get a little bit out of control with lifestyle creep. And so as I mean, as you make more, as your company does better and better, it's very easy to say, you know what, I'm gonna upgrade my car, I'm gonna upgrade my house, I'm gonna do this, I'm gonna do this. Oh, shoot. Our company made $250,000 this year, and I'm the only person in the company. You know what?

Speaker 3:

Screw it. Let's drop $10 and go do something. Mhmm. So I started recognizing that that was a very easy thing to get into, and I wanted to avoid it. And so I said, you know what, if I set myself a salary cap, that is my salary and everything else after that can get reinvested back into the company.

Speaker 3:

That's what's going to allow us to hire people. That's what's going to allow us to grow this into more than just me. And so that was the other early things that we did that I think was very, very valuable. And I think I'm still pretty much at the same salary that I was four years ago and that's been great. And it makes it much, much easier for us to look at how we're doing as a company and say, We're gonna invest 50,000 into this project, or We're gonna do this, or How are we looking?

Speaker 3:

We know exactly how much we're going to spend every single month on salary. Everything after that is flexible.

Speaker 2:

Yeah. I think that's super important. Found I'm just into my second year now of being independent and one thing I noticed is that- and I just pay myself in dividends and the challenge with that is exactly what you've said. The company essentially after disbursements makes no profit because if I have $30,000 a month, I'm like, Yeah, all right. Let's spend some money.

Speaker 2:

Let's do these things that we've been waiting to do. It's a lot easier to be free with the money. Yes. And the challenge with that is I mean on one hand the advantage to that is the flexibility. If one month we have a $3,000 orthodontist bill, it's a lot easier to go, Okay, I'll just pay myself more dividends.

Speaker 2:

That's we're done, right? Yep, absolutely. But the disadvantage is I haven't been very profit focused and one of the things I was encouraged to do this past year was look at my profit margins after owner disbursements. And essentially, I was like, well, I'm at probably about zero to 5%. What this one fellow said to me was 5% is kind of like the new break even.

Speaker 2:

If you're at 5% profit margins, that means all this investment you're putting into your business is actually not investment. You're just basically getting a salary and there's no added advantage to running a business. Interesting. So what for you, it seems like you had this realization of I want to keep some money in the business. I want this thing to have a nest egg inside of it.

Speaker 2:

What led you to that? Was it just you always being quite frugal and liking having the money in I the

Speaker 3:

there's a few things. So the first is that Growing up, we were comfortable as a family. We were never wealthy. We were never super poor. We were reasonably comfortable.

Speaker 2:

Just as an aside, what did your parents do for work?

Speaker 3:

Well, so they varied. So my mom was a professional florist for a while. My father was a professional software developer. Then they ran an organic apple orchard and they also ran a dry cleaners.

Speaker 2:

Okay.

Speaker 3:

So they did a variety of things. Alright. Now my mom is mostly retired and my dad is a software developer still.

Speaker 2:

Okay.

Speaker 3:

Anyway, for all of the years when I was in college and before that, I became very comfortable with not having more than $5 in my bank account. I very much lived paycheck to paycheck. I never had spending money. I remember going around and watching friends that had a lot more and watch them be able to spend liberally and enjoy things. Some of it I remember being envious of, but also I think I came really appreciative of having been very, very little.

Speaker 3:

One of the things that that led me to do was to say, Look, before I hire my first person, I will have their salary in the bank for a year. Their annual salary will be in the bank before I ever hire them. And I'm not completely adverse to risk, but every risk that I take is gonna be very, very calculated. We're gonna make sure that it's a safe gamble. I don't like the idea that I would hire somebody and say, here, come work for me and I'll pay you this amount per year or this amount per hour.

Speaker 3:

And then next month having to fire them because I can't pay them terrified me. Absolutely terrified me. So I said, I will not do it. I will have your salary in the bank and then we'll hire you. And so we did that.

Speaker 3:

And then we did that with number two. Once we got to say number three and number four, it was a little bit harder to do that because all of a sudden you're talking about a little bit bigger numbers. But we still kept that goal. And so then that transitioned into saying, You know what? What if tomorrow the power grid dies and the internet literally dies?

Speaker 3:

Obviously, this is a super cataclysmic event. But what if? Like just what if? I mean, maybe we're not talking about power grid, maybe we're talking about the ecosystem that we've built our products in. Maybe it's me.

Speaker 3:

What if I'm in a fatal car crash tomorrow and all of the employees are now wondering what do we do? So I wanted to have a security net and said, okay, we will be able to operate with zero revenue for a minimum of three to six months. And so that means having cash in the bank. Setting myself a salary and focusing on building that cushion as opposed to reinvesting every dollar we earned made us grow a bit slower, but it made us grow very, very safely. So over the last two years, we have continually grown that safety net.

Speaker 3:

So then this basically, this year, we got to a point where all of a sudden we realized, look, our safety net is pretty secure. We're it's gonna take a super, super event to to to kill us, basically. Yeah. So now Now that we've taken three years of very safe growth basically, now what can we do with it? Let's say that we want three months of operating minimum in the bank.

Speaker 3:

Okay, everything after that, now we can start talking about, investing a portion of it, dispersing a portion of it, and then having some cash just to float to unexpected expenses.

Speaker 2:

Yeah. So and it sounds like profits really increased last year. What what why was that? Why did they go up so much?

Speaker 3:

There there's a couple of things that we did. First, I got really, really frustrated with one of our products because was a so we basically have three main products that we sell. And one of them, which was our highest earner but lowest profit margin. And so on about 700,000 in sales, it had a profit at the end of the year of $5,000. I looked at that thinking, what in the world?

Speaker 3:

Like, that's crazy. Mhmm. Surely, we can do better than that. Like, where did all the money go? Mhmm.

Speaker 3:

And then we would look at another one and it had say 400,000 in sales and yet we had 50,000 in profit. Why is that one so much more profitable than this other one? And so I tackled that problem. And I and I said, I wanna I want to to me, that is a problem. Mhmm.

Speaker 3:

Let's fix it.

Speaker 2:

Yeah.

Speaker 3:

We shouldn't have a cash cow and a money dump. Instead, they should both be cash cows. Like, we can we can we can make both of these work. So we started tackling various problems in that product. Mhmm.

Speaker 3:

And there's a few things that we did. Number one, we we introduced we we have an annual licensing model. So if you if you buy the product, you then renew your license each year. Yeah. For a long for the last ever since the product started, five years ago or so, that has been a manual process.

Speaker 3:

So you do get an email that says, your license is going to expire. You should come back and renew. Well, that doesn't really work that well. So we turned on automatic renewals so that it's just an automatic subscription that processes every single year until it's canceled. And it made a huge difference, a dramatic change to our monthly turnaround once those renewals started processing.

Speaker 3:

Another one that we did is we looked at our pricing and said, Our pricing does not reflect where we are today. It reflects where we were four years ago. Let's raise the prices. So we raised the prices significantly. One

Speaker 2:

of

Speaker 3:

the challenges that we're having, we're being eaten alive by support cost. And it was basically, we had too many low value customers. And so we said, okay, let's get lower. Let's get rid of some low value customers and increase the average value of our customer by raising our prices. So that way, we may have fewer people that come in and purchase, but everybody that does is paying a little bit higher price.

Speaker 3:

And one thing that we have noticed over the last five years is that the and this is this is not uncommon, is the the more that a customer pays, the easier that customer is to support and to manage. The lower they pay, the more of a pain in the ass they are. And that's that's not it's not to be brutally honest, but it's very it's very accurate. Mhmm. The most we spent the most time supporting the customers that paid us the least.

Speaker 3:

And we said that's silly. Like, what if if you've paid us $5, you should never take up an hour of our time. If you've paid us $800, now that's a different story. But what we found is that the $800 customers didn't ever take up any time, but the $5 customers took up hours and hours and hours. So we raised our prices to help raise the quality of the customer.

Speaker 3:

And that made a huge difference not only to our cost, like our support costs went down dramatically, but it also raised our monthly revenue. And I think more important is it dramatically affected the mentality of the team. Our team was happier day to day because we were working with better people at the moment those prices went up. That I don't think can be ignored. That's super important.

Speaker 2:

Sorry, go ahead.

Speaker 3:

No, I was just trying to think of another thing that we did or not. I think those were the two big ones.

Speaker 2:

You must be how are you tracking you're obviously tracking profit per product. Do you have some sort of how are you tracking all those numbers? What goes into that?

Speaker 3:

Basically, all three of our products are technically separate companies. We have our parent company, which is Sand Hills Development, and then we have sub companies under that. And so each one has their own finances. It gets a little bit tricky to track them all but we've got an awesome bookkeeper that takes care of it all for us. But so we do track finances for each individual product.

Speaker 3:

So we can look at each one of them and say, Okay. This one had this much in revenue, this much in payroll, this much in other expenses, here's the profit. And so we separate those all out and then we also aggregate them together to see a company, a whole picture, a whole company picture.

Speaker 2:

Yeah. That's awesome because that usually especially like for someone like me when you have multiple products it's difficult to tear kind of tease all that apart and say Absolutely. What went into this one and what went into that one? But as you've just shown, having that picture is really helpful because if that hadn't been separate you would have maybe just ignored it.

Speaker 3:

I don't think we would have ever realized that one of them had zero profit and one of them had massive profit. Instead, we would have just averaged them and said, okay, our profit is this. And we probably would not have addressed those problems. And I don't know if that was intentional at the time. Our main intention when we separated them so they used to all be to get together, and then we separated them about two years ago.

Speaker 3:

We did it then because I decided that there was a pretty good chance that we would try to sell one of the products off Yeah. At some point in the future. And so I wanted each one to have a separate financial picture so that it was easier to sell.

Speaker 2:

Yeah. Yeah. And that that's super smart too. Especially when you're thinking about profits and what's the advantage of having profits. Well, one advantage is if you ever want to sell, a lot of acquisition deals are done based off profit.

Speaker 2:

They're multiple of your profit. And so if you have that separated out and you're showing consistent year over year profits, that asset becomes a lot more valuable because anyone who's buying Absolutely. Anyone who's buying it say like, well okay, well I could buy this and have it paid off in three years and then after everything after that is profit for them basically.

Speaker 3:

Right. A million dollars in revenue doesn't mean jack shit if you spend 999,000.

Speaker 2:

Well, that's and that's the thing I think that's the danger in focusing just on top line revenue which is a really kind of blunt metric in our industry and I think is you know there's some things that are helpful about it but the I've become a lot more interested in the expense side because it's really easy for expenses to increase at the same rate as revenue and so you're just working harder and creating more complexity in your business and you're not there's no benefit to it.

Speaker 3:

Well, last year was was the first year that we broke a million in revenue. And I remember looking at that being really excited like, yes, we made it.

Speaker 2:

And then

Speaker 3:

I looked at our expenses like, well, but that doesn't mean anything because we only have $10 at the bank. Like $10 of profit. That's worthless. Like that's we had more profit last year and we only made 400,000. What the heck?

Speaker 2:

Yeah. Exactly. Exactly. So I think that's a really good tactic of eventually when you get to scale breaking apart your product lines, putting them under separate companies or at the very least getting your bookkeeper to split it up for you. Is there let's talk about both sides of those equations again just to make sure we haven't missed anything.

Speaker 2:

Is there anything else you've done to increase revenue and or to reduce expenses?

Speaker 3:

There's a few things that I think have had a significant impact, but were not necessarily done for the purpose of increasing revenue or decreasing expenses. One of the big ones is that we focused on people. Take care of people and they will take care of you. We're not interested in hiring somebody at minimum wage. We're not interested at hiring somebody just to get the job done.

Speaker 3:

We have an ethos of hiring around people. So it's the human element. And I think that's been really, really important. We also have very intentionally not gone after growth for the sake of growth. Have no interest in building a big company.

Speaker 3:

Instead, I'm very interested in building a company that thrives with a team that can be very personal. I've thought that the day that I don't know everybody that works for me is the day that I should probably walk away. So I've intentionally tried to say, I don't want to build a larger company. So instead, let's focus on the idea of what can we do to achieve maximum growth with zero addition of people. If we have to add somebody every now and then, that's fine.

Speaker 3:

That's great. I mean, number one, because if they're a great person, we're going to work together and we're gonna thrive together. That's excellent. But I don't like the answer of adding, okay, if you have a problem, you have some it's too expensive. You don't have enough man hours.

Speaker 3:

You need more hands on deck. I don't like solving those problems just by adding people. To me, that doesn't make sense because number one, are tackling a growth problem by just adding more expenses. Sure, if you have the right people, then every person you add should be able to return more revenue to the company than they cost in salary, health benefits, etcetera. But I still don't like that as a general answer.

Speaker 3:

And so instead, focus on our people and we focus on solving a problem in a little bit more creative manners, then I think that naturally builds a much more profitable company than just going after growth for the sake of growth.

Speaker 2:

Yeah. Yeah. That's interesting. Because there's this idea of why are why are you even trying to get profits? And I think one thing I've been thinking about lately is initially when I started very much like you although I was a lot older when I like last year was my first year being independent.

Speaker 2:

And leading up to that, my whole goal was just to pay my bills. So you're just doing stuff just basically for yourself. I just want to make enough so I can quit my job and do this full time. But eventually you get to the point where you're saying, Okay, well, what's the point of this if I keep growing it, if I keep making more money, if there's money in the bank? And certainly some of that is going to be for ourselves as business owners.

Speaker 2:

We get sick and the business can't continue, it would be nice to have some profits to live off of. But then you kind of expand out, don't you? You start to think about your family next. How can I make sure my family is taken care of? How can I make sure my kids are taken care of, etc?

Speaker 2:

But then after that, even then you start to say, Okay, but what's the point? I feel like eventually, you know, some people just do really get excited about growth for the sake of growth. They just it's like a game to see how much money they can get in the bank and that's fine too. But I think there's also this other group of people that are like, I really want to help more people than just myself and my family. I want to see other families impacted by what we're doing.

Speaker 2:

It seems like that's the road you've taken.

Speaker 3:

It is. Our goal is to get that every single person that works with us is taken care of. This is the mindset that is less to give away 25% of the company to team members. This is the mindset that gets every single person raises every year if possible. We have no interest in hiring somebody at 30,000 a year.

Speaker 3:

We have no interest in paying somebody your minimum. We want to take care of everybody that we can.

Speaker 2:

You've given away 25% equity?

Speaker 3:

I've given away 25% of equity of the company. Yes.

Speaker 2:

Wow. So this isn't just profit sharing, this is actual ownership?

Speaker 3:

Yeah. It's real ownership of the company. Obviously, don't do anything on a whim. Number one, it's very carefully thought out. But it's also, look, this is not a company that exists because of me.

Speaker 3:

Sure, I started it. It might not be where it was today if I had walked away three years ago and gave the reins over to somebody else, but this company exists because of the people in it, because of the human element. So we need to be conscious of that and we need to make sure that those are the people that get rewarded. I should not, as the owner, I have no interest in swimming in profits while the team members that have been hugely responsible for all of this see no change year to year. To me, is ludicrous.

Speaker 3:

They are the reason that I have a flexibility that I do now. And so we're gonna make sure that they get rewarded for that.

Speaker 2:

Yeah. I think that's awesome. I think, again, every owner is gonna need to figure out what motivates them to, you know, like why are they in this game? And once again, there's some people listening that are just gonna be like, well, I'm just trying to make a living. And that I think is obviously the first step.

Speaker 2:

And then after that

Speaker 3:

Absolutely. I mean, that's how everybody starts. Yeah. I mean, I started this as a, Oh, I hope I can make it this year.

Speaker 2:

Yeah, exactly. But after that, yeah, what's going to be the thing that motivates you to keep going? Yeah, I think that's awesome what you've done. That's obviously very unique. Apeldi has a very similar philosophy at Balsamiq and I think the cool thing about that philosophy is as you are growing and trying to attract new people, you know, I've often said that like I'm independent for life, but if I needed a job, PELD is probably the only person I would work for.

Speaker 2:

And that kind of reputation of being a business owner that people are willing to work that really wanna work for, that's another great way to grow the company. And the way you've done it now is every new additional dollar of profit doesn't just benefit you, it now benefits all the rest of the team too. They've got a massive motivation.

Speaker 3:

Absolutely. Well, one thing that's always bothered me about the idea of owner driven profits, if I am pushing my team to work harder, sometimes working long nights with long days, they better have a motivation that's not mine. Yeah. And not everybody is is driven by profit in that in that way. Yeah.

Speaker 3:

And so, obviously, that's not going to apply across the board, but it can't be just me. Not if I'm gonna ask more of them.

Speaker 2:

Yeah. We're gonna kind of close off here, but I've got a few more questions around what your life is like now. Certainly. Even for profitable companies, business is hard. What are some of the things you're struggling with right now?

Speaker 3:

I think the main one right now on an entirely personal level is that I've hired myself out of a job. It's interesting to me because if we go back five years ago, I was the developer, I was the marketer, I was the support, I was everybody. I wore all the hats and that has slowly changed. About six months to a year ago, I realized every single role that I filled in this comp that I've done in this company is no longer me. Somebody else is managing them and they're doing better than I was, which is great.

Speaker 3:

I mean, it's exactly what I wanna do. It's exactly what we are striving to do. But so it has been an interesting challenge personally for me because all of a sudden I realized that I don't always know what I'm supposed to be doing with my time or what I should be doing with my time. I'm pretty good at if I have things that I know have to be done, I can tackle them and get them done. And now I'm in an interesting position because now I get to figure out what is the best thing for me to do because the have to get done list is not necessarily my list.

Speaker 3:

Yep. And that's it's been it's been an interesting mental shift for me, but it's also been really great because that is what has allowed me to refocus on figuring out where we are going as a whole, how we are going to take care of our team in the long run, and that's been great. It's been a challenge though because it's very different than what I had done previously.

Speaker 2:

Yeah.

Speaker 3:

On a non personal way, think one of the things that we've struggled with this last year is something we mentioned earlier is we have this one product that has the highest revenue and the least amount of profit. Mhmm. Solving that problem. Mhmm. And and and we're solving it.

Speaker 3:

We're solving it pretty successfully, I think. But it has been an interesting challenge.

Speaker 2:

Yeah, totally. What your future plans for the business? How are you planning on growing or is there anything new this year that you guys are working on?

Speaker 3:

The main one that we're working on right now, well, there's two things. Number one, we're working on a new product. It's a new service system, and we're hoping to launch a very basic MVP later this year. It might be early twenty eighteen. That's a little bit of treading a new water for us.

Speaker 3:

The other one is the product that I mentioned that has struggled with profitability. One of the ways that we're solving that profitability is by taking a 100% control of the product. So this product has had an ecosystem of third party developers that have been wonderful. That ecosystem has allowed the product to grow in many more ways than we could have done in house. Mhmm.

Speaker 3:

But it's also caused some challenges for us. And so we made a few decisions early on. Basically, we decided we we chose to operate a marketplace where third party vendors could come in and sell their their extensions to our product through our site. And we've realized that while that has been very beneficial, it has also been very hindering to some of the changes that we wanna make. And so we're working to discontinue our marketplace, which is going to give us a lot of flexibility and the ability to move very fast.

Speaker 3:

It's gonna make us much more agile.

Speaker 2:

Mhmm.

Speaker 3:

So later this year, we're going to be completely revamping a pricing model that I think is going to turn a turn that product from slightly profitable to very profitable in six months or less. And that's our project right now, is doing that.

Speaker 2:

That's awesome. Awesome. Well, this has been really helpful, Pippin. Thanks so much. I said, it's really great to meet you and and It's

Speaker 3:

been a pleasure. Thank you so much, Justin. It's been a pleasure.

Speaker 2:

Yeah, man. I'd I'd love meeting. I'd love to chat again. Yeah. This was really great.

Speaker 2:

Hello.

Speaker 1:

So there we go. Great conversation with Pippin. Again, you can get the full case study at megamaker.co/profit. I apologize about the audio quality there. Pippin, like you said, kinda lives in a rural area, and we had to do that one over the phone.

Speaker 1:

But hopefully, you were able to garner some good stuff from it. Check out Pippin's plugins online. You can also follow me on Twitter. I'm the letter m, the letter I, Justin, and I'll see you next time I publish one

Speaker 2:

of these. It should be soon.

Speaker 1:

I think Natalie Najeli from WildBit is next.