Build Your SaaS

Which is better: B2C or B2B? When should you walk away from a sale? How do you make difficult decisions?

Show Notes

Three tweets Tuesday

Justin Kan: 

"B2C is a gamble while B2B is (more) within your control."

Stephanie Hulburt: 

"We have a philosophy of “no hard sells” and it has served us well. If someone’s not convinced we move on; we don’t hang on trying to convince one person. It’s tempting to defend yourself, but not good for business."

Naval on making decisions:

"If you can’t decide, the answer is no. If two equally difficult paths, choose the one more painful in the short term. Choose the path that leaves you more equanimous in the long term."

Show notes

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Creators & Guests

Host
Jon Buda
Co-founder of Transistor.fm
Host
Justin Jackson
Co-founder of Transistor.fm
Editor
Chris Enns
Owner of Lemon Productions

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Speaker 1:

Actually don't I don't wanna hit number 1 on those because I don't think I don't know how that would work out. The the servers might be on fire. Okay. Hey, everyone. Welcome to build Your SaaS.

Speaker 1:

This is a behind the scenes story of building a web app in 2018. I am John Buda, a software engineer.

Justin:

And I'm Justin spots. M. Can we include that in the official intro now? Do you think it's okay?

Speaker 1:

I think so. Yeah. I guess it's

Gavin:

it's on the plate.

Speaker 1:

It's a thing we we've committed to.

Justin:

So, folks, we're back for another episode. John and I, this is we're recording this on a Monday. You know, we feel this commitment to record a show once a week, and so we didn't record on Friday. We must have been totally in summer mode, John, because I didn't even think about it until you mentioned it today.

Speaker 1:

Yeah. I don't know what was going on that day. I mean, I was busy. Yeah. I was work I was working.

Justin:

I mean, it's hot outside. Things are happening.

Speaker 1:

Yeah.

Justin:

I just went and saw John Fogarty in concert.

Speaker 1:

He Nice.

Justin:

He is old. How old do you think John Fogarty is?

Speaker 1:

75.

Justin:

Okay. You're actually pretty close.

Speaker 1:

Oh, nice. Alright.

Justin:

He is, when was he born? He is he's aged 73.

Speaker 1:

Okay. Jeff, what, from Credence?

Justin:

Yeah. He's from, yeah, CCR fame, but also had a big, you know, a big CCR was actually only 67 to 1972. And then and so many of their hits, his hits were in that era, but then he also had, center field that came out in 1985.

Speaker 1:

Oh, yeah.

Justin:

Put me in, coach. I'm ready to play. That one.

Speaker 1:

I do I do enjoy some classic CCR.

Justin:

Yeah. So Good stuff. I was surprised by how, like, that dude is still rocking. I mean, there's a few songs where it was like, okay. He he looks like an old man.

Justin:

But I his voice was still super solid. I couldn't believe it. So, I mean, if either of us are still what's the rock and roll equivalent of people building web apps?

Speaker 1:

I don't know.

Justin:

What's the web app equivalent of

Speaker 1:

yeah. I don't think that's a thing yet.

Justin:

Yeah. Kevin Kelly. How old is Kevin Kelly? We've talked about this before, but Kevin Kelly is the oldest web person I know. See, he's only 65.

Speaker 1:

Okay.

Justin:

So maybe if we're doing what Kevin's doing when we're in our sixties seventies. Anyway, we we wanna record an episode every week. We haven't, and we thought today what we would do, because we don't have much time, is we would just pick 3 tweets. And, really quickly, we pick these, and we would discuss them. We would use them as jumping off points for discussion.

Justin:

And this might be a trick. You wanna use your in your own podcast or blog post because it's gonna give us something to talk about, 3 things. But remember that to get a bigger audience, often you have to tap in to folks that have bigger audiences than yourself. And so, we'll see what happens. Maybe we'll report back next week.

Justin:

We're gonna be discussing these 3 tweets and maybe the folks who are discussing it will be interested and might share what, you know, our take on it. So Mhmm. We'll see. You ready, John?

Speaker 1:

I'm ready.

Justin:

Alright. So the first one is Justin Can's, tweet. All these will be in the show notes at sas.transistor.fm. And, Justin says, between sell selling Twitch and starting Atrium I don't even know what Atrium is. I've thought a lot about beat how b to b compares to b to c favorably, in my opinion.

Justin:

Now this is interesting because he he's done both. And Twitch was really kind of a b to c play. Most of the big things we think about, Facebook, Twitter, YouTube, those are all b to c.

Speaker 1:

Yeah. You probably don't hear too much about the b to b successes because they probably just get purchased behind the scenes or whatever.

Justin:

Yeah. And, I mean, there's a few that folks might think of. Shopify would be a b to b app, and, actually, b to prosumer. There's a little bit of a gray area there.

Speaker 1:

Yeah.

Justin:

Yeah. Anyway, a lot of folks, when they think of startups, think of b to c. And Justin is totally in that ecosystem. So this is interesting to have kind of a a Silicon Valley insider, and they're they've traditionally been really bullish on b to c. He's saying, ah, wait a second.

Justin:

Maybe b to b. So he goes first. In b to c in b to c, you have to ride a massive wave to become a success. This is more than just being good at building a company. You also have to be very lucky.

Justin:

Google, Facebook, and Twitter all rode massive waves. B to b, however, is in your control. The problems are known. You can just ask businesses what their problems are and make products to solve them. So, John, and there's more in this thread, but what are some of your thoughts around this?

Justin:

B to b versus b to c?

Speaker 1:

Yeah. I mean, I agree with him. I think b to c, you obviously need, like you said, a massive wave, or a massive wave of growth, a a massive user base. I mean, talking millions, 100 of millions of people using the thing to be successful and to get to that point. I you kinda see this with companies getting massive amounts of funding and just spending money on acquisition, and then they're in debt.

Speaker 1:

And then they have to find

Gavin:

a way to crawl out of a hole. Mhmm.

Speaker 1:

Whereas it seems like b to b, I mean, he talks about being in control and the problems are known, but it's also that I think you can, you know, charge money for things and not have to have this massive wave of growth.

Justin:

It it's also interesting that he highlights how and and, I mean, he had a massive success with, with Twitch. But he's saying, you know, you really have to get lucky with consumers. It's way harder to figure out what they're going to want as a big group. Mhmm. When folks first saw Twitter, they were like, ah, that's stupid.

Justin:

That's never gonna catch on. And for whatever reason, it catches on. You know, even things that seem like no brainers today, Netflix, for example. I remember initially kind of going, well,

Gavin:

why would

Justin:

I go to Netflix, you know, especially when they're just doing DVD, mailing DVDs? Why would I do that instead of going to Blockbuster? Yeah. Like, I go to Blockbuster. I can get the movie right away.

Justin:

I don't have to wait. Right.

Speaker 1:

It was also a nice experience. I thought I I enjoyed going to the movie rental stores.

Justin:

Yeah. People would have thought you were crazy. And so there there seems to be and if you'd said, you know, to folks, I it's just it's it's harder to get people like, maybe if you said, would you like to rent movies online? Maybe people would have said, yeah. But at the time, it was like, well, no.

Justin:

You know, Internet's really slow and expensive. And so so many things have to fall in place for there to be that that thing, that massive wave. It's like, you can't just get one thing right. You have to get multiple things right.

Speaker 1:

Right.

Justin:

And timing seems so important. Like, if you're too early, it it doesn't work out. If you're too late, it doesn't work out. You have to kinda hit it right at the right time.

Speaker 1:

Yeah. Either Netflix knew that going into it, or they just sort of, you know, pounced on the on the right time and said, well, streaming streaming is ready to go. Mhmm. We're ready to do this. Let's let's try it out.

Speaker 1:

And I think, you know, at first, I don't remember. They didn't have a huge selection. It was only movies, I think. I don't even know if it's TV shows.

Justin:

At at first, the reason we got Netflix initially, and we held out for a long time, we were, like, cord cutters, but we had, an Apple TV, but we were just ordering shows and movies off iTunes.

Speaker 1:

Mhmm.

Justin:

And, initially, I remember looking at Netflix and going, this is all garbage. There's nothing good here. But what what got us in was Dora the Explorer because we were paying a dollar 50 per episode on iTunes. And then soon as soon as Netflix got it, it was like, oh, okay. Well, we're gonna use this now because Yeah.

Justin:

We'll definitely spend that much money in a month, on Dora on Dora the Explorer. But, I mean, who would have thought, like, the the quality wasn't great? You know? If we had a choice between watching a movie on Netflix and Itunes, we would choose Itunes because the quality was just better.

Speaker 1:

Yeah.

Justin:

Like, their video codecs weren't great. So many things have to work.

Speaker 1:

Yeah. Exactly. Yeah. That's the yeah. That's and then for them, there was obviously a a point where they needed they needed massive growth.

Speaker 1:

They needed whatever virality, if you wanna talk about that and or Yeah. Wanna call it that. They they needed people that sort of talk about it with others. Mhmm. And then, you know, Justin here mentions in this thread as well, with b to b, you have a clear execution path.

Speaker 1:

You don't need to mess around with virality. Yeah. You know, it's yeah. You don't necessarily you know, it helps for businesses to to recommend it to other businesses, but you're you're probably more so going out and trying to attract those businesses directly.

Justin:

Yeah. Or, I mean, yeah, you could still have word-of-mouth, but there's a a difference between getting, you know, a handful of word-of-mouth referrals every month, which we're actually already getting for Transistor. If you look Mhmm. In our inbound and I think this is a this is important. You wanna have some of that signal.

Justin:

If if you have something that people are not recommending, I think you have a problem. And the fact that people are already recommending us to their friends or to their colleagues or to their, you know, other folks they know that are running businesses is a good sign. But we don't need that to be viral.

Speaker 1:

Right.

Justin:

We don't we don't need to hit number 1 on Reddit or Hacker News or Product Hunt or what we need is a handful of people to do that every month.

Speaker 1:

Yeah. I actually don't I don't wanna hit number 1 on those because I don't think ours I don't know. I don't know how that would work out.

Justin:

Yeah. It it it worries you.

Speaker 1:

Yeah. The servers might be on fire.

Justin:

Yeah. They might melt. So the yeah. It I think it's it's interesting. And and, you know, I I think it does take a lot of skill to to orchestrate b to c companies that can attract that kind of virality.

Justin:

B to b, and especially with b2b SaaS, you do not need viral loops. Everyone's looking for them. You just need a handful of people to recommend your product every month, and that that would be, you know, pretty good growth for most SaaS apps.

Speaker 1:

Yep.

Justin:

I think this whole thread's worth reading. He also has more stuff on his, on his blogs. We'll link that up. Alright. Let's go to the next one by Stephanie Hulbert, and she is, on Twitter, she's sehulbert, and if you're not following her already, I highly recommend it.

Justin:

She's an entrepreneur. She is a, she does image compression, I think, for VR and games and and things like that. Let's see what because she's the founder of Binomial. Let's just see what this is here. Binomial is making state of the art image image and texture compression.

Justin:

So that's what they do. Mhmm. I'm guessing, you know, they're building I'm guessing she I don't I don't even know. Do you think they're they're probably it's probably a lot of, do you call that low level programming? C Or Stuff like that?

Speaker 1:

Probably.

Justin:

Yeah. I I find her really interesting. She's not really in the SaaS business. I think she sells, annual licenses for her her stuff, But she just always has interesting insights on marketing, on sales, on, you know, being a software person. She's got a great thread on how programmers can dress up, how they can improve their wardrobe with a a a few simple things, both for men and women.

Speaker 1:

Is that that's funny. Is that is that a, like, a stereotypical programmer?

Justin:

Yeah. Yeah. It's kinda like, how can you get just increase things a little bit? Anyway, so she has this interesting thread on on, sales and hard sales. And she's quoting this other fellow, Rich Gellrich.

Justin:

And he's saying, at some point, you've got to stop proving yourself. And, and he's talking about in a career sense. When you're first starting your career, you'll have a strong urge to do this. At some point, stop. If somebody challenge you challenges you, just move on.

Justin:

So she's taking this career tweet and then she's saying, you know what? This also applies to sales. She says, early in the business, we established a philosophy of no hard sells and it has served us well. If someone's not convinced, we move on. We may improve messaging for all, but we don't hang on trying to convince 1 person.

Justin:

It's tempting to defend yourself, but not good for business. And I wanted to bring this up because I already even with Transistor, I've already had to deal with this. When folks, you know, get on a chat or send us an email, and they're like, in some ways, almost, this is the way I receive it is they're like, what's so good about transistor?

Speaker 1:

Yeah. What's your what what's your, what is it? There's an acronym for, like

Justin:

Yeah. Your your, primary value metric or your,

Speaker 1:

Yeah.

Justin:

Your custom what? Custom value proposition.

Speaker 1:

Your CVP.

Justin:

Yes. And, you know, it's it's not bad. That those are the questions I'm asking too when somebody Yeah. Pitches me on something, especially something I'm already using. I you know, if someone has a new Slack competitor, my question is going to be, well, what makes it better?

Justin:

And, it's a reasonable question, and it's good to be pushed into just like she's saying, you know, we might improve our messaging. So every time I get challenged on, you know, what makes transistor better, I'm thinking, yeah, how can I communicate that? And working on our home page, the other day, I was challenged on this, and and I thought, you know, one thing we need to have on our homepage is unlimited host unlimited shows. That's one of the things that makes us different. You pay 1 monthly fee, and you can host unlimited shows.

Justin:

But, you know, there was one person that was looking for a host, kind of a well known person. A lot of people forwarded me his tweet saying, this this person has a big audience. You might wanna reach out to them. And I reached out to him. And, you know, to his credit, he just had lots of questions about what makes it what makes transistor better.

Justin:

And and after about we probably had a back and forth about 5 times. I was kind of like, you know what? This probably isn't worth my time.

Speaker 1:

You're right. This guy's not sold yet, so let's move on, and maybe we can get with the same amount of effort and time, get a couple other people.

Justin:

That's right. And, you know, in the beginning, it's challenging because, you know, Libsyn's been around for a long time. And why why wouldn't I use Libsyn? And, I mean, I have lots of reasons why you wouldn't wanna use Libsyn, that, you know, I think transistor is better. But if you're already using Libsyn, and you're happy, and everything's working, maybe you should just stay.

Justin:

Yeah. And and how much effort do I want to spend convincing somebody that they should move to us? You'd at at a certain point, you have to go, okay. I'm gonna try stop trying to sell this person, and I'm just gonna move on and find somebody else. One thing this also made me think of is if you're finding you're having to do the hard sell all the time, that's probably also a bad sign.

Speaker 1:

Yeah. That's gonna that I feel like an untenable situation. Right? You're just gonna be hard selling all the time. No one's gonna just sign up because like, they're not just convinced by either word-of-mouth or, you know, read reading your home page.

Speaker 1:

They're not like, oh, yeah. This sounds great.

Justin:

Yeah. Yes. And the the sometimes it it comes about because of desperation. You're so desperate for the sale that you just keep hammering, and you get one lead on the line. And you're like, this is it.

Justin:

This is it. I've got one. And you're gonna fight for that fish no matter what. And, you know, sometimes you fight and fight and fight, and, you know, you're not able to reel it in or you reel it in and it wasn't worth your time. And so, there is a wisdom in knowing when to when to hold them and when to walk away.

Justin:

Like, you really do and I've heard this repeated with a lot of entrepreneurs. They seem to have this second sense about, you know what? This isn't worth it. I'm just gonna walk away. They can say no and feel fine walking away.

Speaker 1:

Yeah. I think this is related to another tweet that we're not gonna necessarily talk about, but you posted, which was oh, no. It is. Never mind. That's the next one.

Justin:

So well, that's a good segue. Let's get into the next one, which is, Naval. So Naval is the, the founder of AngelList and has recently just kind of, been tweeting a lot more about his experience building. His number one, kind of tweet right now is, how to get rich without getting lucky, which is kind of interesting. There's a bunch of, you know, like, one one of the items in that thread is understand that ethical wealth creation is possible.

Justin:

If you secretly despise wealth, it will elude you. It's kinda interesting. We could actually talk about that one in a different time. But the one we're gonna talk about is decisions. He says, if you can't decide, the answer is no.

Justin:

If 2 equally difficult paths, choose the one more painful in the short term. Pain avoidance is creating an illusion of quality. So maybe this was what you were referring to, in relation to the other tweet?

Speaker 1:

Yeah. Well, y'all yeah. The those the, if you can't decide, the answer is no. I think that's related to

Justin:

Yeah.

Speaker 1:

Yes. This is amazing. I need I need to do this, then do it. Otherwise, just, like,

Justin:

move on. You're thinking of Derek Sivers. It's either hell yeah or no.

Speaker 1:

Exactly. Yeah. This is a similar, I think, a similar idea here.

Justin:

Totally. And I actually like this when I see people I respect when there's alignment in what they're saying. You know, if there's a bunch of folks and they all have different opinions, like, a a bunch of folks who've done it before, and they all have different opinions, it's like, I can't really create a compass out of that. But when there's a number of people I respect that are saying the same thing, that to me feels like a more universal truth. And so decisions.

Justin:

If you can't decide, the answer is no. And this also, I think, goes along with, you know, decisions we'd have to make in partnership.

Speaker 1:

Mhmm.

Justin:

Right? So, if you and I are fighting and we can't if if we can't decide, let's just say no.

Speaker 1:

Yeah. Unless it's something you we, like, have to separate like.

Justin:

Yes. And and in that case, we've kind of reverted to the 37 signals, wisdom, which is whoever cares about it more wins. Yeah. So Right. If John really wants to build, you know, a new use a new type of authentication that's, open source thing.

Justin:

And I'm like, I think it's stupid. I think it's gonna cause more support. And John's saying, no. I wanna do it. He can he can do the customer support for it, and he gets Right.

Justin:

He gets to win.

Speaker 1:

Or or, you know, keeping in mind the recent World Cup, we could. If we're tied, we just have a shootout, some sort of digital shootout, which would be a weird way to to end that. Like, it's

Gavin:

kind of a

Speaker 1:

weird way to end a game. But

Justin:

I actually like that as a marketing exercise. Every time you have a disagreement, the 2 founders get online, and you have, like, a battle a battle royale, in, what's that game that everyone all the kids play?

Speaker 1:

Oh, is it Fortnite?

Justin:

Fortnite. We have a we have a Fortnite Battle Royale. Do you have you played that game?

Speaker 1:

I have not. No.

Jon:

I No.

Justin:

I haven't either. So then it would be a perfect perfect arena.

Speaker 1:

Sort of a towing coin toss, but a little bit more involved.

Justin:

Could you imagine? Oh, that would be hilarious.

Speaker 1:

Here's some late 30 somethings playing Fortnite.

Justin:

Yeah. Actually, folks, if you have an idea of a game John and I could play online and and actually share, like screen share, tweet us transistorfm, and we'll try to do that some time. Maybe we'll start a Twitch channel or something.

Speaker 1:

Right.

Justin:

Here's one thing I didn't understand about that tweet. He says the last part is he says, choose the path that leaves you more what is this word?

Speaker 1:

E equanimous, I think. Equanimous. Which I had to look up.

Justin:

Okay. What does it mean?

Speaker 1:

It is having or showing equanimity even tempered.

Justin:

Okay.

Speaker 1:

Basically, a decision that leaves you even tempered or

Justin:

Okay. The Apple dictionary

Speaker 1:

says calm and cool.

Justin:

Yeah. Calm and composed. Why didn't he just say calm? Nival, come on.

Speaker 1:

Big words.

Justin:

Big words. Oh, that's interesting. So which Yeah. Which one makes you feel more calm?

Speaker 1:

Yeah. I agree with that. Yeah. I You don't wanna decide you don't wanna say yes to something that's gonna bring you more anxiety and stress down the road. Right?

Justin:

Yeah. Yeah. And what what's interesting I is he's contrasting this with the previous statement, which is choose if there's 2 equally difficult paths, choose the one more painful in the short term.

Speaker 1:

Yeah.

Justin:

So, you know, I think an example for us that really illustrates this is, do we incorporate Do we go through the legal pain of having to draft a partnership agreement, of getting advice from a lawyer, of finding a lawyer in the 1st place, of dividing up our shares Mhmm. That was painful in the short term. It would have been way easier for us to go, let's just get started, think about it later. But it

Speaker 1:

it would have been awful down the road.

Justin:

Yes. So, I think this that matches up with this. Right?

Speaker 1:

Yeah.

Justin:

And did it leave us more calm and composed in the long term?

Speaker 1:

Yeah.

Justin:

Yeah. I think so. So this is something I think is gonna become more and more important, as we continue on with both spots and transistor because startups basically companies the the whole idea is if you're leading a company, you're making decisions. You get paid to do 2 things. Think and make decisions.

Justin:

And, everything else, like the execution, which I often like to do, and, you know, we don't really get when you're the cofounder of a company, the execution really isn't what you get graded on. You get graded on thinking and making decisions. And I can see us needing to kind of think of have advice like this when, okay, the next thing that comes up, like, are we gonna you know, in some ways, spots was that was a difficult decision we had to make right away. Yeah. Are we gonna pursue this now?

Justin:

And it is going to be painful because, you know, I wanna execute on it really quickly. And, you know, there's still lots to prove with spots. Do we do do we wanna be in the advertising business? Do we want to, you know, am I going to like that? Are you going to like that?

Justin:

Is that is that so there's a churning that is very painful in the short term, And I think sometimes my, you know, my personal kind of desire is, I just wanna make this easy. Let's just make this easy for right now, and, you know, we'll deal with it in the future. But you almost always have to force yourself to reverse that. Another another tweet that this make reminds me of is, hard conversations, easy life, easy conversations, hard life. You know?

Justin:

So are we going to have the hard conversations now, or are we gonna wait for

Speaker 1:

Yeah. To be on. I mean, yeah, it's I've I've struggled with that. I think in the past, it's definitely easier in the short term to avoid those. But

Justin:

Mhmm. Yeah. And even if folks wanna go back a little bit, and remember, this is still unfolding for John and I. But a good episode that I feel kinda exemplifies this idea of, like, making hard decisions, having hard conversations, is when we John and I talked about I think it's our Voltron needs more fuel. So, if you look, that's June 26th.

Justin:

But it's either that episode or the one right before it, which is or sorry, the one right after it, I See Spots. But where we had to talk about, like, John, what do you want? Do you want to, you know, quit your job right away? Mhmm. Do you wanna you know, if we had $200,000 in investment, how would that change?

Justin:

Like, asking those questions and getting that out in the open, and then, you know, on my side, me going, like, like, I'm feeling this pressure, this financial pressure for us to start, like, making a bunch of money right now. How are we gonna do that? Is it possible? You know, having those hard conversations now, way better than Yeah. Leaving them underneath

Speaker 1:

It is. I think so. Yeah. I have a book that I bought that's been talked about a lot, that I haven't read yet. I've been meaning to called difficult conversations, how to discuss what matters most.

Speaker 1:

I've a lot of people have talked about it. Oh. I can I'll link it up in Amazon, but it's, like, the 10th anniversary came out, you know, 8 years ago, so it's been around. Yeah. But, yeah, overwhelmingly, like, positively reviewed.

Justin:

Yeah. We'll link that up too. Yeah. Anything else on this one in particular?

Speaker 1:

I don't think so.

Justin:

So, yeah. I, this is a short episode, but, again, we just and we might do this in the future. Maybe this will be a recurring, theme is that we just choose 3 tweets and discuss them. If you have something you want us to discuss, tweet us at transistorfm, and, we might choose your tweet to to, you know, to answer. Eventually, we want to get some q and a going.

Justin:

So having a voice mailbox or whatever

Speaker 1:

Yeah.

Justin:

To answer a bunch of questions, that that's not something we have the infrastructure for yet, but, eventually, we'll have a place

Speaker 1:

to maybe a feature in transistor.

Justin:

Yeah. The we want this to be a feature in transistor. So, if you have thoughts about these tweets, definitely reach out to us as well. You could also if you're in breaker, you can comment right in the app. If you're in cast box, you can comment right in the app.

Justin:

Do that. If you're on listen notes, if you use that site to discuss podcasts, do it there too. Podyssey is another one where you can discuss podcasts. We'd love to whenever I can, I kinda do the rands and check the conversation there? So if you're listening there right now, please leave us a comment.

Justin:

Leave us what you think, and we will see you next time, next Tuesday, which is 24th, and actually that'll be interesting because I will be on a flight next Tuesday. So that that's, we'll have, hopefully, by then, we'll have some information about a Chicago meetup, so stay tuned for that. Yeah. We'll see you next week.

Speaker 1:

Cool.