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In this episode, we discuss what we do when a customer has security and compliance questions, plus, a whole lot more.
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.
00:00.52
Rick
What's up this week Tyler
00:01.92
tylerking
What I put up what up that was the lowest energy intro you've ever given Rick you doing. Okay, it was a little little overboard last time. Ah, no yeah things good I got back last week from big snow tiny compf. Um.
00:04.40
Rick
I was intentionally doing that I was intentionally doing that just to offset the last one. Yeah.
00:18.95
tylerking
Which if people didn't listen to me explain that before it's like it was an 11 person air quotes conference. You know it wasn't really like a conference but ah, kind of an 11 person almost like a mastermind session type thing in Vermont that I went to that was a lot of fun.
00:31.92
Rick
Well tell me about it like I I love I never have time or or I know I like to do these things but it never seems like I can make the time to do it nor do I get invited to the things I actually want to go do so tell me like was it worth it. You have to say nice things on the podcast I assume but like.
00:40.99
tylerking
Um.
00:50.11
tylerking
Yeah, know is terrible I hated everyone. no no yeah it was um I've I think you've done more of this type of thing in the pet. Not this exact thing but you like have networked and if I was like name 20
00:51.47
Rick
Yeah.
01:04.22
tylerking
Business people. You know, personally, you could probably do that pretty effortlessly that is not true for me I'm like I can tell you the people I work with and aside from that Rick Linquist and that's my full list. Ah so it was fun. Kind of going and meeting people. It's it's so different from a kind of like a real conference with you know 100 plus people.
01:07.71
Rick
Again.
01:23.43
tylerking
You're just constantly meeting new people which is good in the sense that you get to like you get a ah lot of shots on goals so to speak. But every interaction is fairly shallow. Um whereas this was something like two and a half three days with the same 11 people I'm me being one of them so 10 other people. Ah, skiing or snowboarding you know in the morning take a little break in the afternoon and then around like five p m we started kind of talks and what talks were is everybody gives a kind of like it's not like you know at at a normal conference. The person talking is like I have all the answers. You are dumber than me I'm going to share my wisdom with you. That's kind of the dynamic. Normally this is the opposite. It's I'm going to talk about the stuff that I'm struggling with the things that I want help with and the audience is just. Constantly kind of interrupting and giving ideas and it's it's much more the like of the reverse of kind of the power dynamic. So it pretty interesting.
02:19.96
Rick
That's super cool. Um, did you develop any like did you know anyone going into this or is it off new people.
02:26.23
tylerking
Ah, mostly new people Brian Castles from zip messages I know him like digitally pretty well and had only met once which was at founder summit and one of the other guys there I had met at founder summit but otherwise it was ah a lot of people I like heard of or seen on Twitter but not people I really knew.
02:42.50
Rick
Cool and that's interesting with any um takeaways.
02:46.72
tylerking
Um I had like a handful of here's a little marketing idea this or that I don't think I I didn't like walk away with people who have been to a lot of conferences know what I'm about to say but if you haven't. When you hear about conferences I think you imagine the takeaway is like I'm going to see someone give a talk and they're going to share an idea that's going to like be worth the price of admission for me like someone's going to say here's how you do email marketing and then I'm going to take that knowledge and apply it I don't think like in practice. That's really what most people get out of a conference. It's more the. Relationships and also there's just like kind of a therapy element to it so one of the things I liked is everyone's very open and honest and you see the like if if all you do is hang out on Twitter you can be like why is it so hard for me. Everyone else. It seems so easy. You know all the lines are going up into the right and people are measuring their growth in double digit percentage per month and it's like that's it's never that easy for me and then when you get closer to people and you actually hear the real story. You're like oh it's hard for everyone. Um, everyone's struggling with something and that's just kind of therapeutic to know.
03:56.54
Rick
Yeah, it makes sense and then I guess on the other side of that. It's like when you're sharing your stuff. It's less about ah getting tons of ideas on how to solve this problems or is it more about like just better understanding the problem. Mm.
04:06.34
tylerking
Yeah, there. There were a lot of I think it's just like getting challenged like and I went in before my talk I went in like you all are going to say a bunch of stuff that seems obvious to you and I'm I'm just not going to do any of it and so by the end of it. There is kind of it was all in good, a good humor but everyone was calling me a socialist at the end because. Like Tyler doesn't give a shit about money we like there's all these obvious ways to make more money and he won't do any of them I mean I don't know that necessarily everyone spoke up but I'm pretty sure everyone was in agreement that not necessarily so our price is $15 pieces per month I think like arguably that's the right price.
04:28.75
Rick
Or how many people suggested raising prices.
04:44.30
tylerking
The thing that is very obvious to everyone and even I agree that if my goal is to maximize money like this is what I should do 2 thirds of our customers are still paying us $10 because they're from before we raise prices if we just raised the $10 users to 15 um. I think we'd like immediately make an extra million dollars in error or something like that and and so like they're not wrong that a profit maximizing business would absolutely do that. But I just don't want to you know? So I'm the socialist is is the joke now.
05:04.53
Rick
Um.
05:15.22
Rick
That's that's pretty funny.
05:17.50
tylerking
Um, and the funny thing is like most of people I work with are like self-described socialists so on the one hand I'm like I'm not and on the other hand I'm like but like that doesn't seem like the insult you think it is you know anyway, now it was a lot of fun though. Highly recommend and 1 final thought on this I had been listening for years to.
05:25.68
Rick
Um, relatively.
05:32.57
Rick
That's awesome.
05:37.54
tylerking
Brian talk on his podcast bootstrap web about this and just thinking like man. It would be cool to get an invite to that like the cool kids club like I'm I'm never going to be cool enough to get invited and then I was and it was great but like 1 of my takeaways after this is like there is nothing stopping anyone from just creating one of these like it's literally rent an airbnb and invite 10 people. Ah, it really would like anyone who's listening to this and they think it would be cool to attend just go make your own the barrier to entry is is zero here. Um, so yeah, how about but how about you what's been going on.
06:04.40
Rick
That's all yeah, it's a great That's a great point.
06:10.11
Rick
Well, my main focus is ah for leg up right now is um, we're um, trying to get growth experiments running for the new year um so I want to update on those um, the other thing is I have I do have an update on legup benefits I um. If you tuned into the last episode Tyler and I are going to be working together to build that platform I am progressing the sort of the compensation approach which I need to do um and the update I think from Tyler is that he's progressing his larove skills so that he's in a position to to build it. Um. But no major updates on that front unless you have anything to add.
06:47.67
tylerking
Yeah, just so I actually have I done I've done nothing on Laville ah the past two weeks but I'll give this update in a bit but I've really been focusing on how to free up.
06:58.55
tylerking
I'm going to take a sabbatical which I've said free up my time so that I can really focus on leg up benefits during that that's kind of so I've been doing extra less annoying serum work this week so that when the time comes I can really unplug so I'll talk more about that later though.
07:12.57
Rick
That's an interesting topic and of itself is like how do you create time for something you want to do oftentimes to go do something you want to do it requires some investment today so that you have the time tomorrow I find that I find myself doing that all the time. Yeah, go for it. Yeah.
07:20.89
tylerking
Yeah, can I actually just talk about that now since we're since we're talking about it. Do you know that like there's like this kind of video from the show Malcolm in the middle that gets shared online a lot. Do do you know that show. It's it's good.
07:35.97
Rick
Um, um I remember that was it was it like a kind of ah a comedy family show. Yeah.
07:39.23
tylerking
Yeah, like a family set come type thing and Brian Cranston the the the bad guy in breaking bad is the kind of dad in it. He's not a bad guy but there's this video that gets shared online all the time of like I forget the exact order but it's like he flips on a light switch and the light doesn't turn on. He's like oh I need to go get a light bulb so he goes in the garage and like. Ah, drawer is broken and he's like oh I need to fix that so he goes to get a screwdriver but that while he's getting the screwdriver. Something else is off and like.dotdot he like has taken apart his entire car to what started with just get a light bulb right? Um and I feel like that's kind of happened to me this week because I've been like it. So I'm going to take a sabbatical six weeks we offer this to every last wing serum employee every three years all this. My first time doing it and I've been like okay so when I'm gone the company has to keep running so I need to start figuring out all the things I work on and you know delegating them or some of them won't need to get delegated. We just won't do it. And then I find myself signing up for 2 new bank accounts this week and it's it feels like the equivalent of the guy taking the car apart because I was like well I'm the only one who can write checks which we don't write that many checks. But if we have to I'm the only signet whatever it's called signatory. Um.
08:50.62
Rick
Sanatory now.
08:52.18
tylerking
And it's with bank of America and Bank Of America requires all this bullshit to add signatories. So it's like okay I'm going to sign up for this other banks. We signed up for Mercury which is what all these startups use but they don't let you write checks. You can mail checks through their bill pay but you can't get a checkbook so then I also signed up for blue vine. And then I had some trouble transferring money from mercury in a blue vine and then I have to figure out how to cancel bank of America anyway, I I ended up spending like 10 hours this week on banking because I'm taking a sabbatical in a month. Um, but it's stuff like that. But I'll be super super glad once that's all done. You know.
09:26.28
Rick
Ah, so that's awesome. No it's it's interesting like ah I know I'm I'm kind of going through the same thing right now leg up where it's like what are the things that I spend recurring time on how do I eliminate those in Q one So that for this you know second next quarter I can focus.
09:44.27
tylerking
Yeah I think anyone anyone listening who like especially if you have an employee that can be delegated to or an assistant or something like that I should have done this five years ago I should have said I'm going to act like well or actually take the sabbatical but there are.
09:44.84
Rick
Ah, with Tyler on legup benefits. Um.
10:00.91
tylerking
I think there are 5 things I do at least every week that because of this exercise I will never do again I'm saving not just for the sabbatical I'm permanently taking this off my plate and it it was just as simple as taking the time to write down all the shit I'm doing and figure out. Oh someone else can actually do this.
10:15.73
Rick
The the counter to this is there. There is a too early to do some of this stuff where it doesn't make sense but you you prefaced it with assuming there's someone to delegate it to that makes sense.
10:19.65
tylerking
Yeah, yeah, yeah, yeah, I also think people a lot of people make the mistake of playing business where they're like I'm the Ceo I'm too important to do this and so they hand it off to someone and then it gets done poorly not not because the other person's necessarily bad at but like. Yeah, the Ceo should absolutely or the founder rather forget Ceo title a founder should it's natural to keep doing a lot of random shit but we're at 19 employees. We've been around thirteen years I should not be doing some of I should not be the only one who can write a check in the office. You know.
10:50.81
Rick
Yeah, yeah, an example for me just to kind of bring this to light at a earlier stage is um, every month I especially with you getting involved. Um and Jd being like committed now for a year and and and and going on multiple years. Like financial reporting becomes more more important to the organization and because we've grown the bean counting to have good reliable financial reporting is ah like more time intensive and so I have two choices I can pay someone to do the bean counting I don't think we're quite there yet. So yeah.
11:19.20
tylerking
And.
11:25.74
tylerking
Um, do you mean like bookkeeping what? yeah okay.
11:27.98
Rick
Bookkeeping bookkeeping and so I do the bookkeeping um and but like if I just invested and a couple hours on a Saturday and and really thought through like auto auto classifying all the recurring expenses that we have and revenue like I could cut the work like by 90%
11:44.58
tylerking
Yeah, and make it easier to delegate when the time comes to do that.
11:46.55
Rick
Um, and make it easier to delegate one so I need to yes exactly? So um, that's an example of what like is on my list. But anyway the the the main thing we're focused on right now that isn't related to creating time in the future is growth and so we've got 3 interesting experiments running right now that I wanted to share ah about. The first is j d um, so very seasonal business with leg a beltt or 95 Clients it's funny we Jd wants to get the hundred so bad. Ah, and so it keeps going like up and then like like 2 drop off it. So it's like it's been the most frustrating like.
12:18.90
tylerking
I Just saw someone tweet that this is like a common phenomenon that whatever number you want to get to like it stalls right? at that number.
12:28.19
Rick
Yeah, it's Hilarious. So um I will get there but but the the the focus um outside of our open enrollment period. You can't really control when you're doing outreach whether or not someone is in the like a shopping ah mode or is eligible to buy health insurance. But we can control like the number of people we reach out to and like whether or not they answer a question and so we're he's basically ah developing the system around profiling that we never really figured out last year and he got 45 profiles in January um of Utah consumers 40% were marketplace people.
13:00.14
tylerking
So what he's like going on Linkedin searching for people in an industry and he he finds out if they're marketplace just by like asking them and and these people have answered amazing. So.
13:01.25
Rick
Which got crazy so that's like 20 leads linkedin mostly Linkedin is what's working is just.
13:13.00
Rick
Yeah, and and and 40 but like 45 people answered his outreach I don't know what the top of funnel metric is but um of the.
13:18.86
tylerking
Is there a reason like why like I would just ignore this email. What what's the motivation for them to respond.
13:27.22
Rick
I don't know. Ah I think Jay's got a message that's like interesting enough but like the people who are really like we probably have people who are feeling the pain probably from the recent open enrollment period and so that's probably why the high like 40% of people are marketplace. It's probably high because of that.
13:36.70
tylerking
Yeah.
13:43.64
tylerking
That's interesting. We we've you and I maybe you've already had this thought but you and I always talk about open enrollment being the big time. But right after that I bet a lot of people feel a lot of regret and a lot of like next year is the year yeah
13:53.86
Rick
Yeah, anxiety. Yeah, um, so so that's working and um, he tried so implemented some learnings yesterday. The first of this month got nine nine profiles yesterday. So he's on pace to do over a hundred in february.
14:07.65
tylerking
Well.
14:09.26
Rick
Um, and if we can keep that up and hold a you know just 20% rate we'll have we'll we'll enter open enrollment with like hundreds of really qualified leads just from outreach.
14:16.57
tylerking
Sorry Twenty twenty percent rate meaning you think you can close of these profiles you can close 20% of them.
14:23.84
Rick
No very high level on this is like think of this as the we're building the lead list for open enrollment next year so this assuming we can develop ah a a list of people who we know buy buy marketplace health insurance. We should be able to close ah a lot of them.
14:40.70
tylerking
Okay.
14:41.50
Rick
I don't know what the percentage is but a lot of them in in open enrollment period. But we're doing profiling 100% aren't marketplace if we do a hundred profiles if 20% are marketplace then we'd have 20 leads per month times 12 We don't throw them out but we we ah, we don't have something for them right now. But once we have leg up benefits.
14:49.80
tylerking
Got you so you throw out the non-marketplace ones.
14:58.60
tylerking
Map.
15:00.27
Rick
Be able to say oh are you you work for a small business that offers really crappy group coverage would you make an introduction because leg up benefits might be better for you? Um, sorry that's the profile thing so that's like the outreach thing and that's working.
15:07.53
tylerking
Gotcha cool.
15:14.43
Rick
The second thing that is really interesting is this concept of your concept of aged leads. So um in the health insurance space. You can buy leads. You can do this in any industry but generally you buy leads of people who are looking to buy right now. There's a secondary sort of market though of like once the list like there.
15:17.49
tylerking
Now.
15:33.78
Rick
If you buy leads that were interested a year ago um you can buy them for a lot cheaper. So if like a new lead who's shopping today for health insurance is $15 from a lead vendor per lead. You could buy like an age lead meaning they were interested at this time last year for a dollar.
15:52.60
Rick
And what's interesting about this for us is I have a hypothesis and Jd does too that if someone bought like requested health insurance a year ago for the marketplace. It's likely that they still buy Health insurance as a marketplace.
16:07.69
tylerking
Yeah, yeah, an insurance is so different from like with Crm if they bought a crm a year ago. They're probably still using it with with insurance. You're effectively rebuying it every year.
16:09.20
Rick
Or at least more likely than the average population.
16:21.39
Rick
Yes, and we have this aor thing right? where we can go and say hey you remember when you bought Marketplace Health insurance. How many people spam called you because you did the lead thing because we know you did because we got your information. We're different like make us your agent. Um. So ah, we think this has a potential to lead to more profiles like that we could purchase um and potential conversions. So That's a experiment that we're just launching I'll be able to update that on that soon if it works like it seems like a pretty interesting growth lever for us.
16:48.29
tylerking
Yeah, and sorry you said the ratio is like $15 for a new lead $1 for an aged lead. Wow that's that's incredible and like sorry I know we're beaten a dead horse here. But yeah, like there's there's some moments where it's like.
16:53.44
Rick
Something like that I can get if you're interested in real numbers I can ask Jd but like that's that's what I have in my head.
17:07.22
tylerking
Having the buying intent really matters and back to my example of crm it super matters the window where someone's buying a crm closes and it's over but I feel like buying intent for you helps like definitely ah someone who's looking for health insurance right now is worth more than someone who was looking a year ago but like. The the intent doesn't drop off for you the way I feel like it does for me.
17:25.21
Rick
Yeah, and there yes and and I just we haven't quite figured it out yet, but our ability to once we know that that you buy your own health insurance. Our ability to sell you on making us the agent like I I know we're gonna crack that eventually and so.
17:40.15
tylerking
Yeah.
17:43.39
Rick
It's just a matter of time and like confidence honestly and and like what is the thing like we're we're throwing $25 at people now like make us your agent for 25 like we can't say that but like like try us for $25 um and and so I just know we're going to figure that out. So if we can figure out at the I have.
17:50.93
tylerking
Um, yeah, but yeah.
18:00.36
Rick
I'm sort of betting the house that will figure that out eventually long term at some conversion rate. But if so so if we can figure out at the top of the funnel like how to identify these people profitably then it's like I we're going to have a killer business.
18:07.61
tylerking
Yeah, that's huge and it strikes me. It's been a long time since I had individual insurance but the the process of renewing every year is a pain in the ass right? like you. It's not you don't yeah, you don't get to just be like yep, give it to me again.
18:19.43
Rick
Yes, it's It's rebuying. It's rebuying you can you can do that but but but ah things can happen, especially if you're premium tax credit eligible that are bad and so yes, you have that option but like you're.
18:29.40
tylerking
Now.
18:35.33
Rick
Plan may go away and you may get converted to a new plan and you might not understand that there's yeah.
18:36.58
tylerking
Yeah, that's what I every year because I was I was on my own and health insurance like I don't know 8 years or something and every year it was like okay that plan's gone. You were on this. Yeah, you're on the silver plan where we're splitting it into the silver premium and the silver plus which one of those do you want and.
18:45.79
Rick
Your deductibles going up. Yeah, yeah.
18:55.13
tylerking
And every single year you have to go through this. It just strikes me that That's a perfect time I mean obviously we already know open enrollments perfect time but like that's a moment where you can just say hey if you don't want to deal with it this year talk to us.
19:03.40
Rick
Yeah, so so like think about September if we have a list of 400 people that we are like not their agent like that's where we go like hey openrollment's coming up get on our list to have like the conciers you know renewal experience and prebook. It's free.
19:16.39
tylerking
Yeah, it's free. It's free and you'll end up with the same insurance. You just don't have to worry about it and we'll give you twenty five bucks but not for buying the insurance. Yeah cool I mean i.
19:21.92
Rick
And be twenty bucks not providing insurance for using our software.
19:33.80
tylerking
I've I've been bullish on on this working eventually for a long time. But yeah that that's that the fact that you can buy a lead for a dollar is ridiculous. So cool.
19:40.67
Rick
Yeah, yeah, um, ah the last little experiment and this is more of a flight a question. Ah so as we now that leg up benefits now that you tyler are making legup benefits a potential reality and I'm going to say it's actually going to be a reality because we're gonna.
19:55.26
tylerking
Oh it's going to be a reality.
19:58.17
Rick
We did not fail at things when we work on things together. But it's Jd and I get a little greedy and going one of the best ways to generate leads for legup benefits is to aor groups and so ar is an age of record. So when I talk about um.
20:09.52
tylerking
What is that? What does a O R mean all right? sorry.
20:16.57
Rick
Our individual Health insurance business going to a consumer they can make us the agent. We start receiving the commissions that same concept applies on the group market. So we could start reaching out to businesses right now and become the agent on group Health insurance with the goal of long term building a.
20:29.79
tylerking
Ah.
20:33.70
Rick
Recurring revenue base that we're going to sabotage into leg up benefits eventually.
20:35.70
tylerking
Now that's almost everyone with a group plan has an agent right? So with it with individual. You're saying you don't have an agent right now make us your agent with this. You're you're kind of going to war with existing agents a little more.
20:38.65
Rick
Yes.
20:49.93
Rick
Yep, it's very competitive but the difference is um, sub 50 employee groups are generally ignored by their brokers and so it's it's kind of like a I'll do a favor type thing. So it's massively underserved so it's not that competitive. It's. North of 50 employees is where it gets to uber like people are like taking each other to stay each other who who can do the better steak dinner you know or jazz game that kind of thing um sub fifty sub 25 which is what're going to be our target for legup benefits sub 25 employees. It's pretty like ignored gusto would be like the main competitor like ah, a big.
21:11.45
tylerking
Yeah.
21:22.86
tylerking
Right? And gusto is not going to fight for it at all. Yeah, we yeah we get our insurance through gusto open up a open up a Missouri you know branch and and we'll switch.
21:25.63
Rick
Like there. Nope nope.
21:37.30
Rick
Great, no are you we got to stay focused on Utah um, but anyway my question to you is like is that a distraction or should we like I'll tell you what we did and then you tell me whether you agree or not because I don't like I think it's easier for me. Just say that. So.
21:38.69
tylerking
Stay focused.
21:54.65
Rick
I Think we're gonna just go try a couple and see what it's like because it could be like a total pain the ass and not worth it. But I think like we've actually had people come to us and say can you just be our agent like you're actually super helpful and nice and you answer our calls can you just be our agent. We're like no, we don't believe in group Health end insurance. So um.
21:56.23
tylerking
Yeah.
22:04.34
tylerking
Really. Oh okay.
22:13.92
Rick
We've we we think we should just go try this a couple times and if it's it'll generate revenue. Ah, and if it if we like it great. We can continue keep doing it but I do worry about it being distracting.
22:25.90
tylerking
Yeah I'm torn here because on the one hand it does it. It's certainly a distraction from leg up health. The individual thing. The flip side of this you know the market a lot better than me So like ignore everything about to say like I trust your instinct more than mine. But my instinct here is. That I've got 2 things to say 101 years from now if leg up ventures is that the the parent company. Okay, if leg up ventures is this success I think it is more likely the case that leg up benefits is the centerpiece and leg up health.
22:53.97
Rick
Um.
23:03.40
tylerking
Especially the individual insurance component is just like it's a way to make a little extra money from these people. You've already got as kind of users of legup benefits. That's guest number 1 guest number or comment number 2 is I don't know if you follow Justin Jackson from transistor fm but like he's very good at as a kind of. Content thought leader type person of like getting a theme and just hammering it and hammering it and 1 of his big themes is if you're surfing. It doesn't matter how good at surfing you are you got to be where the wave is and I think ah, a challenge you faced in your career that you and I both did at Zane benefits is we were trying to like change. Public health policy in America and the product we had was good I think the company was run well but the thing we were selling was like borderline illegal. Ah, and I would encourage you to not fall into the trap of trying to get so far ahead of. The rest of the market that you're doing a thing. No one else actually like that you're you're not where the wave is and I feel like employer benefits. There's a wave there undeniably individual you want to be in a position where if individual takes off the way you expect it to. You're in a position to capitalize. But that's different from saying I'm going to bet the whole farm and just only go after individual right now.
24:23.57
Rick
Yep, Ah, it is irrational for us to say no to to the wave of of serving our target customer on Group Health insurance right now that is an irrational decision and and um, we got to go do it. So.
24:31.69
tylerking
Yeah, at the same time like I don't know what what you have to offer like with with with leg up Health you've got more of like a there's this software. It's a product type service. It sounds like in this case, you're really just going to be an insurance broker.
24:49.64
Rick
Yeah, there there's um, there is a you know it's funny We we actually did do a group dental plan for ah, ah employer. Um for fun like ah it Yeah, it's like oh we did it? Ah um, and.
24:58.31
tylerking
I Wish people could see you because you you just did like the shrug of all shrugs like ah.
25:07.60
Rick
Ah, it was pretty manual process ah paper like paperwork. Um, but 1 question that came out of it was should we create leg up help profiles for the employees and add their dental policy to it and it was like no was the yeah I don't think so um and it's not really what leg up.
25:09.94
tylerking
Yeah.
25:19.93
tylerking
Just because it wouldn't provide any value to anyone. Yeah.
25:25.99
Rick
Health is intended for but ah yeah I Do think that there is an opportunity to do ah an innate I Saw an enabled service um around group Health insurance like even leg up benefits could be part of that like that could be something leg up benefits does um but it's probably I don't I think it's probably something different. There's there's there's. Ah, broker tools out there. We could license that provide you know, 70% out of you know to 80% of the value that you need um out of the box.
25:46.17
tylerking
Yeah.
25:55.61
tylerking
I'm pretty bullish on the idea of you using kind of like a productized service to make your team which for now is just JDMore effective I'm less bullish on the idea that like getting people to log in to us piece of software related their health insurance like. And just everyone's goal is to never think about Health insurance. It's not to have a good experience with Health Insurance. You know? Yeah, So anyway I like it go go kick the group broker's ass.
26:18.12
Rick
Yep, it's peace of mind so cool. We're gonna do it. That's that's yeah yeah, we're gonna go try a couple of these and Then'll see if it it's worth. Ah, it's worth the time I think it probably will be.
26:30.27
tylerking
Yeah I mean it's in the enterprise software world. It's always like yeah we're less knowing serum's going after 2 user accounts and someone else is selling 10000 users at a time. It's just it's a better business model to do that.
26:43.72
Rick
Um, I'm I'm just I'm kicking myself now I bet we've turned down probably a solid 5 k and recurring revenue that we would have if we just said yes like not even like just on inbound like there's so.
26:59.64
Rick
So many. There are so many people who ah have come to us and said can you be can you help us with this and we've said no um I'm kicking myself now but we weren't we yeah we we can go. Yeah, absolutely yep, what? what else? what's on your mind.
27:06.65
tylerking
Yeah that's stupid I assume you can go back to them. Maybe I mean you might not get them all. But maybe 1 or 2 cool. Um I want to follow up on something we talked about last time that I referenced but I could have. Gone into more Us something about kind of like traditions. You're planning like an offsite or something with Jd has that happened already or is that that's still in the future.
27:27.91
Rick
Um, that is scheduled for the last week of February so he's going to come out for 3 or four days
27:33.10
tylerking
Okay, we were talking about like how to establish company traditions and all that and I I think I said this in the last episode. Um, but I want to go into more detail. So so apologies if I repeat myself too much here. But I mentioned the shabu night thing you remember me talking about that. Um.
27:46.15
Rick
I Love I Love this this one I Love this tradition.
27:50.28
tylerking
Yeah, so I know you've heard this before um but I just wanted to go through the whole history so because we did this like right like we recorded on a Thursday and the next day we did the shopby night for the first time since pre pandemic um, so that it was. It's it's so incredible I mean I mean like I'm not a very emotional person but I'm like like.
28:00.88
Rick
Was it awesome.
28:10.13
tylerking
Holding back tears the holds like happy tears the whole time. So the the origin ah just to repeat myself is in San Francisco in the early days of lessening cm when we hit a milestone like I wanted to celebrate with somebody but like there was no company There's no team or whatever. So I just invited all my friends. To go to shabu which is like a japanese fundo and in San Francisco there's I don't know if it's still there. It's called shabu house 2 hours all you can eat all you can drink emphasis on all, you can drink for $50 per person so you yeah.
28:39.82
Rick
Um I got to fly out for the next one this is sounds incredible.
28:43.71
tylerking
Absolutely it's it's so much fun and so you get this big. You know I did there'd be like 15 of us or like a big group on ah around this table eating this like the food's fine, whatever, but like ah, there's free beer and freesake so you can do a sai bomb um, and the the rich I don't know this is not necessarily a part of like real shabu tradition in Japan but like. My friend who introduced me to it said? Ok the rule is like everyone has to toast someone else and after each toast you don't have to do a full sake bomb. But that that's when I was younger. That's what we did now now you just have a drink but ah yeah, and then there's like.
29:17.25
Rick
Ah so a a toast and the nasaki bomb That was the original.
29:21.50
tylerking
A 5 minute break and then you do it again and then a 5 minute break and then you do it again. So I don't remember the end of any of these necessarily. But um, so it's it's it's more tame now. But it's still. There's if you want to there. There can be a fair amount of drinking but the toasts are originally was with a bunch of straight like friends but not people at the company. So now that we're in St Louis only 3 people only me Michael and bracken at the company ever went to one of those original chabu nights but it's this tradition that started in a whole different city with a whole different group of people that now all the people in St Louis like they know the stories and they know how much fun this is and so like. Half the people had never been to one because you know we've hired some new people and stuff and so it's you know I stood up at the beginning gave a toast to like kind of a random person a random employee and the role is like so she was the next person so she had to give a to someone else and and it's just kind of a chain of like here's what I appreciate about you here's what I like about like. Here's a thing you did that really impressed me and it's like partially because of the alcohol and partially just because like there's not normally a moment to stop and like say these things it gets like really sentimental and nice and it's just like an incredible company bonding moment.
30:33.83
Rick
That's awesome. So positive too.
30:36.13
tylerking
Yeah, yeah, and I mean you know the later in the night as people get a little looser after having a few drinks like yeah people say shit They'd never say but like nice things you know anyway I'm not saying ever if you want to go steal this exact idea.
30:46.14
Rick
Um, yeah, yeah.
30:52.85
tylerking
Random listener out there. Please go for it but like moments like that when I look back like I remember every single shabu night. So vividly and it's so special make something like that I think that should be the goal. Um, ah.
31:07.43
Rick
That's awesome. By the way I want to say we were planning to do a dinner like JD was walking me through the itinerary he was doing I was like you know if it doesn't it feels like work like let's kill it and he was like great kill it so he just.
31:11.18
tylerking
All right.
31:23.12
Rick
We actually cut some stuff. Um, and so we we feel really good about the agenda that we have now and in ah in the the focus on relationship building and fun. Um is going to be key work. Um I mean I don't ever get to Ski So I'm super excited to Ski. Um.
31:23.19
tylerking
Um, yeah.
31:31.78
tylerking
Yeah, awesome, Any anything in particular, you're excited about.
31:41.49
Rick
So we we're gonna go to Powder Mountain Probably um, have you been there? Yeah I've never Ski Powder mountain. So um, yeah I've been to I haven't been to.
31:45.94
tylerking
Nice, Yeah, really, that's like no sorry sorry sorry I have been a pattern I I always confuse Pattern Mountain and snowbird. Um I have been to both. But yes I was like you've never been to but snowbird I'm sure you've been to. Okay.
31:58.11
Rick
Yeah, snowbid I've been to? Um, yeah, but but and that may be it when you come out here. Um, snowbird may be the only resort that is still guiding good snow now.
32:03.61
tylerking
Sorry, that's some inside baseballm because it'll be early April all right cool all right, go and scan that's awesome. Ah, next. Update I've been talking about this for months but like finally it happens zapier has launched. Official so in the last month we we launched a new Api and zapier. So. It's been a not like a ton. We've got I think 35 users right now. Um, our current customers are not very tech savvy and in a sense we so we were like really worried prior to this because.
32:23.10
Rick
Are are people using it.
32:40.14
tylerking
I Assume most of our listeners have used Zapier. It's like it's no code, but it's pretty complicated like you have to you have to think like a programmer because it's like when this happens do this and you have to like Map fields to it like okay the field's called this on one side and it's called this on the other side and maybe there's a one to many relationship what you do with that. It's kind of hard to use. And so one of our concerns was like we have a really low tech customer base are they all going to see this announcement. Go try to use zapier and then come to us with all the support questions about how zapier works so part of me is kind of glad not many people are using it because that we were really worried about that. It's. Hypothesis is there are a lot of people who are more tech savvy that don't use us because they come check us out and like you said this for you like you would never use a crm that doesn't have zapier support. Um, so our hope is It's mostly for new users as opposed to being for current users but time will tell.
33:22.47
Rick
Yeah.
33:29.25
Rick
I Just went to your homepage. You release a new homepage design. It looks good. It looks like super fresh like is impressiveive.
33:35.16
tylerking
Ah, yeah, we're we're kind of always tweaking it. But yes, we we just concluded maybe test. Thank you.
33:45.58
tylerking
You know what? the sad thing is that I appreciate you saying that? ah literally 0 difference in the a b test between that and our old one and it's completely different the copies different the design's different. The layouts different I think we're just at a point where like.
33:49.66
Rick
Really.
33:59.43
tylerking
People are not making ah the decision to buy or not buy based on our homepage I mean if we made it terrible we could. We could certainly hurt ourselves but I just don't think there's much room to optimize it anymore. Um, yeah, it's also I know you're not like as ah.
34:10.14
Rick
Um, interesting.
34:17.28
tylerking
Worried about design as some people I think if you were you'd be like this is not very polished were we're like going through it and like the icons aren't all from the same library and some of the colors don't match like we we need to go fix some things but but again none of it fucking matters. So whatever. Um, yes is after launch So two of our.
34:27.49
Rick
That stuff doesn't matter. Yeah.
34:36.42
tylerking
Ah, 4 kind of phase 1 product led growth projects have launched now. Um the next big thing coming up is a redesign that I'm I'm very excited about and that's coming along nicely. It just feels like the dev team is is crushing it like they're moving a lot faster than they used to.
34:53.65
Rick
Man like you just got out of the way and then things started happening.
34:59.60
tylerking
You know I I wish that were true. It's actually the opposite. It's because one of the big changes is I mentioned this in a episode a while ago like I now meet with every developer every two weeks before these meetings were still happening but it was just the Dev and Robert kind of the lead like the manager. But.
35:11.17
Rick
Um.
35:18.00
tylerking
What we realized is roberts the tech lead but he's not like the product lead and so projects would kind of like all the code getting written was good but they would veer away from whatever the product priorities were a little bit so now I'm sitting. It's an hour in these meetings and but it's helped a lot.
35:36.66
Rick
Um I Love your new website like it's really fresh I feel like it's.
35:40.29
tylerking
Thank you I I I think we cloned I want to say savy cow I didn't I didn't have anything to do with it. Eunices did the whole thing but after I think she I think it was so it was some other company that she was like I'm going to steal that as the starting point. Um I know some people don't like.
35:46.79
Rick
Wow.
35:54.40
Rick
That's great.
35:57.93
tylerking
Having their ideas borrowed but ah I don't know this is an art this is a landing page anyway, um, I'm glad you like it though and then a final update here on the topic of design since we're just talking about it. So unfortunate, we we have a kind of halftime contract designer. Um, who's been doing great work helping with our redesign. Fortunately, she's probably not going to stick around for too much longer. Um again I keep saying this that nobody ever believes me. She doesn't like working remotely and she's like I got to find an in-person job ah because she lives in Bermuda. So.
36:33.80
Rick
Amen.
36:36.62
tylerking
We're probably losing her for that Reason. Um, which means we need to figure something out I don't want to hire a designer like a full timer because you know Recession. We're not growing Superfas. It's just like adding another person to the team doesn't make sense right Now. So. Um, trying to figure out how to free up enough of my time to to take over design which is both I Do Love it. Yeah, so right now I said earlier I'm I'm like figuring out all the stuff I could not do but the things I've spent my time on that I could free up my time.
36:57.66
Rick
Um, you love that.
37:11.40
tylerking
In the short term it so I can take my sabbatical but my hope is when I come back from the sabbatical. We'll see if I can actually stay true to this. But my goal is going to be Monday and Tuesday I'm just not going to I'm not going to have meetings I'm not going to um, like if an email comes in that's more like a Ceo or a manager type email I'll be like I'll get to this on Wednesday. So I want to do Monday Tuesday I an individual contributor designer and then Wednesday Thursday Friday I'm like a Ceo manager type of person. That's my hope I think that's unrealistic but I'll try. Yeah.
37:38.53
Rick
I like it. Yeah try but I mean I think it's real I Actually think I think when you set days like that you end up making happen if you want it to be that way. It will end up happening that way you have the power.
37:50.13
tylerking
Yeah, the the hard thing is saying no like it's so calm I'm sure everyone listening can relate to this I'm in a meeting or talk these 10 things need to happen and I'm like well I can do these 2 of them real easily. So I'll take those 2 and then someone else takes the other 8 or whatever but I'm in. 10 meetings a week like that and so now I've got 20 tasks a week that I just have to say I have to have to start being like nope that's not getting done or someone else is doing it but that that can't that's not more important than the other work that could be getting done I'm just so bad at that? Yeah yeah.
38:23.64
Rick
That's hard, especially when you like doing the work.
38:28.00
tylerking
But I do like design more. So anyway I'll keep updating on that I probably won't have an update for a while but I'm I'm going to go more into design mode. Um all right? This is the first time we finished our updates in less than an hour in a while we can. We can go into rants and shout outs.
38:39.67
Rick
Yeah I know so I have a bit of a rant. So I I have a newsletter I crossed 1000 subscribers a while ago I wasn't paying attention to my monthly bill. But I do it did a big financial audit my like. When I crossed the thousand subscribers convert kit like upgraded me to the next package and it more than doubled my subscription fee and I just I got like I want to say like I don't want to say wrong. Um, because I know it's like $70 $60 now or for it's like.
39:03.83
tylerking
Yikes from from what to what or like ballpark. Okay, but it's not like from 5 to $10 It's like pretty substantial. Yeah.
39:16.40
Rick
Hundreds of dollars a year now like and heading to thousands of dollars a year and so I'm like wow like now I'm conflicted like do I want more subscribers like they cost money. Um, so I feel like there's something there where it's like man either.
39:27.84
tylerking
Um, yeah.
39:33.56
Rick
And don't fully I mean all I use Convert kit for is to track subscriptions and send emails. So there's probably a more cost effective alternative. Um, but man like I they really got man. It's like not worth going to. It's like expensive enough where it's like painful but not too expensive to where it's like I want to go deal with ripping out.
39:47.60
tylerking
Yeah. You could argue they nailed it then right like that's that's kind of what you if you're profit maximizing. That's what you want I've always hated like I think base camp really popularized this kind of tiering system that everyone uses now which is so funny because then they switched to a totally different pricing model and then a bunch of people copy that and then they switched away from that.
39:53.17
Rick
And so I'm just like okay there you go? Yeah yeah, so.
40:11.54
tylerking
So they're leaving all these companies with pricing models I hate that are copying their old version. But yeah old like base camp and and highrise and all their products were like this where you had 1 contact and the price goes from $10 a month to like $60 a month or something which what that means is as you're using the product you're like. I better keep an eye on my contacts or my projects or whatever. And yeah, that's not what you want people thinking about I don't know the flip side though is what they could do is be like we're going to charge you ten cents for every you know, 50 subscribers or whatever and that's just like There's no certainty in that like okay so my price is changing every single month. Yeah I don't know I don't know what? What do you think they should do.
40:55.28
Rick
Well I guess like i' I'm just I mean that yeah I wouldn't change anything I except like I'm just starting to question whether I want to have a newsletter anymore because it's like cost me more money than it's making.
41:02.92
tylerking
Yeah I mean Convert kit is a premium priced off convert kid is priced for people who make money off of their newsletter.
41:11.17
Rick
Now now that's true. So I'm probably using the wrong tool be my guess but like I'm just like going to like let's say I just get if I grow at the rate I'm growing I'll probably like growth is accelerating on my newsletter. So let's just say ah, it's a big year and I get to 5000 subscribers paying a hundred bucks a month like I can't afford that 5000? Yeah, but yeah I guess the question like that's what I mean assuming I get to like if that were true I'd probably figure out a way to.
41:29.53
tylerking
Yeah, ah then again, sorry you said 5000 subscribers like that's got to be worth something to you is. It's it's worth 5 times what a thousand subscribers is worth.
41:47.29
Rick
Make a hundred bucks a month.
41:47.45
tylerking
Yeah I don't like people who there's all these people but sorry I don't mean to say I don't like the people I don't like the strategy of I think there are a lot of people with like podcasts with 200 listeners and they sell ads and it's like the the amount of money you're making off these ads is not meaningful like like what you should do is say. I'm going to hire 1 employee from this audience or I'm going to get an investor from this audience. That's how you make money off of relatively small audiences if you don't have a 100000 people following you monetizing with ads or charging a subscription or something like that feels silly to me.
42:23.50
Rick
Totally totally at a 100000 subscribers you're at you're at um, how much you think they charge per month.
42:30.14
tylerking
I mean 100000 of ah a bunch like a thousand bucks a month.
42:33.66
Rick
Almost yeah six hundred seventy nine dollars a month for a thousand hundred thousand subscribers on the monthly. Yeah, yeah, that's and that's what you get, but then they charge I think they do like if you do ah have to check on it. But I believe like if you if you use their billing sort of.
42:36.28
tylerking
Yeah, but I think a lot of people using Convert kit are like selling ebooks and that type of thing.
42:51.20
Rick
Ah, subscription service. They take a piece of that too look. Ah no I didn't yeah yeah, very well. Yes.
42:51.42
tylerking
Yeah, but did you So I if they do. It's small because did you see all the gum road stuff that just happened. Do you know Gum Roadde they're they're like a yeah, they raised prices to it's 10% Plus whatever your stripe fees are. So It comes out to you know 13% or something and it's caused this uproar I know at the time everyone's like Wow convert kid is super super cheap compared to that anyway, yeah sucks when the price goes up.
43:18.37
Rick
Um.
43:21.30
Rick
I just people jacked prices on me this year like and it it wasn't just like oh here's 10% increase it was like 100% plus increases for zapier Airtable Convert kit
43:32.60
tylerking
This this is what I loved about the gum road thing is she was like well you know our old pricing for high volume customers was like 3% and that's basically the processing fees. We weren't making any money off of it. It's like fine. The solution is not to raise it to 13 like go raise it to 4% and now you've got a really nice business. Ah, that's that's why they're rich and we're not ah what next.
43:46.80
Rick
Yeah.
43:55.33
Rick
Anyway, yeah exactly ah I don't know I I I had this thing on here about I don't know if you saw but indie Vc which was a Utah based um, sort of predecessor to calm fund. Um.
44:13.56
Rick
I got I got an update that and you could check it out at indiev.vc.com to sign up for their updates. But um I got an update that they are coming back which I thought was interesting.
44:21.46
tylerking
Yeah, and my understanding of the history here is so that they were predecessor calm so calm fund completely unrelated just like they were one of the they were the first prominent investor to say I'm not investing in like high growth high risk startups I'm going for a safer more modest play indie companies.
44:29.86
Rick
Um, and.
44:38.69
Rick
Mindy companies.
44:40.68
tylerking
Um, and then they shut the fund down saying basically like it's working the companies are investing in are giving great returns and all this but Lps limited partners of people who invest in funds. The people give the investors money they weren't interested in this model they were saying no, we want the high upside. Yeah.
44:54.93
Rick
They they could they had yeah they could not raise money to fund. They couldn't fund a fund um with institutional investment and so that was interesting. Have you gotten any indication that because you were a institutional investor at a calm. Um I'm sorry an lp at calm.
45:00.26
tylerking
Right? it's.
45:07.20
tylerking
At Calm. Yeah, and I'll be yeah.
45:12.66
Rick
Um, ah I mean were they running into similar problems or is this. Ah.
45:15.34
tylerking
Yeah I I don't know any details or anything but like I think I think probably everyone who's an investor like it's a lot harder to raise money in general right now I don't know if problems are related to I don't even know if that I would call them problems I don't I don't have any.
45:27.38
Rick
Um.
45:32.94
tylerking
Knowledge here. But I know they're like thinking about how they want to do it as opposed to just like staying on Cruise control at least part of that is just it's hard to raise money right now. But yes, it might also be actually you know what? they they have said I think Publicly like what they had been doing is raising from people like me.
45:41.11
Rick
A.
45:51.20
Rick
Are.
45:51.54
tylerking
And I think they were like this is not the model you know because I'm giving like $5000 a quarter which to me is a lot of money to them is nothing and it's it's the same thing we're just talking about with group insurance like it's so much harder to raise money in small chunks versus going to the harvard endowment fund and be like.
46:08.31
Rick
Yeah, yeah, yeah.
46:08.89
tylerking
About $5000000000 you know? So yeah I think it's hard to it's hard to raise money in general but especially like if Lps are not like institutional investors are not ah or the Lps behind Institutional. They're not trying to make waves. They're not trying to innovate. They want a proven model. Venture Capital even though it's proven to be bad. It's still proven I Say bad it because almost all Lps for investor for vcs. Don't don't beat the market but whatever. Yeah, it's cooler back back? yep.
46:42.49
Rick
Yeah, they're back. So if you um, you know another another I'll turn another option.
46:47.62
tylerking
Um, I'm going to give a shout out to Mercury Bank I mentioned them earlier everyone listening probably or any knows about them. Deep is this a brand you're familiar with.
46:53.12
Rick
Yes, I'm and I'm with Chase and I'm I'm it's part of my financial system automation I am curious about mery mercury. So how's that been going.
47:03.90
tylerking
Ah, so far. It's been great and I mean they don't do anything that any other bank doesn't do as a matter of fact, they do significantly less but it's just easy like the amount of time you have to spend on the phone with bank of America and half the time bank of America I think chases the same way they're like you need to come into a branch to do that because. You know they're worried about fraud and and this and that but I'm like well my brother is the person who opened the account he's in Boston I'm in St Louis half the time bank of America is like the 2 of you need to come in together. It's like well ok then we're just not getting the thing done that we need done because we're in different cities. Mercury is just like an online first bank so you can't do as much but what you can do. It's like point and click like add other users create credit cards transfer money around. Um you know, open up his mini checking account or like I think they give you up to 15 checking accounts which is awesome.
47:49.59
Rick
Yeah I have to pay I have to have a minimum balances and all these checking accounts and's like requires management. What I like about is the virtual card like the idea of virtual cards being able to create those do they have that concept. Yeah, that's so nice.
48:03.68
tylerking
Um, yeah I you or I think they do I'm still using Stripe for credit cards. Um, which I'm torn about I I'm really down on Stripe recently I think that the the whole company is like. Very clearly headed in the you know every every tech company does this where they're like a darling they really care about Ux all that and then it's like oh no, there are investors we have to you know we have to turn this into a money making machine and I think they're ah they're jumping the shark right now. But for now we use them for credit cards and it's fine.
48:31.45
Rick
Um.
48:34.44
tylerking
But yes Mercury has credit cards and I believe they do virtual cards.
48:38.40
Rick
What looks like I just clicked on Stripe Um, and this is relevant for leg up benefits connect your user's financial accounts. It looks like they've rolled out a plaid competitor now.
48:47.18
tylerking
Um, yes, it's It's expensive, but it might be better. It might be worth it. Um, all right? and then you've got tiny. Let's talk tiny.
48:57.30
Rick
Tiny yeah I don't I don't know if you follow these guys. But um, what's what's his name. Um pretty ah Andrew Wilkinson a pretty prominent guy and in the tech startup community. Um, but I think they're in Canada and.
49:04.48
tylerking
Andrew Wilkinson
49:14.39
tylerking
Here.
49:16.86
Rick
They had ah a business called tiny um that it was a holding company for a number of businesses some that they started some that they've bought and managed um and they merged with we commerce which was is a public company but not on like an american stock exchange like I don't really understand where you can buy. Um. Stock. But ah I think effectively like it's it was basically like a reverse ipo like an Ipo through merger. So now tiny is you can invest in that and their business through this combined entity in the public markets which is pretty cool.
49:49.51
tylerking
So it's kind of like a sp except that the the public company isn't like a total shell. It's like a real company but is a way for tiny to go public.
49:58.10
Rick
It's a real company. Yeah yeah, and ah and you know I would like I follow like I think they the 2 partners um, the other guy's name is Chris collectively they own eighty plus percent of the company which is pretty interesting to be able to invest in that in a public company. Um, because they're they're very like long-term value invest investing mine minded and ah ah I don't know like I I thought this is pretty cool and what a fantasy of like being able to do that like in your into your like retirement. Um, so I'm envious of what they're doing and.
50:29.79
tylerking
Yeah.
50:34.85
Rick
Ah, Matt like could imagine like 20 years from now like having a small version of this would be really really cool where you have multiple companies that are doing important things and um, being able to run them the way you want to run them I don't know I guess access to capital um would be the main reason. Um, that would because like.
50:43.42
tylerking
It I agree but why go public then.
50:53.74
Rick
That would be my guess. But yeah, what it would. There's some. There's so many downsides to going public.
50:57.20
tylerking
Yeah, like you. They're certainly losing control I'm not saying they they're losing all their control but you would have less control as a public company even if you still own 80% of it because now you have like laws you have to abide by and stuff like that by the way they're on the Toronto stock Exchange. It looks Like. Um.
51:16.11
Rick
How you buy toronto stock well robinhood doesn't exist in um in Canada so like yeah.
51:19.36
tylerking
Um, I think the same way you do.
51:27.86
tylerking
I Don't know I've never done it I've never bought an individual stock in my life I only buy Index funds. So I have no idea of course I do Um yeah I don't know I think it's cool that like it's a cool success story of Wow like this company that.
51:32.68
Rick
Of course you do And yeah.
51:45.39
tylerking
They're probably kind of more ambitious and more aggressive than you or I but like some shared values. It seems like that they were able to like reach this level of scale to merge with a publicly traded company like it is cool and at the same time I'm like you've got this amazing holding company with all these other companies I know Andrew's rich like his episodes on.
51:51.68
Rick
Um.
52:05.26
tylerking
My first million the way he talks like you can tell he's just thrown millions of dollars around without thinking I don't understand why anyone does this to themselves like just keep owning the business.
52:13.15
Rick
Um, yeah, there's there's something though, like what is it? um is it is it money like it's got to be like ah like money motivation.
52:21.19
tylerking
Yeah, or I mean I guess it's part I don't know wecommerce Really, it's possible that they actually just wanted to acquire wecommerce and like it was less about going public I don't know I know some companies go public if you give stock options to employees. You do need to give them away to look like.
52:30.00
Rick
Yeah, interesting.
52:38.90
tylerking
Ah, liquidation event type of thing. So. It's possible. It was for that like stripe is desperately trying to go public right now because employees have been waiting for so long. So maybe that's it. Okay, but yeah, that's a cool success story. We got 8 minutes here um we've had a few users or not users. Ah listeners. What's the what's the word. Um, right in like not recently like months ago with ah topic ideas and we've been blabbering on so much. We've never gotten any. Do you want to just maybe take one of these off the top of the list. Um, so Akshay asked. Basically.
52:59.68
Rick
Um.
53:09.70
Rick
Ah, yeah, hit one. Let's hit one. Yeah, see one.
53:15.43
tylerking
Um, how do we deal with compliance and security. So like if if you run a software company people always write in and they're like you know are you this compliant you know? are you a Pci compliant. Are you sock to are you know? what's your ah.
53:30.87
tylerking
Why am I spacing on the ah you Eu regulation. Um, Gdpr Yeah, ah like what do you do about that? Um I have I can say what we do but you have a history of working in like really heavily regulated industries and stuff like that. What do you think about this.
53:34.75
Rick
Gdpr.
53:48.10
Rick
Well it it only applies if you're going after Enterprise. So Generally if you're going if you're targeting the very small business space. It does not come up outside of like very basic like out of the box compliance stuff. Ah. Like that's my experience.
54:03.49
tylerking
I well so slight caveat to that I agree we mostly we we sell only to small teams. But if you smell sell to a small team at a big business. So a lot of universities for some reason universities a lot of universities use us not for their like whole university but like it's like the ah. The school of architecture has this special alumni and development department with 5 people and they use us. It is such a pain in the ass collecting money from universities because they all they buy software as if they're a 50000 person organization. Even though it's a 5 user account. Um.
54:36.88
Rick
Yep, Ah, the great example. But yeah I think like it depends on who you're targeting. Um I think ah if you're going after bit if you're working. Um, if if you're working with large organizations. This is something you have to deal with um if you but you can avoid it like.
54:53.50
tylerking
Yeah, and when the University type customer comes to us. So now we have like a team of people So we're like maybe we'll fill out your so for people and done that that will send you a security questionnaire which might be an excel spreadsheet or it might be like a web form but it's like go through and it's like.
54:53.80
Rick
By going after a different target customer.
55:12.65
tylerking
Do you have systems in place for blah blah blah do you have and they're very vague and you don't know how to interpret it just it's a pain in the ass sometimes we fill them out sometimes we don't but in the early days. We just be like absolutely not. We're not filling this out goodbye. Um, you don't get you don't get that 5 user count. But it's like in the grand scheme of things. It's just not worth putting that effort in to get a 5 user count that.
55:24.30
Rick
That's one way to deal with it.
55:31.30
tylerking
That demands that much work from you.
55:33.62
Rick
Yeah, so um, but like let's say let's assume that you do have to do this for your business. Um I mean if if you want to if this is a core propcy of your business. You've got to develop a core competency in dealing with these security forms and you've got to build like marketing material to respond to them and win them and.
55:36.30
tylerking
B.
55:49.10
tylerking
Yeah, so how'd you do that I assume you dealt with this at people keep.
55:51.31
Rick
Ah, and audit and you got to scale it. We really didn't um, it would come up in partnerships. Um, so there were a couple of things that would come up when we wanted to do big deals with like a paychecks or an Adp they would get super like in our you know in the weeds on. Ah, pci compliance was a big deal back then gdpr wasn't around but like we had to go through that and we would we actually got sock 2 compliant or was was it called soc two or is it. It was Sas seventy back then is what we call? Yeah, we so exist. Yeah, we picked for certification but we.
56:14.11
tylerking
Ah.
56:22.64
tylerking
So 70 Yeah, that still exists too I think there's there's a million of these. But yeah and just just for people who haven't been through this. Um, ah let me describe what I think this means and correct me if I'm wrong about anything any of these.
56:27.88
Rick
You know we wanted those deals. Um and the deals would have paid for it. Ah yeah, yeah.
56:38.30
tylerking
Sock To Sas 70 Hipaa there's not like a single governing body that gives you certification. There's just like a set of rules. You need to follow and then what you generally do is hire some auditing firm like a lot of accounting firms have like. A wing that does this, they send people into your business. They look at everything and they say I with the reputation of my big accounting firm name I certify that this company is following the requirements to to be sock to compliant or whatever is that more or less what you're talking about.
57:08.33
Rick
Yup, yup and and usually there's and also an output as part of that that is like internal policies and procedures related to the certification that you share with ah in a standard I like but you basically produce the standard like view of your security protocols. Um, and you can share that with under Nda like nondisclosure. So typically the way this starts is you you you enter into like a hey like we might want to buy you buy your software. You might not and it's like okay well we have security requirements before we can actually really consider this. The first thing you do is you sign a nondisclosure agreement.
57:42.70
tylerking
Right? right.
57:44.36
Rick
An nda right? and and it's like that's for the first thing that you sign and then it's like okay now we can share information but this is all before like whether you you know you're getting a deal or not so potential for a lot ton of wasted wasted time but like you know I think early on like what do you do like you just deal with it right? like stay up late in.
58:00.60
tylerking
Yeah.
58:03.79
Rick
Fill out the forms and try to like hack your way to to winning a deal.
58:05.96
tylerking
So so one thought on that though you you said this at the beginning like if you sell to small companies. You don't have to deal with this but the corollary to that is if you do this, you have to charge what it's worth like why is enterprise software. So expensive. It's partially because you have to deal with all this bullshit signing up. So now when when ah when a big client comes to us. Our general rule is we will not sign any ndas. We're like our terms of service already have everything you're looking for in it. But if they're big enough. We might make an exception but we say to them is like just so you know we're not going to charge you anything less than $25000 a year like if we're signing this nda you are I just want to prepare you? Whatever we charge you. It's going to be at least to this amount. And they're always like yeah sure, whatever like we're we're used to paying huge amounts of money but you absolutely should not go through this and then be like we're going to charge you $10 a month at the end of it.
58:53.99
Rick
Yeah, that's and another way of saying this is like hey if if you're going to do this like we're attaching a profession like in addition to our normal fees. There is a ah you know enterprise ah bullshit. Ah, 1 time implementation fee.
59:04.69
tylerking
Yeah, but like if you look at Salesforce's pricing. You might be like why is it that there's a like why does the price per user get higher as the number of users gets higher and it's because you have to deal with this shit and and because they can pay. So yeah, okay, that's yeah, good.
59:18.00
Rick
Yep, and yeah, well 1 other thing. so so I think there's like a couple of tips that come to mind with this as one is like you if if you think about this from a marketing perspective and position your company to address these concerns. You can get away with a lot of stuff without having to go through the. Bureaucracy and that is like treating like positioning your company with like a security page I don't know if you have one of these and where you talk to each of the points and how you're compliant and you can get away 90% of the time especially in the midmarket and below with like just showing people that page saying we got it. We got it covered. Um.
59:41.84
tylerking
Yep, yeah, we do.
59:54.13
Rick
So that's 1 thing and then the second tip here would be like if you do need to do the security questionnaires. There are companies that outsource like sort of like you can outsource salesforce consulting. You can outsource a questionnaire filling out ah security questionnaires.
01:00:08.69
tylerking
Yeah, interesting. So I have I have two two thoughts to riff especially at that first point you make that if you have a security page and so um Ben Ornstein gave a really good talk at founder summit about this because to his company tuple does a fair amount of enterprise sales.
01:00:08.69
Rick
And you can hire someone on an hourly basis to do this for you once you kind of figure it out.
01:00:25.53
tylerking
Um, doing any kind of enterprise sales the the real key is you have to understand the bureaucracy you're dealing with there are a bunch of people who all have their own incentives and you have to understand what those incentives are they have no reason not to waste your time they'll they'll ask for all kinds of stuff. Um, because them saying hey fill out this thousand question I've literally filled out a thousand question survey before they'll ask you to do it and sometimes if you're just like no, they'll be like oh okay I don't I didn't care about that in the first place. Um, your point about send them the the security thing so this is what Ben said this is what I've done personally, you send them to your website. And you say I think this answers everything you need if it doesn't let me know which questions it doesn't answer now. It's the other person's job to figure that out and they are not going to spend their time on it. They'll just be like all right looks good. So just keep in mind when they send this. They're only wasting your time because it costs them nothing and you need to make it cost something.
01:01:18.41
Rick
Yeah, the qualify this um like it's like before you're going to spend time on this, you got to figure out how to like make it so that you're not spending time on this. Um at all unless it's super qualified deal like high probability of turning into actual cash. Um, and then second is like.
01:01:35.32
tylerking
Yeah, yeah, absolutely um, my final thought here. So let's know Serum doesn't have any like we've never paid for sock to or Sa seventy. We're not hippa compliant any that stuff we get the questions all the time. Um, our answer to this is first of all like.
01:01:35.64
Rick
Minimize the amount of time you have to put in and you can do for those with what you with the tip you just gave.
01:01:55.20
tylerking
I say I used to work at a company and like was one of the lead people to get hippa certified and and so I I was there for the Sas 70 thing two. So I'm like I've been through this I believe we live up to the standards but because we serve so many different industries and incredibly small businesses. It has not made financial sense for us to have an auditor come in in check so number 1 you can say that you can be like. I'm not promising you but like we just because we don't have the certification. We are good and then number two what we always say is we're happy to prove it to you. You just need to pay for the audit. It's $50000 um, no, one's ever paid. But what it tells them is like I'm confident we would pass.
01:02:23.10
Rick
I Love it.
01:02:31.93
tylerking
And some people will will be like well that's unacceptable. We need this most most customers are like okay that's good enough for me. So um, yeah, those are those are some thoughts but it sucks It's the way Enterprise software is purchased is just miserable.
01:02:47.51
Rick
Yeah, yeah, it is a tradeoff.
01:02:49.50
tylerking
This is why I stay focused on small businesses. Yeah for sure all right? Well we're we're at an hour probably good stopping point.
01:02:58.75
Rick
Cool or um, if you'd like to review past topics and show notes visit startup to last dot com see you next week
01:03:03.91
tylerking
Let's see ya.