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In this episode, we talk about CAC, customer acquisition costs, and how a startup can decide how much is too much to spend on acquisition.
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.
00:14.24
tylerking
Dude tragedy tragedy is up this week figma. Did you follow the news today Figma has been acquired by Adobe which.
00:15.90
Rick
Tragedy. No I have no idea what but I don't what happened.
00:31.43
tylerking
There's lots of takes online about it and like would you take the $20000000000 and this and that but set all that aside Adobe is literally my least favorite company on the planet. You can go back and check my Twitter history I have this on record that there is no company in the on the whole planet that I hate more than Adobe and figma is one of my absolute favorite companies and. Adobe already did this to me my previous favorite company way back in the day used to be macroedia and Adobe bought them and just ruined everything they made and now I'm worried figma is going to get ruined.
01:04.96
Rick
Doesn't Adobe have a competitive product already to them.
01:06.26
tylerking
Yes, Adobe x d or whatever it's called apparently it's pretty crappy I don't know.
01:13.81
Rick
Well um, so are you going to switch products. Are you gonna are you gonna give them a shot. What's.
01:19.25
tylerking
No I'm not ah listen I I think it's totally fine to complain about stuff and then also acknowledge that we live in a system and you have to play the game a little bit like figma is still the best product I think it will get ruined. That will probably be 5 years from now I'll keep using it until then and I don't know what the alternative is I I hope so but I mean figma was this weird unicorn where it's so rare like before figma came out I was like no one's ever going to compete with Adobe. They have such a monopoly.
01:34.49
Rick
Someone will step in and be the new figma by then for sure.
01:49.20
tylerking
It's such complicated software. It's not like making a project management tool or you know some cred app. It's like really really sophisticated tool I think it it was a once in a lifetime thing that something like figma came along and just absolutely ate Adobe's lunch but I'm not confident. It's going to happen again.
02:07.70
Rick
Well so you don't think so that and that tells me that Adobe can't ruin it that bad for you.
02:07.99
tylerking
So I'm bummed.
02:11.71
tylerking
Well no, it tells it tells me that they're they have a horrible monopoly and they're going to abuse their power and make it impossible for anyone to compete with them. Yeah I mean $20000000000 a lot of money but I just wish no no, they they raised a lot of money.
02:22.15
Rick
Um, ah, that's a bummer was it self funded was it a venture capital funded. It was yeah.
02:30.69
tylerking
Um I have a tweet from like four years ago that's like after figma's most recent rays they're obviously going to get acquired by Adobe because that's the only outcome here.
02:40.50
Rick
Yeah, the ah they raised three hundred and thirty million dollars according to crunchbase.
02:44.35
tylerking
Yeah I I just hate that like like once you do that You can't long term be a good company. Um, you know briefly you can, but eventually you know, eventually the investors want their money back. You know that's why I like bootstrapping anyway.
02:50.34
Rick
Um.
02:57.34
Rick
Um, yeah I'm good I was I was on vacation last week well it was kind of a vacation that tell you that I was going to cancun with sable. Yeah.
03:00.28
tylerking
How are you done.
03:06.14
tylerking
Yeah, yeah, with just you and sable. No no kid.
03:11.00
Rick
No kid but it was it was also with lucid's ah executive team and president's club like so top sellers and so it wasn't exactly a vacation but it was fun to catch up with people. Um, the new Ceo of lucid is Dave Grow I don't do you know him did you meet him. He was.
03:14.56
tylerking
Okay, not just you and save. Okay.
03:25.50
tylerking
Now I don't work.
03:29.15
Rick
1 of Ben's part and Carl's partners early in the days. Um, so you probably did meet him but just don't remember it but he um, ah really.
03:34.40
tylerking
Um I think Ben and Carl are the only 2 lucid employees I ever met I think because they they came out to San Francisco to like try and recruit me one time and I should I should have taken that job.
03:44.37
Rick
Yeah, well that was that was funny. Um, that was one of the things that came up ah at dinner one night was like oh remember that Rick like because they they I mean what one of the questions I always ask people is like they're really good at recruiting is what's your secret and the thing that.
04:01.97
Rick
Those guys always say is like when we have a really solid person. We attack their networks and so you know I think that was the early strategy like Ben's network first and then you know when you get a good person attacking networks. So that's one thing I took out of the trip is ah but.
04:08.10
tylerking
Um I.
04:12.67
tylerking
Um, yeah.
04:18.86
Rick
Attacking. People's networks for recruiting purposes when you really have a good team member.
04:20.64
tylerking
Yeah, makes sense by the way I should correct what I just said I made it sound like they flew to San Francisco just for me they were in San Francisco for a conference that the 2 founders of a billion dollar company did not fly to San Francisco just for me I do there was a conference there.
04:33.60
Rick
Now you don't know that.
04:38.32
tylerking
I think it was like Google I o or something anyway, no okay so attack someone's network. Yeah that that makes sense i.
04:44.39
Rick
Yeah, so I don't have any job openings right now to attack 4 but like leg up health but like it's something that I'm going to keep in mind. Um and absolutely applying at windfall.
04:53.92
tylerking
Yeah, now counterpoint to that or not.. It's not a counterpoint but like a way to I think get that wrong is like the first 6 hires at lessening Ceremonyum. We're all kind of friends of mine. Um, so I was attacking my own network which there are pros to that for sure. But it also resulted in. Ah, really like 1 dimensional group of people like the company's much stronger now because we've started hiring strangers who bring new perspectives and stuff like that What you're making faces.
05:23.61
Rick
Um, that's what you say I mean it's like the diversity argument is what you're making.
05:26.49
tylerking
Well even setting aside. Yeah yes I there's no question. It helps with diversity to look outside your network for most people but like even setting aside diversity like I think we had a lot of blind spots because I was hiring a lot of people like me. Um, but.
05:40.23
Rick
Yeah.
05:42.97
tylerking
So like I who did I know I knew a bunch of computer Science Majors who are like nerds in high school. And yeah, you know just it it works but I would yeah.
05:50.83
Rick
Um I look at it. Um I look it on a spectrum starting to interrupt you I look I look it on spectrum where it's like reduced risk versus like there is no like you you can move so quickly and so confidently when you tax someone's network because they have worked together before and it's like it's like.
06:04.68
tylerking
Oh absolutely.
06:09.33
Rick
Ah, it Deris the hiring process with maybe like some downsides of less diverse ah diverse vision of thought etc whereas like you going diverse like has a lot of upside but also comes with risk.
06:20.93
tylerking
I Think what I'm saying I guess is not that you shouldn't attack. Someone's network. It's that you shouldn't just attack your own network and stop there like ah someone who's better at this than I was then would already have 20 people. They really trust and they could be like I really need a good customer service person. Let me go to my friend. Who knows empathetic high communication people as opposed to me whereas just like I know a bunch of Engineers. So. So if if you've done that work then I think it makes sense.
06:45.17
Rick
Got it. So if you're a network if you if you have ah if you have a diverse network then attack your then you've got that network to pull from. But if you don't then yeah makes sense I mean yeah I mean that was one. Ah.
06:52.13
tylerking
Yeah, yeah, anyway, cool any other learnings or takeaways from your quasi vacation.
07:03.12
Rick
The big thing is just man that company is just so success. So impressive. Um, the people are the it's the people though like the people are so nice and so smart and so driven like it's It's very interesting.
07:04.75
tylerking
Yeah, crushing it.
07:14.47
tylerking
Yeah, did you participate like you're the spouse in this situation. Um I assume you didn't participate in all this stuff where you just kind of like going to dinners and stuff like that. Oh really interesting.
07:25.30
Rick
On a percent of stuff. It was all plus ones? Yeah and and people brought like everyone could bring a plus one but like some people brought a friend or a brother or ah in ah so in most cases it was a spe. Ah ah a spouse. But um, it's called Presence club and that is to celebrate.
07:37.50
tylerking
Um, so what was the point of this event.
07:42.93
Rick
Ah, the people I think I don't know exactly what the definition is but like the people who perform like the sellers who performed well and so it's the top. Ah sellers plus the you know leadership. Ah that supported them plus like some support the top performers of teams that support sales.
07:56.78
tylerking
Okay, so it's a reward. Not a. It's not like a offsite retreat type of thing.
08:02.96
Rick
No, this is this is a reward it was meant to be fun and there were some Rah Rah stuff like but it was very brief. Yeah yes in no, um, yes I will say yes, but.
08:06.47
tylerking
Cool You feel you're looking a little tired before that you feel restored at all.
08:19.29
Rick
It was definitely like an all-inclusive ah party resort So like and then we man we were the first but.
08:22.91
tylerking
Um, ice. Well I assume lucid being a Utah company has a lot of mormons there was was there a lot of drinking and stuff going on. Really yeah.
08:31.86
Rick
Oh yeah, oh yeah, yeah I mean certain people don't drink but other people do um but not like great. No one's getting out of control. Um, but you know you you do that for a few like seven days. It's like tired and then you you know our flight got delayed on the way back and that was tough but um.
08:44.76
tylerking
Um, yeah.
08:48.64
Rick
I was good I can't remember what I was going to say but um, anyway, we can move on no other big learnings other than like they have done a really good job of hiring great people. It's super super potent and and impressive.
08:54.60
tylerking
Cool, yeah, very cool. Um all right I think I'm probably going to dominate this episode I've got a lot of random topics I bet some of these will dive into and some we'll just move on from. Ah. I'll just go in order my first one up here is I've been coding for the first time in a while I think I mentioned 1 or 2 episodes ago that like when summer ends our interns and coding fellows leave and my life gets a lot calmer. Um, and like I actually am fully caught up on my work right now. My email inbox is empty. I I just forgot what this feels like and so one day each of the last two weeks I just blocked off for no meetings worked napped woke up worked until midnight coding and I'm like feeling like a developer again. It feels great I don't really have a yeah.
09:44.59
Rick
It's awesome to see you like it better.
09:48.44
tylerking
I mean this is definitely what I like is the feeling of flow of like being in flow state and you just never it. It doesn't matter who you are you never get that with management type work because by definition you're switching from thing to thing. And and there's no such thing as flow state when you're just answering emails and sitting in meetings all day I think I would be equally happy designing I think I'd be equally happy like working on some deep strategy thing. But this is the first time I've just like sat down and focused on a big problem for a full day.
10:20.60
Rick
Cool What problem are you working on.
10:23.33
tylerking
Yeah, ah new I mentioned last episode we're we're planning on updating our onboarding flow. Um, so the the way our codebase works and I think most companies codebase works this way. There's like a react app which is it's like react for people who don't know is like a single page app Framework. It's complicated but it like it's hard to code in but it lets you build really great experiences for apps and then we have all these other pages that are just random websites like the signup page the reset your password page the login page things like that. There's a longer answer than you wanted. But I still know how to do the non react stuff. Better than anyone else at the company I think or at least as well. They all prefer working in React. So I'm kind of going through and I'm like I'll take all the non-react projects and I'll just get them done So right now I'm doing the the sign up Page. It's cool I'm like yeah I'm like learning Stuff. There's a lot of new like.
11:14.52
Rick
Awesome! Why aren't you converting it to react.
11:22.28
tylerking
Um, some people would argue you should I Ah how long of an answer. Do you want here? it.
11:26.65
Rick
I Want to know like like is it because it's It's like not a good time investment decision or is it like a bad decision. Totally yeah.
11:36.99
tylerking
I Think there's 2 sides to this one. Um, react apps generally take longer to load Once it's loaded each subsequent page load is faster. Um, So if you if it's something that someone's going to leave open and interact with a lot. Ah, building it in react is probably a better user experience. But if it's like you're going to load this page fill out a form and hit submit. You can do that in react in a very performative way. But it's like harder to the other thing is react or just like using a real coding framework like react. Allows developers to organize complex code a lot better like as a codebase scales. There's more upfront cost I think but it's worth it to like keep things organized if you're just throwing together a little one-off page I can build this much much much faster than like anyone could build it in react I think.
12:21.49
Rick
Got it got it. Okay, so speed is it's speed and then there's all like time versus value like.
12:25.58
tylerking
It's just like messy.
12:29.77
tylerking
Yeah, like I pitched this to the rest of the Dev team I was like should I just go do this stuff and they're all like as long as you never make us touch it sure like we don't want to deal with your shitty code. But you'll get it done faster than anyone else. So yeah, feel feel like an entrepreneur again.
12:43.45
Rick
Um, perfect, perfect that makes sense Cool Yay. Ah.
12:48.50
tylerking
Ah, um, another probably small update So we've made the the decision not to do interns next summer. Um, yeah, so why? like I mean I think I know the answer. Why did why does that surprise you.
12:55.60
Rick
Um, that surprises me.
13:02.98
Rick
It's ah I mean mostly it's been a hallmark I mean it's definitely ah you know one of the things I want to talk to you at some point about is rituals like that's ah, an important ritual that has been around for a very long time at listeningnoing serum to to kill. It is ah is to kill a ritual.
13:11.59
tylerking
Um, you have.
13:18.43
tylerking
Yeah, well I should we didn't do interns last summer either like not we didn't do it in 2021 that was because of covered we didn't know if we'd be in person or not so we talked through it. What are the reasons we do interns. Um, one reason is to get stuff done. You know they they write. We only do Devin turns normally they write code the code is useful. The amount of mentorship. It takes ah for that to happen. We think it's roughly like a net break even like the code they're writing our full timers could code write that code instead if they didn't have to take all the time mentoring.
13:42.45
Rick
Wow.
13:51.36
Rick
I agree.
13:51.51
tylerking
I actually think it's worse than break. Even we we break our projects into hopefully two week sprints um three of the developers did not complete a sprint last summer three of our full timers. So it really slows down the fulltime team quite a bit. Ah. Number 2 why might we hire someone an intern. It's recruiting for long-term full-time hires I think that's the best reason like it's a really great way to hire entryleve talent is to first hire them as an intern because for a lot of reasons but primarily it lets you d-risk right? You can hire. 4 interns if 1 of them sucks. It's really not a big deal. You give an offer to the best 1 you're pretty much guaranteed. A really great employee assuming they accept the offer. We don't expect to be hiring anyone next year and it's it that the hard thing about this is there's like this really long lead time like right now we have to start hiring interns for 2023. They do the internship in 2023 and we give them an offer to start in the summer of 2024 it's really if you're a company that's like doubling every year you're like sure whatever I'm sure we'll have openings then but we're not that and it's really hard to like have that kind of lead time for a job number 3 kind of what you were saying earlier the ritual the culture. It really makes the summer feel special. Um, we're still doing the internship or I'm sorry we're still doing the fellowship where we teach people to code I asked all the full timers I was like do you feel like the interns provide something that the fellows don't and the answer was no, they're like as long as we do one or the other.
15:27.50
tylerking
It'll still feel like summer and like we're doing this ritual and all that so we decided that just doing the fellowship is enough.
15:31.31
Rick
I Think the fellowship is great that is the core of what you're trying to accomplish with it and the everything else is added sort of around it. So that's great. What a great decision. Well yeah, it sounds like you're not you haven't made the decision. You said probably not. So.
15:40.57
tylerking
Yeah, no thank you? Ah sorry I wrote this like two weeks ago it's definite now. Thank you? yeah.
15:50.13
Rick
Okay, yeah, good good job hard decision but good but like very thoughtful and I seem to me it feels like the right one but it knows.
15:57.94
tylerking
Actually I should there's 1 possible way of interns. We did give us intern offer to one of the fellows last summer. Ah before we'd made this decision if she accepts we will probably go try to find another intern because it's kind of lonely being the only intern so we would probably but I doubt she'll.
16:16.40
Rick
You're gonna buy her friend. Yeah.
16:17.93
tylerking
But yeah, exactly well you like a stuffed animal and are you familiar with Rubber ducky rubber duck debugging something My my wife who teaches like R like statistics programming to like.
16:25.56
Rick
No, what is that.
16:33.87
tylerking
Non computer science students like psych psychology students. Apparently this is a trick for debugging is you buy a rubber ducky and you talk to it. Um, as if it's a person and like apparently this really helps people like jar there like that it gets you through roadblocks If you're talking to this rubber duck.
16:44.90
Rick
Um, is.
16:49.55
Rick
Yeah, you just need to tell her that my my version of that is just talking to myself out loud I don't have a ducky I just thought to myself but talking to yourself is effective. That's hilarious.
16:55.95
tylerking
Um, um, yeah, no, she she literally like buys a bunch of rubber duckies and takes them in the first day and gives one to everybody.
17:07.40
Rick
Really teaching people to think.
17:10.16
tylerking
Yeah, because like it's yeah well anyway, we don't need to go down that. But yeah I think it's kind of a funny little funny thing. Um I've got more. You've got 1 thing on your list when do you want to take it now or or way to a little bit all right, go for it.
17:19.77
Rick
Sure I'll take it now. Um so ah j d and I skipped last week and then the week before well I guess it's been two weeks yeah because I was in Cancun and so I really just took off so 2 so two weeks since we talked and both of us during that time developed.
17:27.47
tylerking
Skipped your like weekly 1 on 1 thing.
17:37.00
Rick
Significant anxiety about the performance of the business. Um and is really really interesting. Um, so we went in both to our meeting both like ah you know because like it's very seasonal business. We don't know how we're doing really until the end of this year no nothing changed.
17:48.47
tylerking
Yeah, doing doing change or this was just kind of like an emotional thing.
17:55.29
Rick
Just like we felt blocked and not moving on things by the end of the meeting. We're like this is awesome and so we just planned like out what we were going to do um and and and just started doing it and instead of thinking about it. Um.
18:01.68
tylerking
Okay, what happened.
18:14.71
Rick
And so now we have we've taken our framework for local marketing ah blitzing and then we've basically turned that into a plan. We think we can execute this year and there's sort of tier one stuff that we have to do tier 2 stuff that we think we can do and then tier 3 stuff that's pie in the sky that we probably can't do but we'll try if we can um and we're.
18:33.70
tylerking
How I feel like it sounded like you already had this plan last time we talked like what what's different about this plan.
18:34.80
Rick
Off the races.
18:40.38
Rick
Not We didn't have a executable plan. We had a framework and with ideas of things we wanted to do um and it was paralyzing. Um, and so what we did was we broke it down into stuff like here are the things we need to go do like let's go.
18:45.71
tylerking
Yeah.
18:51.10
tylerking
So like what? what's an example of a just a very like concrete tactical thing. Yeah.
18:55.58
Rick
Billboard advertising is something we're probably not going to do. It's a tier three like but it's part of our local like our long term local um marketing blitz. Um.
19:02.41
tylerking
Okay, so so a month ago or whenever you sat down and said let's make a list of 60 things but you didn't you didn't remove stuff you. You're just looking at the full list and that's what was overwhelming about it.
19:15.19
Rick
Kind of it's but you got to remember like there's no list here like it's more like I have a 1 hour conversation with Jd once a week and that's where these conversations happen and before I went on vacation I had like sort of clarified like oh wow I've got I've got clarity now around how to run this business like seasonally um.
19:20.83
tylerking
Yeah.
19:32.32
Rick
And you you're starting to see it too where we're talking about it but it was all philosophical like it was written down like it as a framework more so than like ah, an executable like check the box type plan and so we basically this today we just converted that framework into an executable plan and it's like okay, let's go.
19:35.80
tylerking
Yeah.
19:49.41
tylerking
Cool. Do you have I mean we kind of talked about this I think last episode that like it's weird for you because you've got this open enrollment period which is presumably when all your sales will happen. Do you have any way of evaluating what's working.
19:51.24
Rick
And we feel better I don't.
20:05.37
tylerking
Before then because you don't really expect customers is there some other metric you can look at.
20:11.12
Rick
Ah, the metric that we are focused on right now is what we're calling flow ready contacts or flow-ready leads. But it's effectively. We have 3 buckets of prospects that we can go after 1 is a consumer lead. The second is an employer lead and the third is a partner lead someone who will refer us business. Um. And so adding like how much how much how much flow ready means ready to market to and ready to prospect. So we have first name last name organization and an email address. Um and then ideally phone number in Linkedin as well. Ah, but but effectively we're ready to like go after him. And how many of those are we adding ah and you know you know and how many of those do we have ready to reach out to is is sort of the like if we have a bunch of those ready to go. We believe we can convert some percentage of them. But it's highly manual in terms of creating those and bring them into the system.
20:51.36
tylerking
Um, ah.
21:05.45
tylerking
Gotcha but so that's what Jd will be working on for the next month or however, long before open enrollment starts.
21:06.22
Rick
That's one.
21:12.00
Rick
Yep, the other one is like how many signups organic signups to our how many organic searches are happening and hitting the site related to Utah health insurance and how many of those people are creating accounts like it's very low right now. So it's not meaningful, but like if that's happening more on.
21:23.12
tylerking
Um, okay.
21:27.51
Rick
Out of season. It's indicative of it happening more in season. It's a good question.
21:30.54
tylerking
Gotcha cool So you've got a plan. Hell we go do it Great I Want to hear more.
21:38.73
Rick
We'll go do it and we're gonna see what happens and just a lot of talking. You know you kind of get like ah we both want this to work. Um, and it's kind of you know it does feel like this is a make or break quarter for us like.
21:50.14
tylerking
Um, yeah.
21:53.69
Rick
It's got to work like he he can't he. It's got to grow a certain amount for him to be motivated to keep doing it and it's got to grow a certain amount for me to be motivated to keep funding it and um so it's it definitely feel. We feel the pressure kicking in I think it's healthy.
22:05.25
tylerking
Yeah, that's I Love how aligned you both are that you could imagine a situation where like you're paying him such a comfortable salary that he's like I'll just keep doing this forever or it's it sounds like both of you are sacrificing and both of you stand to gain a lot if it works and so you know. Hopefully it does and maybe it won't but either way this is like what an exciting This is what starting a company is right? That's awesome.
22:31.78
Rick
Yeah, yeah, so um, yeah, so monthly revenue is we had ah our our record monthly revenue in August ah, 3 point 3 k and monthly recurring revenue which is cool. Um, that's up.
22:41.26
tylerking
Um, all right.
22:46.80
tylerking
Um, I mean that's like that's not nothing.
22:49.11
Rick
I Know like that's the other thing I keep telling like we've got something here. We just got to just keep we got to get focused. We got execute and just keep going. Um.
22:55.29
tylerking
If you were 24 the age I was when I started lessening crm and you weren't married and didn't have a kid and weren't trying to buy a house. You'd be like hell yeah I'm good forever on this I can live off this.
23:08.28
Rick
Yeah, exactly. So yeah, it's it's real. Um, we've got work to do. Um you know ah but ah you know anyway it's it's ah that's up from like our January revenue where I could even look at like last year's revenue um me just look at last year's revenue for fun right now. January was ah um, was ah less than 2 k um, yeah, August last year was 1.6 k so we've more than doubled. It's pretty good.
23:28.65
tylerking
So you've added one point three one point four k something like that.
23:37.72
tylerking
Yeah that's amazing I'm well I'm especially excited by what you've done since January because like since August last year you had open enrollment and it's hard like it's hard to do an apples apples comparison. But the fact that you've grown over a thousand um mrr during a period of the year where you a you're not working on it very much. Personally and b you wouldn't expect people to buy health insurance during that time of the year that's encouraging.
24:00.57
Rick
I know and it's like but but but but there's this huge like is it going to accelerate question in Q four that we just don't know all we can do is is try to minimize regret by putting down a plan and executing it and basically it's.
24:08.89
tylerking
Um, right? yeah.
24:18.90
tylerking
Um, do you have numbers that like have you have you thought if if we do this at the end of open enrollment. We're good and if we do that we'll have to reevaluate.
24:19.21
Rick
Praying that it works.
24:31.41
Rick
We're kind of like 10000 clients it's kind of like our unspoken like less than 100 clients would be really like hard to stomach. Um, that's twice what we are right now ish um well ah, ble less than twice. Ah.
24:35.74
tylerking
Um, yeah.
24:43.75
tylerking
Um, yeah.
24:47.26
Rick
Another number would be um I think 200 would be huge like we'd be ecstatic. Um, there is a version of like 80 or ninety where it's like hey but we know how to do this now. So there's there but like sub 100 would be yeah.
24:59.69
tylerking
Um, yeah, 80 or 90 feels to me like figure out how to make it a lifestyle business for now like you can't work full time all year around and have that growth. But if you could be like well we're just going to kind of hibernate until next open enrollment and get that type of growth that could be a great business.
25:19.75
Rick
That' you know thats that is an interesting thing I think both of us are looking at this is how do we get to full time and there isn't both to full-time and there isn't this version of like well maybe it's part-time for both of us. Um, that's interesting that is something I'll talk to J D about but it's it's kind of irrelevant. It's a later conversation.
25:31.20
tylerking
Um.
25:34.20
tylerking
Absolutely yeah and it's It's probably not smart to think about these things I'm just trying to make good radio here.
25:37.00
Rick
Yeah, well I will tell you though like what 1 thing we did today was like let's talk through Worstcase scenarios again, it just takes all the pressure off to do a postmorte like a pre post a pre-mortem um, like let's talk about the worst case scenario I like ah we talked about it and was like okay, we're good.
25:51.29
tylerking
Yeah, it's it's kind of related to the cats on the roof thing that we talk about all the time where it's like if you have to have a hard conversation at some point again I'm I'm not trying to put the carp for the horse. Hopefully that isn't necessary at all. But like if you do It's good for both people to go into it like.
25:56.96
Rick
We're both okay with that.
26:10.31
tylerking
We both already know what the situation here is and this isn't going to surprise anybody and there we go so cool.
26:15.44
Rick
Yeah, so and I think I think we'll see some I think this will work. So um I have some. There's a lot of good stuff. J d's plant planting a ton of seeds all year and I just I'll be stunned if it if if we if we don't break a hundred and and get closer to 200 I think it'll be I think we'll probably end like.
26:18.80
tylerking
Yeah. Um, yeah, that's awesome.
26:32.96
Rick
Where we are now without ah ah, but another breakthrough will probably end low 100 s that's my update.
26:37.25
tylerking
Yeah, cool, all right? um, want to give some updates on some things I've talked about before I've I've mentioned we're trying to build out this like Api integration ecosystem thing where we're redoing our Api and then. Reaching out to people and trying to say basically to other companies to say why don't you integrate with us and we'll do everything we can to send you customers. Um, so yeah, things are I think going pretty well there. Ah there are 2 things I can mention publicly one is that Brian from zip message is building an integration with us. Ah yeah, and I sp.
27:07.73
Rick
Brilliant.
27:12.22
tylerking
So we have a few integrations already from random companies but like a they're mostly not like tech companies or companies that like we have a relationship with they just it's well whatever I mean there. It's good that they built them but this is a product I use that message is a product I use every day and really like and there's a different type of. Ah, oomph. We can put behind marketing it when we really believe in the product. It's not that I don't believe in these other ones I've just never used them I have no idea we're going to like really push that message hard to our customers because I really think they should be using it. Um. The other one is Peter soon. Um, from reform which is a like form building tool which we actually just became a customer of customer of this week so again like I don't have as much history with that one. But that's another one where it's like good enough that we decided to use it. So I really look forward to pushing that to people.
28:02.42
Rick
Um, that's awesome. What's your use case.
28:06.55
tylerking
We have a kind of funny one. So. It's a form builder like historically I've used like Google forms and stuff like that if I need to send a survey out to people and honestly I will prefer reform. It's like it looks nicer. But Google forms is getting the job done fine the real situation we ran into was okay so we have. Callendly we use callamly for our customers to schedule calls with us callendly built this thing called pre premeeting routing or something routing where you can ask questions and it'll send you to the right? ah call form. The problem is. All of the utm parameter tracking gets lost in that redirect so we care very much where someone came from to book a call with us. Um, there are a lot of reasons that matters but like 1 is if our support is overloaded. We turn off the highest volume source of demo but bookings so we need to know where they're coming from. Um, so we were in order but to do this this routing we weren't able to track where a person came from so we're having them do the routing in reform we're saying like asking all the questions there and then reform can send them to callmbly and include the utm parameters's you have to do a little workaround. But. Ah, it's we're not even capturing the form values like we don't care. It's just getting them to the right place which is kind of a cool automation. Yeah, um, yeah, it's it was kind of a circuitous path there but we got there.
29:24.46
Rick
Um, interesting. That is very interesting I wouldn't have thought of that.
29:36.40
Rick
So ah, so so you've got these two ah I would never have thought of these integrations by the way. Um, very interesting. Did you think of these and reach out to them or did they hear your the podcast I'm just curious like these are really interesting. No brainers in hindsight like but I would never have like.
29:45.14
tylerking
Yeah, yeah.
29:51.57
tylerking
Yeah, so is it message I don't think is quite as natural like I Love the product. It's I think it will be a good integration in the sense that like any communication ideally gets logged in a crm but it's not as natural as a form builder.
29:52.77
Rick
Thought of this.
30:07.58
tylerking
The thing that happened there though is I follow Brian his podcast bootstrapped web and I follow him on Twitter and he did this big pivot. Not not pivot but like a niching down for zip message where they're focusing on coaches and consultants instead of just like people like me for example and I saw that I was like those are 2 of our biggest. Industries so I just reach out was like just so you know we have like you know at least high hundreds if not thousands of customers in that category like if you build an integration I'll send it out to all of our people and they'll hear about you? yeah yeah I you know I don't want to I tend to be too optimistic about these things but I'm kind of like.
30:37.61
Rick
So no brainer for him.
30:45.89
tylerking
I think we're going to send them a hundred plus customers like we'll see. Yeah, maybe not yeah I'm certainly not making any promises here but like I think there are a lot of people who will try this out actually that that one's yeah, sorry, good. Well anyway and then with Peter I just.
30:48.57
Rick
Significant.
30:54.95
Rick
Um I Love this I Love it. Sorry go ahead.
31:04.23
tylerking
Cold emailed him I was because I listened his podcast and I was like we need a form builder. That's one of the top. No one's like requesting is it message integration because they don't know that's not like a existing category with form builders. We get this request all the time and I was like hey I listen to a podcast from someone with one of these let's reach out. So.
31:20.10
Rick
So interesting.
31:23.39
tylerking
And then there's 1 or 2 other people who I'm talking to that like don't have a current product but they're thinking about building 1 um so update on that. So I I sent a survey out in our company. Our email newsletter dollar not all but 10000 our customers this week had a survey in it that was like what integrations do you want. And at the bottom of it. It's like can I reach out to you to put you in touch with someone thinking about building an integration so that basically if you tell them what you want, they're more. They're more likely to build what you want. So now I have a list of about a hundred people of my customers willing to do customer interviews with potential api partners. My. My goal here is to just like provide overwhelming value to the other company. So then my hope is I can make a case study of being like look how well this worked for them more people build integrations with us I can give you customers to interview I can you know.
32:18.13
Rick
Yeah, you yeah, you're building a ah product for other product developers. Um, and you need to run the same. Go-to-market. Ah you know stuff like you need all the stuff case studies reviews. Ah.
32:20.50
tylerking
Yeah.
32:28.10
tylerking
Um, yeah.
32:33.15
Rick
Word of mouth all the stuff that you have built for your core customer.
32:36.40
tylerking
Yeah, exactly so I'm trying to think like what is ah a fledgling saas company that maybe has a great product. Maybe a little more like drive and time to spend on this than I do but what don't they have and what they did 1 thing. They don't have is access to customers to interview. So I kind of figure if I can be like I've got a list of them ready to talk to you that could be a pretty compelling thing.
32:59.25
Rick
I'm I'm curious. Do you? Um, do you have like a list of the requests like could you share some of the top 5 like the top 5 requested things from from your survey.
33:12.13
tylerking
Yeah, let me pull it up. Um I'll say there was one standout which is email marketing. Um, so and I I kind of said in it like we're not talking about specific companies and I and I also say in it don't request anything from a company bigger than us like.
33:25.42
Rick
Yeah.
33:28.20
tylerking
Constant contact is not going to build an integration with us right? That's not what we're looking for here. We're looking for smaller companies than us. Um, we already have a Mailchimp integration that we built. But so many people hate Mailchimp um far and away the most popular response was an email marketing integration. And I don't even think they care what it is I mean a lot of them want constant contact. But I think a lot of them are just like anything except Mailchimp. Basically.
33:53.30
Rick
What what do they want though? is it like ah is it something to spam people with or is it more like of a nurture a nurture thing.
33:59.43
tylerking
Um, so the the if certainly some people want to spam which is to be honest, why we're not building this ourselves like I a pardon me is like they're going to do it. They're going to figure out a way to spam So I'm willing to have an integration but like I don't want to be the weapon that they use if that makes sense. Um.
34:05.65
Rick
Um.
34:12.28
Rick
Um, yeah.
34:17.30
tylerking
So one 1 legitimate use case is they just have a newsletter. They're just like I want to put people in a group in my crm called Newsletter and I want them to be in this I want to be able to send emails to them basically and in a non spammy way. Hopefully another one and.
34:30.80
Rick
Through less annoying serum.
34:34.70
tylerking
They don't need to send it through less Annoyings Hereum I mean they would love to. We're not going to build that. Um they would love to just send it.
34:37.67
Rick
They want to deploy they want to deploy that list to they want. They won't to sync that list between the 2
34:43.53
tylerking
Yeah, exactly. So that's what we have with Mailchimp is is just a basic sync like that the next level up which we don't have but I think if someone were building this they should consider doing is just basic triggers and in particular we have these pipelines like a lead pipeline where you move people through these statuses to just say when someone moves from the status that status. Send him this email which I don't think would be hard to build. It's just like it needs a little tighter integration than just pushing context back and forth. Yeah.
35:04.91
Rick
Um, so.
35:13.54
Rick
Yep, and do you have that exposed like you have a contact ah deal so stage. Ah Api.
35:19.43
tylerking
Yeah, we so kind of yes we're working on a new api. That's not like it's ah working. But not if you go to our website and look at our Api Docs That's not what you'll see. You'll see the old one. But if you reach out to me anyone listening I can put you onto the new one.
35:32.87
Rick
Cool. What's your get go keep going through the list. What are the other things people want.
35:37.91
tylerking
Yeah, so email marketing was most popular appointment scheduling was very high I do hesitate I was thinking I should reach out to Derek from savvy cal about this? Um, the thing is I'm torn like I would love for someone to build this. The thing is we are planning on building this and I don't want to like ask someone to invest. Time making this integration and then like a year later we're competing with them directly. It feels kind of dishonest of me so I'm planning on just letting that sit there. Yeah.
36:02.84
Rick
Yeah, but you could just disclaim that like we probably will build this. It could be tomorrow. It could be in 6 years could be in never um.
36:08.40
tylerking
Yeah, you're right? if if you'd asked me three years ago I would have been like oh it's six months away and we still don't have it so you're right I might do that so appointment and scheduling I should also mention like someone could have their own appointment and scheduler or email marketer. They could also just build an integration with some other company.
36:10.47
Rick
Um, yeah.
36:25.99
tylerking
Could be like I built a constant contact integration. Um, that would also work lead generation. Tools was pretty high up there. So like people buy lead lists from whatever sources I don't know where they come from and they want those put in directly into the crm.
36:30.71
Rick
Um.
36:41.21
tylerking
Web forms which reform will get us document signing was next up like a you know docusign type thing. There's a bunch of others but those were the top ranked ones. Yeah I Ah even just these two that were it's looking like pretty likely we're going to get them. That that could be a big deal for us.
37:01.43
Rick
Um, docusign seems like ah like a document signing solution seems like a no-brainer as well. Ah I Guess that's a little hard to build integrations for.
37:04.70
tylerking
Um, yeah.
37:12.40
tylerking
Some of these will be so we're almost done with our zapier integration. A lot of these like web forms is one that zapier will be pretty good at Zapier is good for like pushing data. 1 time. It's bad for like back and forth syncing. Um I Still think. Something like reform will be really great because our customers don't want to figure out how to use zapier but document document signing I feel like could be done with zapier pretty easily.
37:38.82
Rick
Um, yeah I like that interesting I like what's the craziest I'm like I wonder what like is least requested but like.
37:40.12
tylerking
But um, certainly that's that's what's going on there I'm I'm doing some biz dev.
37:51.27
Rick
You have any aha moments when are there any like oh that's interesting like requests.
37:54.10
tylerking
Um I need to look through this because you got 118 responses and they just keep coming in. Um, yeah I can I can share it with you.
38:00.88
Rick
Can I see I would love to look at this I feel like this is like this is super interesting from a customer research standpoint and you're talking to customers that are our target customers. Um, so I'm interested in like what's keeping them up.
38:11.34
tylerking
Yeah, you're you're probably going to tell me that I asked the wrong question So I'm a little nervous here. But no yeah I I can share this with you for sure. Um I don't think but most of most of it's not like going to blow your mind. It's you know.
38:17.25
Rick
Cool. Thank you.
38:26.20
tylerking
People want constant contact integration. Basically um, yeah, cool.
38:31.51
Rick
Very cool. Update I Found that really interesting I don't know if any listeners did but like that was that's that's a really interesting ah project you have going.
38:39.59
tylerking
Yeah I'll keep I'll keep keep giving updates there um all right both of these next 2 are meaty. Ah I'll just start with the one at the top this kind of I had a conversation um on Twitter with some people about this but I've been thinking like. How much should you be willing to spend to acquire a customer. Ah, that's a very vague question I have a lot more to say but like do you Rick feel like there's conventional wisdom on like how you figure out what you should be willing to spend.
39:07.87
Rick
Yeah I mean the conventional wisdom is less than you spend I mean more less than you make sorry.
39:14.00
tylerking
Um, lesson you make? Yeah, but what I always hear is a third of your Ltv your lifetime value someone just made that up. Obviously.
39:18.48
Rick
Yeah, but like sure but that but then but yeah, but then you're getting into like all sorts of like situational questions that are are nuanced and what your goals are like I mean if you're if you're yeah sure. But like what's the.
39:29.86
tylerking
Yeah, but it's good to have abstractions right? Okay, so and and why is it a third and not 100% there's at least a few reasons one is ah you get the revenue gradually over time you spend it all upfront. So.
39:36.70
Rick
Yes.
39:45.51
Rick
Time value money.
39:47.16
tylerking
You know time value money right? Ah, also there are other costs associated with serving a customer that probably are not built into your customer acquisition costs. You know customer service hosting costs stuff like that.
39:56.74
Rick
well well I when I calculate ltv for for my businesses I usually factor in time value of money into the ltv calculation and the cost of service are you not doing that for your Ltv calc. Oh okay.
40:11.96
tylerking
I Don't think most people do um I don't yeah yeah I think most when most people say ltv I think they mean the total amount of revenue you get. It's like revenue per user divided by Churn rate.
40:15.20
Rick
Interesting. So you're doing like a revenue ltv. So really, not, you're doing like a lifetime revenue.
40:27.42
Rick
Yeah, okay so that's like 1 input to lifetime value I would say that's lifetime revenue not lifetime value. Lifetime value is like taking into account should take into account like revenue minus cost of service and then adjusted for discounted for time.
40:29.44
tylerking
Is basically.
40:44.77
tylerking
Okay, so I think I mean what's that face you just made okay that would be great I Don't think a most people including myself are sophisticated enough to do that I mean if I it would take some time.
40:45.29
Rick
The time value of money I'm just saying just saying you are sophisticated enough to do this but it makes ah but it makes it. But then you can say like this is the most we should spend like.
41:02.70
tylerking
Well what you're saying though is you just jumped to the end of the you ants jump to the answer. What should you be willing to spend whatever this number is $1 less than whatever this number is so like how do you calculate this number. Okay, but here's here's I think it's complicated though. Um, first of all.
41:09.49
Rick
Yes, yes.
41:15.85
Rick
It is complicated. It's nuanced and complicated. Not every customer is goal.
41:21.35
tylerking
I should yeah not every well there's that there's churn is okay, let's dive into some of this. Okay, a third of Ltv is what you often hear as a shorthand for what you're saying like if you don't want to do time value money. You don't want to worry about costs. You just want benchmarks industry average. They say a third lifetime value. Another thing you hear is base it on payback period like oh you know you should be able to pay back your investment in six months or eight months or whatever.
41:48.19
Rick
That's a different question though. Um, it's not about necessarily like are you profitable. It's like it's um, how how um quickly can you reinvest? Ah so so there is ah like there's a question there of like how fast can you grow.
41:57.18
tylerking
Um, right.
42:03.87
Rick
But like how much how quickly do you turn $1 into 2 and then you can reinvest that extra dollar back into creating more dollars and um twenty like twenty months versus like three months is a significant ah difference in terms of turning like the the time you can reinvest the money that you made.
42:17.96
tylerking
Right? But shouldn't you. It's always amazing to me when people are like oh you know we have a three month or a six month payback period. It's like well you should be leveraging that until like you should be growing infinitely fast. What what they mean is like I can spend $100 and get that I can't spend $200 and get that. Because almost every marketing channel works worse as you scale it.
42:42.30
Rick
Well there's well I think that we're talking about unit ah unit economics here. So like being able to maintain and scale a hundred dollar unit cac like or a three month payback cac is huge because. You could plow money into it and not have to raise as much money because you're paying. You're yeah yeah, sure.
42:56.63
tylerking
Right? Which is basically a myth but like that there's no we all if you read kind of lightweight blog posts and tweets and stuff you walk away from it being like oh you just get this machine you pour money in the top three months later you get that same amount of money back and then you pour it back in the top again and it's this infinite money machine. I think Jason Cohen from wpengine had that according to 1 of his talks I've never heard of anyone else say that actually exists.
43:22.25
Rick
Um, I think the really successful companies that don't raise a lot of money have this.
43:27.13
tylerking
But really successful.
43:31.94
Rick
Um, like major outcomes like they're growing like crazy growth is not like an issue. Yeah yeah.
43:34.34
tylerking
Yeah, so that that haven't raised money so mailchimp at lassian that's it like what? Okay and I don't know about it lassian they might have Mailchimp was very much like a freemia. Their product is very viral. Yes, in theory there are like customer acquisition costs. But it's not like paid marketing. You know.
43:54.32
Rick
I Guess what I'm saying is like what I'm what I'm thinking about when I say that is for a bootstrap company the time it takes you to pay back. Cac is extremely important because you are limited in terms of what you can invest by your cash.
44:06.80
tylerking
Um, yeah I I Totally Agree. It's just there aren't really that many role models out there like you keep here you you see it's at low volumes you see all these people talking about this and then it's like well what companies out there. Like maybe convert kit I'm just trying to think of bootstrapped companies I've heard of that are in order Magnitude bigger than lessening Cm. There are a lot but like not not that many.
44:29.53
Rick
The simple answer I agree the simple answer to the question of like how much Cac is like you want your Cac payback to be as low as possible without sacrificing growth.
44:39.11
tylerking
Yeah, sure. So absolutely so let's let's be realistic though and and talk about lessening crm. It's not low, but it's profitable. Well so yeah, if ah, well it varies.
44:46.17
Rick
What is it.
44:54.11
Rick
Okay.
44:54.43
tylerking
I don't want to tell you yet because I want to get to an answer of what should we be willing to spend first our lifetime value and by that I mean the way most people use it not the way you use it. Our lifetime value is nine hundred and thirty six dollars per user I'm going to talk per user not per account here because like a 10 user accounts very different from a 1 user account. Um. So every user we can acquire will pay us nine hundred and thirty six dollars before they churn asterisk that churn calculations bullshit because everyone does this wrong. But I'm doing it the way the rest of the industry does it a third of that is three hundred and twelve dollars so using this.
45:24.10
Rick
In.
45:31.73
tylerking
Industry standard. Maybe we should be willing to pay three hundred and twelve dollars now that person's paying us $15 a month which makes that payback period twenty months which is way higher than what anyone says is acceptable so these 2 different benchmarks are pretty wildly misaligned in our case for any company with low churn like us. That's going to happen any company with really high churn the opposite would happen.
45:55.25
Rick
Um, or you could bring in annual payments.
45:57.19
tylerking
Yeah, well that only works if one so this is the famous Jason Cohen advice where he says like he would pay $50 and get 1 paying user and then push an annual not push like that sounds bad but like give them an offer to pay Annually, they'd pay. Ah, hundred dollars so he spent $50 and gets a hundred dollars like literally that day now the hundred dollars for the next year but then he takes that and put that back at the top of the money that the the machine if your payback period is more than twelve months that doesn't work because you get the money. It's still not enough to pay it back. And you have to wait twelve months before you get any more revenue.
46:39.55
tylerking
Um, so twenty months is not I mean maybe you could argue? What do you think we should be willing to pay.
46:39.74
Rick
Um, so what are you? What? what are? what are you paying currently.
46:46.20
Rick
I Like as much as you can afford like I don't think you have a choice you have to pay as much as you have to pay to grow and then you need to figure me like whatever it takes is my answer and then you need to figure out ways to drive it down.
46:50.10
tylerking
Um, yeah.
46:59.93
tylerking
So what we've been doing is we've been saying. Let's let's limit ourselves to a twelve month payback period which means $180 per user. Um, and then the reality is we kind of fudge the numbers a little bit so like a we're not counting. Um, we're not cutting labor like some channels like. Software advice Alex is like calling people and it takes a lot of work. Some channels are totally automated. We're not factoring that cost in and then also sometimes it's like well it's two hundred and ten dollars and we're like that's kind of close to one eighty like fine. Um I'm kind of thinking we should raise it though because the realities we're not getting much success with with. That those spends but we're not like far off like we're getting some stuff.
47:39.67
Rick
Um, a different question like so this is making me think about like control profitability growth. Um I'm I'm I'm wondering like if you need to like go, you don't have control. Um I'm wondering if you just need to like go like. You need to grow like figure out how to get growing with control before you worry about profitability and.
48:01.30
tylerking
Well maybe we do have control. Oh so you're saying spend spend enough and not worry about profitable. Okay I hear you? yeah.
48:07.74
Rick
To get control. Yeah spin enough to get control and then worry about profitability. Um that that would be like sort of my bias here assuming you don't feel like you have control of like being able to pull lever.
48:11.77
tylerking
Right.
48:19.74
tylerking
We don't and that's we've we thought we've been doing that um in the sense like even twelve month payback period because all that if I can rant for a second. All this advice on indie hackers and Twitter and Linkedin it's coming from marketing people and thought leaders who like paint this rosy picture that's not.
48:29.47
Rick
Um.
48:36.11
tylerking
Some people get it. But it's not realistic and so it's like even a twelve month payback period is like unacceptable according to those people and so I thought we were already way overpaying but the more I think about it the more I'm like we actually have quite a bit of cash flow. We could spend an extra $20000 a month on marketing without it really hurting the business. Um. We don't have enough growth. Let's let's spend the money and try and even if it's like not quote unquote profitable like why? not? Yeah okay I think I agree with you I think we're probably heading that direction but let me throw a wrinkle in this just. For other people doing this math. One of the things that makes these numbers even worse than they sound is that churn is not like okay, how do how do people calculate to to calculate lifetime value. You take the monthly amount a user pays you and multiply it by the average number of months that someone stays with you to get the average number of months.
49:31.27
Rick
I'll just add that That's not lifetime value like that's lifetime revenue. Okay, ah like that's lifetime value like it should take into account like what you're spending to service the customer. Um, and ah.
49:31.29
tylerking
You do one divided. Yeah Rick you can try to make up whatever terms you want. That's what everybody else in the world means by lifetime value.
49:44.91
tylerking
All right, keep keep pushing that boulder up the Hill Rick
49:49.11
Rick
And the value of like money a dollar to day versus a dollar tomorrow. Okay.
49:54.26
tylerking
Okay, fine lifetime revenue. Um, but so the thing is ah it's that implies a hundred percent of your cohort signs up for an account and pays you they all stay with you for that number of months and then they all cancel at once that's kind of the the. Like the math works out that way. Of course. That's not how it works what actually happens your churn is almost always going to be the highest right after someone signs up this is because people aren't necessarily activated. They like their free trial ends they pay. They're like not really bought in and then three months later they cancel if almost any saas company on earth if you look at it the turns way higher. And that means like all the other people who didn't cancel have to pay for a lot longer than the quote unquote average lifetime before your actual revenue catches up with that lifetime value. Um, so I say the lifetime value is nine hundred and thirty six dollars but in fact, for many people. It's $30 and for some people it's unlimited because they won't cancel until after I die and it makes the math really hard so that that's why I I definitely am not like let's go spend $800 to acquire a user because it's like it wouldn't work out.
51:03.44
Rick
Yeah, yeah, exactly yeah, but but you probably you might want to try it and see if like if you spend $800 and figured something out by spending $100 toquire users through experimental channels and then started optimizing it like that would be worth worth spending money like there's this whole thing of like.
51:17.58
tylerking
Yeah.
51:21.42
Rick
Learn like you're paying to learn versus paying to be efficient and um, there's there's a tradeoff there too.
51:27.57
tylerking
Agree I should say though we when we do a totally new Channel. We don't cap it at all where we what we say is go spend $1000 and see what happens. It's not like stop if you're not getting this ah roi I'm talking about like ad words cap terra. Like channels that we have going and it's just like we already know what we get at our current spend What if we spent more like we., There's no reason to believe we could then lower it from there because we're already trying that like we've been doing these channels for years. We know what we get at our current spend. So okay, um.
51:57.83
Rick
I like it.
52:02.32
tylerking
Thanks for hearing me out there all right? We got 8 minutes I assume you probably want to get out of here on the hour right? I shouldn't go into another big topic. Okay, um, stop it Rick we're 37 we're not supposed to be adults yet.
52:08.80
Rick
I do need to go I have a baby to take care of I'm ah an adult Tyler I have a children responsibility I'm just kidding what's that. Ah do you want to talk about this.
52:20.81
tylerking
Um, no, let's let me skip to a rant shout out because these are a little faster. Um I saw an interesting take on the term product led growth recently that I thought I might mention here. Um, okay so first of all, ah this has been in the bootstrapper podcast circles for a bit. Um, oh wait.
52:28.59
Rick
Go let's hear it.
52:40.35
tylerking
Oh it's later than I thought I should make this faster. Okay I won't belabor this ah I will cut to the chase we've often said product like growth is like when you build stuff that helps you grow go back to previous episodes you hear a longer 1 I listen this podcast episode on Lenny's podcast I'll link to in the show notes.
52:42.19
Rick
Cut to the Chase man.
52:59.64
tylerking
The guest was Emily Kramer who was like Asana's first head of marketing and a bunch of other marketing stuff. She had an interesting definition of product like growth which is she said normal growth like no matter what marketing generates sales. Um, then sales hands the lead or I'm sorry I said that wrong marketing generates leads then marketing hands the leads. Off to the sales team and sales closes it product like growth is marketing hands the leads off to product ah like the leads go sign up instead of going and talking talking to a salesperson and that that's what product leg growth model is which I never heard and it's like a really nice framework for thinking about it I think.
53:36.24
Rick
Said it again.
53:37.88
tylerking
Yes, in all cases whether your product led growth or whatever the alternative is marketing is the thing generating leads but with traditional what we'll call sales led growth marketing hands the lead off to the sales team and the sales team closes it What product led growth means.
53:45.72
Rick
Yes.
53:57.40
tylerking
Is that it self serve enough that marketing goes that the lead goes straight into the product and never talks to anybody. That's what product leg growth is she. That's what she's saying.
54:06.13
Rick
I Don't think that's what product like growth is is that what is that what she's saying kind of like it's a better.. It's a broader definition but I always think a product like growth is like um is ah being led by product not marketing. But I guess it's the same I see I see I think I see your distinction. Maybe I'm behind on this. Yeah.
54:22.29
tylerking
Yeah I mean you're doing both like there's no product led growth thing where you're not doing marketing but I wish there was a different term I think there are 2 different things and we need 2 different terms but whatever the term is I like this mental model of like you have to do marketing to get leads no matter what.
54:36.18
Rick
No matter what yes I see I see your point Yes, got it I marketing doesn't go away with private leg growth. It becomes even more critical. Yeah is that your point.
54:40.45
tylerking
Send those leads directly to the product.
54:47.62
tylerking
Yeah, yeah, so um, anyway, that's yeah, just I think it's a framework people should have in mind and that's all I have to say about that all right I'll let you go Eric I'm going to let you go go go see your family loser. What.
54:55.20
Rick
I like it I like it a lot. Are you gonna let me go I have a question for you I have a question for you I was reading a book called leading matters by John I think his last name's Hennessee. He's the former president of Stanford um, he's on the board of Google I think he's the chairman of alphabet. Or one of the subsidiaries I'm not sure exactly which one do you know who I'm talking about you know he wrote a book. Um, it's a basically stream of consciousness about what he thinks about leadership and the difference between like university initiatives versus like commercial initiatives which is pretty interesting around innovation.
55:12.93
tylerking
Now Might dont.
55:30.35
Rick
But one of the things he said is um, you know you should ask yourself is do you value? Ah revolutionary future contributions more than incremental improvements today or vice versa. Do you value revolutionary future contributions.
55:41.74
tylerking
Do you say say that again.
55:48.43
Rick
More or incremental. Um ah to to today improvements today that are incremental.
55:52.85
tylerking
Okay, and sorry I think I just spaced out So what is that the answer to that question tells you what? Okay yeah.
55:59.42
Rick
I Just I Just it's a very interesting question like what do you value more but he yeah he says you stand to that question because it totally changes how you should approach like like profession if you really care about revolutionary future contributions like the University area is the place for you whereas if you care about like.
56:08.65
tylerking
Yeah here.
56:15.35
tylerking
Oh interesting. Okay.
56:18.97
Rick
Truly like business is the is the land of incremental improvements.
56:21.64
tylerking
Probably he means big business like new startups and stuff are doing revolutionary stuff I think.
56:30.88
Rick
He would say that startups sort of Shepherd revolutionary contributions from the University landscape to incremental improvements. But but like like I'm definitely like overstating his point of view here like I think what it's ah it's definitely more of like a framework for thinking but like.
56:38.80
tylerking
That's that's given universities a lot of credit but okay.
56:47.89
Rick
Startups Play a huge role in like taking these revolution ideas that are um, that have no realness to them and sustainability and bringing them to commercial. But then it becomes an incremental battle from there.
56:56.56
tylerking
Um, yeah, yeah, what are you? but which do you value.
57:04.11
Rick
Gosh I Ah I think I care more I I fantasize about future contributions but like I sleep better when I'm making incremental improvements.
57:10.88
tylerking
Yeah I think it depends what is revolutionary mean but if you're talking like colonize Mars That's definitely not me if you're talking like this is going to be a totally new take on task managers which I don't think is what he means right? that that's where I am.
57:26.83
Rick
But yeah, but like but you're not building that are you, you're you're prioritizing. So so that then I think you're saying you value incremental improvements more because you're incrementally improving your way to the like like being in a position to revolutionary revolutionize.
57:31.79
tylerking
Um, I'm trying to put myself in a position to build it.
57:43.90
tylerking
If I thought I could pay my employees indefinitely I would I would go build the bigger thing right now. But yeah, oh interesting. Okay, interesting. Yeah.
57:45.14
Rick
Anyway.
57:51.41
Rick
Which is why he says that's university is a place for you because there are no deadlines you get paid. You can't get fired like ah etc like so anyway, interesting question like I think like if you want to be successful at business. You've got to have a pretty strong. You've got to like. If you want to do the revolutionary future contribution. You've got to place a lot of bets like it's not going to be 1 it's going to be like serial entrepreneurship. But if you value inremental improvements. You could really, you could kind of you know, iterate your way to something meaningful over a long period of time. Ah, anyway.
58:08.58
tylerking
Um, yeah.
58:18.96
tylerking
Um, yeah, all right I like it now I'm well I got a lot of stuff but we'll have to save it for next time.
58:25.55
Rick
Yeah, um, anything else you want to talk about.
58:31.85
Rick
I want to? there's 1 thing on your list that I want you to pull up ease. No I'm not going to. We shouldn't talk about it but I want to talk about the four day work week next time I think you should pull that up. Yeah I think that should be pulled up right? um.
58:33.85
tylerking
Right now which one. Okay, wow, that's that's an old card from a long time ago, but okay, all right one day.
58:49.59
Rick
If you'd like to review past topics and past topics and show notes visit star plus dot com I'll see you next week Tyler
58:56.30
tylerking
See ah.