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The "No BS" version of how startups are really built, taught by actual startup Founders who have lived through all of it. Hosts Wil Schroter and Ryan Rutan talk candidly about the intense struggles Founders face both personally and professionally as they try to turn their idea into something that will change the world.
Welcome back to the episode of
the Startup Therapy Podcast.
This is Ryan Rutan,
joined as always by my
friend, the founder,
and CEO of startups.com.
Will, Schroeder will, there's a
lot of talk in the startup space
about the fact that we need to
stay focused, focused, focused.
Um, and while I agree with that.
By and large.
I think there's, there's a
few things that we need to
consider within that, and, and
there's an important aspect,
I think that's played a part
in both of our, our lives and
startup careers and some of our
hobbies too, that that shows
up on a pretty regular basis.
And in fact, you are just having
a conversation about this with
one of our startups.com members.
So why don't you, why don't
you kick off with, with that,
and let's go from there.
Well, it started the, the
conversation started with
nothing to do with what
we're gonna talk about today.
But what was funny was he
reached out to me 'cause he got
my newsletter, which is usually
the basis for how we do these.
And uh, he said, will, I
gotta be honest, this sounds
like it was written by AI
and I, I just thought, and
it wasn't by the way, right?
Yeah.
But the time that we're
in, like, the times that
we're in, I thought it was
funny that like everyone is
kind of like trying to see.
Is it real?
Or you know, whatever.
And I wrote back to him and
I said, ah, no, actually this
was actually written by me.
However, however, maybe because
I've been spending so much
time with ai, I'm starting to
write like ai, which I thought
was kind of interesting.
Yes.
And AI was trained on
some of the best writers
in the world, right?
So maybe you're just one of the
best writers in the world will.
Right.
Maybe that's
exactly where I was
headed with that.
So.
That's where I started.
I mean, I think that's the most
likely, most likely scenario.
Yeah.
Yeah.
So he and I were talking,
we were going through some
challenges he was having,
and so for, who is it?
We never re uh, reveal
names on here, but I know
that you're listening.
This episode is
dedicated to you.
And I told him that we
would create an episode
forum when we were talking.
And what we were talking about
was the value of the side quest.
And it just so happens.
That he was a, he's from
the video game industry.
Oh,
and for our fellow gamers out
there, a side quest, as you
would know, is when you deviate
from the main quest is your
business, your focus and you
go on a different mission that
isn't necessarily connected
to the main quest but could
also reveal some treasure.
Yes.
I dunno about you Ryan.
I love side quest.
I live side Quest.
I'm Quest.
I side Quest like crazy.
Right, and, and, and I feel
like what we've learned in
our business@startups.com
were those side quests, those
distractions as they would
be called those deviations.
Have become the most important
part of our business.
A hundred percent, man, they
might look like a detour
to begin with, but at some
point they either end up
becoming a shortcut or just
the path that ends up saving
the entire run, you know?
Right.
And it looks something like
this, Hey, we're doing business
A and everything you know
is probably okay, maybe not.
Let's say it's okay.
Yep.
And co-founder comes up and
says, Hey, I wanna try path
B. And path B is a tangent.
It's something we
don't normally do.
And what I wanna talk through in
this episode is how that tangent
normally is dismissed, right?
Usually it's, Hey,
that's not focused.
That's not the main Quest line.
That's that's not
what we're here to do.
And I think it's
a giant mistake.
Now, don't get me wrong,
I'm not saying let's
get distracted as hell.
Yeah, yeah,
yeah.
I'm saying we gotta keep
our minds open that maybe
just maybe in almost every
case for us, just maybe.
That side quest, that
distraction leads to
a better business.
Yeah.
And that I think I
wanna unpack today.
Yeah, man.
I mean, I think this is way
too easily written off as
like the A DHD machinations
of founders when when I
look at its, man, it's
curiosity as risk management.
Curiosity.
Wow.
That's a much better
way to put it.
Yeah.
We're out there just exploring
and figuring out what,
what should we be doing?
But, so let's start by talking
about like, what I think
you, you've called the myth
of the linear path, right?
Right, right.
Like this, the linear path
that fairytale that we tell
investors where, you know, in
reality I see the real path
is being more of a series of
right angle turns based on some
well-informed guesses, right?
Things that we gotta go explore,
things we gotta think about.
For sure.
And I, I think if you didn't
know how this business actually
works, and Ryan, you and I
have the benefit of working
with thousands and thousands
and thousands of, of founders.
So we see every path there
is, but what people think the
path is, if you haven't done
this before, most people are
doing it for the first time.
What you think the path
is is that you have an
idea, you build product.
Product is accepted by
market, company grows.
That's how it works.
And then there's a couple
of twists and turns, but
that's pretty much it.
Yeah.
It's not how this works.
No, whatsoever.
No.
Like that's maybe what you think
is in the brochure, but that
that ain't in the brochure.
Right.
The real path is
we have an idea.
Within a few months, we
realize it's a shitty idea.
We rebuild idea,
we try second idea.
Yeah.
That's also a shitty idea.
And then we rebuild it
and rebuild and then
we just keep doing it.
Yeah.
Incrementally less shitty
kinda, right?
Like sometimes like iterating
sounds like what happens
when you mysteriously had
a good idea the first time
uhhuh
and it just kept, you
know, being a good idea,
which rarely ever happens.
That's the myth of the
linear path that we have an
idea, we say undistracted
and we just go and execute
and everything works.
That sounds awesome.
Does
and if.
If you could magically
do that, do that.
Yeah.
Good luck with
that.
You know what's funny?
Will, you know
what's funny to me?
Like anytime the path starts
to feel like perfectly linear,
smooth, my first instinct is.
What am I missing?
Right.
I guess because we've done
this so much that like
the second it's like you
just keep going straight.
I'm like, are you
sure about that?
Like, 'cause it never has
ever, ever, never worked
out that way in the past.
So when it does start to
feel like it's just on
rails, as they say, I'm like.
I, something's we're
missing something here.
Something's gotta be off.
Let's take it back a step.
Let's think of how
improbable it would be,
right?
That you could maintain
a linear path, right?
Yeah.
Here's what would have to
happen in order for this to
actually be even possible.
Number one, you'd have to have
an idea that had perfect product
market fit or damn near to it.
Mm-hmm.
Now here's what's great.
You would've had to have
that idea and have never
built or tested it yet.
Or put it out in the
market meaningfully or
try to acquire customers.
All the things that come and
somehow still hit that stride
in order to make zero deviation.
Then competitors would enter
the market and investors
would enter the market and
you'd have to hire lots of
people who have their own
ideas, et cetera, and somehow
mysteriously, none of that would
change your path whatsoever.
Like all of those things would
have to fall online in order for
you to not deviate from path.
Now I say that this isn't
saying focus isn't important.
Focus at the expense.
Yeah.
Of seeing what else is there
is dangerous in my mind.
Yes.
I love focus.
We love focus.
Yes.
But there's a cost to it.
Focus is only noble if you're
working on the right thing.
Right.
Other, how do you know it is?
Absolutely not.
It is just, yeah.
It is just planned distraction.
Yeah, play distraction.
And I think that because folks
haven't done this before,
they haven't seen other path.
Like look at it this way,
if you came from big Corp.
Big Corp exists now because
some dude, years and years
ago, probably decades, if not
centuries ago, went through this
process and got you to here.
Now that you're at Big
Corp, you're at some
insurance company or bank or
whatever you're at, right?
All of those things have been
figured out, like all the side
quests have already happened.
Now, that's not to say at a big
corp you couldn't, you know,
have a side quest, but it's
rare, and I say that because a
co-founder, let's say, coming
out of that environment,
they're used to the fact that
things have been figured out.
There isn't a reason to go on
a side quest because Right.
We've already figured
out product market fit.
Oh man.
Competition and
everything else like that.
Yeah.
So you go into a startup
with that mentality and
you're like, Hey, why would
we do anything else Uhhuh?
And it's like, dude, you had
the benefit of someone else
having figured this out.
This isn't that.
Yeah, no.
Linear planning is what
happens when, uh, ego's
in charge of the roadmap,
right?
Uh, right.
Yeah, yeah, yeah.
'
cause honestly, like, I think
it's one of the most dangerous
phrase in, in startups, right?
We already know.
Do you though, do you
really actually know?
Right.
Especially if, like,
in your case, you're
coming from like the.
Example you're providing, if
you're coming from Big Corp
or something, you're gonna
go start something that's
based on the experiences
that you already have.
Yes, you do know
some things, right?
But those have to be
readapted to the startup
environment, right.
And right.
Certainty is not
a startup asset.
Right?
Adaptability is, but, but
certainty, I think in most
cases is a startup liability.
'cause we just don't know.
Right.
A roadmap is just
a story, right?
It's a theory, not
even a theory, sorry.
It's a hypothesis.
The exploration is what provides
the evidence that allows us
to turn it into a theory, but
we have to go through that
exploration, and exploration
comes most of the time through
all this side questioning.
One of the last episodes
we did was how we're
really good at failure.
Oh yeah.
And I think this tethers a
lot to the side questing, the
idea that we're willing to
go try kind of everything.
Mm-hmm.
Really just kind of
everything and see what
works and what doesn't.
Yeah.
Because we're really good
at, at regrouping, uh, when
failure happens invariably.
But I think for a lot of
folks, they haven't had to
go through that level of just
jump off the bridge and see
what happens kind of moment.
And they're terrified of it.
And to be fair.
It's because it's
terrifying, right?
So again, if, if you're battling
your co-founder, let's say,
in, in, in this case, I'm
saying co-founder wants to stay
straight and narrow and you
wanna try something different.
If you're battling
co-founder and co-founder
is like, I want to go in
this specific direction.
And I think any
deviation is a mistake.
Yeah.
There's nothing
wrong with convict.
Nothing wrong with
conviction and, and I
respect that, that in focus,
that's exactly it, right?
It's conviction's great.
If you've developed
conviction around the
vector, that's actually
going to lead to success.
But like at the stage at
which sometimes we become
convicted, it's, we get
convicted with, it becomes a
life sentence of the wrong sort.
We don't want that.
We gotta be really careful.
And I think it's important to
think about, you know, we're
not changing our mind, we're
not changing course entirely.
We're updating our model.
Right.
We're being flexible enough
because to your point, we
couldn't possibly, we wouldn't
have prob probably would not
be right from the beginning.
Right?
Right.
It is an experiment of process.
We have to do these things
and so to me, the side quests
are, are the laboratory.
I don't think as a company
matures even a little bit,
you know, from, from an
idea, even the product in
market, I don't think people
understand that this process
doesn't end, for example.
Correct.
In the early stages, you know,
we got an A lean startup,
we got an A hypothesis,
we got all these things
about an idea validation.
Yep.
And the idea was, hey, we're
gonna try a bunch of stuff
and we're gonna see which
idea sticks and what to build.
That's not where
this process stops.
Correct.
That is one miles.
Stone.
Yeah.
But the process where we have to
keep looking at what, what if,
what else, what next never ends.
And I think when it starts to
end is when you actually start
to run into problems, right?
Yeah.
Where, when you actually
start to run into a situation
where your competition's like,
well, we'll try out What if.
Exactly it.
Right?
It's, it's, it's what
we said before, right?
It's, it's when, when you know,
right, when you, when you have
certainty, you think you have
certainty and that can feel
very secure and that can feel,
that can feel really great.
I dunno if you saw this
will, but there was a, an
interesting physics discovery
made this week that actually
reversed a previous theory.
Using ai.
And the, the thing that
they found most interesting
about it was that the, the
discovery, the fact that it
reversed an existing, kind
of proven to the extent
that we could theory Yeah.
And then hypothesized and,
and proved, uh, the, the real
solution to this, the findings.
When humans looked at this, they
went, like, one of the reasons
this happened is, is that's
something that a human would've
been Sure wouldn't have worked.
Ah, right.
Exactly.
Exactly.
Uncertainty, right?
So let's play this out
in our world, meaning
the startups.com world.
Okay.
I wanna.
Prove a, a case where I
believe these side quests
aren't distractions.
They can be, by the way.
You can absolutely just be
straight up distracted, right?
Yeah,
yeah.
And
well, yes, yes, of course.
Every one of us has some level
of a DH ADHD that, that feeds
that distraction beautifully.
There's plenty of shiny
ball syndrome in the in,
in the founder space.
Oh my God.
Right.
Let's go back in time
to the year 2012.
Uhhuh.
I remember it
well.
You and I were, were
younger and more vibrant.
We were launching a company
called fundable.com,
which still exists today.
And at the time,
crowdfunding was a huge deal.
Yeah.
Was a huge deal.
This was like, like the era
of Kickstarter, you know, in
Indiegogo back in that day.
And we decided around
2011, 'cause that's when
we were building it.
And then we launched it in 2012
that we were gonna launch an
equity crowdfunding platform.
Yes.
Where people could make
equity investments on the same
way they were making reward
style investments for, uh,
products just sitting around
waiting for Obama to sign
the jobs act to make it.
Yeah, exactly.
Oh man.
Oh yeah, yeah, yeah.
And so, so we're all pumped up.
This is gonna be world
changing, what have you.
Yep.
And it turns out what,
like 30 other companies,
it was pumped up as we were
doing the same exact thing.
Oh
yeah.
It was quite a crowd
at the starting
gate.
A funny aside, 'cause 'cause
as I, you know this, but I,
I want to tell the audience,
there was this moment where I'm
sitting across from a friend
of mine in Santa Monica and
we're both talking about how
pumped up we are about our new
ideas, and about halfway into
the conversation it occurs
to us that we're talking
about the exact same idea.
We're rolling
the same thing.
Yeah.
And it was so awkward.
He'd be like saying,
I just met this girl.
She's the girl of my dreams.
Like, I'm, I'm ready to propose
I bought the ring, right?
I think I'm gonna
propose tomorrow.
And your buddy's like,
so am I. This is amazing.
Right?
I propose tomorrow as well.
And you realize it's
the same girl, right?
Yeah.
Yeah.
Um, anyway, so there was at
least 30 other companies.
30 other companies
as you recall.
Yeah.
That had the exact same idea.
Now there's a couple ways
you can look at that.
Number one, if 30 other
companies had the same idea,
it must be a pretty good idea.
Yeah.
Like everybody, like
brainstormed it.
They talked to investors,
they got investment, they,
they went down the same path.
We launched this
thing and it goes.
As I remember it.
Okay.
Like how do you remember it?
Look, it went okay.
It went okay.
It didn't turn into everything
we wanted to, neither in
the beginning, nor over
time, like there was that
sense that, well, maybe this
will mature, and here's the
really interesting thing.
So maybe this will mature.
Maybe the market will
come together over time.
That was the linear path.
Right.
And so we could've just
said that and we could've
just followed that and we
could've said, look, this
is just, it's a new market.
It's gonna take time.
We realized very early
on that one of the things
that people needed was to
understand how to use it.
We built the platform and
then we let a bunch of people
into a gym who'd never worked
out before and they were
dropping weights on their
feet would put themselves.
So we built out a
personal training, uh,
arm, and that helped.
And that helped.
But the market never
really matured.
And so at the same time, we
were engaging in those side
quests and saying, okay, cool.
We love working with founders
and equity crowdfunding was
where we wanted to start, but
what else can we be doing?
And that was where the
side questing began.
Right.
But of those 30 companies will,
we're still around how many of
the others, if you had to, and
it's the finger in the wind
here, how many of the others
are still around that were, that
just stayed equity crowdfunding.
I can't name two.
And if there are more,
I apologize to, you
know, a lot of this book
people are our friends.
I apologize if
you're still around.
It's not because I'm
disrespecting the fact
that you're still around.
It's because I just don't
even pay attention anymore.
Yep.
It just doesn't, it, it became
kind of an irrelevant, it's
so off my radar.
And that's coming from a guy
who, you know, a team here
who owned that platform.
Right.
Still do.
Which is super
important point, right?
A startup without side
quests is a startup with
a single point of failure.
Great way to put it.
Yeah.
Single critical
point of failure.
Yeah.
Yeah, yeah.
Yeah.
And we managed to avoid that.
Right.
We, we weren't sure
about any of this stuff.
We said, Hey look, this
is, this is one vector.
This is one way that we can
be helpful to this population
that we want to help.
So let's fall in love with
who we want to help, but
let's not fall in love with
exactly how we're helping them.
'cause we have no
idea how this ends.
Now that we do know how
this ends, I'm real glad
we took that course.
So let me explain what happened
so folks understand throughout
2012 we're, as you mentioned,
we're loading people onto
the platform and we keep
running into the same problem.
Over and over and over.
People wanna raise money
from investors, but
they're sorely unprepared
yes.
To do it.
They don't, they don't
understand what a pitch deck is.
They don't understand the
fundamentals of their business.
They haven't done any
product market fit idea
validation, literally nothing.
Right?
They just know they don't have
money and they need money.
So we were like, well, where
are they going right now?
To fix all those problems,
to create their pitch deck,
to go create, you know, all
these, these other things.
And we realized nowhere.
And so we went on what I
would call an epic side quest,
where we went out and we did
diligence on 200 companies in
the startup space to purchase.
And we ended up, um,
not 200, 100, I'm sorry,
uh, 100 companies that
we ended up doing.
We talked to way
more, it's kinda like
the way I feel about how
many children I have.
Some days it's three,
some days it's a hundred.
Um, was it a hundred?
Was it 200?
Was it a thousand?
Like I, we
talked over 200.
We did diligence on a
hundred, which is a lot of
companies, and we purchased
six venture backed companies.
And they were all within
the startup space.
And what we wanted to be able to
do was be able to help startups
at each step of this problem.
And so we ended up buying, uh,
companies to help people get
customers to help find advisors,
you know, all these things.
It was all these things,
which became essentially
the genesis of startups.com.
Yeah.
Now, what's really interesting
about that to me is we
didn't hesitate for a second.
It's a side quest on this one.
Yep.
Right.
Not at all.
And we had no idea how
this would turn out.
It's not like, you know, we
were like, oh, well let's
clearly go buy a bunch of
companies and blah, blah, blah.
Who are we to do any of this?
And it goes back to our
previous episode is we just
weren't afraid to fail, which
is our greatest strength.
'cause we just wouldn't.
Charge into everything.
You know something that's
really funny about everything
we talk about here is
that none of it is new.
Everything you're
dealing with right now
has been done a thousand
times before you, which means
the answer already exists.
You may just not know
it, but that's okay.
That's kind of what
we're here to do.
We talk about this stuff on
the show, but we actually
solve these problems all
dayLong@groups.startups.com.
So if any of this sounds
familiar, stop guessing
about what to do.
Let us just give you the answers
to the test and be done with it.
I want to throw another one
in there because the macro
point here is that side
quests are not random, right?
Not when they're done, right?
Yes.
Distractions are random.
Yeah.
They're controlled experiments
that have some level of
capped downside, right.
With some intention of upside.
Just to, to make it clear
that like it's not that we
were immune to considering
things that probably were
outside the wheelhouse.
'cause yes, all these things
definitely had a point.
But will, do you remember
a moment when, for about a
week we were very excited
in the office as we were
considering buying Atari.
Oh my God, I forgot about that.
Oh dude.
I totally forgot.
We were gonna buy Atari.
We were speaking of video games.
We ran, the numbers were Quest.
We almost turned video
games into our side Quest.
Wow.
I totally forgot about that.
Yes, we did diligence on Atari.
Oh my God, I totally
forgot about that.
Yep.
Yep.
For those of you who don't
neither know nor care.
There was a, a point
in time, this had to
been like 20 13, 20 14.
Yeah.
Where Atari, the famous brand,
like the actual, like, you
know, one of the first home
consoles was going up for sale.
It was going
bankrupt, essentially.
Yes.
And, and the assets were
gonna go up for sale and,
and they were gonna go for
ones of millions of dollars.
Yeah.
Which even back then was
a lot because it was just
basically the brand, right?
Yeah.
There wasn't, I remember
they owned some games
and stuff like that, but.
As children of the eighties,
we were like, are you
gotta be kidding me.
The
nostalgia element alone was
just like, if I had lived
one day with that business
card, I'd have led a better
life in some ways, you know,
just, just for the fun of it.
Right.
But it was a complete deviation.
Right.
Talk about distraction.
Oh yeah.
Talk about even
we were like, dude, this is
pretty far off, off the park.
Uh, but yeah, so at some
point we even considered
buying at Target.
So.
Within that though, within
these, these side quests, I,
I wanna point out more than
the outcome, which is, you
know, it helped kind of drive
what became startups do com.
Yeah, yeah.
I also wanna point, we
learned so much Oh my God.
From the Quest.
Yes.
The quest
itself.
From the Quest.
Right.
Not the outcome, not
the treasure at the end.
'cause sometimes
there wasn't, right?
Yeah.
The quest itself.
You remember this part?
So I moved my family
out to San Francisco.
Yes.
Right.
And every day I'm reporting
back to you guys of all these
meetings I'm having, I'm gonna
be just meetings nonstop.
Yeah.
With everybody I can meet with.
And I, and we're learning
so much from this.
Yes.
We're like, Hey, do you know,
like this company's, you know,
growing at this rate, or this
company's failing completely.
Or like Uhhuh, we got so
much intel from this Quest.
Intel, yeah, yeah, yeah.
As to what our
market looked like.
And, and Ryan, I would
argue, I would argue that.
Some of that intel
serves us to this day?
Explain,
no, absolutely.
Yeah.
You don't have to
argue that at all.
No argument here.
Well,
a
hundred percent.
We, um, we learned a lot
about what not to do,
Abe.
Absolutely.
And going in on these
quests as valuable.
Yep, exactly.
I was like, not gonna
go into that business.
Like businesses we thought
were incredible, like Atari.
Uh, we, we were like, we talked
to the founders and, you know,
we're very founder forward.
So when we talk to founders
about buying their business,
we don't sit there and,
and like grill them like a,
like a private equity firm
with or, or an m and a firm.
We sit on their side of the
table, and I've done this a
million times, particularly with
the companies that we acquired.
And we say, if I'm in
your shoes right now as a
founder, here are my options.
You could sell to us.
Mm-hmm.
And that might be
an okay outcome.
I, I'm not telling you it's the
best outcome, it's an outcome,
but here are your other options.
And by doing that, by putting
ourselves in the shoes of all
these other founders, we got
to, we got to get a firsthand
view of how all these other
markets actually worked.
Right,
right.
And again, we were talking
to lots of of funded
companies, like venture funded
companies, and actually I
made a lot of great friends
outta this process as well.
But a really fascinating part
was we got more market intel.
As to how every facet of
our business could work.
And I think 18 months, then we
could have possibly gathered
through, you know, as much
research as we could ever,
ever bought or done ourselves.
Yeah, yeah, for sure.
It was a crazy force
multiplier in terms of, of the
understanding of the markets
and where things were going,
where things weren't going.
It was incredible, man.
It's interesting, but I,
I, I was trying to think
of, you know, side quests
as insurance policies
that we pay for with Yes.
Time.
It's all cost us.
It was time.
And I'd argue if you
can't afford that level
of exploration, you
definitely can't afford to
be wrong about anything.
Right.
And so the only way you're
gonna find out about things
is that exploration, right?
So it's a bit of
a catch 22 there.
You have to find a way
to be able to afford this
level of exploration,
this level of curiosity.
Okay.
Right, right.
So if, if we're proposing
a side quest to our
Ory co-founder, right?
Who who is, is, you know, say
the straight and narrower uhhuh,
an advisor, investor, whomever.
I think part of that argument
is simply there's a good
chance it won't succeed per se.
Sure.
But here's what I think
we'll learn in the failing.
Right.
Here's what I wanna
unpack and explore.
That will tell us
without question, that
is not the path for us.
Sure, sure, sure.
And I think that part of the
explanation is often lost
'cause it's like, Hey, I
wanna try this other thing.
And this ornery co-founder is
like, well, that won't succeed.
Probably not.
Yeah.
But, but here's what I'm
hoping to learn in that
process that will help
our current path succeed.
Or again, inform if, if
this is the current path.
Yeah.
And, and I think that's
important, right?
I think that that the insight,
the learning, the, the,
the kind of the, the what
if path you wanna go down.
I think that is the
treasure, right?
I think that's the
important measurable.
If other things come out
of it, right, there's other
outcomes in their side, great.
But I think that the
kind of the, what am I
trying to understand?
What am I trying to learn
is the actual treasure.
If it doesn't have one of
those, then it's probably
not a side quest, it's
just procrastination.
Around what you actually
should be doing.
I wanna throw another
one out there, and this
is a little bit of side
quest to this discussion.
One of the most popular side
quests that I see with startups
is becoming a services business.
Right.
You and I see it all the time.
Yes.
Right?
It's we're trying
to build a product.
Product isn't ready, market
adoption isn't there.
We're doing have the customers,
so we kind of spin off
this services business Yep.
To kind of just do that
work for the client
to generate some cash.
Yeah.
In order to hopefully get
back to the product business.
And I hear pushback
on this all the time.
Well, that's not the product.
That's just the
services business.
Dude.
If it pays the bills,
it is the business.
Yeah, it is the business.
That's how business work.
That's duck quest.
Yeah.
Yeah.
That is the, yeah, the pay
the bills is the quest.
Right.
How we get there is, is
the question, and I bring
this up because for a lot
of startups, when we talk
about that non-linear path.
They also think that income
should only come from exactly
what we built and have
in front of us right now.
Yeah.
Incorrect.
Because you get $2 for every
one of those dollars when it's
time to pay the bills, right?
Yeah, exactly.
They're worth more.
Right.
Like if we could explain how
many businesses have taken
the path of like, the reason
they're there today is because
they did 20 different things
to keep the bills paid.
Yeah.
You know, our most
famous example, of
course is the Airbnb.
Thing where Brian Chesky
famously, and, and by the
way, this story is sold.
I don't even know if it's true
anymore, but for those that
haven't heard it a thousand
times, the super short
version Chesky was running
out of money for Airbnb.
He decided that had this
crazy stunt where he sold,
uh, serial, he sold Captain
McCain's in Obama owes
during those elections.
An idea how old this story is
now, if I recall, like $40,000.
Yeah.
It, it was enough to keep going.
That's what I remember.
I don't remember how
much you made today.
We the on.
By the way, this is
told by him, right?
So this isn't me
making up the story.
In fact, it's told by him
on our site, like, uh, on
an interview on our site.
So hopefully it's true.
But think of how Fri
random that side Quest was.
And, and we've done whole
episodes on this, how.
Making money is
not a side quest.
It's like however
you have to do it.
Staying alive is
not a side quest.
Right.
It's the pavement
for the runway.
You need it.
Yeah.
I mean, to the point now where
like if somebody tells me
they're building a software,
one of my first questions
is, okay, how much have
you delivered as a service?
Like, have you done
this for people?
Yeah.
Do you know what they need?
Because if not.
Prepare for a whole shit ton
of side quests to come your
way because you're gonna have
to do them all to figure out
what people actually need.
Right?
Yeah.
I love doing the service
first because it teaches you
so much about, so much about
what people actually need.
For me, product comes
down to three things.
Proven proprietary
process, right?
The three Ps of building
an actual product.
If you don't have a proven
proprietary process, and
if you're building software
that you've never delivered
service for, you can't,
you're gonna run into P four.
Which is, which just means we
built the wrong shit first.
Right.
And obviously, so, so yeah, I
just, at this point, I treat
service as a, not as an optional
step or a side quest, but as the
very beginning of what you're
gonna do to go build product.
I remember years and years
and years ago, the base
camp guys like way, it was
like 20 years ago, right?
They used to run these sessions,
I think in Chicago that
were just training sessions.
Yeah.
And, and they would.
They basically charge an arm
and a leg form and run 'em in.
And at one point they got
asked, uh, the founders,
the co-founders, why
are you doing this?
Like, you guys are
a software company.
Why are you running these
sessions and like doing
event events, business,
essentially uhhuh.
And they, they looked at,
it was like, it makes money.
Yeah.
You remember why we built
software business, right.
This does the same thing.
Yeah.
Makes money.
So I think a lot of people
though will look at these
side quests and they'll be
like, oh, that's just a pivot.
I think that's a huge mistake.
I think that's a total
misclassification
of the side quest.
A side quest is an exploration
that might lead to a pivot.
Yeah.
A pivot is when you figured
out that the side quest
is the right answer.
Yeah.
Yeah.
And you change the
whole business.
Yes.
Right.
Yeah.
I wanna make sure these
two things don't get
get pushed hand in hand.
Us going to San Francisco
and looking for other
businesses is a side quest.
Yeah.
Us changing the whole
business to startups.com
Right.
Is a pivot.
Right, right.
Will.
I bought lawyers.com
this morning.
We're a new business now.
That's a pivot.
Right, right, right.
Shitty pivot.
Um.
If you think about it,
we're sitting here on
this podcast, which was
essentially a side question.
It, do you recall how
this whole thing started?
Like, do you remember when we
started like kicking this off?
It didn't go that
well, by the way.
You're talking about the,
uh, you know what, we should
auction this off at some point.
Will the three first episodes
that we'll never see the light
of day, where it'll never
see light of day by talking
about the weather and like
it, it was all so stilted.
Oh my God, it was so bad.
We had no idea
what we were doing.
Like we, we thought like
what a talk show would be,
and it was just not at all.
It was done and it made
no sense whatsoever.
Right.
But let me put it in this
framing for our podcast, which
has how many episodes now?
We are shooting 3
27 today, buddy.
Damn.
Okay.
So that's a lot of episodes.
That's a lot of has.
One of our best conversion
tools for these wonderful folks
that listen, you know, you
build a relationship with us,
you get an a sense for who we
are, and maybe you buy some
of our stuff, maybe you don't.
Honestly, we're gonna,
we're gonna produce
the podcast either way.
Exactly.
Which is the point.
Yes.
When we.
First started doing this.
It's just something that
Ryan and I wanted to do.
It wasn't, Hey, this is gonna
be a great conversion tool.
Like that'd be great.
Obviously we weren't
even entirely sure what
all the topics would be,
right.
We just hit record,
went poorly at first.
Still learn.
Yeah, they're still
figuring it out, but.
Listen, this was a side quest.
This side quest was, you know,
we're, we had plenty of other
things we were working on.
We weren't short of things to
do, but we took this random
side quest as the podcast and
it wound up becoming like a
really integral part of our
business, both from, again,
from attracting customers, but
also from developing content.
I mean, it has so many legs.
Yeah.
Also, just go back to like the
learnings that we took away.
From the 18 months of, of
exploration in San Francisco,
all those conversations you had.
Yeah.
Think about all of the things
that we have come to more
concrete understanding of and
better ability to share and
talk to founders about, because
we do this every week, right?
This has become more than
just a part of the business
and more than part of it.
Right.
This is a part of life for
me at this point, right?
I look forward to this.
Every week we do this.
Yep.
It's something important
at so many levels.
And, and it's taught us a ton.
Right?
These were obviously
all ideas that you had.
I had, and we've discussed.
Yeah.
Yep.
But like through that
discussion, these things
become a little bit more
like a product, right?
It becomes advice
we can deliver.
It becomes help we can
give at scale, right?
And in person and everything.
And so it's just, again,
like we never would've
been able to see that.
Had we not tried
it and had we not
exactly
keep trying it after the
third episode because if
we'd only waited on the
merits of the first three
episodes, uh, we definitely
wouldn't be talking today.
Zero listeners.
Uh, it's, it's funny.
So I think for a lot of
people, like they get nervous
about the side quest because
they feel it's a distraction.
They feel it's tantamount
to a pivot and pivot.
Pivot is different.
Pivot's like, dude, we're
putting all our eggs
in a different basket.
Not to pivot
is not a marriage.
A pivot is a marriage.
A side quest is a
first date, right?
Like
exactly.
Side quest is we're
gonna go figure this out.
Yeah, exactly.
And so I think for a lot of
folks, when they see those
side quests, Hey, let's
try something else out.
They get nervous.
Understandably.
They get nervous and say,
oh, we should be only
to be focusing on this.
It's like maybe, and not every
side quest is a good side quest.
Most will fail.
Most side quests will fail.
Yeah,
yeah,
right?
Yep.
But again, that's okay
because that's information.
That's information because
otherwise, like what I
would say, if you're not
side questing and you are
at a point where like, you
know, it's not working, so
we have to make a change.
Let's say, let's stick
to the pivot and and side
quest thing here, right?
So we don't wanna
pivot on vibes, right?
We don't wanna pivot based
on the fact that, look, this
doesn't seem to be working.
Let's try this instead
entirely, we can side quest
our way into evidence.
Then we can decide
whether we absolute.
The side quest is how we
earn the right to pivot.
Right?
I agree.
And look to put it, no.
In certain terms, it
takes balls to side quest.
It does.
It takes courage to explore.
Yeah.
Right.
I mean it does.
It's easy to say, no, I
don't wanna do anything else.
I just wanna focus on this.
I don't say easy.
That also requires
discipline, but when you
say, Hey, I might be wrong.
Mm-hmm.
Which I think is a big part
is you mentioned ego a few
minutes ago, I think to be
able to say, Hey, the current
main quest right now Yep.
The, the focal point
where we're at.
I might be wrong, and it's
okay to have conviction.
It's okay to show up in your
meetings and say, you know what?
I believe in this
product so much.
I don't wanna change
course whatsoever.
I, I wanna, uh, stay
on it, which is okay.
Right?
Yeah.
Which is okay, but it takes
a huge amount of courage
to say, I genuinely believe
this is the path, but I'm
not afraid to find out.
It's not.
You and I go into a meeting
and, and you know, often,
we'll, we'll say this when
we're we're in this discussion,
we'll say, can we start by
agreeing that none of us knows?
Yeah, nobody knows, right?
Nobody knows the actual answer.
And then there's a few ways to
go and find that out, right?
We can stick to a linear
path, hope for the best,
and find out what time tells
us, or we can go side quest
and quickly get answers.
I think that's part of the
construction of the side.
Quest for me is thinking of
it in terms of like, does
this allow us to more quickly
understand the, the context?
Does this allow us to more
quickly get to an answer?
It again feeds back
into main quest,
right?
Right, right.
You got a side quest
to go get the hammer.
We need to open the chest.
That's part of the
main quest, right?
You gotta, you
gotta do this stuff.
The big risk here isn't
in trying something new.
I know.
We, we think of that as
like a, a division of focus
order, but the big risk isn't
in trying something new.
The biggest risk is, is
being wrong in private
and, and sticking to that.
Right.
Right.
Our job isn't to to,
to defend the plan.
Right.
Yeah.
I think that's what founders
get in, put into that position
a lot where we're, it's so in
pitch mode all the time that
we feel like it's our job to
defend the plan, but it's our
job to discover the truth.
Yep.
This is what we have to agree
to, and side quests are one
of the ways that we get there.
I agree, and I think if you
look at our history, like our
success over 15 years as a
company, which I'm very proud
of, both the L longevity, how
many people we've helped and,
and all the people that have
kind of come through this
company over time, what's
made us the most successful
hasn't been conviction to
knowing what the answer is.
Yeah.
It's had been the openness
to be able to say.
What if, what if that, what
if that, and I think it's
also part and parcel with
what we do for a living.
We are in the business
quite literally, of helping
people ask, what if it would
be a bit, yes, uh, it'd be
hypocritical if we never did
it ourselves, but we do do it.
We put ourselves on
the line all the time.
Every year we make big bets
on totally different things,
and we see what happens.
Like we said before, we're
willing to be wrong, and
I think that that takes a
tremendous amount of courage.
So I think for a lot of
startups, the biggest risk
for your startup is not being
able to take that linear path.
The biggest risk is not knowing.
So the only way, the only
way that you can de-risk
this business is by taking
the plunge, by trying every
side quest that you can
within reason and figuring
out which one of those.
Actually defines where you're
supposed to really be at
overthinking your startup
because you're going it alone.
You don't have to, and honestly,
you shouldn't because instead,
you can learn directly from
peers who've been in your shoes.
Connect with bootstrap
founders and the advisors
helping them win in the
startups.com community.
Check out the startups.com
community@www.startups.com
to see if it's for you.
Could be just the
thing you need.
I hope to see you inside.