5 People, 7 Figures: Interview with Geoff Roberts, Outseta

WEBVTT
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We said, we had a lot more fun when we were 20
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than when we were a company of 200. So what do
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we need to do to stay small yet still facilitate
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building this sort of large and vicious software
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company? I hear so much from founders and business
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people bemoaning that hiring is so hard and this,
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that, and the other thing. And I have a really
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strong opinion that it's not. I think the...
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The difference is people do not put the effort
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into hiring that they put into sales or product
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development or these other areas of the business.
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It's kind of this thing that is done passively.
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And if you want to drive real efficient, you
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need to treat hiring as a priority 1A. I think
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as it pertains to startups, you need to have
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honest conversation about what you're actually
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building. whether you know there's a market for
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it. I see this with our customer base is largely
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early stage startups all the time. And I see
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this constantly with they've worked on something
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for six months or a year or two or three years,
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and it's not going where they want it to go.
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And they are not honestly assessing why that
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is. Presented by Zapier, the AI automation company.
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Hello and welcome to the small team big scale
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podcast the show we talk about how tiny teams
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with big ambitions are doing more with less scaling
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smarter, not harder, and building big businesses
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with teams that could fit around a dinner table.
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I'm your host Ron Schmelzer, and on today's episode,
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we're talking with Jeff Roberts, who's the co
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-founder of Outseta, about how a team of just
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five people, working about four to five days
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a week with a part -time additional person doing
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some mid -stuff just a few hours per month, built
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a profitable seven -figure business serving over
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1 ,000 SaaS companies. all without taking a dollar
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of outside funding and not wanting to, and while
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building a structure for their company that is
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really eye -opening and, well, pretty amazing,
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in my opinion. So, hi, Jeff. Thank you so much
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for joining us on the Small Team Big Scale podcast.
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Ron, appreciate you having me. Great to be here.
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Yes, it's fantastic. And for those that don't
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know about Otseda, I'll give you a little quick
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intro, but then I'm going to have Jeff tell us
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a little more about how they got started and
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how we got to this point. But for those that
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don't know Otseda, it's a platform that integrates
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all of the core tools that are required to build
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a SaaS and membership business. Payments, authentication,
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CRM, and email tools, and I'm sure there's more
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in the pipeline. Jeff has been bootstrapping
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the business for almost a decade, and despite
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the supposed SaaS -pocalypse, he has no intention
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of stopping anytime soon. Outsider operates using
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an unusual organizational model where every full
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-time role pays a standard $210 ,000 salary with
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the same equity rate as the founder. and people
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can choose to work within the company. anywhere
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between one to five days per week, and 50 % of
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the profits go into a profit sharing pool. The
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structure is specifically designed to keep the
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team as small as possible, enabling a small team
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to build a particularly ambitious software product
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over a 15 year period. Now you can see why Jeff
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is the ideal person for this podcast. And he's
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written a recent article I'm going to link to
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in the show notes called, Growth by Elimination,
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where he lays out how Alceta has grown by eliminating
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everything from invest... and management to sales,
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budgets, and forecasts. I know some of this stuff
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may drive people crazy. They're like, ow, how
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can you do this? But it's clearly working. And
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all of this is to stay laser -focused on the
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four things that matter most. And we'll talk
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about that. So in his seven -year update, he
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revealed that Outsetter grew its revenue 70 %
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year -over -year, driven not by new customer
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acquisition, but by existing customers growing
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and organically moving through the pricing tier.
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So, Jeff, I can keep going into it, but like...
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Bring our audience up to speed. How did you get
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here to this point? And what's what's driving
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you to build this kind of business? Good questions
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and a lot to unpack there. So going back to the
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origin story about set up at the stage for a
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lot of this. So I was spun out of another company
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that was called Buildium, which had a very. Typically
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for a SaaS business that did well, um, the, the
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company raised venture funding grew to a large
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scale. The head count of the team was, was inflated
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and it was a great outcome and a good experience.
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It's where I was lucky to start my career. Um,
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but when we went looking to do something next,
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um, we had a product idea coming from, from Bildium
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and to an idea of how we want to run the company
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and what we wanted to do differently. So. The
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product idea very directly came from my own experience
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in the context of a SaaS business. I'm a business
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user who is like we're off now we need to get
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Salesforce and we need hub for marketing automation
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and we need for billing and we need Zendesk for
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support and charcoal for reporting. We stitched
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together these third party software tools as
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all SaaS companies for the most part do. And
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we cut back and scratched our heads and said,
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well, all these SaaS businesses need the same
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tooling. Nobody has delivered them in a single
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platform, particularly for early stage businesses
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that have less complexity. There's opportunity
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to bring all this stuff together in an integrated
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form. The analogy that we used for the product,
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we want to build Shopify for SaaS. Shopify made
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it easy to start an e -commerce store and to
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make it easy to start a SaaS business. So. It
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was very much scratching your own situation that
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led to the product vision. Then we said, okay,
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we just worked on this startup for quite a long
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time. What will we do differently? Number one
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thing we came up with amongst our founding team
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was we said we had a lot more fun when we were
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20 than when we were a company of 200. So what
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do we need to do to stay small yet still facilitate
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building this sort of large, vicious software
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company? And it came down to we needed to attract
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this number of very talented and extremely committed
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employees. And then we said, OK, how do we do
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that? And our entire compensation mod equity
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agreement and all these things we're going to
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discuss fell out. So that's the short version
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on what the product and the structure that were
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discussed came from. Yeah, I think it's really
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interesting because. I think when people start
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a company, they think about what is usually the
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two alternatives, which is I'm going to bootstrap
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something, it'll be small. Usually they're sort
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of consulting firms or small software companies,
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and they kind of figure that there's some limit
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that they have to growth. Obviously, if you're
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doing services consulting, you're limited by
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your time and your resources. If you're bootstrapping
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a software business, sometimes maybe you're undercharging
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for your product. Usually it's the problem. And
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then the alternative is like, oh, well, I got
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to raise a bajillion. and find huge markets and
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try to dominate. And now it's like this battle
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and I'm constantly raising money. But like we're
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starting to see there is this third way, which
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is, wait a second, you can build a scalable,
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sustainable business without raising money, without
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the limits. And I think part of this is this
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whole idea of niches, which is there are niches
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that can support $10 million businesses, $20
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million. So as you're looking at this, I know
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you're doing the whole forecasting and planning
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thing, Are you how are you thinking about in
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terms of growth? Are you just going to say, let's
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just let this grow as big as it can? Or is it
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there's like a there's a place that you want
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to want to be with the company? Yeah, I would
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like it to grow as fast as it can to be honest
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with you. We are not willing to sacrifice control
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in the way that we want to run the business and
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the benefits we want to get from the business
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that way to get there. I'm sure if we went out
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and raised $50 million tomorrow, we could deploy
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that $50 million and grow faster. We would lose
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control over our decision making. We would have
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all the strings that come with venture capital.
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And that's just something we deliberately decided
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that we don't want to do. To your point about
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this being a two -way door, either bootstrap
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and think small or raise funding and think big.
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I think there is a third dimension we really
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thought about and leaned into. early on that
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is popular with most people, to be frank. But
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the third dimension worth mentioning there is
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time. We definitely set out saying we want to
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build this into a large successful business.
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We're going to do it with the constraints of
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bootstrapping. But what that means is we're going
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to have to work on this over an extended period
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of time. And we really said at the outset, we
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are looking for an idea that is big enough, significant
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enough, and durable enough, most importantly,
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that we can work on this for 15 years and it's
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going to be relevant. And when you look at what
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we offer, it's payments, it's authentication,
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it's CRM, it's email. These things have been
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around forever, going to be around forever. Certainly
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the feature sets might change a little bit as
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technology comes and goes. things that are going
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to be needed long into the future. So we were
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very comfortable saying, okay, we're going to
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commit 15 years to that. We think this is still
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going to be relevant 15 years later. So I'm curious,
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when you started, was it just you or forget if
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it was like you and a co -founder and then how
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are you deciding when you need to have an additional
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person there? Sure. more than just sort of the
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contracting and temporary help. So it was myself
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and two founders. We started together because
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we had very complementary skill sets in short.
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I was a marketer. There was a front end developer
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and a back end developer. So we needed to bring
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the product to market and market it. From there,
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the mindset has really been. we hire completely
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as last resort. We only hire when things are
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really breaking down and it's become untenable
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for the existing team to continue to do the things
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that we need to do and support the product and
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support the customer as well and whatnot. But
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mindset throughout the last 10 years has always
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been, okay, we have some problem in terms of
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scalability. How do we solve it without an additional
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person? And yes, think It's like AI now and automation
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tools and those things have been part of the
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solution, but I would say a much bigger part
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of the solution has been just not doing a lot
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of the things that a typical business does. Yeah,
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it was a martial arts theory. It's like the most
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powerful move is just to avoid shift of the energy.
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Don't go right into it with your full force.
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That's usually a good way of hurting yourself.
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This is really good insights. And I think part
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of this is that as you're starting to grow, one
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of the things I know I read in your blogs is
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that you had other ways of covering your personal
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costs. People think about starting a company
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and they need income. Part of it is they need
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income because they want to feel like the business
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is. doing something is generating revenue. But
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a lot of times they need income to support their
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way of living. And I think it's an interesting
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thing, because even for you, you weren't 100
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percent in Outseta from the beginning, et cetera.
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I've been all in time wise for quite a while
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now, close to five years. But it took, I think,
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four or five years for me to get to that point
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where I was working on Outseta full time. Um,
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and that's, you know, one of the downsides of
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bootstrapping and, uh, our, our early years were
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particularly lean. Uh, people think I'm crazy
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when I say this, but it took us, um, something
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almost three years to get to a few thousand dollars
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in MRR. So there were years where we worked on
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this thing without any significant revenue. Um,
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and that meant that I had to do other consulting
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work, other advising work, other stuff to, to
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pay my bills and juggle jobs. Um, And as it outside
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his revenue grew over time, my commitment to
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it and my salary from it and all of that grew
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alongside it. But we as opposed to taking the
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shortcut that raising funding can provide, we
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said we're going to. be miserable until we get
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to the point where this thing is self -sustaining.
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Yeah, I think it's a healthy way of looking at
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things, especially since employment as a whole
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is in the midst of a pretty substantial change.
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It's not just the fact that companies like yourself
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can exist now and build and grow significantly,
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even if it does take time. But I've had some
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interesting conversations where people said,
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like, well, what is the safer choice now working
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for someone or working for yourself? And I'm
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like, it's not so clear anymore that working
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for someone is a safe choice anymore. There are
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issues of like having enough support in terms
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of benefits and healthcare and stuff like that,
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that's a societal thing. But it's just, and so
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it sounds like you found other people, not only
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you found other people to help you, but you found
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other people with that same mindset, which I
00:13:14.659 --> 00:13:17.220
think is just as important. Because I've worked
00:13:17.220 --> 00:13:19.340
with other people who felt like they needed the
00:13:19.340 --> 00:13:23.120
full -time employment from a, I guess, a psychological
00:13:23.120 --> 00:13:25.220
safety perspective. I don't know what your thoughts
00:13:25.220 --> 00:13:28.659
on that, yeah. Yeah, I think a huge thing for
00:13:28.659 --> 00:13:32.860
us and the reason we have shared as transparently
00:13:32.860 --> 00:13:34.539
as we have with everything and we've published
00:13:34.539 --> 00:13:37.039
our compensation model and made all of this very
00:13:37.039 --> 00:13:40.820
public. People often think it's some marketing
00:13:40.820 --> 00:13:42.799
thing. It's not a marketing thing. No one buys
00:13:42.799 --> 00:13:44.940
our software because we have open salaries or
00:13:44.940 --> 00:13:48.600
whatnot. It is a, I would call it a self -selection
00:13:48.600 --> 00:13:51.460
thing by putting this out there into the world
00:13:51.460 --> 00:13:54.580
and explaining we work this way, here's why.
00:13:55.139 --> 00:13:57.580
People self -select in or out of it. There are
00:13:57.580 --> 00:14:00.480
certainly people that have looked at our way
00:14:00.480 --> 00:14:02.519
of operating and our compensation model and all
00:14:02.519 --> 00:14:06.379
of that who have said, you know, I'm a poor engineer.
00:14:06.559 --> 00:14:09.320
I could go to Facebook and make $500 ,000 a year.
00:14:09.360 --> 00:14:11.710
Why would I work with you in this way? And that's
00:14:11.710 --> 00:14:14.529
totally fine. Those people are not going to want
00:14:14.529 --> 00:14:16.070
to be it outside of that. It's not going to be
00:14:16.070 --> 00:14:18.330
the environment that they are looking for. But
00:14:18.330 --> 00:14:20.409
we've had other people, all of the engineers
00:14:20.409 --> 00:14:23.769
on our team today could go elsewhere and make
00:14:23.769 --> 00:14:25.990
significantly more money if that's what they
00:14:25.990 --> 00:14:28.889
wanted to do. But they have said, want to work
00:14:28.889 --> 00:14:30.690
in this way. We have the flexibility of working
00:14:30.690 --> 00:14:33.210
this way. We have the ridiculously high amount
00:14:33.210 --> 00:14:34.990
of ownership that we're given in this business
00:14:34.990 --> 00:14:37.529
for working this way. And they self -select in.
00:14:37.669 --> 00:14:40.330
And I think that's really what it's all about.
00:14:40.539 --> 00:14:42.559
Yeah. I was going to ask about this later, but
00:14:42.559 --> 00:14:44.740
this is a good pivot time to talk about the ownership
00:14:44.740 --> 00:14:47.919
model because you have a very interesting equity
00:14:47.919 --> 00:14:51.600
model which is based on a day -by -day basis
00:14:51.600 --> 00:14:54.399
in many ways. I read the blog post, I'll share
00:14:54.399 --> 00:14:55.679
it, but maybe you want to explain a little bit
00:14:55.679 --> 00:14:57.779
about how that works and also the trade -off
00:14:57.779 --> 00:15:02.440
between compensated work time in terms of money
00:15:02.440 --> 00:15:04.399
compensated work time versus equity compensated
00:15:04.399 --> 00:15:06.960
work time and how that works. That's I think
00:15:06.960 --> 00:15:08.820
the first time I've seen a formula like that.
00:15:09.210 --> 00:15:11.509
how you came up with it, whether it was based
00:15:11.509 --> 00:15:13.470
on something else. And it was like 16 questions
00:15:13.470 --> 00:15:16.009
in there. So it all goes back to this desire
00:15:16.009 --> 00:15:19.669
to say to stay small and attract really loyal
00:15:19.669 --> 00:15:21.470
employees who want to be here for the long term.
00:15:21.490 --> 00:15:23.490
And we just started by saying, OK, how do we
00:15:23.490 --> 00:15:27.070
do that? And the first thing we did is we're
00:15:27.070 --> 00:15:30.009
trying to hire pretty senior people. There needs
00:15:30.009 --> 00:15:34.190
to be a good salary. There is nothing magic about
00:15:34.190 --> 00:15:37.860
210 ,000. per year. As I mentioned, there's certainly
00:15:37.860 --> 00:15:40.700
opportunity to make more than that. But we think
00:15:40.700 --> 00:15:43.440
that's a pretty healthy, well -paid salary that
00:15:43.440 --> 00:15:46.720
would attract good people. So we started there.
00:15:47.240 --> 00:15:52.200
And we said, OK, we can envision instances where
00:15:52.200 --> 00:15:55.159
we have an opportunity to work with a really
00:15:55.159 --> 00:15:57.639
talented person. They have their own entrepreneurial
00:15:57.639 --> 00:16:00.360
projects and maybe don't work on Outsetto full
00:16:00.360 --> 00:16:03.419
time. Let's create a structure where they can
00:16:03.419 --> 00:16:05.899
come and work at Outsetto Park. they want to.
00:16:05.919 --> 00:16:08.179
So we said, you can work at one to five days
00:16:08.179 --> 00:16:10.500
per week and it's still going to be based on
00:16:10.500 --> 00:16:13.120
that same $210 ,000 a year salary. So if you
00:16:13.120 --> 00:16:16.200
work a week, it's $42 ,000 a year. If you work
00:16:16.200 --> 00:16:18.500
two days a week, it's $84 ,000 a year, three
00:16:18.500 --> 00:16:21.320
days a week, one, six, all the way up to the
00:16:21.320 --> 00:16:25.320
two 10. So then we had our model to attract talented
00:16:25.320 --> 00:16:29.360
people as well. And then we said, uh, particularly
00:16:29.360 --> 00:16:32.620
in our early years, although we were early stage
00:16:32.620 --> 00:16:35.440
bootstrap. We don't have the money to go out
00:16:35.440 --> 00:16:39.460
and pay $210 ,000 a year immediately. How do
00:16:39.460 --> 00:16:42.100
we get some of these really talented people on
00:16:42.100 --> 00:16:44.379
anyways and make sure that they're committed
00:16:44.379 --> 00:16:46.639
and they want to be termed. And we said, let's
00:16:46.639 --> 00:16:49.419
give them just as the founders would earn equity.
00:16:49.919 --> 00:16:53.379
So we give everybody the ability to use how many
00:16:53.379 --> 00:16:56.039
days per week they want to work for cash compensation.
00:16:56.539 --> 00:16:59.080
And they can also choose how many days they want
00:16:59.080 --> 00:17:02.850
to work for equity compensation. The equity compensation
00:17:02.850 --> 00:17:07.450
model is super, if across all of our employees,
00:17:07.890 --> 00:17:11.710
a hundred days have been worked for equity. And
00:17:11.710 --> 00:17:16.210
I have worked 15 days. I own 15 % of the company.
00:17:16.430 --> 00:17:20.049
It's really that, that simple. So, um, as an
00:17:20.049 --> 00:17:22.730
example today, I work on outside of five days.
00:17:22.890 --> 00:17:25.650
I am paid cash compensation four days per week
00:17:25.650 --> 00:17:28.609
and I earn equity one day per week. And everybody
00:17:28.609 --> 00:17:31.980
uses what what works best for them. Yeah. Was
00:17:31.980 --> 00:17:34.079
that based on anything or you just sort of kind
00:17:34.079 --> 00:17:36.579
of came up with the formula and you put together
00:17:36.579 --> 00:17:39.819
that structure independently? Yeah, we pretty
00:17:39.819 --> 00:17:42.160
much did it independently. I mean, we definitely
00:17:42.160 --> 00:17:44.680
looked at other software companies and how it's
00:17:44.680 --> 00:17:47.759
solved for equity arrangements in the con of
00:17:47.759 --> 00:17:50.339
early stage businesses and whatnot. And we wanted
00:17:50.339 --> 00:17:53.720
to do something like this. And it also certainly
00:17:53.720 --> 00:17:57.220
comes from a place of. You don't need me to tell
00:17:57.220 --> 00:17:59.819
you in the case of most companies even those
00:17:59.819 --> 00:18:02.599
that have big exits It's investors and the founders
00:18:02.599 --> 00:18:05.559
that make out like bandits and in most instances
00:18:05.559 --> 00:18:09.319
even with pretty successful exit You know, it's
00:18:09.319 --> 00:18:12.279
not super meaningful employees and there's a
00:18:12.279 --> 00:18:14.799
there's a reason for that Investors put in money
00:18:14.799 --> 00:18:17.779
and the founders put in time that the other employees
00:18:17.779 --> 00:18:21.039
don't but we want to create an environment where
00:18:21.039 --> 00:18:23.259
if this if this thing does do well and if we
00:18:23.259 --> 00:18:26.990
do when the rewards are shared a bit more than
00:18:26.990 --> 00:18:30.369
they typically would be a more traditional structure.
00:18:30.670 --> 00:18:32.890
Yeah. In addition to that, you have a profit
00:18:32.890 --> 00:18:34.930
sharing plan. So that's interesting as well.
00:18:34.950 --> 00:18:37.509
So it's not just sharing in ownership benefits,
00:18:37.509 --> 00:18:39.890
which you generally realize, as you mentioned,
00:18:40.150 --> 00:18:42.670
on some sort of liquidation or exit event. But
00:18:42.670 --> 00:18:45.349
the profit, you can realize much sooner than
00:18:45.349 --> 00:18:47.849
that if and when there's profits. Right. So talk
00:18:47.849 --> 00:18:51.230
a little bit about that. Yeah. So that came from
00:18:51.230 --> 00:18:54.630
a place. of exactly as you mentioned equity is
00:18:54.630 --> 00:18:58.569
always spec first of all we went into this saying
00:18:58.569 --> 00:19:00.390
we're going to work on this for 15 years this
00:19:00.390 --> 00:19:03.130
was not a going into this trying to exit quickly
00:19:03.130 --> 00:19:07.210
so how do equity become meaningful or have value
00:19:07.210 --> 00:19:12.670
is it ever um that's an open also with the same
00:19:12.670 --> 00:19:14.710
salaries for everybody then there's a question
00:19:14.710 --> 00:19:16.650
of okay how do you motivate people if somebody
00:19:16.650 --> 00:19:19.809
has paid the 210 dollar a year salary what's
00:19:19.809 --> 00:19:21.950
motivating to continue to work harder and do
00:19:21.950 --> 00:19:23.950
better and push the company and all these things
00:19:23.950 --> 00:19:26.910
that are super important for any business um
00:19:26.910 --> 00:19:28.509
and we said it should be it should be profit
00:19:28.509 --> 00:19:32.119
sharing the problem gives you upside beyond the
00:19:32.119 --> 00:19:34.640
state that is paid out yearly. It gives everybody
00:19:34.640 --> 00:19:37.660
the opportunity to adopt the mindset of to keep
00:19:37.660 --> 00:19:39.579
this team small because if we keep this team
00:19:39.579 --> 00:19:42.200
small, there are profits. We need to squeeze
00:19:42.200 --> 00:19:44.640
efficiency out of wherever we can so that we
00:19:44.640 --> 00:19:48.279
are making more profits and everybody gets to
00:19:48.279 --> 00:19:50.940
participate. Meaningfully. Well, that's fantastic.
00:19:51.039 --> 00:19:53.180
So let's get into the business itself. I think
00:19:53.180 --> 00:19:54.960
it's kind of what I find really interesting about
00:19:54.960 --> 00:19:57.700
the business besides the fact that hey, I have
00:19:57.700 --> 00:20:02.039
a community, I have a SaaS company. So I understand
00:20:02.039 --> 00:20:05.099
the value proposition very clearly. But it's
00:20:05.099 --> 00:20:07.390
interesting how the product is. As in some ways,
00:20:07.490 --> 00:20:08.769
you might not have thought of it a reflection
00:20:08.769 --> 00:20:11.690
of the business itself, because the idea is that
00:20:11.690 --> 00:20:13.450
the product is like this leverage engine, right?
00:20:13.450 --> 00:20:16.430
So one platform that replaces three or four separate
00:20:16.430 --> 00:20:19.569
tools. So what has gone into the product? But
00:20:19.569 --> 00:20:21.450
how you even think we talked about how you think
00:20:21.450 --> 00:20:22.950
about expanding the team. Now I can talk about
00:20:22.950 --> 00:20:24.509
how do you think about expanding the product
00:20:24.509 --> 00:20:26.490
and how do you think about that in terms of do
00:20:26.490 --> 00:20:28.869
you stay focused in the market and expand customer
00:20:28.869 --> 00:20:31.089
base or do you expand functionality wise? Because
00:20:31.089 --> 00:20:32.549
things are definitely getting more challenging
00:20:32.549 --> 00:20:34.490
in this world where building things is getting
00:20:34.490 --> 00:20:39.609
easier and easier. for everybody. I think the
00:20:39.609 --> 00:20:44.430
popular mindset in SaaS for a long time and rightfully
00:20:44.430 --> 00:20:46.430
so, I totally understand where it's come from,
00:20:46.509 --> 00:20:49.109
has been pick one problem and go super deep.
00:20:50.049 --> 00:20:52.710
So build the best email marketing, build the
00:20:52.710 --> 00:20:55.630
best CRM, build the best payment system. We from
00:20:55.630 --> 00:20:59.230
the get -go did the opposite and we've been for
00:20:59.230 --> 00:21:02.509
that for a long time and I would go so far as
00:21:02.509 --> 00:21:06.880
to say we chose the much other market opportunity.
00:21:07.119 --> 00:21:10.940
I think most SAS founders, because they are tech,
00:21:11.319 --> 00:21:13.339
because they love software, because they have
00:21:13.339 --> 00:21:15.859
the ability to get tools and know how to do that,
00:21:15.859 --> 00:21:18.460
how by default said, we're going to go out and
00:21:18.460 --> 00:21:22.160
buy all of the software tools and build the best
00:21:22.160 --> 00:21:25.940
we can and take the time to stitch all together.
00:21:26.059 --> 00:21:28.380
Even if they can sit there and say that we're
00:21:28.380 --> 00:21:31.720
not the best use of my time, they do it. And
00:21:31.720 --> 00:21:36.109
we said, that's fine. We recognize that the market
00:21:36.109 --> 00:21:38.609
who wants this integrated solution might not
00:21:38.609 --> 00:21:41.509
be as large, but realize very early on, there
00:21:41.509 --> 00:21:43.650
is a market for it. There is people who are like,
00:21:43.650 --> 00:21:46.170
I am tired of integrating all these tools or
00:21:46.170 --> 00:21:47.789
I don't know how to integrate all these tools
00:21:47.789 --> 00:21:51.130
or my zaps are all breaking. If you can give
00:21:51.130 --> 00:21:54.269
me the basic stuff that I need and it just all
00:21:54.269 --> 00:21:56.829
works together. I go that that's super attractive.
00:21:56.829 --> 00:22:00.230
And that is primarily who we serve today, where
00:22:00.230 --> 00:22:03.589
I'm up with a real estate that will. We chose
00:22:03.589 --> 00:22:06.569
to compete over the category set we chose to
00:22:06.569 --> 00:22:10.009
build. We just looked at SaaS business and we
00:22:10.009 --> 00:22:12.410
said, what are the tools that they need that
00:22:12.410 --> 00:22:15.250
are non -negotiable? And we came up with payments,
00:22:15.730 --> 00:22:18.730
authentication, CRM, email, help desk. Pretty
00:22:18.730 --> 00:22:21.329
much every SaaS business out there uses tools
00:22:21.329 --> 00:22:25.049
to some degree. And we said, that's what we're
00:22:25.049 --> 00:22:27.769
going to build. And we haven't wavered in 10
00:22:27.769 --> 00:22:29.650
years. That's exactly what the product is today.
00:22:29.839 --> 00:22:32.859
I don't think we have much vision of going beyond
00:22:32.859 --> 00:22:35.559
that, to be honest with you. This is the feature
00:22:35.559 --> 00:22:39.220
set. The challenge for us has always been how
00:22:39.220 --> 00:22:41.619
do we make that feature set as good as possible
00:22:41.619 --> 00:22:45.579
and approach feature parity with the point solutions
00:22:45.579 --> 00:22:48.200
that we've competed against. We don't have true
00:22:48.200 --> 00:22:50.359
feature parity, but that is part of the story.
00:22:50.839 --> 00:22:53.200
For everything that we offer, we're trying to
00:22:53.200 --> 00:22:56.619
offer the 80 % of the feature set. that delivers
00:22:56.619 --> 00:23:01.059
98 % of the value, and we don't have a few whistles
00:23:01.059 --> 00:23:03.740
that the more specialized tools do have. That
00:23:03.740 --> 00:23:06.759
makes sense. I'm interested in this. When you
00:23:06.759 --> 00:23:08.900
think about your customer, who is your customer,
00:23:08.980 --> 00:23:12.519
both in terms of the kind of company or the kind
00:23:12.519 --> 00:23:15.859
of person, and then also the role within that
00:23:15.859 --> 00:23:18.099
organization, maybe how technical they are or
00:23:18.099 --> 00:23:21.880
non -technical they are as a customer? This has
00:23:21.880 --> 00:23:25.390
been the most interesting part of outset as journey.
00:23:26.109 --> 00:23:30.490
We started out in 2016, focusing on developers
00:23:30.490 --> 00:23:33.289
exclusively, mass businesses exclusively, and
00:23:33.289 --> 00:23:36.109
that was our target customer. And we sort of
00:23:36.109 --> 00:23:38.150
learned that we were fighting an uphill for the
00:23:38.150 --> 00:23:40.690
reasons I just mentioned. Developers are demanding
00:23:40.690 --> 00:23:43.690
in terms of the tools that they use. We didn't
00:23:43.690 --> 00:23:46.009
have feature parity with, you know, the tools
00:23:46.009 --> 00:23:48.029
we're competing against. They have the ability
00:23:48.029 --> 00:23:50.950
to integrate all this. So we realized we were
00:23:50.950 --> 00:23:54.339
fighting a tough battle. Um, about four years
00:23:54.339 --> 00:23:58.559
in, uh, the, the no -code world bloomed, uh,
00:23:58.660 --> 00:24:02.160
thanks to companies, Webflow. And we recognize
00:24:02.160 --> 00:24:05.039
that there was an opportunity to point out Seta
00:24:05.039 --> 00:24:07.140
towards these last technical folks who needed
00:24:07.140 --> 00:24:10.819
all the same tooling, but didn't have same technical
00:24:10.819 --> 00:24:14.720
skillset. And really what kicked the business,
00:24:14.720 --> 00:24:17.619
um, to high gear and helped us start to grow
00:24:17.619 --> 00:24:20.940
in a really significant way. Um, and then as
00:24:20.940 --> 00:24:23.779
the, the product continued to develop and mature,
00:24:24.079 --> 00:24:27.400
we saw the developers come running back and developers
00:24:27.400 --> 00:24:31.160
that use outside of today tend to people who
00:24:31.160 --> 00:24:33.359
have built SaaS products before they're looking
00:24:33.359 --> 00:24:36.160
for speed to market. They see us as a Trinity
00:24:36.160 --> 00:24:38.380
to get products out the door much more quickly.
00:24:38.839 --> 00:24:40.900
They have also lived through the challenges of
00:24:40.900 --> 00:24:42.400
integrating all different tools. And they're
00:24:42.400 --> 00:24:44.180
just like, listen, we're builders. We want to
00:24:44.180 --> 00:24:48.000
focus building software, um, not not our tech
00:24:48.000 --> 00:24:51.079
stacks. So. that tends to be the persona of the
00:24:51.079 --> 00:24:53.940
developer that uses outside of today. Customer
00:24:53.940 --> 00:24:56.279
base is very much split. We have very non -technical.
00:24:56.400 --> 00:24:59.480
We have very technical people. And that's a challenge
00:24:59.480 --> 00:25:01.720
for us as a business. You need to build product
00:25:01.720 --> 00:25:04.980
that is usable by both groups. We need to have
00:25:04.980 --> 00:25:07.319
documentation that makes sense for both groups.
00:25:08.519 --> 00:25:10.900
And frankly, I don't know. I've always wondered
00:25:10.900 --> 00:25:14.039
like, do we have this right in both audiences
00:25:14.039 --> 00:25:17.309
or not? When I've had that discussion, people
00:25:17.309 --> 00:25:19.230
are like, you need to go look at your most suitable
00:25:19.230 --> 00:25:21.009
customers and what do they look at? How much
00:25:21.009 --> 00:25:23.750
of your customer base do they make up? Our customer
00:25:23.750 --> 00:25:26.329
base is really evenly split, 50 -50 down the
00:25:26.329 --> 00:25:30.109
middle, so we have continued to serve both audience.
00:25:31.009 --> 00:25:33.049
Well, that's a really good point. We've had some
00:25:33.049 --> 00:25:35.069
really interesting conversations with a few people
00:25:35.069 --> 00:25:37.869
that have really... Figure some of them have
00:25:37.869 --> 00:25:39.710
figured it out. It's good. This is the ICP, right?
00:25:39.750 --> 00:25:42.529
The ideal customer profile and I mentioned already
00:25:42.529 --> 00:25:44.529
data CMS, which is that small company It's just
00:25:44.529 --> 00:25:46.349
built a headless CMS and they realized really
00:25:46.349 --> 00:25:48.349
that their big customer were agencies You know
00:25:48.349 --> 00:25:50.990
like web agencies and who could spin up websites
00:25:50.990 --> 00:25:53.950
in like two seconds by you know Doing a CLI thing
00:25:53.950 --> 00:25:55.769
which is what they have but there are other companies
00:25:55.769 --> 00:25:57.809
who talk to Gina Bianchini Who is the CEO of
00:25:57.809 --> 00:25:59.589
mighty networks? We've talked to Wade Foster
00:25:59.589 --> 00:26:02.430
CEO of Zapier. We've we we've had all these people
00:26:02.430 --> 00:26:05.690
on our podcast Fabian Veidt CEO of make and a
00:26:05.690 --> 00:26:08.559
manual strike of who's the CEO of Bubble. And
00:26:08.559 --> 00:26:11.400
what they've all realized is sort of like that
00:26:11.400 --> 00:26:15.059
growth is never like straight curve in any way,
00:26:15.059 --> 00:26:17.960
whether it's linear or quadratic or exponential,
00:26:18.380 --> 00:26:22.599
it's like step function. And Max Kang who built
00:26:22.599 --> 00:26:24.880
like a $10 million business selling sticker books
00:26:24.880 --> 00:26:26.980
on Amazon. It's a crazy story. It's just like
00:26:26.980 --> 00:26:28.740
him and two or three other people. It's just
00:26:28.740 --> 00:26:31.720
the weirdest story. It's here on the podcast
00:26:31.720 --> 00:26:33.640
to listen to. But a lot of them have realized
00:26:33.640 --> 00:26:36.390
that a lot of it comes down to really narrowing
00:26:36.390 --> 00:26:39.670
down and finding that one ideal customer and
00:26:39.670 --> 00:26:41.970
then finding two people that are like that and
00:26:41.970 --> 00:26:43.769
expanding from there. And then it's not being
00:26:43.769 --> 00:26:45.670
all things to all people, but it is about trying
00:26:45.670 --> 00:26:47.630
to be as much as possible to that one person.
00:26:47.890 --> 00:26:49.930
So I think that's really good insight. And it
00:26:49.930 --> 00:26:51.369
sounds like you're getting to that inflection
00:26:51.369 --> 00:26:55.049
point yourself. Yes, I would say we have been
00:26:55.049 --> 00:27:00.109
on a constant journey of looking for that person
00:27:00.109 --> 00:27:04.009
and thinking through. Do we have a customer that
00:27:04.009 --> 00:27:08.029
we feel like deserves that level of focus? I
00:27:08.029 --> 00:27:12.049
think we are. Closer than we've ever been to
00:27:12.049 --> 00:27:14.430
having an opinion on that, but to be fair, we
00:27:14.430 --> 00:27:17.750
have not made the decision to focus on one particular
00:27:17.750 --> 00:27:20.990
use case completely. Well, I can guarantee that
00:27:20.990 --> 00:27:22.789
as you do it, we will be reading about it on
00:27:22.789 --> 00:27:25.789
your blog. I think that's our next little question
00:27:25.789 --> 00:27:28.049
here, which has to do with this really great
00:27:28.049 --> 00:27:29.849
appraise. I love companies that build in public.
00:27:29.970 --> 00:27:32.369
That's how I found you and how I found some of
00:27:32.369 --> 00:27:34.509
these other companies because that's actually
00:27:34.509 --> 00:27:36.490
how I found DataCMS. They posted something on
00:27:36.490 --> 00:27:39.400
Hacker News and I'm like, OK, I got to dig into
00:27:39.400 --> 00:27:41.680
this. So tell me a little bit about this, because
00:27:41.680 --> 00:27:43.839
it is a philosophical. You have a lot of things
00:27:43.839 --> 00:27:45.920
that come from this, having a particular point
00:27:45.920 --> 00:27:48.220
of view, right? The point of view on how you
00:27:48.220 --> 00:27:49.759
start a company, a point of view on the kind
00:27:49.759 --> 00:27:51.460
of products and how you decide on functionality.
00:27:51.819 --> 00:27:54.039
But you also have a point of view on transparency,
00:27:54.240 --> 00:27:56.700
which is the blog post, the talks, the revenue
00:27:56.700 --> 00:27:58.960
numbers. So tell me a little bit about that.
00:27:59.059 --> 00:28:01.859
What is that mindset like? I think you mentioned
00:28:01.859 --> 00:28:04.240
that it's not about driving customer acquisition,
00:28:04.579 --> 00:28:08.200
but tell me what drives all of that and how would
00:28:08.200 --> 00:28:10.599
you keep that going? Yeah. Yeah, it's it's not
00:28:10.599 --> 00:28:12.500
about driving customer acquisition, but I would
00:28:12.500 --> 00:28:18.920
say an important caveat is in our case, our audience
00:28:18.920 --> 00:28:21.279
is of founders of early stage companies and other
00:28:21.279 --> 00:28:24.460
entrepreneurial people. Our audience is myself,
00:28:24.640 --> 00:28:27.079
essentially the persona that we that we sell
00:28:27.079 --> 00:28:31.430
to. So, when we are transparent and when we do
00:28:31.430 --> 00:28:33.849
share these things, it is of interest to people
00:28:33.849 --> 00:28:35.950
that our product might be of interest to. And
00:28:35.950 --> 00:28:39.710
we do get customers. We do get customers from
00:28:39.710 --> 00:28:43.950
it. We don't think of it as we're doing this
00:28:43.950 --> 00:28:47.009
for the sake of customer acquisition. For the
00:28:47.009 --> 00:28:51.509
most part, I do it because I do think it builds
00:28:51.509 --> 00:28:56.190
trust. You know, it is a way to get brand awareness
00:28:56.190 --> 00:29:00.569
out there and for people to come to know me and
00:29:00.569 --> 00:29:02.369
the other people on our team and how we think.
00:29:02.890 --> 00:29:07.609
And, you know, there's so much in tech around
00:29:07.609 --> 00:29:09.630
how fast companies grow and this, that, and the
00:29:09.630 --> 00:29:12.109
other thing. I think by being able to point people
00:29:12.109 --> 00:29:16.069
towards essentially a 10 year diary of us building
00:29:16.069 --> 00:29:19.849
our business, it helps us come across as credible
00:29:19.849 --> 00:29:24.309
and build trust and attract the types of people
00:29:24.309 --> 00:29:27.289
that we want to attract. So that's really the
00:29:27.289 --> 00:29:29.789
reason to do it. Yeah. Yeah. And I think there's
00:29:29.789 --> 00:29:32.269
a lot of that like that, like that in many different
00:29:32.269 --> 00:29:33.869
industries where people are just like, join me
00:29:33.869 --> 00:29:36.250
for the journey, join me for the ride. You end
00:29:36.250 --> 00:29:39.130
up attracting the people that that are attracted
00:29:39.130 --> 00:29:41.609
to that, which is fantastic. And especially when
00:29:41.609 --> 00:29:43.789
you're not you're not trying to build a one billion
00:29:43.789 --> 00:29:45.890
dollar company and try to build a 10, 20, 30.
00:29:45.950 --> 00:29:47.670
I'm sure you'd be happy with the 50 million dollar
00:29:47.670 --> 00:29:50.069
company or 100 million dollar company. 100 percent.
00:29:50.119 --> 00:29:52.839
There's definitely markets for that. There's
00:29:52.839 --> 00:29:54.440
definitely an audience for that. I think it's
00:29:54.440 --> 00:29:57.779
in my mind easier to build a 10, 20, 30, 40,
00:29:57.859 --> 00:30:00.339
50 million dollar company than a billion dollar
00:30:00.339 --> 00:30:02.000
one, which requires a lot of, you know, winner
00:30:02.000 --> 00:30:04.119
take all approaches, which are, I would say,
00:30:04.220 --> 00:30:06.880
not very customer friendly or employee friendly.
00:30:07.319 --> 00:30:09.740
or anything like that. But let's talk a little
00:30:09.740 --> 00:30:11.119
about the technology ways, because you started
00:30:11.119 --> 00:30:13.400
about 10 years ago. Technology, well, it always
00:30:13.400 --> 00:30:15.660
keeps moving. Things are really moving super
00:30:15.660 --> 00:30:17.839
fast here. You mentioned a lot about feature
00:30:17.839 --> 00:30:20.819
parity and really thinking about that and what
00:30:20.819 --> 00:30:24.740
users can do. How are you thinking about, is
00:30:24.740 --> 00:30:29.240
AI speeding things up for you? How is it accelerating?
00:30:29.599 --> 00:30:32.000
Is it changing the way your customers think about
00:30:32.000 --> 00:30:34.119
you and your product? Is it making them think
00:30:34.119 --> 00:30:36.740
more about maybe I want a headless experience,
00:30:36.920 --> 00:30:39.319
an agentic experience, an MCP experience? Just
00:30:39.319 --> 00:30:41.940
curious as to how this is changing your perspectives.
00:30:42.759 --> 00:30:45.279
Yeah, I would say there's a few things here,
00:30:45.440 --> 00:30:47.740
sort of three points to hit on. The first one
00:30:47.740 --> 00:30:51.420
has just been What I would describe as like the
00:30:51.420 --> 00:30:56.559
emotional impact of AI. So we've worked on this
00:30:56.559 --> 00:31:01.240
for 10 years. Really, it took us six years, maybe
00:31:01.240 --> 00:31:03.380
even seven years to get the business to the point
00:31:03.380 --> 00:31:06.460
where it was stable. There was a sizable customer
00:31:06.460 --> 00:31:08.900
base. Everybody was being paid well, et cetera.
00:31:09.380 --> 00:31:11.980
And we had two or three years there that were
00:31:11.980 --> 00:31:14.420
stable. They felt good. We're continuing to work
00:31:14.420 --> 00:31:19.240
on the product. had the benefits of all of the
00:31:19.240 --> 00:31:21.380
previous six years of work, and we'd gotten to
00:31:21.380 --> 00:31:23.200
this point where we had this self -systeming
00:31:23.200 --> 00:31:26.319
wonderful thing. We still very much do, but I
00:31:26.319 --> 00:31:30.740
would say from a founder perspective, AI has
00:31:30.740 --> 00:31:33.980
just thrown a wrench into everything in the sense
00:31:33.980 --> 00:31:37.950
that it's brought in uncertainty. Um, so I, I
00:31:37.950 --> 00:31:41.250
certainly view the upside potential about set
00:31:41.250 --> 00:31:44.349
up is probably much higher than I ever did. Obviously
00:31:44.349 --> 00:31:47.630
now, but I also view the worst case scenario
00:31:47.630 --> 00:31:50.769
as, as much higher than it ever has been too.
00:31:50.869 --> 00:31:54.009
I think the odds that this could go to zero and
00:31:54.009 --> 00:31:55.750
we could be put out of business are much higher
00:31:55.750 --> 00:31:57.490
than they were before. And I think the odds of
00:31:57.490 --> 00:32:01.829
a. significantly great financial outcome have
00:32:01.829 --> 00:32:05.369
gone up as well. So that's the first bit. I don't
00:32:05.369 --> 00:32:06.990
know which way that's going to shake out. Of
00:32:06.990 --> 00:32:10.150
course, we're trying to ensure that the positive
00:32:10.150 --> 00:32:13.630
one is how this shakes out, but that has been
00:32:13.630 --> 00:32:17.289
the difference in feel. The second one is outside
00:32:17.289 --> 00:32:19.769
is this product that integrates with all sorts
00:32:19.769 --> 00:32:22.630
of different website builders, coding frameworks,
00:32:22.849 --> 00:32:26.579
et cetera. It's really stack agnostic and The
00:32:26.579 --> 00:32:28.440
primary difference on that front is now people
00:32:28.440 --> 00:32:30.779
are trying to integrate outside of with AI tools.
00:32:31.160 --> 00:32:33.279
Um, and there's been a whole track of work to
00:32:33.279 --> 00:32:36.700
say, okay, someone's in Replet or using cursor
00:32:36.700 --> 00:32:39.579
or using Claude and, uh, they want to integrate
00:32:39.579 --> 00:32:41.420
outside of what does that look like? How do we
00:32:41.420 --> 00:32:44.440
change the onboarding experience for the, the
00:32:44.440 --> 00:32:48.640
AI builder, so to speak. Um, and we spent a lot
00:32:48.640 --> 00:32:51.700
of cycles on that at this point. Um, and then
00:32:51.700 --> 00:32:55.200
there's also this. Um, notion of the day -to
00:32:55.200 --> 00:32:57.700
-day running of a business and people are looking
00:32:57.700 --> 00:33:00.240
to build small and mighty teams and have agents
00:33:00.240 --> 00:33:02.839
do more of the work and alongside their human
00:33:02.839 --> 00:33:04.839
counterparts and all of that. This is the thing
00:33:04.839 --> 00:33:07.859
that I think so far we'd have really nailed.
00:33:08.319 --> 00:33:11.799
Um, so up until, you know, 12 months ago, it
00:33:11.799 --> 00:33:14.420
was not something frankly, we were thinking about.
00:33:14.559 --> 00:33:17.940
We're building software for an end user who's
00:33:17.940 --> 00:33:21.460
a human in our user interface. But now we have
00:33:21.460 --> 00:33:23.279
to think about, okay, all those things that you
00:33:23.279 --> 00:33:25.400
can do within our user interface, can those be
00:33:25.400 --> 00:33:29.059
done programmatically via our API, via our MCP
00:33:29.059 --> 00:33:31.720
server, et cetera? And just this week, really,
00:33:31.740 --> 00:33:34.599
we've gotten to the point where all of the core
00:33:34.599 --> 00:33:37.200
actions that you can take as a human user within
00:33:37.200 --> 00:33:40.500
our software, you can also take via the API,
00:33:40.640 --> 00:33:45.240
via the MCP server. And with our customer base,
00:33:45.259 --> 00:33:47.299
as I mentioned, we have this mix of technical
00:33:47.299 --> 00:33:50.250
and non -technical people. It is still very much
00:33:50.250 --> 00:33:52.930
the technical folks and the early adopters who
00:33:52.930 --> 00:33:56.529
have started to use those features. But we have
00:33:56.529 --> 00:33:59.210
seen them since releasing them really take off.
00:33:59.210 --> 00:34:01.109
People are leaning into this stuff in a serious
00:34:01.109 --> 00:34:03.069
way. I think it's going to take a while for our
00:34:03.069 --> 00:34:05.690
non -technical users to catch up and realize
00:34:05.690 --> 00:34:08.789
what these tools enable. But I feel like we've
00:34:08.789 --> 00:34:11.170
done a really good job of that. And it's probably
00:34:11.170 --> 00:34:13.150
the thing we're most proud of this year. Yeah,
00:34:13.309 --> 00:34:15.670
that's that I could tell you that's a huge unlock
00:34:15.670 --> 00:34:18.969
because If you think about a lot of people are
00:34:18.969 --> 00:34:20.590
still love to code and love to code by hand,
00:34:20.750 --> 00:34:23.510
but people have these accelerated time frames
00:34:23.510 --> 00:34:27.530
now. And if I could just go, hey, agent, let's
00:34:27.530 --> 00:34:30.250
build a SaaS solution. Here's my design document.
00:34:30.289 --> 00:34:33.590
Here's my PRD document. Go go to outside. I'm
00:34:33.590 --> 00:34:36.570
not I don't want to get 15 tools working here.
00:34:36.710 --> 00:34:39.550
Just go there. MCP my way to build me the system.
00:34:39.590 --> 00:34:42.659
And if I can get up and running and like. four
00:34:42.659 --> 00:34:44.980
or five hours with something credible, then I
00:34:44.980 --> 00:34:47.000
can test it, then I can do the hard part, which
00:34:47.000 --> 00:34:48.780
is getting people to pay attention to what I'm
00:34:48.780 --> 00:34:53.079
doing. I think it's a huge unlock. Yeah. This
00:34:53.079 --> 00:34:57.719
is the thing we are really leaning in as a business.
00:34:58.059 --> 00:35:00.139
And to be honest, everyone's like, oh, yeah,
00:35:00.320 --> 00:35:02.719
it changes everything. This is the exact same
00:35:02.719 --> 00:35:05.179
problem we started solving for developers back
00:35:05.179 --> 00:35:07.659
in 2016. It's the exact same problem we solved
00:35:07.659 --> 00:35:12.710
for NoCo. 2000, 2024, it's just AI now. But if
00:35:12.710 --> 00:35:15.489
you look at the, even the AI builder, they are
00:35:15.489 --> 00:35:17.869
using agents. Yes, they are asking their, um,
00:35:17.909 --> 00:35:19.389
you know, coding assistant to assemble these
00:35:19.389 --> 00:35:21.429
tools, but they're still integrating Stripe.
00:35:21.650 --> 00:35:24.329
They're integrating, uh, Clark for authentication.
00:35:24.550 --> 00:35:26.869
They're integrating read for transactional emails.
00:35:27.389 --> 00:35:29.409
They're still integrating all these points solutions
00:35:29.409 --> 00:35:32.550
and AI has made that easier. But if you look
00:35:32.550 --> 00:35:36.429
at this Subaru of AI builder, who's this last
00:35:36.429 --> 00:35:38.960
technical. and who isn't a developer themselves.
00:35:39.800 --> 00:35:43.679
This is the graveyard of AI projects. Activation
00:35:43.679 --> 00:35:45.940
challenge around knowing, integrate those tools
00:35:45.940 --> 00:35:47.659
and getting them to speak to each other. And
00:35:47.659 --> 00:35:51.340
all of that is where AI projects die, but it
00:35:51.340 --> 00:35:54.920
can solve that in one prompt instead of to integrate
00:35:54.920 --> 00:35:58.179
all these different tools. So that is. our story
00:35:58.179 --> 00:36:01.000
from an AI integration perspective. That's fantastic.
00:36:01.139 --> 00:36:02.900
Well, as I said, I think it's a big unlock. I
00:36:02.900 --> 00:36:06.059
think that'll do something quite a bit. So it's
00:36:06.059 --> 00:36:08.059
a good move. It's better than ignoring it. It's
00:36:08.059 --> 00:36:10.019
funny. We've had some conversations with some
00:36:10.019 --> 00:36:12.000
of the more traditional SaaS players. And I actually
00:36:12.000 --> 00:36:14.239
feel, when you were talking about the two outcomes
00:36:14.239 --> 00:36:16.980
of going bust and going great, I think the going
00:36:16.980 --> 00:36:19.800
bust is probably very unlikely. Because as long
00:36:19.800 --> 00:36:21.500
as you're serving your ICPs and you're giving
00:36:21.500 --> 00:36:24.539
them what they want and you're listening to them,
00:36:24.559 --> 00:36:27.989
I think you're fine. more worried about these
00:36:27.989 --> 00:36:30.210
mega SaaS companies that have that are in the
00:36:30.210 --> 00:36:32.449
value extraction mode where they're just charging
00:36:32.449 --> 00:36:34.469
more and more and more for their products providing
00:36:34.469 --> 00:36:36.710
less and less access to functionality and features
00:36:36.710 --> 00:36:39.670
locking things behind you know gateways and and
00:36:39.670 --> 00:36:41.699
and people are saying Why do I need all this
00:36:41.699 --> 00:36:44.179
for? Like I could just, one, you're making it
00:36:44.179 --> 00:36:46.420
so hard, you're motivating me to just build something
00:36:46.420 --> 00:36:49.639
on my own to, because I have a point need, I
00:36:49.639 --> 00:36:52.440
have an itch I want to scratch, or I can go to
00:36:52.440 --> 00:36:54.400
better, more flexible, cheaper solutions. So
00:36:54.400 --> 00:36:57.579
I think they have a greater risk and outcomes,
00:36:58.099 --> 00:37:00.070
negative outcomes, but. That's probably a whole
00:37:00.070 --> 00:37:03.429
other conversation for another little time. So
00:37:03.429 --> 00:37:05.429
let's get back into sort of like the vibe here,
00:37:05.550 --> 00:37:07.329
which is like small companies punching above
00:37:07.329 --> 00:37:09.449
their weight because they know I love that. One
00:37:09.449 --> 00:37:10.909
of the things you've talked a lot about is this
00:37:10.909 --> 00:37:14.670
idea of life profitability. So this idea that
00:37:14.670 --> 00:37:17.530
your work should enable you to live a better
00:37:17.530 --> 00:37:20.389
life and that providing that environment to employees
00:37:20.389 --> 00:37:23.530
creates one more loyalty and gets better quality
00:37:23.530 --> 00:37:27.690
work. So talk a little bit about How that works,
00:37:28.510 --> 00:37:32.489
talk a lot about how do you build people who
00:37:32.489 --> 00:37:35.590
feel vested for the long term in the company
00:37:35.590 --> 00:37:37.710
as growth, yeah. Yeah, the first thing I'd say
00:37:37.710 --> 00:37:40.110
is just the term life profitable is not mine.
00:37:40.269 --> 00:37:42.909
It comes from a South African entrepreneur, Adi
00:37:42.909 --> 00:37:46.949
Pinar, who wrote a book by that title. You should
00:37:46.949 --> 00:37:49.550
go read the book if you haven't. It kind of gives
00:37:49.550 --> 00:37:51.929
language to things I had been thinking of for
00:37:51.929 --> 00:37:54.730
a long time, so I'm a huge fan and I know that
00:37:54.730 --> 00:37:58.880
phrase a lot. Um, but the, the idea of this all
00:37:58.880 --> 00:38:01.480
came from my experience at the first SaaS company
00:38:01.480 --> 00:38:04.940
I mentioned called building them. Um, I was a
00:38:04.940 --> 00:38:07.679
young guy when I worked at my first job out of
00:38:07.679 --> 00:38:10.860
college and, um, the co -founder of that company,
00:38:10.980 --> 00:38:12.719
one of the co -founders of outside of now. So
00:38:12.719 --> 00:38:15.719
my, my boss, my co -founder, um, when we started
00:38:15.719 --> 00:38:18.760
working on this, uh, but they just did a number
00:38:18.760 --> 00:38:23.130
of things that are incredibly. employee trick
00:38:23.130 --> 00:38:27.309
that I repped the benefit from being able to
00:38:27.309 --> 00:38:32.030
work remotely long before it was popular. They
00:38:32.030 --> 00:38:35.869
paid off a portion of my student loan. They hired
00:38:35.869 --> 00:38:40.070
me the most incredible coach, marketing coach,
00:38:40.369 --> 00:38:43.769
rather than hiring over me at a point when the
00:38:43.769 --> 00:38:45.829
intelligent thing to do to hire over me because
00:38:45.829 --> 00:38:47.590
the business was exploding. They just did all
00:38:47.590 --> 00:38:50.670
these things that were really, really I'm an
00:38:50.670 --> 00:38:55.429
employee -centric. And based on that, I saw in
00:38:55.429 --> 00:38:58.329
myself, I thought of the company as my own. I
00:38:58.329 --> 00:39:00.730
worked incredibly hard and I was very loyal.
00:39:00.730 --> 00:39:04.250
It was because of how I was treated. That really
00:39:04.250 --> 00:39:06.750
stuck with me. And as we started thinking about
00:39:06.750 --> 00:39:09.090
SETA and wanting to keep the team small and wanted
00:39:09.090 --> 00:39:13.199
to have people hear and all that. I basically
00:39:13.199 --> 00:39:16.179
said, how do we create this environment where
00:39:16.179 --> 00:39:19.380
the company is so good to the employee, that
00:39:19.380 --> 00:39:21.639
employee then wants to be so good to the company
00:39:21.639 --> 00:39:23.900
because the company is allowing the employee
00:39:23.900 --> 00:39:26.039
to do all of the things they want to do with
00:39:26.039 --> 00:39:29.800
their life outside of work. A person that, you
00:39:29.800 --> 00:39:34.219
know, lives to work to live much more so became
00:39:34.219 --> 00:39:38.039
like fundamental to, or trying to do with the
00:39:38.039 --> 00:39:40.719
structure. And it comes down to just small things
00:39:40.719 --> 00:39:44.070
in terms of how we work. Uh, there's no hierarchy
00:39:44.070 --> 00:39:46.949
at outside of like I'm a founder, but I'm not
00:39:46.949 --> 00:39:50.210
anybody's boss hire people we possibly can and
00:39:50.210 --> 00:39:53.010
say The skills that you've you've got figure
00:39:53.010 --> 00:39:55.489
out how to contribute to them and move us towards
00:39:55.489 --> 00:39:59.389
our goals Um one meeting a week where we try
00:39:59.389 --> 00:40:01.409
to get everybody there because it's our one time
00:40:01.409 --> 00:40:03.650
a week to sync up But other than that and work
00:40:03.650 --> 00:40:06.570
whenever you want. Um, nobody's you know After
00:40:06.570 --> 00:40:09.170
you are expecting you to be online at any certain
00:40:09.170 --> 00:40:12.099
or anything like that And all these things just,
00:40:12.280 --> 00:40:16.219
we want to create space for people to live awesome
00:40:16.219 --> 00:40:18.980
lives. And we think if we do that, they're more
00:40:18.980 --> 00:40:21.039
likely to work hard on behalf of the company
00:40:21.039 --> 00:40:23.880
that will drive the company's success. So I think
00:40:23.880 --> 00:40:29.039
so much of the like employer employee relation
00:40:29.039 --> 00:40:31.039
has traditionally been thought of through the
00:40:31.039 --> 00:40:34.019
lens of how does the company extract maximum
00:40:34.019 --> 00:40:37.280
value out of the employee. And we're trying to
00:40:37.280 --> 00:40:41.920
look the lens of how to give the employee everything
00:40:41.920 --> 00:40:44.440
they want. Because if we do that, then they're
00:40:44.440 --> 00:40:46.079
going to be like, wow, this thing is enabling
00:40:46.079 --> 00:40:48.480
me in an incredible way. And I'm going to work
00:40:48.480 --> 00:40:51.500
to make sure this thing endures and does what
00:40:51.500 --> 00:40:54.460
continues to be able to do that. So it's kind
00:40:54.460 --> 00:40:57.400
of a flip of the mindset. But to me, that's the
00:40:57.400 --> 00:41:00.760
most interesting part of entrepreneurship. I've
00:41:00.760 --> 00:41:03.500
worked in software forever. I'm deeply in need
00:41:03.500 --> 00:41:06.889
of software related stuff every day. but it's
00:41:06.889 --> 00:41:09.929
organizational design and how do you grow startups,
00:41:10.230 --> 00:41:12.570
that is really what gets me out of bed. Yeah,
00:41:12.809 --> 00:41:15.389
organizational design. I think when people are
00:41:15.389 --> 00:41:16.869
reading the blogs, I'm gonna link to them, I'm
00:41:16.869 --> 00:41:18.690
sure one of the questions they're gonna have
00:41:18.690 --> 00:41:20.909
in their mind, because people are used to things
00:41:20.909 --> 00:41:25.969
like planning and structure of some sort, and
00:41:25.969 --> 00:41:27.949
I'm sure one of the questions might be, especially
00:41:27.949 --> 00:41:30.190
when you're working for yourself, it's, well,
00:41:30.409 --> 00:41:32.230
one thing, because you can, it's easy to manage
00:41:32.230 --> 00:41:34.630
yourself. For some people, actually. Some people
00:41:34.630 --> 00:41:36.769
maybe not so easy. But when you're working in
00:41:36.769 --> 00:41:38.530
a group, there's going to always be this thought
00:41:38.530 --> 00:41:41.389
like, well, no forecasting and no budgeting.
00:41:42.110 --> 00:41:44.590
But you obviously do have to think about where
00:41:44.590 --> 00:41:46.289
you're going to allocate your resources, including
00:41:46.289 --> 00:41:48.869
your time and your money. So how do you go about,
00:41:49.090 --> 00:41:52.809
within the flat hierarchy structure, trying to
00:41:52.809 --> 00:41:54.739
figure out like... Which direction do we go?
00:41:54.840 --> 00:41:58.380
Do we invest in doing a trade show? Do we spend
00:41:58.380 --> 00:42:00.679
our time and effort pursuing this partnership?
00:42:00.800 --> 00:42:02.400
You know, whatever. There's lots of things that
00:42:02.400 --> 00:42:04.380
kind of get into this mix, which I think a little
00:42:04.380 --> 00:42:06.500
farther ahead. Yeah. Yeah. There's two things
00:42:06.500 --> 00:42:08.800
that are fundamental to making this work. The
00:42:08.800 --> 00:42:11.139
first one is transparency. So it doesn't work
00:42:11.139 --> 00:42:14.760
at all if all employees don't have access to
00:42:14.760 --> 00:42:16.519
all the information. So the employees need to
00:42:16.519 --> 00:42:18.760
know how much profit are we making? What does
00:42:18.760 --> 00:42:21.539
the bank look like, how much could we possibly
00:42:21.539 --> 00:42:24.739
spend because we're bootstrapped and we're limited
00:42:24.739 --> 00:42:27.559
by the actual cash that we have on hand and all
00:42:27.559 --> 00:42:30.539
of that. Just being transparent gives people
00:42:30.539 --> 00:42:33.280
a sense of what's possible. They're looking at
00:42:33.280 --> 00:42:36.739
all the cards, so to speak. The second part is
00:42:36.739 --> 00:42:39.880
honestly the equity because everybody has skin
00:42:39.880 --> 00:42:43.159
in the game to a much larger extent than you
00:42:43.159 --> 00:42:46.480
typically would. So that just drives misalignment.
00:42:47.159 --> 00:42:50.079
Everybody They shooting themselves in the foot
00:42:50.079 --> 00:42:52.619
if the company is not successful So we're all
00:42:52.619 --> 00:42:54.639
rowing in the same direction because I'll have
00:42:54.639 --> 00:42:57.519
really meaningful skin in the game That we all
00:42:57.519 --> 00:43:00.119
agree on what the path forward is investments.
00:43:00.139 --> 00:43:03.079
We should make and whatnot. Of course not So
00:43:03.079 --> 00:43:08.019
in that case, I would say guiding Rule today
00:43:08.019 --> 00:43:12.280
is the person who has a tease or the most expertise
00:43:12.280 --> 00:43:15.119
in a particular area of the decision so when
00:43:15.119 --> 00:43:17.860
it comes to marketing for example, I am the in
00:43:17.860 --> 00:43:19.980
-house marketer when it comes to what we're investing
00:43:19.980 --> 00:43:22.659
our money in from a marketing perspective, the
00:43:22.659 --> 00:43:26.360
team looks to me. When it's a decision, we look
00:43:26.360 --> 00:43:29.400
to the senior engineer who are most familiar
00:43:29.400 --> 00:43:31.400
with our tech stack and that kind of stuff. It's
00:43:31.400 --> 00:43:35.619
obvious, but it totally happens in a small team.
00:43:35.800 --> 00:43:38.800
There's not enough people that there's the need
00:43:38.800 --> 00:43:43.000
to aligns and titles and all of that. It happens
00:43:43.000 --> 00:43:45.949
relatively organically. Um, and then there's
00:43:45.949 --> 00:43:48.570
also just using a marketing invest as an example
00:43:48.570 --> 00:43:51.849
because everyone has all the information. Um,
00:43:51.989 --> 00:43:53.849
and we don't even have hard and fast rule in
00:43:53.849 --> 00:43:57.289
this, but to give you an example, if I were to
00:43:57.289 --> 00:43:59.730
go spend a thousand dollars to sponsor a new
00:43:59.730 --> 00:44:01.750
or something like that, I don't have to ask for
00:44:01.750 --> 00:44:03.949
permission. We have to do that. It's a marketing
00:44:03.949 --> 00:44:06.309
investment. I'm the person to make that. I just
00:44:06.309 --> 00:44:09.090
go do it. If I wanted to invest a hundred thousand
00:44:09.090 --> 00:44:11.809
dollars in something that makes a much bigger
00:44:11.809 --> 00:44:14.090
impact on the company at large. That is something
00:44:14.090 --> 00:44:16.260
we would get. or we would discuss, we would say,
00:44:16.440 --> 00:44:18.320
this is one of the major events we're thinking
00:44:18.320 --> 00:44:21.980
of making as a business. Why do this versus some
00:44:21.980 --> 00:44:24.519
other thing? And it becomes a conversation amongst
00:44:24.519 --> 00:44:29.260
the team. But day to day, that allows us to operate
00:44:29.260 --> 00:44:31.239
with a lot of velocity. You're not making these
00:44:31.239 --> 00:44:35.480
massive investment just day to day. So it creates
00:44:35.480 --> 00:44:37.679
a lot of you just operating that way, I think.
00:44:38.000 --> 00:44:39.699
Yeah, it's really interesting. It's funny how
00:44:39.699 --> 00:44:41.860
we're talking about. you know, business and business
00:44:41.860 --> 00:44:44.739
structure. But a lot of it's into economic and
00:44:44.739 --> 00:44:46.219
economic theory and political and political theory
00:44:46.219 --> 00:44:49.079
is not a political podcast whatsoever. I don't
00:44:49.079 --> 00:44:50.699
want to get into it, but there's a lot of people
00:44:50.699 --> 00:44:52.719
thinking about the same thing. Things work better
00:44:52.719 --> 00:44:55.570
in small teams where everybody is aligned. Can
00:44:55.570 --> 00:44:57.769
we think about that in terms of other structures
00:44:57.769 --> 00:45:00.070
in terms of, you know, maybe politics should
00:45:00.070 --> 00:45:01.530
work that way. Maybe we should worry. Maybe there's
00:45:01.530 --> 00:45:03.590
more of this demarche approach. There's lots
00:45:03.590 --> 00:45:06.090
of lots of thoughts about that. I think it's
00:45:06.090 --> 00:45:09.110
it's usually happens every few, whatever, hundred
00:45:09.110 --> 00:45:10.449
and two hundred something years when there's
00:45:10.449 --> 00:45:14.230
a big technological shift. There's often an economic
00:45:14.230 --> 00:45:17.269
and a political shift as well. And we're heading
00:45:17.269 --> 00:45:18.969
into that because there are times I feel like
00:45:18.969 --> 00:45:21.449
we're heading slowly into techno feudalism here.
00:45:22.389 --> 00:45:24.769
But we have large people with large interests.
00:45:24.590 --> 00:45:26.889
who are controlling a lot of decisions. But hey,
00:45:26.889 --> 00:45:30.070
that is a really big shift in the conversation
00:45:30.070 --> 00:45:32.329
here. So let's not do that. So let's get a little
00:45:32.329 --> 00:45:34.050
bit more into where you're at. And we have our
00:45:34.050 --> 00:45:37.210
rapid fires. I always love to get into. But the
00:45:37.210 --> 00:45:38.829
thing about this is for other founders who are
00:45:38.829 --> 00:45:40.730
listening to this podcast, of course, if they're
00:45:40.730 --> 00:45:42.190
interested in the product, encourage them to
00:45:42.190 --> 00:45:44.550
take a look at your product and not build those
00:45:44.550 --> 00:45:46.190
things themselves or deal with the challenge.
00:45:46.610 --> 00:45:48.389
But let's say they want to build an organization
00:45:48.389 --> 00:45:51.849
like yours. They have a team, maybe five, six,
00:45:51.849 --> 00:45:54.579
seven. They're trying to figure it out. Maybe
00:45:54.579 --> 00:45:56.300
they have some customers, they have a product
00:45:56.300 --> 00:45:58.900
that works, but they're doing the grinding thing
00:45:58.900 --> 00:46:01.320
where they're liking 80 hour weeks and they can't
00:46:01.320 --> 00:46:03.039
figure out how to get off the treadmill. Maybe
00:46:03.039 --> 00:46:05.320
what's some advice that you might give them to
00:46:05.320 --> 00:46:09.579
help shift their approach? Maybe some steps they
00:46:09.579 --> 00:46:11.699
should follow in some order to say, hey, you're
00:46:11.699 --> 00:46:14.179
doing it this way. You may run into the wall.
00:46:14.559 --> 00:46:16.719
There's another way. Here's what I encourage
00:46:16.719 --> 00:46:20.519
you to start thinking about. Yeah, the way that
00:46:20.519 --> 00:46:24.840
I think about it is, Almost any process within
00:46:24.840 --> 00:46:27.639
a business can optimize to some extent or try
00:46:27.639 --> 00:46:30.000
to automate or whatever. And most founders are
00:46:30.000 --> 00:46:32.719
smart enough to recognize that they can do that.
00:46:32.920 --> 00:46:35.340
However you're doing sales, however you're doing
00:46:35.340 --> 00:46:37.219
support, however you're doing marketing, you
00:46:37.219 --> 00:46:39.920
can squeeze some efficiency out of those things.
00:46:40.320 --> 00:46:42.559
And that certainly helps and you should certainly
00:46:42.559 --> 00:46:44.900
do things. We do that stuff every day too. We're
00:46:44.900 --> 00:46:47.679
trying to figure out how to... Do do more work
00:46:47.679 --> 00:46:50.360
in a scalable world? But I think the the big
00:46:50.360 --> 00:46:53.320
unlock if you are in that position where everything
00:46:53.320 --> 00:46:56.199
is a grind is more so this mindset of what can
00:46:56.199 --> 00:47:02.300
I just not do and For us that has been this pretty
00:47:02.300 --> 00:47:05.679
long laundry list of stuff. We don't have a dedicated
00:47:05.679 --> 00:47:08.039
support We have everybody contribute a little
00:47:08.039 --> 00:47:10.179
bit of their time to support don't do any sales.
00:47:10.179 --> 00:47:12.860
It's completely product -led growth We don't
00:47:12.860 --> 00:47:14.920
do salary negotiations. That's part of the reason
00:47:14.920 --> 00:47:18.019
we we have this standardized salary. We don't
00:47:18.019 --> 00:47:20.679
waste time on forecasting and budgeting. Just
00:47:20.679 --> 00:47:23.840
try to do what we think is the best long -term
00:47:23.840 --> 00:47:28.320
business day to day. We don't put together board
00:47:28.320 --> 00:47:30.719
decks or investor stuff because we don't have
00:47:30.719 --> 00:47:33.619
investors and you said we never will. So all
00:47:33.619 --> 00:47:36.559
these things are these very explicit decisions
00:47:36.559 --> 00:47:39.539
that we made and there's certain trade -offs
00:47:39.539 --> 00:47:42.420
with all of them. But if you add up the amount
00:47:42.420 --> 00:47:44.619
of time that typically goes into those things
00:47:44.619 --> 00:47:47.760
collectively, it is massive. And if we tried
00:47:47.760 --> 00:47:49.900
to do all those things with the five people that
00:47:49.900 --> 00:47:52.480
we have at Outseta, we would never be able to
00:47:52.480 --> 00:47:56.739
do the much more what we deem meaningful work,
00:47:57.119 --> 00:47:59.599
which is building product, marketing, customer
00:47:59.599 --> 00:48:03.139
service. So that's where I would start challenge
00:48:03.139 --> 00:48:06.380
re -assumption around what it is that you need
00:48:06.380 --> 00:48:09.739
to do. And some of that you can probably eliminate.
00:48:10.210 --> 00:48:11.989
Altogether or outsource or whatever it might
00:48:11.989 --> 00:48:14.750
be. Yeah, that's those things I'm thinking about.
00:48:14.829 --> 00:48:16.989
This goes back to the old Timothy Ferris and
00:48:16.989 --> 00:48:19.570
for our work requires like eliminate, eliminate,
00:48:19.570 --> 00:48:22.710
automate, outsource. That's how you think. How
00:48:22.710 --> 00:48:25.349
do you think about the elimination part we got?
00:48:25.690 --> 00:48:27.550
We actually have a great blog post on all that.
00:48:27.769 --> 00:48:30.269
How do you think about the outsource part? Like
00:48:30.269 --> 00:48:31.690
in where you're like, OK, well, this has to be
00:48:31.690 --> 00:48:33.210
done, but this probably shouldn't be done by
00:48:33.210 --> 00:48:35.510
us. We're going to trade our money for time.
00:48:35.829 --> 00:48:37.289
How do you know when and how do you think about
00:48:37.289 --> 00:48:40.949
that? A perfect example of that, and not that
00:48:40.949 --> 00:48:43.530
this is an uncommon example, but it's like our
00:48:43.530 --> 00:48:46.710
year -end accountant bookkeeping. We've got an
00:48:46.710 --> 00:48:49.650
accountant and we give them access to our Stripe
00:48:49.650 --> 00:48:52.909
and they go into that. I could do that. My co
00:48:52.909 --> 00:48:55.489
-founder could do that. We're familiar with that
00:48:55.489 --> 00:48:57.170
type of work, but it's just like, this is not
00:48:57.170 --> 00:49:00.010
core to pushing this business forward. It is
00:49:00.010 --> 00:49:01.789
not horribly expensive. It's something we can
00:49:01.789 --> 00:49:03.750
take off our plate and not think about whatsoever.
00:49:04.309 --> 00:49:06.750
That's a decision to outsource. That makes sense.
00:49:07.360 --> 00:49:09.739
Okay, great. Well, hey, this is fantastic. I
00:49:09.739 --> 00:49:11.420
can probably go for hours. You probably will.
00:49:11.719 --> 00:49:13.840
I think I encourage our listeners to reach out.
00:49:14.159 --> 00:49:16.719
but we get into our rapid fire. So I always ask
00:49:16.719 --> 00:49:19.559
the same three questions for all of our founders,
00:49:19.619 --> 00:49:22.539
whether they're big team, you know, small team
00:49:22.539 --> 00:49:24.659
founders within large organizations or small
00:49:24.659 --> 00:49:26.980
team founders who are just doing their own thing
00:49:26.980 --> 00:49:28.860
by themselves. So I always ask these same three.
00:49:29.239 --> 00:49:32.280
The first question has to do with tools. So think
00:49:32.280 --> 00:49:36.000
about yourself and for your own personal experience.
00:49:36.380 --> 00:49:39.460
What is one tool or automation that you absolutely
00:49:39.460 --> 00:49:41.719
can't run your business without? The one that
00:49:41.719 --> 00:49:45.369
gives you and your team 10x leverage every single
00:49:45.369 --> 00:49:50.429
week? Yeah, that's a good question. I would bring
00:49:50.429 --> 00:49:55.090
this back to a previous point around, not elimination
00:49:55.090 --> 00:49:59.710
in this case, but just variables that don't change.
00:49:59.809 --> 00:50:01.710
In this case, it's going to sound self -serving,
00:50:01.730 --> 00:50:04.710
but I don't mean it specific to Outseta. We started
00:50:04.710 --> 00:50:07.889
using Outseta from day one in our business as
00:50:07.889 --> 00:50:10.050
our tech stack, and we have not changed that
00:50:10.050 --> 00:50:13.760
in 10 years. Um, and I, I think, uh, this is
00:50:13.760 --> 00:50:17.159
a great example of, I see so many founder friends
00:50:17.159 --> 00:50:20.820
all the time who, you know, some new customer
00:50:20.820 --> 00:50:23.280
service tool comes out or a new CRM or they want
00:50:23.280 --> 00:50:26.340
us payment providers or whatever. And these become
00:50:26.340 --> 00:50:30.059
these huge projects internally that take enormous
00:50:30.059 --> 00:50:32.980
time and effort. And maybe they're after benefit
00:50:32.980 --> 00:50:36.400
of these, these new tools. But I, I think the
00:50:36.400 --> 00:50:40.460
point here is just consistency and finding a
00:50:40.460 --> 00:50:44.570
system that works. continuing to use it is iterated.
00:50:45.150 --> 00:50:47.969
And I, again, I don't mean that through the lens
00:50:47.969 --> 00:50:50.170
of outside of whatever your tech sack is. And
00:50:50.170 --> 00:50:52.050
I think you hear this a lot from developers when
00:50:52.050 --> 00:50:55.309
it comes to, like, you can build projects with
00:50:55.309 --> 00:50:57.409
PHP. PHP has been around forever. It's the same
00:50:57.409 --> 00:51:00.429
mindset. It's find what works and stick, stick
00:51:00.429 --> 00:51:03.710
with it. That is probably my biggest advice.
00:51:03.849 --> 00:51:08.309
I don't have a particular, like, mind blowing
00:51:08.309 --> 00:51:11.369
automation that comes to mind. As I think through
00:51:11.369 --> 00:51:13.449
that lens, the only example I can give you is
00:51:13.449 --> 00:51:18.389
a common one these days. We have trained a support
00:51:18.389 --> 00:51:22.070
agent on our docs and whatnot, and that has sort
00:51:22.070 --> 00:51:25.409
of become our level one support. I would say
00:51:25.409 --> 00:51:29.409
I was very hesitant to do that. I have been a
00:51:29.409 --> 00:51:32.949
pretty outspoken proponent. are not proponent
00:51:32.949 --> 00:51:36.570
of these AI -based chat tools. I hate myself
00:51:36.570 --> 00:51:39.769
as a customer. I think they create bad customer
00:51:39.769 --> 00:51:43.670
experiences. So we were very hesitant to do this
00:51:43.670 --> 00:51:46.789
ourselves. We did implement this. It did make
00:51:46.789 --> 00:51:50.090
a significant difference for us as a business.
00:51:50.150 --> 00:51:52.110
And I think that the approach that we took is
00:51:52.110 --> 00:51:54.090
what I would recommend to other people considering
00:51:54.090 --> 00:51:57.170
this. If people come to our website and they
00:51:57.170 --> 00:52:00.929
have a question, they start by asking an AI agent.
00:52:01.389 --> 00:52:04.170
And if they get a response that answers the question,
00:52:04.210 --> 00:52:06.929
great. If they don't immediately route them to
00:52:06.929 --> 00:52:11.289
a person. And what I think that has taught us
00:52:11.289 --> 00:52:13.869
and I think the benefit of these sorts of workflows
00:52:13.869 --> 00:52:18.929
is it's remarkable how often somebody will get
00:52:18.929 --> 00:52:23.130
an answer from an AI agent. And if they don't,
00:52:23.449 --> 00:52:26.590
you can route them appropriately. So that's been
00:52:26.590 --> 00:52:29.260
a pretty good. pretty good unlock for us from
00:52:29.260 --> 00:52:32.059
automation perspective. But that's all I got.
00:52:32.760 --> 00:52:34.300
Yeah, and it's actually becoming I'm starting
00:52:34.300 --> 00:52:36.099
to hear more and more of that, which is let the
00:52:36.099 --> 00:52:38.599
customer choose their own support path. Because
00:52:38.599 --> 00:52:40.019
there are some things we're like, I don't need
00:52:40.019 --> 00:52:42.199
to talk to someone. I just like how do I do this?
00:52:42.280 --> 00:52:45.230
I'm having a billing question or. You know, whatever
00:52:45.230 --> 00:52:46.969
the question is, is like self -service is good.
00:52:47.050 --> 00:52:49.329
In some cases, they want self -service, especially
00:52:49.329 --> 00:52:50.869
if they're dealing with things like cancellation.
00:52:50.949 --> 00:52:53.309
They don't want to talk to someone. But but but
00:52:53.309 --> 00:52:54.789
but then there are other things where it looks
00:52:54.789 --> 00:52:56.309
like, you know, I don't want to be I don't want
00:52:56.309 --> 00:52:58.630
to go through agent hell with agents like stupid.
00:52:58.630 --> 00:53:00.489
And I just want to talk to someone that they're
00:53:00.489 --> 00:53:04.230
talking about. So I think realistically, we like
00:53:04.230 --> 00:53:06.010
we had shot ourselves in the foot a little bit.
00:53:06.030 --> 00:53:09.429
And this is mostly my fault. But we had we had
00:53:09.429 --> 00:53:11.869
like we had gone so far in the other direction.
00:53:12.269 --> 00:53:14.710
that we had trained people, the minute they had
00:53:14.710 --> 00:53:16.869
any question, they should submit a support ticket.
00:53:17.289 --> 00:53:19.489
And as a result, we were getting tons of support
00:53:19.489 --> 00:53:21.590
tickets that were very basic prompts because
00:53:21.590 --> 00:53:23.630
people just, if you give them a crutch, they're
00:53:23.630 --> 00:53:26.250
going to lean on the crutch. And now just by
00:53:26.250 --> 00:53:28.630
sort of forcing them to ask the question and
00:53:28.630 --> 00:53:31.889
see if basic queries can be answered, some percentage
00:53:31.889 --> 00:53:33.929
can, and the hard stuff gets through to us and
00:53:33.929 --> 00:53:37.119
we give them the... personal support we've always
00:53:37.119 --> 00:53:39.619
done. You got triaging at work. That's important.
00:53:40.199 --> 00:53:41.820
Well, Kate, let's move on to the next rapid fire.
00:53:41.920 --> 00:53:43.059
Actually ended up being a little longer than
00:53:43.059 --> 00:53:45.780
rapid fire. I have no problem with that. So the
00:53:45.780 --> 00:53:48.659
next question we ask is about processes and methods.
00:53:49.320 --> 00:53:52.420
So what system or process do you think every
00:53:52.420 --> 00:53:54.539
lean leverage first team should have in place
00:53:54.539 --> 00:53:56.579
by the time they hit their first million dollars
00:53:56.579 --> 00:53:58.659
in revenue? I think that separates the ones who
00:53:58.659 --> 00:54:00.340
are truly getting scale, like the ones where
00:54:00.340 --> 00:54:02.559
you put in an hour of effort and you get 10 hours
00:54:02.559 --> 00:54:05.039
of return. That separates them from the grinder.
00:54:05.070 --> 00:54:06.929
where they spend all this time and effort to
00:54:06.929 --> 00:54:08.329
get to the first million. You're going to spend
00:54:08.329 --> 00:54:10.250
twice as much effort to get to the second million.
00:54:10.710 --> 00:54:12.269
Maybe what's one thing you might tell people
00:54:12.269 --> 00:54:14.789
to stop doing? I know you already gave some advice
00:54:14.789 --> 00:54:16.949
about that. Or maybe something they should start
00:54:16.949 --> 00:54:19.809
doing today. So I'll go in a much different direction
00:54:19.809 --> 00:54:22.150
on this one. Everyone is going to say some sort
00:54:22.150 --> 00:54:25.489
of automation or whatnot. For me, it's hiring.
00:54:26.590 --> 00:54:30.710
So I hear so much from founders and business
00:54:30.710 --> 00:54:34.480
people. the moaning that hiring is is so hard
00:54:34.480 --> 00:54:36.599
and this that and the other thing and i have
00:54:36.599 --> 00:54:39.420
a really strong opinion that it's not i think
00:54:39.420 --> 00:54:42.960
the the difference is people do not put the effort
00:54:42.960 --> 00:54:45.679
into hiring that they put into sales or product
00:54:45.679 --> 00:54:48.039
development or these other areas of the business
00:54:48.039 --> 00:54:50.780
it's kind of this thing that is done passively
00:54:50.780 --> 00:54:54.000
and if you want to drive real efficiency you
00:54:54.000 --> 00:54:56.699
need to treat hiring as a you know priority 1a
00:54:56.699 --> 00:54:58.599
i argue it is the most important thing that you
00:54:58.599 --> 00:55:01.219
do because you get the right people on the bus
00:55:01.219 --> 00:55:05.960
and you just explosion of productivity. So treating
00:55:05.960 --> 00:55:08.860
it as a first -class priority is my answer. You
00:55:08.860 --> 00:55:11.079
got me really thinking here because if you want
00:55:11.079 --> 00:55:13.039
to treat them the same, you want to treat your
00:55:13.039 --> 00:55:15.820
hiring and employee and team, team growing is
00:55:15.820 --> 00:55:17.440
the way I like to think of it because we're small
00:55:17.440 --> 00:55:19.690
teams, right? If you want to treat it like sales
00:55:19.690 --> 00:55:21.429
and marketing, then if we have an ideal customer
00:55:21.429 --> 00:55:23.969
profile, we should probably have an ideal employee
00:55:23.969 --> 00:55:26.570
profile or an ideal teammate profile. And if
00:55:26.570 --> 00:55:28.409
we don't do anything in sales and marketing that
00:55:28.409 --> 00:55:30.590
doesn't cater to the ICP, we probably shouldn't
00:55:30.590 --> 00:55:32.090
be doing anything on the teammates side that's
00:55:32.090 --> 00:55:34.590
not catering to the ITP or IEP, whatever you
00:55:34.590 --> 00:55:37.530
want to call it. Yeah, exactly. And I think one
00:55:37.530 --> 00:55:40.769
of the things that we certainly look for, and
00:55:40.769 --> 00:55:42.989
you screen for it and you build it into the hiring
00:55:42.989 --> 00:55:45.809
process, is this employee going to come in and
00:55:45.849 --> 00:55:48.610
Um, dramatically increase output compared to
00:55:48.610 --> 00:55:51.710
your normal. Are they going to find ways to be.
00:55:51.989 --> 00:55:54.449
Subtly scalable human being. And what evidence
00:55:54.449 --> 00:55:56.710
do we have that they're actually going to do
00:55:56.710 --> 00:55:59.090
that? That's probably the number one thing we
00:55:59.090 --> 00:56:03.130
look for at this. There's plenty of super talented
00:56:03.130 --> 00:56:06.590
people, um, you know, that don't deliver that
00:56:06.590 --> 00:56:09.010
they were come in and work at a different pace
00:56:09.010 --> 00:56:11.250
and know how to kind of connect their output,
00:56:11.530 --> 00:56:14.260
despite their talent. And there's other people
00:56:14.260 --> 00:56:16.059
that do, and that's something we try to suss
00:56:16.059 --> 00:56:19.400
out when we hire. Fantastic. So last rapid for
00:56:19.400 --> 00:56:21.860
a question has to do with tips. So if you can
00:56:21.860 --> 00:56:24.340
give an additional piece of advice to a founder
00:56:24.340 --> 00:56:26.440
who's running that dinner table size team right
00:56:26.440 --> 00:56:30.539
now who wants to scale, but is having this starting
00:56:30.539 --> 00:56:32.239
problems because you were in that start phase
00:56:32.239 --> 00:56:34.340
for took a while to get the engine going. But
00:56:34.340 --> 00:56:36.960
you got there. Maybe what was maybe some one
00:56:36.960 --> 00:56:38.800
of these insights, probably in your blog somewhere,
00:56:38.980 --> 00:56:40.260
but like one of these insights that sort of got
00:56:40.260 --> 00:56:42.849
you out of that first just trying to get things
00:56:42.849 --> 00:56:44.469
off the ground phase where it's like, oh no,
00:56:44.610 --> 00:56:47.150
things now really are taking off. Yeah, I think
00:56:47.150 --> 00:56:51.489
as it pertains to startups, you need to have
00:56:51.489 --> 00:56:55.309
an honest conversation about what you're actually
00:56:55.309 --> 00:56:58.730
building and whether you know there's a market
00:56:58.730 --> 00:57:01.289
for it. I see this with our customer base is
00:57:01.289 --> 00:57:04.110
largely early stage startups all the time. And
00:57:04.110 --> 00:57:07.070
I see this constantly with they've worked on
00:57:07.070 --> 00:57:09.690
something for six months or a year or three years
00:57:09.690 --> 00:57:12.440
and it's not going where they want it to go,
00:57:12.719 --> 00:57:17.539
and they are not honestly assessing why that
00:57:17.539 --> 00:57:21.159
is. I'll give you two examples. One is, in this
00:57:21.159 --> 00:57:24.000
case, we didn't build anything new and novel,
00:57:24.179 --> 00:57:26.619
right? We built a CRM and a payment system and
00:57:26.619 --> 00:57:30.460
an authentication tool. These were very established
00:57:30.460 --> 00:57:33.800
known categories of software. So when we looked
00:57:33.800 --> 00:57:36.900
at why we weren't growing, I have a very high
00:57:36.900 --> 00:57:39.849
degree of conviction. It wasn't As of what we
00:57:39.849 --> 00:57:41.849
were building, it was because what we had built
00:57:41.849 --> 00:57:45.530
good enough yet. We were, we had to really get
00:57:45.530 --> 00:57:48.329
each of those tools to the point was competitive
00:57:48.329 --> 00:57:51.590
with the alternative. I had a lot of faith that
00:57:51.590 --> 00:57:54.789
once we did that growth would come. Um, that's
00:57:54.789 --> 00:57:57.769
why we stuck it out. Three years to a few thousand
00:57:57.769 --> 00:58:01.369
dollars in MRR and decided to keep going when
00:58:01.369 --> 00:58:03.449
you get the evidence in the business at that
00:58:03.449 --> 00:58:05.389
point. And there's no place to keep going. You
00:58:05.389 --> 00:58:08.389
just spent three years building the 3000 MRR.
00:58:08.590 --> 00:58:11.869
Any objective person would tell it's nuts, but
00:58:11.869 --> 00:58:15.730
we knew that there was there. I see so many founders
00:58:15.730 --> 00:58:19.710
are trying to build something new and they think
00:58:19.710 --> 00:58:21.829
that they have a growth problem. They think they
00:58:21.829 --> 00:58:23.769
need more marketing. They think that they need
00:58:23.769 --> 00:58:26.630
venture capital where it might be. But the truth
00:58:26.630 --> 00:58:29.489
is they're just building that people don't want.
00:58:30.789 --> 00:58:32.889
Like that is the thing that I try to help people
00:58:32.889 --> 00:58:35.210
suss out when I'm asked these questions. It's
00:58:35.210 --> 00:58:38.840
like, do you that there is a market? for your
00:58:38.840 --> 00:58:40.940
thing and your product just isn't good enough
00:58:40.940 --> 00:58:42.380
yet, or you haven't figured out how to market
00:58:42.380 --> 00:58:45.760
it or whatnot. Or do you fundamentally have a
00:58:45.760 --> 00:58:48.000
demand problem because you're building something
00:58:48.000 --> 00:58:50.880
where the just isn't big enough or there's not
00:58:50.880 --> 00:58:53.320
a large enough market to support the type of
00:58:53.320 --> 00:58:55.699
business you're trying to. Yeah, that's really
00:58:55.699 --> 00:58:57.440
and it's hard to think for founders especially
00:58:57.440 --> 00:58:59.400
if they've put their time and effort and money
00:58:59.400 --> 00:59:01.860
and roll either their Visibility into or whatever
00:59:01.860 --> 00:59:04.019
it is the reputation. It's hard for people to
00:59:04.019 --> 00:59:07.239
say maybe maybe I shouldn't be doing that But
00:59:07.239 --> 00:59:09.639
you have to sort of disconnect yourself in some
00:59:09.639 --> 00:59:12.500
ways look a little Less passionate because at
00:59:12.500 --> 00:59:13.960
the end of the day what's worse, you know spending
00:59:13.960 --> 00:59:16.440
time on something that nobody cares about or
00:59:16.440 --> 00:59:19.099
the Reputational damage of changing your mind,
00:59:19.179 --> 00:59:22.000
you know focusing on something else. So I like
00:59:22.000 --> 00:59:24.960
that exactly Well, anyway, this has been fantastic
00:59:24.960 --> 00:59:27.079
as mentioned. This is court. This is exactly
00:59:27.079 --> 00:59:29.400
the kind of interview that is like perfect for
00:59:29.400 --> 00:59:31.960
this podcast I really hope folks listen to it.
00:59:31.960 --> 00:59:33.980
I want you to share it I want to thank you Jeff
00:59:33.980 --> 00:59:37.139
so much for sharing your time your insights and
00:59:37.139 --> 00:59:39.980
just all this Support you're providing to this
00:59:39.980 --> 00:59:42.380
network and proof that this way of building a
00:59:42.380 --> 00:59:44.460
business actually does work I like to think so.
00:59:44.460 --> 00:59:48.400
It's been a it's been a fun fun challenge our
00:59:49.009 --> 00:59:50.889
I'm planning to do this for a long time more
00:59:50.889 --> 00:59:54.010
and if I can advocate for more companies building
00:59:54.010 --> 00:59:56.699
small, but my. That's something I love to do.
00:59:56.840 --> 00:59:59.260
So thanks for me. Yeah. Well, thank you. So for
00:59:59.260 --> 01:00:00.579
those who are going to follow up some more, I'm
01:00:00.579 --> 01:00:02.000
going to provide some links in the show notes
01:00:02.000 --> 01:00:03.739
for those listeners who are listening. You could
01:00:03.739 --> 01:00:06.800
find Jeff Roberts, that's G -E -O -F -F Roberts
01:00:06.800 --> 01:00:11.400
on Twitter and in bluesky at Jeff Roberts, actually
01:00:11.400 --> 01:00:15.159
at Jeff T. Roberts, Twitter slash X and bluesky
01:00:15.159 --> 01:00:18.260
at jeffroberts .bsky .social. You could find
01:00:18.260 --> 01:00:21.079
them on LinkedIn as well. Definitely go to the
01:00:21.079 --> 01:00:23.070
website. You can. find out about the product,
01:00:23.110 --> 01:00:25.630
but also about all these blog posts. So if you
01:00:25.630 --> 01:00:28.710
go to Outseta, that's O -U -T -S -E -T -A dot
01:00:28.710 --> 01:00:31.030
com. Definitely take a look at the posts, the
01:00:31.030 --> 01:00:33.030
equal compensation model, the payment structure
01:00:33.030 --> 01:00:35.789
model, the growth by elimination article, the
01:00:35.789 --> 01:00:37.889
seven year updates, the nine year updates, the
01:00:37.889 --> 01:00:40.550
SAS operating agreements. All that stuff is there.
01:00:40.590 --> 01:00:42.590
It's public. It's transparent. You heard it.
01:00:42.730 --> 01:00:46.409
You heard why. And I want you to subscribe to
01:00:46.409 --> 01:00:48.150
this podcast if you're not already and forward
01:00:48.150 --> 01:00:50.519
this. The podcast, for those founders who are
01:00:50.519 --> 01:00:52.500
listening who are doubting whether or not you
01:00:52.500 --> 01:00:55.420
can truly build a small team that scales, that
01:00:55.420 --> 01:00:58.619
serves over a thousand businesses with over seven
01:00:58.619 --> 01:01:01.260
figures of revenue, this podcast is the proof.
01:01:01.340 --> 01:01:04.719
So I want you to think big, stay lean and scale
01:01:04.719 --> 01:01:08.760
smarter. Small teams that scale big aren't the
01:01:08.760 --> 01:01:11.719
future, they're the now. If this episode has
01:01:11.719 --> 01:01:14.440
you inspired to learn more, hit that subscribe
01:01:14.440 --> 01:01:17.300
button, share it with your crew, and join the
01:01:17.300 --> 01:01:21.460
movement over at Scalabrate .com. That's S -C
01:01:21.460 --> 01:01:27.039
-A -L -E -B -R -A -T -E dot com. Until next time,
01:01:27.360 --> 01:01:31.280
think big, stay lean, and scale smarter. Because
01:01:31.280 --> 01:01:34.539
small teams have mega potential. And thanks for
01:01:34.539 --> 01:01:37.599
tuning in to the Small Team Big Skill Podcast.