Rob Walling, Co-founder, Drip
Rob Walling’s DIY Startup Success
The serial entrepreneur talks about the freedom and huge payoffs that can come from humble, bootstrapped companies.
Ever since the entrepreneurial itch first infiltrated Rob Walling’s life, he’s been working hard to avoid working for someone else—bosses, consulting clients, even investors. As a result, he’s become the quintessential serial entrepreneur, bootstrapping his way from one project to the next in a scrappy climb to success.
Walling currently wears many hats. He has been at the helm of several tech companies like Drip, Micropreneur, HitTail and DotNetNovice. His keeps a regular entrepreneurship blog, which he parlayed into the book Start Small and Stay Small: A Developer’s Guide to Launching a Startup. In his spare time, he’s a podcaster, conference host, teacher, angel investor, and audio book junkie.
But his entrepreneurial journey began when Walling left his full-time job and began consulting and freelancing. The move was great at first, but he soon found that freelancing and consulting was a lot like working for someone else.
His new dream was products—to build something that people would buy on his own terms without the watchful gaze of a boss. But it didn’t work like that. Instead, Walling’s second transition came when he acquired a small software application and tasted true freedom. As he puts it, “My goal was to cobble together enough of a portfolio so that I could stop consulting.”
His acquisitions ran the gamut from a site that sold beach towels (but ranked high on Google) to a book on bonsai trees. But eventually, he was able to give up consulting completely. He developed a strategy built on incremental progress—a solid stair-climbing approach that has made every acquisition his biggest yet.
When transitioning from consulting to products, Walling started small (generating a few hundred dollars a month) and worked with the product to promote its growth. He did not try to launch or even grow multiple things simultaneously. Instead, he believes in focusing on a single project until it is capable of generating income with minimal involvement.
The Silicon Valley Myth
Walling is a bootstrapper, through and through. He warns against getting caught up in the Silicon Valley myth that success is a reward reserved for billion dollar companies with boatloads of funding, and he patently rejects the theory that the only businesses that matter are funded businesses.
To Walling, most investors are a lot like bosses. They require you to sacrifice working on your dream so that you can prepare slide decks; they use artificial metrics, like headcount, to measure growth. “Headcount is not a bragging right…you don’t need 50 people to run an eight-figure business. You can do it with 10 or 20.”
As he sees it, there are no downsides to self-funding. Going it alone forces you to “build a real business instead of a dreamy unicorn goal.” Too many entrepreneurs look at funding as permission—launching is scary and lack of funding becomes an easy scapegoat.
According to Walling, there are really only three commodities: time, skillsets, and money. Any two out of the three are required to start a small business. If money is scarce but time and skills are plentiful, invest what you have.
Spend the time and use your skills to gain money. If money and skills are plentiful but time is hard to come by, use the money and knowledge to find and teach the best resources. Lacking skills? Invest the money and the time in acquiring the skill. Any way you slice it, it just takes two.
That said, as an angel investor, there are times when Walling believes that funding is a good thing. He advises new entrepreneurs to wait until they have a proven product and a 12 to 18 months of funds (enough to live and run the company) before trading in their flexibility and autonomy for funding. Funding is also necessary for startups looking to break into a horizontal market (one with a wide range of buyers). Bootstrapping only works on niche businesses, and while it is certainly possible to expand into other markets in the future, initial efforts and resources of a bootstrapped business must have a narrow focus.
The Two Sides of Rob Walling
The portfolio that Walling worked so hard to develop is now robust, and he divides his time between two main endeavors: products and community.
On the product side are things like HitTail and Drip. Walling acquired HitTail after several years of promoting his book and traveling around for speaking engagements and conferences. He was thirsty for a project that would spark his own learning and through which he could gain new experiences. After owning the company for four years he gained the confidence he needed to tackle his next venture, Drip.
The Drip team is a first for Walling. He has tackled all of his other ventures as a one-man-show, with the occasional assist from a contractor. Drip is different; the team of five will soon grow to seven. The company’s consistent month-on-month growth is sustained by focusing only on the one to two channels that provide the most benefit—for Drip, those are word of mouth and content marketing.
On the community side, Walling reaches his followers through his book, podcasts, speaking engagements and conferences. Each of which he has matured to the point of requiring minimal involvement. He has long-term resources in place to ensure that each of these runs smoothly allowing him to focus on Drip.
Scaling from Small and Profitable to an 8-Figure Business with Rob Walling
As a bootstrapping evangelist, Walling knows what it takes to bring a business to the next level.
Are we in a space that will provide a decade or two of stability?
If your product is reliant upon something that is beyond your control and is likely to change in the next 10 years, you’re not ready.
Should I go through a small round of funding?
If you do it right, with the right people, you will only need one round. The right investors are not going to force you to make arbitrary changes (like increased headcount).
Confidence is key. Know that if you have brought your business to the seven-figure mark, “You have the skillset to do whatever you want. You are a very unique, gifted, and talented person. Not many people can do that. Have the confidence in yourself to know that you can pull it off.”
If you want to grow, surround yourself with other founders who are just ahead of where you are and then follow what they do. Participate in a mastermind group to gain guidance and actively seek knowledge.
Walling has also learned a tremendous amount from more than 300 audio books on his shelf, and he has applied these lessons in each phase of growth.
Rob Walling’s Bootstrapping Book Club Picks:
- The 80/20 Manager: The Secret to Working Less and Achieving More by Richard Koch
- Startup CEO: A Field Guide to Scaling Up Your Business by Matt Blumberg
- Work the System: The Simple Mechanics of Making More and Working Less by Sam Carpenter
- Built to Sell: Creating a Business That Can Thrive Without You by John Warrillow
- What to do when you want to bootstrap and how to make it work
- The secrets to keeping yourself in check and managing expectations
- The secrets to self-confidence in the startup world
- How to build yourself a top mastermind group
- What it takes to ensure that you have a proven product that people will love
Full Transcript of Podcast with Rob Walling
Nathan: Hey guys welcome to another episode of the founder podcast my name is Nathan Chan and I am your host, I am the CEO, and publisher of Foundr Magazine. And its really, really awesome to have you listening and sharing your earbuds with me. Now before we talk about today’s episode, I just want to give you a quick update with where I’m at. So pretty much I just came back from a little bit of a holiday, a little bit of a conference/speaking session at the tropical think tank in the Philippines. And what was really, really, interesting was just the power of in-person stuff. I’d never been to many conferences before and had some amazing takeaways. Learned a whole ton, met a whole ton of cool people, and it, I’m super, super re-energized and back, and ready to roll, and absolutely crush 2016.
So I guess like any good horse, you need to send your horse to the paddock and you can’t race it every single week. And I was pretty burnt out. So I took some much-needed break, and now I’m super re-energized and very, very, excited to get back into the swing of things. So about today’s episode it’s with a guy called Rob Walling and he’s the founder of an email marketing company called Drip. And Rob shares with us so much gold around email marketing, customer acquisition, bootstrap versus venture funded startups. He’s a very, very, proud bootstrapped entrepreneur. And he’s bootstrapped many companies, exit many companies, and he’s just a very, very, great teacher. And know so much when it comes to starting a company, building it,growing it, and then at the end of the spectrum selling it. So, I know you’re going to get a lot of value from this one. Me and Rob talked about a lot of things that I guess I’ve never really touched on in the show. So guys look if you are enjoying these episodes please do take the time to leave us a review it helps more than you can imagine. And please do tell your friends, spread the word. If you have any friends that are interested in entrepreneurship or they are entrepreneurs, please do let me know about the show I’d love for you could if you could do that for me, every little bit helps. All right guys now jump into the show.
Nathan: So the first question I’ll ask you is the question we ask everyone that comes on is how to get your job?
Rob: Oh, interesting. How do you get my job?
Nathan: How’d you get your job?
Rob: How did I get my job? It was more than a decade of stair stepping my way up the ladder. Of basically launching small products and figuring fumbling my way around. Figuring things out, and then parlaying that knowledge, and that revenue from that small product, and I mean products making hundreds of dollars a month, very small into ones that then made a few thousand a month, and then some that made tens of thousand a month, and that’s how I found myself here. It genuinely feels like just this kind of steady stair-step journey.
Nathan: Okay interesting. And what is your background?
Rob: My background is in software development, but I’ve always had kind of an entrepreneurial bent. I did sell comic books and candy and junior high, and I’ve wrote booklets this is before their that really the internet so is instead of e-books, I wrote actual
physical booklets on topics like comic book collecting and just things that I felt like I had expertise in and I sold them through classified ads in little local Pennysaver things. And I always wanted to start some type of tech company and that was that was kind of how I got here.
Nathan: Awesome. And can you take us back to, I guess so were you working a day job as a software developer? And then you can made that transition?
Rob: Yeah, that’s right yeah.
Nathan: And did you start with your your blog? Like how did it all start, man?
Rob: Yeah, I made two transitions really. I made one from salaried employment to basically consulting / freelance which was a really nice shift for me because it gave me a little more time and location independence because it was all remote work so I can live
anywhere in the states. But the bigger jump the one that I had thirsted for more and took you know way too long, but it was took me about maybe six or seven years from the time I really started trying to do it was the jump into products, to whereas making a full
time income and then I truly had that freedom of like your own boss because then you don’t have clients anymore, right? You don’t have someone who who can dictate that. And that happened in like 2008-2009. And it was something I’d been wanting for decades, but had really only been going after it for like I said maybe six or seven years in a way that
where I was actually making progress on it.
Nathan: I see, and can you tell us like walk us through like, I guess your product road map. What has been, what did you start first? You’ve got a series of companies drip, hit tail. You’ve got a microprinter.com. You’ve got so like a community. You’ve got a podcast, that’s it’s very, very, popular startups for the rest of us. So you’ve worked on many, many, different things. I’d love to hear just that chronological order of how things come about.
Rob: Yeah that makes sense, it’s a good question. I do a lot or I’m involved in a lot, but that definitely didn’t happen over night. It really started about a decade ago in 2005 and it’s as you referenced earlier it started with my blog, and I just started writing down my thoughts as a developer working for a full-time gig for a company. And I was giving thoughts about that and really, what I built a little bit of an audience, but it wasn’t that interesting. And as soon as I started making the shift into the entrepreneurial thinking and started going after being a bootstrapped software entrepreneur. That’s when I saw that the exponential growth of the audience right away or within a few months. And the big turning point was right around 2005 because before that I had launched some little efforts and really had spent a lot of time, didn’t know what I was doing, and I was too… too caught up in the kind of the Silicon Valley mindset I’ll say. I live here in California and I was reading Inked Magazine and business 2.0 and entrepreneur magazine and all those the press basically TechCrunch. I don’t know if it was around then, but that kind of stuff. And it fills your head with the thought that in order to do a software company you need to launch
some billion-dollar business and and raise funding.
And that’s what I I kept making poor choices because of that and it was in 2005 that I was gonna build my own niche software product, I decided like invoicing software of some kind, and I stumbled across this little software application that was in alpha it was pretty much pre-release they’ve taken pre-orders, but they really hadn’t shipped code that worked. And the it was to developers and they were looking for marketing assistance. And I knew just enough about marketing online to be dangerous and instead of partnering with them I’ve acquired it from them. So I acquired the code base and I paid $11,000 for it which was a lot of money for me at the time. And that was my first insight into wow this can work, like the book it started making a couple $100 a month. I later grew it into the 2 to 3,000 pretty consistently, it got up to five at some points, but that was the click for me of like oh, I don’t need that many more of these little apps to basically live full time on them even in California. And so the shift happened there and that also happened in the blog because once I had that I talked about it on the blog inside story of a small software acquisitions. It was a series of posts and that went to the top of Hacker News all three of them. People started following me as someone who was doing some interesting and unique things and it wasn’t I didn’t intentionally go out to do that it kind of evolved, and then once I had that I learned just enough marketing skills some SEO, some AdWords, a little bit of paid advertising. Then I parlayed that and I acquired a number of other little site. One was in e-commerce sites that sold beach towels at ranked high in Google which is why I acquired it. There’s one called CMS femur that was more of a product type service help people build themes from from their designs. I had a couple e-books that I acquired, and bonsai trees, and some other random things I was really just trying to cobble together a portfolio. I know ,it’s completely random and I was just trying to cobble together enough of a portfolio that I was able to stop consulting. That was my goal.
Nathan: I see, and then what happened next when did you get onto to heat tell? Was that your first major?
Rob: That was the the biggest app, to be honest most of the apps that I acquired were the biggest app that I did at the time. I was really, I was trying to stair step my way up and trying to grow inexperienced and kind of in magnitude. And so I’m acquiring these things until I hit my full-time income in about 2000, late 2008, right. So it really took me about three years from the time I started hitting it hard. And that’s right around the time that people started asking me so many questions on the blog that I couldn’t answer them. And I started realizing there’s a book in here. I know enough now to be able to talk him I’m working full-time for myself with product income. A lot of developers want to do this. There’s some knowledge here. And so I sat down wrote the book called “Start Small Stay Small” a developer’s guide to launching start-up. And that became kind of the first foray into something beyond the blog because up till then it was purely just the blog and later out of that came microentrepeneur.com. Which is a kind of an online membership website for folks who are interested in that space.
And then we launched the conference in 2011 called MicroConf today. It’s all the same audience right. It’s people who want to self-fund software companies and startups, and it wasn’t until 2011 that I acquired HitTail because I was so busy from about 2009 to 2000, half way through 2011. I wrote the book launch, the book, supported the book. Then I got a bunch of speaking invitations so I was flying around the country doing speaking in between managing my apps and then launched MicroConf. And I was busy right? Launch some membership website, and so we launched the podcast actually. I started partnering up with Mike Tabor at that point who co-hosts the podcast in MicroConf with me. And started to the rest of us. I think started in 2010 and so I was busy just doing that side of the business I really have two sides of what I do. I have the actual software companies that I run and then I have the community side, right? The teaching which is the book the blog, the podcast, the conference, and everything. And in 2011, I kind of came out the other end of the the teaching stuff in terms of the other side of… I was like okay I’ve been teaching a lot and now I’m ready to now level up my experience level and get new experiences that are bigger, more risky, more interesting and that was when I acquired Hit Tail which was which is a SAS app that I recently sold actually.
Nathan: Oh, okay interesting. Are you able to talk about the sale?
Rob: A little bit, I mean I’m under NDA, unfortunately. It was… I owned it for about four and a half years. I grew the app during that time. And yeah, I mean… I don’t know, I
can’t talk about the purchase price or anything like that, but it… I sold to, in order to focus on what became my next act which is as you mentioned earlier it’s called Drip. And that’s email marketing automation software. And that’s now, I’m actually building a team around
at, it because everything I did it up till then was solo including HitTail. It was just me with some contractors, Yeah, and HitTail gave me the flexibility and the skills, and the confidence, and the knowledge to work with a developer launch Drip and now we’re, this is, it’s in a big space right? It’s this marketing automation, email marketing space and so we are a team of five and we’re hiring a couple more people right now.
Nathan: Yeah, yeah, look Drip. I’ve known it for a long time. I’ve seen it around. And how’s that all going? Like that so you’re really, really, big on self-funding your start up with whatever the idea even software and I’m curious before we even get into Drip. Like why is that?
Rob: So it’s interesting. I’m not… I won’t say I’m anti-funding because there are times and
places to raise funding. There’s certain ideas that can’t be done without funding especially like B2C, business consumer stuff. And means these huge ideas, but what I am against is the mindset and and kind of the culture of the press of saying, of acting like the only businesses that matter are the funded businesses. Because most of the businesses that that’s not even software companies are not in the Silicon Valley, in New York, Manhattan and in Seattle and Boston. They’re all over the world in these places where you can’t raise funding right? I mean if you live in the middle of Indiana you’re gonna have a really tough time raising funding. You probably have to move to a major city, uproot your family, probably gonna have to work 70 80 hour weeks. You might have to give up a board seat. You might give up control of your company. There’s just a lot that you have to give up to do that. And it’s for a small chance at a huge paycheck. And that small chance is so tiny, so tiny. I have friends who are, not even friends, but acquaintances who are spending more time building their slide decks than they are building their businesses. And that’s…it’s kind of a heartbreak to me because they’re talented people. And so that’s why I like the self-funding or the bootstrap side of it. Is from day one you’re building something to provide value to someone that they’re willing to pay for. And you’re building what I consider more of a real business than kind of this dreamy unicorn goal.
Nathan: Yeah I see. And what about when it comes to scale, man?
Rob: Yeah that’s actually the point where I believe funding is a good choice. Like if you see these SAS apps and they grow to let’s say a million dollar annual run rate, and they
have their systems down they know they’re at product market fit and now, they know they just need to hire more sales people, hire more engineers. Raise funding at that point that’s a great time to raise funding. If you insert a dollar in this side to get four dollars out of that side you’ve proven it, you’re done. Now just scale that thing to $100 million but or $50 million or wherever you want to go, but it’s… a lot of people I find are trying to ask for permission, right? They want an excuse to not do it because launching is scary and they’re almost like looking for someone to give them permission in other words a venture capitalist or an angel. Here have this money yes I validate your idea and now go do this and I would encourage you that if you’re in that bow like think about what you can do on your own now without having to get someone else’s permission.
Nathan: Yeah, that’s a really, really, great point because you know, for some founders it would be quite a daunting process I guess to hand over a portion of your company, know that if you do raise around and at somebody else owns you know a share in your business they want to get a return and it just adds so much more pressure. Plus you kind of have to you know report and and you have to do at least do like a check-in, at least every few months of letting that investor or the people that are giving you money like your where things are at. And I know that that isn’t something that people always want.
Rob: Yeah I would agree. And I think that folks may not know that going into this process . They may not know the downsides of it. And they may think boy someone’s going to write me a big check and this is going to be this great you know a movie montage like we see in the “Social Network” or you know some movie that shows Steve Jobs suddenly being world famous and people want the power or they want some people want the fun, and the journey, and the power, and they want to somehow see themselves on the cover of a
magazine. But there are a lot of folks who maybe don’t want the boss like you said, like I consider investors kind of your boss. I mean they aren’t directly, but if they have control then they are essentially you’ve traded, you haven’t you haven’t built freedom out of it.
You’ve more built like a job with the boss. And that’s where I think you know self-funding if you can pull it off and a lot of folks that I, I work would do. That’s where you can have, you can go after your quality of life, you can take some time off at a certain point, like there was about at eight or ten month period amidst this.
This was about 2010 actually we had our second child and I basically worked between 12 and 16 hours a week while he was growing up. When he from them is born till about 10 months then I was really raring to go and that’s when I, we did in MicroConf and HitTail. I couldn’t have done that if I’d raise funding, right? You can’t be a CEO of a front of company and do that, but I did have the flexibility. And so I, it’s something I wouldn’t trade. Now with that said I, I’m not saying I would never take funding because there I would take it under my, I would just have to fit my terms, right? I’m Rob Walling and this is how I run companies and are you willing to be on board with with what I’m doing? I’ve also started to angel invest. So I’m definitely not against the idea of funding but when I’m angel investing in essentially people who have bootstrapped to revenue already. That they’re making their at a $80,000 a year or a couple hundred thousand a year run rate. So they’ve already made it past them early hurdle. I know that they execute, the app ideas are good. I mean, it’s just different mindset. I’m not throwing $5,000 or something 10,000 in the new Facebook. I’m putting some money into something that’s you know charging a dollar amount and and really just needs the money to kind of start scaling up.
Nathan: Yeah, I see. So tell us about Drip, where you guys, at with that you
said you sold HitTail to focus on Drip. So this is a SAS that, what are your goals? Where you guys at currently? Like i said I’m quite familiar with the platform. Some of my friends
use it. Can you tell audience more about it?
Rob: Yeah, we launched it about three, well let’s see, I think we started working on at about three years ago. We launched it about two and a half years ago It’s a, I have a co-founder named Derek and he wrote all the code from the start and then recently we’ve hired some folks. So we’re as I said we’re at five employees. We should be at seven here in the next month. I purposefully, unlike funded company because once you raise
funding they really encourage you to just raise headcount higher, higher. We are the
opposite, we are trying to be pretty capital efficient as a self-funded app and so even though our revenue is growing at a really nice pace, you’ve been growing between 10 and 15 % every month for as long as I can… as longer I can remember. Let’s say a 12 to 18 months. So even though we have that growth, we still don’t, I don’t consider headcount some type of bragging right. And we are in the the space, we were originally the email marketing space which is more let’s in MailChimp constant contact. And we quickly realized that everybody wanted automation the more sophisticated email marketers who were looking ahead they wanted to be able to tag people, and move people in and out of list based on behavior, and do lead scoring, and that kind of stuff that only Infusionsoft and Ontraport and these more expensive tools could do. And so that we moved into that space more about a year and a half ago now. And that really ignited the growth because we became an easier to use tool for the companies. It’s SAS company’s information marketers, consultants, who were previously basically paying for like infusion software part on or that stuff. So we’re easy to use, were less expensive and we really kind of found our niche so to speak between though you know between the players like MailChimp, Aweber constant contact and the more expensive guys on top.
Nathan: Got you, because you guys do some interesting stuff. Well you have like little pop-ups and stuff, tie-lid full… like how does that work?
Rob: Yeah we have a little widget. It’s just so kind of like a little toaster popup, like a lark chat window or something in the lower right. So we have a widget there.
Nathan: Yeah. Like Qualaroo or something
and so people are having to do the embedded forms which was kind of the old school way of doing it we thought. And turns out we were a little bit ahead of the curve because within let’s say six to twelve months of when we launched we started seeing others come out with it like the, like sumo me, and Optinmonster, and those folks standalones and we had kind of gotten out ahead of that curve. And so these days when our customers signed up
they now have a choice, because of course sumo mean Optinmonster integrate with us, it’s a you can come through them at lead box as well from lead pages, but for for us, a lot of our customers just use our widgets because they can they can style them the way they want and then integration obviously tight into the app.
Nathan: Yeah, yeah and what’s really cool is you can do some really powerful targeting
Rob: Yeah, targeting in terms of all the emails you’re sending because you can paste on what people do. I mean you can say, hey if someone is not a customer because what soon as someone subscribes now you have their email and you can tell do they go log in
or have they already started up with that email then you know that they are a customer or you might know that they’re a trial user or you know that they’re just a lead you know a marketing prospect so to speak. And so when we send our emails we back in the day we were sending if we were using a platform like an Aweber constant contact. You kind of had these lists and you might have the same person on all three lists and they’re getting duplicate emails and or not getting targeted ones and in a tool like Drip or other marketing automation tools that are competitors you can segment that and you can just say, “Boom I wanna send this particular email only to customers.” I was in this particular email only to
prospects who have visited the site and visited the pricing page three times in the last week. I mean you can literally get down to that level of granularity when you’re running you’re running a deals, moving them into and out of campaigns and sending specific stuff
like Black Friday sales a good example because you can really just target the people you think are most interested.
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Nathan: You know a lot of people struggle with the concept that you don’t need money to
start a business. Are you able to… it depends, it depends obviously on the kind of business but if you want to start an online business for the most part you don’t always need as much money as is perceived.
Rob: I would agree and I think I think the myth that you need a lot of money is perhaps because people think of online businesses as or startups as what we see in the movies
and in the press and there’s this whole class of business or category of business that is not that difficult to start it you got to learn some stuff you might need a few dollars to start it but things like e-commerce websites or small software products or add-ons for
WordPress like well I have friends who are making full time incomes now from WordPress plugins. You know, and these things are I mean these things are not you can start I the way I view it is if you have you have three there’s three commodities. There’s your time there’s skill set and there’s money, okay. So time and money are probably pretty obvious what they are skill set if you you can either tends to be online it you could either a marketer or your developer or you have both so of those three which is skill set money if you have two of those three you can launch an online business so I don’t you don’t need much money if you have time and a skill set right if you only have a skill set and money you can do it you know how much time but you can certainly manage and pay people to do it, and if you only have time and money then you can learn one of the skill sets and hire the other one so that’s how I view it as kind of this trichotomy and if you get two of the three money is not the requirement but you if you don’t have any money than you are going to need to invest a lot of time and learn some skills that you don’t know if you don’t have them already
Nathan: Yeah, no that’s it that’s a great way to think about it so what would the next step be like you know you’ve launched maybe an MVP or you’ve you know you’ve your bootstraps start up your self funded it and you know you might have a co-founder you might be working on some sort of web app or online e-commerce or something along those lines. What’s the next step, Rob like like you know you said that you only just decent enough to be decent at marketing like if you can’t afford to pay for customer
acquisition or you might only be able be able to do that on a small scale what
what do you recommend?
Rob: Well at that point once you’ve just launched hopefully you started building a pre-launch list before you ever launched. Rather frankly before you ever started writing any code because that’s something I highly highly recommend. It’s to start marketing the day
you start coding in essence and so you’ve launched hopefully not to crickets you’ve launched to a list of a hundred or a thousand or five thousand people of some kind so you have some type of revenue coming in. So on that day now you’re handling support and you’re trying to figure out who’s using my app or buying for my e-commerce site where
do they come from? Why are they buying? Who’s not buying? and why are they not buying? You’re really trying to figure out who your people are because you’re as a bootstrapper you’re gonna need to choose a niche or maybe two niches. It’s very, very hard to start a horizontal business you’re gonna start a horizontal business mean you’re going to cover many niches we’re all niches something like a Microsoft Word you know where anybody can use it you really need to raise funding that’s an instance where you’re just not in the game. But if you want to build a niche e-commerce site for people who do fly fishing or a niche SAS app for you know freelance web designers that’s where we’re really talking about it.
And so on that first day I would A be trying to figure out who the best customers are for us who’s really getting value and then B a start making list of where do they hang out and how can I reach them. And a good place to start as a book called “Traction” by Gabriel Weinberg and Justin Maris and he lists 21 channels of traction channels and marketing channels. And so there is thing there’s organic SEO there’s you know Adwords there’s in-person events he just goes down the list Ne interviewed ingest and interviewed one expert in each of those areas and that’s what the chapter focuses on. And in fact it’s the book that I wanted to write I wanted that to be my follow-up. I loved the idea and when he wrote it I said boom I don’t have to write that now so i recommend it to everybody if you are just trying to dip your toe in the water of this stuff because it gives you such a nice survey you know of all the ideas that eventually you may need to learn.
Now you if you get one or two channels really working for you you can build a great bootstrap business on it you may not be able to get you a hundred million dollars but do you need that you know what about getting to a hundred thousand dollars if you’re solo or two and a thousand if you’re working with a buddy it’s like that’s that can bring you a lot a lot of freedom.
Nathan: Yeah, that’s that’s a really really good point. I really like how you said if you find one or two channels because the goal should be right to find one to two channels not trying you cover all 20 that that maybe Gabriel mentioned in his book, right?
Rob: That’s right. Especially as a small team because you can’t manage you can’t be good at that many you really need to be good at what’s working and you need to chuck everything that’s not working and not try to maintain it just because the latest social media expert is touting you know some new Instagram at or something it’s like if if that’s not going to work for your business you you can’t dive into it because you can’t get good enough at so many things.
Nathan: I agree you like you know like the stuff like we’re doing with Instagram that’s a massive lead generation channel for us so you’ve built an email list a big part of it on Instagram like from zero was about this time last year was about 3,000 fast forward to now it’s close to 120,000 mainly grown from Instagram has been a massive customer acquisition channel for us. But you know, people say you should be doing this should be doing that I’m like now like I just want to focus on Instagram because that this is what’s working for us you know.
Rob: Exactly, and that’s you know you’ve done that and you mentioned app store SEO when you came on our podcast it’s something you had two or three that really works for you. And with Drip we have two or three that are really working for us and it’s none of the things you mentioned because we’re different businesses. And so that’s what you have to figure out is what’s going to work in your situation and to try to follow and listen to people that are doing something very similar to you. So if you run a SAS app and it’s bootstrapped try to find someone running a boot straps a SAP don’t go listen to someone launching the next Facebook or you know Paul Graham, I respect him a ton but if he says something you may it may not apply to you because you have to put it through a filter of like does that only make sense if you’re trying to build a billion-dollar business.
Nathan: Yeah, that’s such a good points out of curiosity what are the two to three channels that are working for you in terms of growth right now?
Rob: We have a couple let me think that you know. One which is such a it used to feel like a cop-out to me it is a little bit of a cop-out I don’t like it when people say this but frankly our word of mouth is very good. People who use our product love our product and they tell other people about it and that is going to always if you can build that channel it will always be your best channel yeah only I’m good that nope because because as soon as people tell another person and they come in they’re just ready to use it they’re looking for red flags that’s that’s it you know other than that they’re already sold on it. So if you can build that by providing amazing support great experience a great tool at a good price you know I mean all these things that will that will build it if you’ve built a no brainer tool. Barring that the other channels are working for us content marketing it’s working these days you know that you with with the advent of social media and medium and there’s so many channels you know the Hacker News growth hackers inbound odd or just all these places where people are hanging out there are a lot of ways to amplify your content if you’re producing high quality stuff. Yeah, I think trying to think of another one that’s big well I mean my audience is doing well right I have to have all the software entrepreneur is that I’m talking to they give me the benefit of the doubt and they’ve tread Drip out and gotten customers from there there’s a problem those are probably the top three I would I’d throw out.
Nathan: I guess the next question I have for you Rob is if you’re in this is would be definitely the case for some people you know listening and reading if you’re at you know I guess we’re in your business you passed you know paying your salary you and then and you you’re a little bit past solo-preneur and you’ve got a couple of staff on you want to build like you know an eight-figure business what’s next man. Like do you think it is wise can you can you can it still be done to just continually be be self-funded like what are your thoughts on that?
Rob: I definitely think it can be done and there are a lot of examples of folks doing just that I think you have to ask yourself a couple questions one is are we in a space that you know, is going to give us a decade or two of stability so what I mean by that is if you are basing your app and you’ve grown to like you said a few hundred thousand but you are based entirely on the Twitter API. My answer that would be probably not going to stick around for you know they’re just changing number or if you rely heavily on Google and some stuff that they have they think they chat down API’s all the time I mean they’ve they’ve done some damage to people.
So if you’re in kind of not so solid ground and then i would say it might be time to think about either diversifying and going in another direction or perhaps selling your app if you want or just keep running it realizing that boy you don’t want to build at eight figure business and then have it swept out from under you right so that’s kind of the first question I like to think because I’ve had you know HitTail itself was almost put out of business we had to rewrite a big piece of it when Google did some shenanigans with not provided and Panda and Penguin. So, that’s the first thing to think about but once you’re past that then it’s just a question of do I keep bootstrapping it or you know self-funding it or do I raise around like you can raise a small round these days and never have to raise again if you raise it from the right people. There are people like myself or David Houser founder of Grasshopper indeed a VC who are putting in a small names around up front with without the expectation of you raising a Series A and going on to $100 million and without the expectation of you moving into a major city and working 80-hour weeks. And so that could be an interesting source if you have a business that’s like David Hauser’s requirement he was just on “Rocketship Podcast” he said if they’re doing I think it’s between $500,000 and a million in annual revenue and they’re consistent and have a repeatable process that they’re writing checks in that area. And so that’s an interesting way if you decide that you do need capital to scale but I mean it’s really up to you. If you… if you’re covering your expenses and you’re okay with some just some slow growth over the next five years or ten years and you’re cool to keep working on your business why not do that you know, if there’s not a huge downside to it.
Nathan: We have to work towards wrapping up, but this is something that I’m finding is coming up amongst our audiences you know once you’re at that stage that we discussed you know, you’ve got you might have a few staff and you you know anywhere between a couple hundred thousand to the million mark in terms of annual and you run rate, what advice do you have for people to go from I guess a solo entrepreneur and a solar founder to to a CEO
Rob: Yeah, that’s a good question first question is ask yourself do you want to do that? Because I don’t necessarily think that you have to have to do that I think that some people want more flexibility more freedom and to be able to remain as a solar founder and there’s nothing wrong with that if that’s what you’ve decided if it’s best for you and your family and the lifestyle you want barring that if you decide you do want to grow which many of us do, I think that the biggest lessons that I’ve learned is by being around other founders who are doing the same thing and who are just ahead of me. And so that is by by reading interviews in in magazines like Foundr. It’s by listening to podcasts like this one or you may be startups for the rest of us or rocket ship where they interview or Mixergy and it’s going to conferences where you are able to touch base and connect with people and I’m in two different mastermind groups which is just three of us sitting down one is on Skype when is in person. And the folks who are just enough ahead of me are able to teach me you know I ask them questions like when I was hiring my first employee like, “Okay so how do I manage payroll okay. So do you have to give health benefits?” Okay so you know I mean it’s those questions that that you can get some guidance from.
And then the other place to be honest that I’ve done so much learning is audiobooks. There are so many good books on this topic of kind of becoming you know a leader in a manager in a CEO and a lot of them are fluff there… there’s some that I’ve dug into and even just listening to people like Warren Buffett or Elon Musk listening to their biographies and learning how they kind of transform themselves I’ve got a lot of inspiration from it and I think that I think it takes time as you do this and I think at first it’s it’s a big choice and it’s… it can be hard but yeah the more experience you get you know if you’ve started a business and gotten it to the point you said between couple hundred and and seven figures you have the skill set to kind of do whatever you want. You are a very unique and gifted talented person at that point I mean you’re just not many people can do that. So have the confidence in yourself to you know that if you want to do it then know that you can pull it off and you can learn what it takes to be good at it.
Nathan: Yeah that’s great advice. Any notable resources for anyone? Like you said you’ve got a lot of gold from audiobooks any or any books in particular that you would like to recommend?
Rob: I’m actually trying to think of I have 300 audiobooks in my Audible accounts. And I’ve listened to all of them so often calling a single book is pretty hard there’s one called the “8020 Manager” that I liked that is less about being a CEO but it is really good about figuring out what type of person you are and how you work and how you can interact with with folks that you work with. Might be one off the bat.
Nathan: Because yeah I think when it comes to you when you go from like you know we talked about you know self-funded solo-preneur solar founder and then you know you get some traction you got product market fit and you get anywhere between you know that scale that I talked about in terms and run right I think it would be quite easy to get bored like wait for from where I’m sitting because because as entrepreneur you can get bored easy you know and and you always want more ambitious and and it’s just so exciting so much fun that a lot of the time you would you want to keep moving the nee to move forward and scale matters. And if scale matters that you need to grow your team, right?
Rob: I mean to a certain extent you don’t certainly don’t need to grow it as much as as a lot of these Silicon Valley companies. I don’t know if you recently saw GumRoad scale back from 22 employees to 3 any reason was. And the reason was as they said because the other 19 were not crucial to running the business they had raised around in 2012 they had scaled up because that is what you do if you don’t do that your investors are pissed. I mean they want you to hire because it shows that you’re growing or whatever. I don’t quite understand that to be honest but and then they apparently you know this isn’t a crunch so it’s not like I know firsthand but apparently they didn’t have the revenue to support 22 people so when they scale back they you know laid off 19 people. And they’re now functioning on three. So all that said GumRoad is being run by three people you know, and Drip which is pretty substantial business at this point is run by five people so it depends on what business you’re in right I mean software does scale really well. So you do need to hire more people but you don’t I don’t believe that you need to be at 50 people in order to run a a trick your business I think you can do it with and you can do with you know 10 to 20
Nathan: Yeah,yeah okay that’s awesome. All right well yeah look Rob this would be a great conversation,man is this a lot to take away. Especially around bootstrapping and stuff like that and just just being a founder. Where’s the best place that people can find you but also before we wrap on that is there any final words of wisdom that you wanted to share?
Rob: You know, one other yeah one I’ll just leave it with this there’s another book that I’ve read about transitioning to that next level it’s called “Startup CEO” and it’s pretty sure it’s written by Brad Feld and that is another book that I think people if you’re in that situation that you can learn a lot from.
Nathan: Awesome. All right, yeah so where’s the best place people can find you man like you oh actually one last question?
Rob: Of course yeah. That’s great.
Nathan: Dude, you do so much stuff like give us like how do you manage it all, man?
Rob: You know I don’t try to launch multiple things at once. I don’t try to grow multiple things at once because that’s the mistake that people make its you’re too splintered. At this point I am focused I’m all in on Drip and I’m running the company all the other stuff I launched years ago and so MicroConf now we were in a twice a year once in Vegas once in Europe but we have helped and we have helped who’s been with us for three years. So they in essence run the nuts and bolts I show up recruit speakers in speak you know, I don’t actually do that much with it. Same with the podcasts I’ve to podcasts I show up maybe write an outline but it’s on my terms I don’t do any of the editing I don’t post a WordPress you know, it’s so it’s it’s getting systems in place each time launching one is a bunch of effort but then once it’s on homeostasis you can you can get away with pretty slim time commitment for these things. And that’s really that’s how I able to do it.
Nathan: Awesome, awesome. And in regards to systems and stuff like that is there any any notable tools that you recommend?
Rob: No, I mean sis for systems I’m more wood would recommend a couple books like work the system that talks about designing systems and then I liked built to sell it’s a pretty simplistic it’s a little parable, but it’s a pretty cool thought process so if you’ve never thought about why you should system systemize your business. Those are two that should should get you on the way.
Nathan: Awesome. All right we’ll look where’s the best place people can find you, Rob?
Rob: You folks want to hear more I’m basically chatting about this stuff for 30 minutes every week pilot on a podcast called “Startups for the Rest of Us.”
Nathan: Awesome, awesome. Okay, we’ll look thank you so much for your time Rob we will wrap there but it’s been an absolute pleasure,man.
Rob: Absolutely, man. It was my pleasure thanks for having me.