Episode #009

Breaking Into Bootstrapping Your Own SaaS Business with Clifford Oravec of Tamboo

Thinking about becoming an indie hacker? Learn how to start, what skills you need, and the biggest pitfalls to avoid in this discussion I had with Clifford Oravec, author of The Epic Guide to Bootstrapping a SaaS Startup.

Review

Enjoy the episode? Review us on iTunes! 😇

Transcript

Courtland Allen 0h 0m 7s

What's up everyone? This is Courtland from IndieHackers.com. And today I've got Clifford Oravec on the show. He's the founder of Tamboo and the author of a very popular series of posts on Medium entitled The Epic Guide to Bootstrapping a SaaS Startup from Scratch By Yourself. Today, instead of doing a one-sided interview, I'm going to mix it up a little bit and we're going to be doing more of a two-sided, free-flowing discussion. Our goal is to talk about things from a beginner perspective so if you haven't started an online business or maybe you only recently started making money online. We're going to talk about things like why you should take the plunge, what the trade-offs are, what kinds of knowledge and skills it's important to develop early on, what kind of pitfalls you should avoid, and stuff like that. So I'm pretty excited to see how this format works out. And without further ado, we should just jump right into it. Clifford Oravec, how are you doing?

Clifford Oravec 0h 0m 56s

I'm doing great, how about you?

Courtland Allen 0h 0m 58s

I'm going just fine. So let's start with the question of why should anybody try to independently make money online.

Clifford Oravec 0h 1m 5s

That's a fun one. So when you say independently you mean just by themselves?

Courtland Allen 0h 1m 13s

No necessarily. So let me zoom out and look at the status quo. If you are, say, a software engineer working for a traditional software engineering company then who's your customer? It's not actually the users who are using the software that you build, it's the company that you work for. They're paying you a salary in return for a lease on your time and your skills. And as a result of that they care a great deal about how you use your time and your skills, right. They care about what tools you use. They care about who you work with and how you get the job done. They care about how many hours you work. They care about what location you work from. All that stuff because that's what they're paying you for. Alternatively, if you are making money independently, at least in the way that I'm using it, then instead of selling your time to a company or an employer you're trying to create something of value and sell that directly to the users themselves. So the question is why go this route instead of getting a job?

Clifford Oravec 0h 2m 4s

That is a great question. Having a job is a great way to secure steady income. So if that's something that's important to you, having a job is a great way of doing that. The downside to working a job is, it might sound a little cynical but, you know, you're basically owned, right. They tell you when to show up, what you can and cannot do. It's someone else that's going to determine how far you advance in your career or within the company, and what your pay will ultimately be. Again, it's a trade-off. If financial security's important, having a job is a good thing. So there's actually some steps in between having just a regular job and going all the way of going independent online. One of them would be, you know, doing consulting or contract work or freelancing or whatever the cool term is nowadays. That's a little bit closer towards the independent route but it gives you a little bit more of the financial security in terms that you're still working for a company or maybe a handful of companies that are paying you for your time to help them do something that they're trying to achieve. And that's also a good way of doing it. Except there's a little more risk involved because if you can't find a client, you know, you're not going to get paid. Or if your client decides all of a sudden to drop you or your services then you're scrambling trying to figure that out. But all those options there, you're tying your income to your time. So there is a, you know, a theoretical glass ceiling that you can only work so many hours in a day. Even if you optimize for 24 hours a day if you could pull that off and be able to bill for every one of those, you know, your income is going to be tied to your ability to work hours. And not only that, let's say that you are super efficient. You're still going to be subject to market rates. So if the market rate for whatever skill set you have is x, you know, chances are you're going to be somewhere in that neighborhood. There's really no economies of scale that you can really get out of that type of thing. Again, it's a great trade-off if you need the security and the consistent revenue. But it can be limiting. So if you go to the other side where you start to go independent, the allure I think for most people is getting control of their time back. So if I don't want to wake up at six in the morning and have an hour commute and get to work and stay there for eight, 10 hours, an hour commute back home and all this, that's usually what a lot of people want to jump on, is "I want my time back." It doesn't really work that way, but that's what a lot of people want. The other side too is, you know, basically not having that glass ceiling there. If I can sell something and it doesn't cost a whole lot to make, so digital goods and whatnot, like software, and I could sell that over and over and over again, well I could make a lot of money that way because the theoretical limit would be the size of the market that I could capture. And I think the final one would be there's a separation in that model. There's a separation of time and money. So it's, you know, if you choose not to work an hour in theory you're still making money, right. Or I could work one hour and make more money in that hour than just doing a straight exchange like you would with an employer.

Courtland Allen 0h 5m 7s

Yeah I think that sums it up perfectly. Especially what you were saying toward the end really hits on some of the advantages to making money online as a developer. Because if you're a developer you can write code and code obviously can continue working even when you go to sleep, hence passive income. And if you write code that works online then your target audience, that market of people that could buy what you're selling, is humongous. There's billions of people on the internet. Even if you only target a small percentage of that, it's still probably millions of possible customers. So you stand to gain a lot more than you ever could if you're trading eight hours a day for whatever services you could provide. So of all the reasons that you listed, which ones are your personal favorites for why you decided to be an indie hacker?

Clifford Oravec 0h 5m 50s

For me, I'm kind of your classic over-achiever. And so working in a corporate environment you're limited. Whether it's because they don't have a need for what you'd like to do, or they have people that don't want to see you succeed, that does happen. So for me, I enjoyed consulting a lot. I did a lot of consulting for years. I got to work in a number of different environments, right. And you felt like, "Well okay, I'm getting paid top-dollar for my time and I get to choose the projects I get to work on." So that was fulfilling for some time. But the thing for me is I got tired of just doing the same thing just over and over again. So, you know, you get a new client or you do a new project and it's like, "Okay, let's go through this process of building something again" or whatnot. I got tired of just project work after project work after project work. You know, it just felt like a never-ending cycle. So when I write code I want it to achieve something and I want to be able to leverage that and build off of that. And I found that very hard to do in consulting. I went back into the corporate world trying to do that, basically building on your successes. And I found that doesn't really happen. It's really hard to climb the corporate ladder all the time. So for me, being independent means that I can build off of these successes. So I can take my drive for wanting to continue to do things and I can build off of those successes and see returns on the time that I've invested. So for me that's the biggest compelling reason for it.

Courtland Allen 0h 7m 25s

Yeah, I have similar reasons. I think one of the coolest things about being a developer is that the code your write can work, in the background, in perpetuity forever, whether you're there monitoring it or not. So let's say you take a job at a company and you optimize their signup form. And you increase conversion rates by 20% or 30%. That's a permanent change. Things are permanently going to be better for them and yet you're only really compensated based on the hours that you put in. So you move to another project after that. Or let's say you quit or you get fired or something. Then your compensation stops. And it doesn't really matter how well the code you wrote actually performs for the company. You're done, you're just going to get paid for the time that you worked on it. So I think what's really appealing to me is the idea of having kind of an alignment between the value that I create and the reward that I get. And it's really hard to get that alignment unless you're working independently.

Clifford Oravec 0h 8m 12s

Right, and the other trade-off would be, let's say you're able to automate something that's really time-consuming at a company, right. Your reward for doing that is more work, right. You don't buy back your time. So let's say that there's something that would take you 10 hours a week to do and you were able to automate that in some way. You don't get those 10 hours back. It's basically, Well thank you for doing that. Here's some more stuff that we've been meaning to get to that you can do in those 10 hours that you just saved yourself. Whereas if you're on your own and you're like, "Well hey, I saved myself 10 hours a week," well you can choose what to do with those 10 hours.

Courtland Allen 0h 8m 43s

So my second question is, "Why software?" Why try to sell software as a service rather than any other alternative? And what are the alternatives to SaaS?

Clifford Oravec 0h 8m 54s

SaaS is the hot kid on the block, right. And the major allure, from a business model perspective at least, is sweet, sweet recurring revenue. That's what seems to attract a lot of people. And it's software, right. So we all like writing software as developers. So this is a perfect fit, right? I write software and I get recurring revenue which means that after I get enough people I can just stop working on this thing and just go sit on the beach with a Mai Tai, right? It doesn't really work that way. In fact, SaaS is probably the hardest thing to actually make work from a business and a product design perspective. There are a lot of easier ways to make money online than going after SaaS. They're not in all cases pure software-based, and I think that's a big reason that you don't see as many people going after them. For example, if you have specialized knowledge you could create an info product. You could sell an ebook or course or something along those lines. Something that's more of a transactional type of sale, where you're not going to have that recurring revenue component. You're going to have like a one-time purchase or maybe you could cross-sell or upsell to get some additional dollars out of a transaction. And so for a lot of people they're like, "I don't really want to do that because once I make that sale it's done, it's over. I want the SaaS side." But the thing is it's much easier to get someone to commit to a transactional sale than it is to get them to commit to an ongoing payment type of plan or a subscription basis. And I mean, you see this yourself. You're scrolling around on Amazon, you're looking for some books or something. "Oh, here's a book that tells me about something about what I need to learn how to do." And it's priced appropriately. You probably don't even think twice, you just hit buy, right. But the minute someone's like, "Oh, well we're going to charge your credit card monthly for this" you're like, "Hmm, I don't know." Even if it can give you a lot of benefit. So there's a lot of objections that you have to overcome and there's a lot of value that you have to demonstrate on a consistent basis. So other ideas in between going all the way to the SaaS side is downloadable software. A lot of people seem to shy away from that, but that's still a thing in a lot of industries for a lot of different purposes. So you could call it on-premise or you could do a desktop, but again a lot of the times those are a single transaction, maybe with some sort of an annual support commitment. I mean you could go the e-commerce route if you're creative and you could open up your own storefront. Or you could get into productized services. Let's say, and we were talking earlier where, "Hey, I'm really good at this and I'm really efficient at this but I can't command the hourly rate that I would that represents my efficiency." Well you could turn that into a productized service. So if you're really good at slamming out landing pages and you can do them in under an hour and you think that's unfair because when you charge someone for an hour of your time and it would take someone else to take five hours to do what you did. Okay great, package it up and say, "I will build you a landing page for this fixed price." And if you can get it done in an hour, great, you know. You're making up the difference on that margin there. There's also some other things that you can do, like WordPress plugins or something that's often overlooked. I read a stat like 25% of all websites run WordPress. But yeah, you have a lot of non-technical people on WordPress that need to do stuff. They're using WordPress for their business. If you can give them something that they could buy and install and run with, that's a great thing too. So the plugin economy is something that's often overlooked. But I would say look for things like Shopify, WordPress, that kind of thing. That's the next step before getting into SaaS. It's still software, but SaaS is actually much more difficult than a lot of people think.

Courtland Allen 0h 12m 29s

Yeah it's a lot harder to succeed with SaaS than people think, I agree. And it's easy to get confused about that because when you go on Tech Crunch or you go on Indie Hackers, you look at the businesses that are doing the most revenue, you see SaaS companies. And you get stars in your eyes. You think, "Okay, that's exactly what I want to do." But often times it's better to start somewhere else. And I know Amy Hoy, for example, tells her students, "Hey, don't start with Saas. "Start with a tiny product first." And she even has a checklist of things that you should, you know, milestones that you should hit before you know that you're ready to start a SaaS company. You need the requisite marketing and sales knowledge. You need the free time and the resources to actually commit full-time to a SaaS. Because it's going to be more work. And I think there's a lot of wisdom there because it just helps to start in a place where you can get some practice and get your first paycheck. Indie Hackers itself is not a Software as a Service solution. It's me interviewing people and selling space for advertising, right. That's not SaaS. That only continue if I keep reaching out to advertisers and doing manual transactional sales and I continue putting out interviews. But that doesn't mean I don't learn a lot from doing it. And that doesn't mean that I'm not building an audience that I can't, you know, utilize in the future if I want to start a SaaS company. So I think a lot of people jump too quickly into starting a SaaS company when they don't really understand the alternatives and they haven't looked into the alternatives. And they don't understand the benefits of the alternative approaches. One thing I see a lot among developers specifically is that they say, "Well, okay. What is the point of having my skills as a programmer if I don't start a software business", right. If I just start a blog or an ebook or a course then it's like my software development skills are going to waste. And that's not actually true. Because if you compare yourself to somebody who is not a programmer and they try to start any of these businesses, well there's all sorts of ancillary tasks beside your main product that you actually have to take care of to start any sort of business. And if you're a developer, a lot of times you can provide a website that's faster or sleeker or more reliable. You could automate all sorts of time-consuming tasks using your skills so it's important not to underestimate the degree to which your skills as a programmer, assuming you are a programmer, can help you, even if you don't start a software business.

Clifford Oravec 0h 14m 32s

Yeah I would say on top of that, one, you have a huge cost savings, right. So someone who's not a developer who needs to hire a developer to do any of these things is going to have to pay for that time. Developers aren't cheap and that can stop a lot of people from being able to go and do an online business because they can't afford to hire a developer to build it out. So get to save on that, you know, if you can do it yourself, right. But I think I would add one of the biggest reasons to do something that is not SaaS to start out is, in my opinion, most SaaSes don't fail because of the underlying technology. I'm sure you could find me one or two examples where it couldn't scale or this or that and the other. But most of the time if people are like, "I'm going to build a SaaS that does this" they can go and build that. That's not really the problem. The problem is that there's a lack of business experience or there is a broken business model, right. Those are really the things that, or product market fit, which I'd throw into lack of business experience. And those are the things that usually cause failure, right. By getting out and doing a smaller thing like a WordPress plugin or an info product or a productized service, you're getting the experience to learn how to run a business with something that's easier to sell than a recurring subscription, right. So stepping into this you don't know much about sales or marketing, right. It took you years to learn how to develop and write code. Learning how to do sales and marketing if you're not a natural at talking to people and learning how to get people's attention, being able to convey things in a language that they understand or shows them how this is beneficial to them, that can take years to get really good at as well. So trying to do a SaaS where it's hard to convince people to get charged on a monthly or an annual basis and trying to learn sales and marketing in that environment is much, much, much harder than saying, "I'm just going to sell a book." Or "I'm just going to sell this WordPress plugin" and trying to learn about sales and marketing that way. To me, at least, that's the hugest advantage. And you get the feedback of, "Oh wow. This worked and I sold something." So if you sold a WordPress plugin for like $25, seeing that $25 show up is an amazing feeling. And even though your paycheck is probably much, much larger, that $25 is sweeter than your paycheck, I guarantee, when you see it.

Courtland Allen 0h 16m 57s

Right. And another thing that happens once you start generating revenue, even if that revenue is coming from one-time transactions, is that you start becoming aware of all of these potentially valuable business ideas that were not obvious before you actually had a business. So because you're actually selling a product, you're probably focused entirely on how do you generate more revenue. How do you get more customers in the door? How can you effectively increase pricing without driving customers away? How can you upsell customers different products? How do you improve your marketing efforts and get more followers on Twitter? Or get a higher search engine ranking? Or decrease customer churn or increase customer retention, etc.? The solutions to every one of these problems is a business idea. And depending on what you're doing, chances are other people are doing something similar. And if you can come up with a generalized solution to that problem people will probably pay you for it. Because it will increase their revenue. So I always think that the best way to come up with a good business idea is to start a business and then identify all of the things that help you make more money.

Clifford Oravec 0h 17m 54s

Right, right. And there's a lot of people if you go back and look at the interviews that you've done I'm sure there's a lot of people where that's been the case. Like Nathan Barry, for example. When he was selling his ebooks and whatnot he did a lot of email marketing. And naturally that ConvertKit would come out of that. He ran a blog, he was a very popular blogger and ConvertKit targets bloggers, right. I think when he started ConvertKit he was actually trying to target authors that were writing books and whatnot, originally. Because he had that experience and he was like, "Well here's how I used this in what I was doing. "If I find people that are like me they'd use it." It turned out, I guess, that that wasn't the best market for him and he switched over to targeting professional bloggers, of which he is one as well. So by doing some of these you actually can find an idea that people would be willing to pay for on a subscription basis.

Courtland Allen 0h 18m 44s

Exactly. So another concern that a lot of people have, and rightfully so, is what kind of outcomes can they expect from going the indie hacker route and trying to make money online independently? There's a lot of advice online that, quite frankly, makes it seem a lot easier than it is. But in reality it's risky to quit your job and start a business. It's risky to give up your free time and do all sorts of entrepreneurial things. It's risky to change your lifestyle. So what kind of results do you think people can expect out of making the transition to become an indie hacker? And what do you think their chances of success are, realistically?

Clifford Oravec 0h 19m 22s

Well definitely don't expect that you're going to launch something in a weekend, take out some Google AdWords and you're going to be crushing 20,000 MRR, you know, within the first two weeks. That just, that doesn't happen. And there's a reason that we talk about people who have had something like that happen. Because it's abnormal, right. It's an anomaly. So you're like, "Wow, they did this and they crushed it." Yeah, the problem is you're not going to be able to reproduce that. They got lucky. They did something right. They got in front of the right people at the right time and they got lucky. Well you should really expect is, I mean it's going to be slow. It's going to be way slower than you could possibly imagine. Getting your first customer to sign up and to actually use it and to pay is going to be a process that I don't think most people are really prepared for. Especially when you look at how e-commerce works or any of these transactional sales. You're like, "Okay, I put this up and people bought this." SaaS really doesn't work that way. You've got to got through the grind and you've got to fight for every single customer. In a lot of cases you're not going to attract people through marketing and get them to sign up at your first pass. Your marketing message, your value prop, other aspects of your marketing site or your onboarding process or your product itself, people are going to shy away from. I mean a lot of times you've got to go hand-to-hand and you've got to go sell people directly. You've got to go cold email. You've got to connect with these people, understand what they're trying to do, and walk them through your funnel by hand and get their feedback at every stage of the funnel. And, I mean, it can take a long time before you've got somebody who's like, "Yes, this solves exactly what I'm looking for and I'm willing to plop down my credit card and continue to pay you month after month for this." I think that's something that gets overlooked as a lot of people look at the end result of, "Okay hey, we're at 30,000 MRR." All of us look at them, they're like, "Well that sounds really good." But I know of very few overnight successes, and those are flukes. It usually takes two to three years to get to something like 30,000-plus MRR, especially for like a first-time SaaS person. Second-time SaaS people, they kind of understand things, they have a little bit of an advantage, but there's still that whole product-market fit song and dance that you've got to go through. And there's also the other aspect. There's going to be word-of-mouth referrals, which are a pretty big thing that can help you to grow. Getting those takes time. So starting out nobody knows you. "Well who else uses you?" People want to know that. Or "Why should I use you versus these other guys?" And, you know, a lot of times you're going to go off the recommendation of a friend. If you're at work and you're like, "Hey, what can I use to do this?" Maybe there's a recommendation that they have. You're going to go check it out. They're going to be like, "Yeah, let's check it out." It takes time to get to the point where people are going to refer you to people. And so starting out don't expect much. I mean, just being honest, probably expect zero for quite some time. I'm being serious.

Courtland Allen 0h 22m 29s

It's not easy to get the ball rolling. And I think the problem, or one of the problems that people run into, one of the most common mistakes, is to look at a super successful company and say, "I'm going to do what they're doing." When in reality the things that they're doing now that are super successful are probably completely different than the things they did when they first started. So when you first start, things are usually, as you said, really slow and hard to get off the ground. Because you don't actually understand your business yet. Right, you don't understand who your target customer is and who's ideal to buy your product. You don't understand what price point they're going to buy at. You don't understand what marketing copy appeals to them and exactly why they're buying. You don't understand where you can find and reach them online in the most efficient manner possible. You might think you know these things, you might have ideas for how you're going to do these things, but in reality those are just guesses. And you're not going to actually know until you put in the hard work of engaging with customers and engaging with them one-on-one. And often times this represents itself as just a lot of rote, manual work. You know, sending hundreds of cold emails over a period of months. Or a good example is Tyler Tringas, the founder of Storemapper, who I interviewed for Indie Hackers a few months back, he would actually go to job boards and he would find store owners who were looking for contract developers to add a map of all the store's locations. And he would say, "Hey, I'm Tyler. I'm a developer. I could add that map for you on your website. Or you could use my service, Storemapper, that I built. Just put that on your website, it'll be a monthly fee, it'll be a done deal in like five minutes." And so then he would actually hear from customers, Yeah, here's where I'll use Storemapper. Here's where I won't use Storemapper. And he would learn from that and improve his product. So that's a process that obviously he's probably not going to be doing once his product gets to around 20,000, 30,000 a month in revenue. It's just not scalable, right. But early on he was pounding the pavement and putting in hours of hard work talking to people one-on-one to figure out what is was that they needed. And that's a trend that I've seen over hundreds of companies that I've interviewed. So it's very important if you're just getting started to manage your expectations. And understand that to get the ball rolling it's going to take a lot more work in the beginning than it does in the end. And if you're going to learn from other company's stories you really need to understand what it is they did in the very beginning. And not be tricked by the marketing and sales techniques that they use at the end.

Clifford Oravec 0h 24m 48s

Right, yeah, absolutely. And most everyone doesn't talk about the early stage, right. Either it was so long ago they forgot about it, they don't think it's relevant, they're embarrassed by it, or they're just super jazzed about their current success. And it's that early stage expectation that can make or break you. If you're starting out and you're like, "Hey, why am I not at, you know, 10,000 MRR after the first month?" I mean if it was that easy everyone would be doing it like full-time as their job, right. They wouldn't be trying to do it on the side. But to go off of what you were saying with the sales, there's another aspect that a lot of people don't realize. Sometimes if you're targeting a certain market you can't reach them online. Or you can't do it very easily through marketing. People aren't really searching for solutions in your space. Pretty much the only way to make them aware that you exist is to reach out to them one-on-one and say, "Hey I know that you work in this type of a role within this type of a company and we do this for people like you." It's not like they're going online and they're doing searches for these types of things where you can capture them through SEO or you can write some really clever article that's going to catch their attention. Sometimes you just got to pick up the phone or you got to send an email just to get in touch with these people. And that's I think another thing. Is a lot of people are like, "Hey, I just start marketing and people just show up and buy." You can get it to there at some point but when you're starting out that's not a great approach. You're robbing yourself of the opportunity to talk to people and really understand who they are. Things that maybe you don't understand about the people that you're trying to reach or the market you're trying to sell to. And not only that, someone that comes in through your site, they've never talked to you, they don't owe you anything. So when you send them an email because they didn't convert from trial or they churned out, they're like, "I don't know who you are so I don't really need to give you any explanation. Go away," right. Or they just think it's an automated response, even if you sent it by hand. If you brought them in by hand there's some sort of connection that you have. There's some sort of expected reciprocity from just a social perspective that, "I at least give this person an explanation for what I'm doing." So by going one-on-one with people you get a lot more information than just playing the passive game. Where I put up a website, people show up and give me money. Maybe they do, but think of how much more money you could be making or how much better your product could be if you were actually talking to these people and really understanding them and how they use it.

Courtland Allen 0h 27m 22s

Yeah, a direct quote from your Epic Guide to Bootstrapping a SaaS Startup from Scratch is, "Just remember that if you can't sell your SaaS one-on-one you're probably not going to be able to market it at all." People don't realize that sales is actually the easy thing compared to marketing. Because you have one person in front of you at a time and this dynamic conversation and you can actually listen to their complaints and you can respond to their objections and teach them and convince them to buy your product. Whereas marketing is this mass thing where you blast a message out to tons of people and you have no idea how they'll react, right. They might say, "Ugh, this message doesn't appeal to me." So it's really not something you should worry that much about until you've done sales. Until you've actually talked to customers one-on-one and learn from them. And you understand what message resonates with them. You understand what kind of objections they have to buying. You understand what gets them to buy in the end. On that note, let me ask you what kind of knowledge and skills do you think that people need to have or that they should have to get started?

Clifford Oravec 0h 28m 21s

The biggest problem you're going to have starting out is getting people to use your app, right. So the skills that I would say that you need to know is really, they're more business skills than technical. You're going to have to understand, I think first and foremost, why people buy things. Why would they want to buy this? A lot of people think with entrepreneurship that you have to be an inventor, right. So how many times have you done the, "Oh I have this great idea." I run to Google, I type it in, and it's like FML, right. Somebody else already did this so I can't do this now. But that's not true, that's not true. And I'll tell you why. Just because someone else has done it before doesn't matter if people don't know that it exists. So what you need to do is you need to say, "Okay, well I'm aware there's some other people that are doing this." Let me go find the people that I think would be using this and let me go ask them what they use to solve this problem. If you hear these company names coming up, they're like, "Oh we just use this." Or "we just use this." That's what I would call like a Coke and Pepsi market. Basically there are a handful of dominant players that everyone knows on a name-brand, recognition basis. Those markets can be really difficult to get into unless you pull a Sprite, right. "We're the un-cola," right. You have to differentiate yourself from those market leaders to be able to get in there. But if you go and you're talking to people and they're like, "Huh that's really, I really don't know. I've never found a good solution." Or "I'm using spreadsheets." Or "Wow, if you had something I would throw money at you." That right there should be an indicator that there's a situation where the people that are offering a solution in this market have not gone out and educated the market that they exist. People don't know they exist. So that's actually a good thing if you can get in front of these people and make them aware that you exist. But like I said where it's what skill do you need. That's a business skill, that's not a software development skill, right. Being able to go through that kind of process and understanding why do people buy or how do people become aware of brands. Or how do you sell to somebody, right? And the secret there is that you don't sell. You help people buy. Those are the skills that you need to have in order to be successful in this space. And that's usually a skill none of us have starting out, right?

Courtland Allen 0h 30m 42s

Yeah and it's actually really unintuitive. Because you think, "Okay, I'm a consumer. I've been buying things all my life. I know exactly why people buy things," you know. And then you go out and you create a business and you create a product that nobody wants and you put up a landing page that no one understands. It doesn't convert any users because it's not intuitive. It's not enough to have just bought things your entire life. You actually have to get some experience selling. Get some experience marketing. Get some experience iterating on product ideas and building products that people actually want.

Clifford Oravec 0h 31m 11s

Right and I would say the other thing too is really understanding psychology, empathy, understanding people, how they think they perceive things. That is something that can go a long way too. When you get so focused on your product and you're just like, "It's me, me, me. This is my company, I'm building this product." Well none of that matters if people don't actually find it useful. If people aren't intrigued by it. If people don't see the value. And so putting yourself in their shoes and understanding how do they perceive your product and your value proposition and your offering, it takes a lot of practice if it's not something that you're a natural at. But the more that your can develop that skilL of having empathy, of being able to look at yourself through the eyes of someone else, the more things you will see that were hidden from you before, even though they were hidden in plain sight.

Courtland Allen 0h 32m 6s

Yeah, one of the things that I see a lot is that an entrepreneur will put up a website for their product or their service and nobody will use it. Or people will come to their website and they won't sign up. So they come to the Indie Hackers forum, they make a new post on the forum and say, "Hey check out my website. What do you guys think?" And 99 times out of 100 their website just goes on and on about their product, the people who created their product, and the features of the product, and how this feature works compared to this other feature. And not one place on their website do they say anything about, "Hey here's how my product is going to make your life better, as a customer. Here's how you're going to get that new promotion. Here's how you're going to make more money. Here's how you're going to close more sales. Here's how you're going to be smarter than your peers." They just don't appeal to the customer. It's not, like I was saying earlier, it's just not intuitively obvious that people buy because you're making them feel better or be better. It's, you know, kind of the intuitive thing to do is just describe how badass your product is and hope that that connects with people. And in reality it never does. They just don't appeal to the customer's interests and the customer's desires. And like I was saying earlier it's not intuitively obvious how to convince people to buy what you're selling, right. The intuitive thing is to just list all of your product's features and to just talk about yourself constantly and hope that people are as excited about that as you are.

Clifford Oravec 0h 33m 18s

You're going to make money because other people are going to give you that money because what you're putting out there helps them. They're not giving you money because you're awesome. They're not giving you money because your UX is so hot. They're giving you money because they care about themselves and they care that what you have is going to help them get some super powers. You're going to help them make more money, you're going to help them save money, you're going to help them get some time back. That's what they care about. They don't care about you.

Courtland Allen 0h 33m 44s

Exactly. And that's something that you're going to have to learn. And if you're somebody who listens to a lot of podcasts like this, if you read a lot of Indie Hacker's interviews, or you just read blogs or business books, then you probably will find yourself in a situation where you think, "I'm learning tons of stuff. I'm getting so much advice." And it seems maybe a little bit overwhelming, right. So the question is how do you learn effectively? How do you actually incorporate the knowledge that you're hearing so that when you start your business you don't make all the mistakes that people have warned you about.

Clifford Oravec 0h 34m 16s

This is a great one. So I made this mistake and I wanted to save all of you the time. You don't need to read crap. What you need to do is you need to go and you need to do something. So a lot of people, this is what they do. They stand back and they're like, "Okay well I'm going to be the next Elon Musk." So I need to make sure that this startup idea is just going to crush it out the gate. And they sit there and they over-analyze the heck out of all these different options for what they could do and so on and so forth, trying to nail it out the gate. And that's a mistake in my mind. It's good to think about these things because if you go in blind you could be targeting a market that has absolutely no potential. But if you over-analyze it you wind up not doing anything. And you got to keep in mind, your first attempt at this, it's not going to be the last thing you do, right. Not a lot of people marry the first girl that they date. So you got to treat your first attempt at this as, "Okay this is a first date with somebody and we'll see how it goes." You can't be planning out marriage when you're on Match.com and you're looking at someone's picture, right. You know, like that's a little creepy. Now you might say, "I'm looking for someone who's going to be marriage material" and that can help you to filter down the type of people you're looking at. But don't try to crush your first startup out the gate. Don't try to crush your second. Just do something that you think that has some potential, that you think you're going to have some fun doing, because you're going to have to put in a lot of time and effort to do this. You're going to have to write a lot and tell people a lot about it. So it better be something that you actually care about because otherwise you're going to get bored with it and hate it. But start doing that, okay. Because a lot of the books out there and going to be for Silicon Valley style startups. They're going to be for VC-funded startups. They're going to be for startups that are way further in their stage than you are just starting out. That would be like reading a book about marriage when you don't even know how to get a first date. Your goal is to get your first date. So what you should do if you're having trouble with your first date, go find dates about dating. Not about marriage, not about successful relationships. Just dating, go figure out what you need to do there. And I hope the analogy isn't lost but I mean at each stage only focus on the thing that you have to do that's right in front of you. Stop trying to plan 50 steps out all the time. Because you're going to get the learnings, right. So if you know how to get dates and you're just like, "Hey I'm having a hard time finding the right type of person," well you can go and read a book about that. Now you know how to get dates, that's not a problem. And you progress along that line, right. But so many people wind up worrying about Super Mario Brothers level eight when they're still stuck at level one and it does them absolutely no good. You worry about level eight when you get to level eight. So my advice is read books that solve the problem that you're having right now. If you don't know how to sell to people, if you don't know how to market to people, go read some books on that, you know. It's put the books down unless the book is helping you with something you're struggling with right now. Not something that you think that you're going to run into three months from now, forget that. Worry about that three months from now, focus on now. Because otherwise you're going to spend way too much time gathering up the knowledge of late-stage startup that you're never going to get to.

Courtland Allen 0h 37m 29s

Exactly. So I've taught, by way of analogy, four of my friends to code. And you know how nobody ever learns how to code, they don't just read like 10 books on programming and pop out on the other side and say, "I'm a programmer now." You actually have to kind of seesaw it, where you're learning and then you work on a project. And then you get stuck, you look back at the books as a reference. And then you learn some more new stuff. And then you work on a project and then you learn from that. And you look back at the books as a reference. Over and over again, right. And if you don't learn this way then the things that you read and the advice that you get, it's just going to go in one ear and out the other. Because you don't have any sort of actual experience to connect your learnings to. You actually need something in your brain, to structure your brain when you've tried something. Then when people give you advice you can say, "Oh okay, you know, I tried it the wrong way last time. Let me do it the real way this time." And that's not to say you should totally neglect reading. You need practice but you also need to read. You also need to talk to other people who've done it. Otherwise you're putting yourself in a position where your attempting to rederive every business learning that's ever been designed from scratch by yourself. Which is, you know, not smart.

Clifford Oravec 0h 38m 34s

Oh yeah, yeah. If things aren't working you got to debug it, right. So if, you know, you definitely don't want to be doing project after project trying to get something off the ground. You've got to learn from why it did or didn't work. Yeah, so you can't be like, you can't just throw your hands, like with your example of the forum. They come in and they're like, "Oh people didn't like my landing page. I suck at this, let me go do another startup." No! They didn't like your landing page. You need to figure out what's wrong and you need to bang at that. And guess what? It can take weeks, it can takes months before you actually get that messaging nailed in or you actually think through why people should actually pay you for this, right. So if you throw the towel in because you're not getting results and you never understood why you weren't getting results you didn't learn anything. I'm sorry, you went through exercises that bought you nothing, you just delayed your time. You spent, you wasted three months of your life if you can't go back and figure out why this didn't work.

Courtland Allen 0h 39m 39s

Yeah, another reason I see a lot of beginners quit is because they will come up with an idea and they'll say, "This idea is the best thing since sliced bread. I can't wait to get it out." And then they'll put their head down and they won't talk to anybody. And they'll just code and work and hack at it for six months before they show it to anybody. And then they launch it and of course it's a total dud. Because they didn't test it on anybody. They just assumed that their guesses for what people would need would be immediately correct. And that's very rarely the case. So, you know, that's just another low hanging fruit piece of advice. Build an MVP. Build a minimum viable product that, when people use it, their feedback is enough for you to say, "All right, I'm headed in the right direction." Or "I'm headed in the wrong direction." And that shouldn't really take you more than a couple weeks. The average person that I've interviewed on Indie Hackers took three weeks to get their product launched and in the hands of customers. So don't spend six months building something and not getting feedback because it's going to be super demoralizing, it's probably not going to work out and you're probably going to want to quit. What you want to do, and this is very common advice, is you want to build a prototype. You sometimes call it an MVP, which stands for Minimum Viable Product. So you just want to build the smallest thing that you possibly can that you can actually show to your potential customer and say, "Hey, would you buy this? Or would you buy something like this? Or will you buy this thing itself?" So a good example is Josh Pigford, who created Baremetrics. It took him about seven days after coming up with the idea to build a product and actually get it to its first customer and have someone say, "Hey, I'll pay you for that thing." And the average company that I interview on Indie Hackers takes about three weeks to go through that entire process of building something and getting it in the hands of their first customer. So you really don't want to spend six months doing it. It's going to demoralize you and you're going to be wasting a lot of time.

Clifford Oravec 0h 41m 27s

And the other thing too is that if you realize, "Hey, the reason that this hasn't succeeded is because I haven't sold enough or I haven't marketed enough," don't shut it down until you've actually done that. You know? It's like, "Oh I've been working on this for three months, it's gone nowhere." And it's like, Well the reason it's gone nowhere is because I haven't really promoted it. I'm just going to throw this away and go start something new and interesting. No, go and sell and market it and go see if you even have a chance and see what people say, you know. Like I said, you have to learn from it and you have to say, "Is this an obstacle that is overcomeable or not?" There's some things that are out of your control and you have to make a choice. Do I want to stop doing this because of that? Yes or no. But if you keep coming up with, "Well I didn't do this" or "I didn't do this, that's the reason that it's going nowhere," well guess what? You need to start doing those things.

Courtland Allen 0h 42m 17s

Exactly right. You don't have to actually build your finished product. We're not saying that your whole product needs to be done in like three weeks. In fact, you need to be in it for the long haul and realize that it's going to take you a long time to get to the final version of your product. If there ever is a final version of your product, right. But initially you need to be creative or you need to test your hypotheses and you need to get something in the customers' hands and learn about what it is that you're doing and who your ideal customer is and what they care about as fast as possible. And sometimes that means not even doing something that requires code at all.

Clifford Oravec 0h 42m 48s

Yeah I actually think three weeks sounds about right to me. Like sometimes people are like, "Oh this is too, for it to do what it needs to do I can't do this in three months." Well the trick is figure out one of the features of what you want in this end-product that you can do in, let's say, even under a month, right. And go do that and then stop after that and go see what you can get. I mean 30 days, that's not too bad. You could probably do 30 days' worth of something if you had to build something to show people. But I would say push it further and see can you sell the idea to people before you have to write a line of code. Or if people are like, "Well I'll see it when I believe it," can you write a prototype that you can just throw away? That you can just do a Skype call with someone, say "Well here, it's working on my local box here. This is what I was thinking it could do," right. Or can you even do like a high-fidelity wire frame where, Well this is what I think it would look like. Just look for a way to cut down how much time or energy you think you have to invest in it. You can almost always reduce a problem far further down than you would believe if you actually spent the time to say, "What is the minimum thing that I could do here?" Someone was telling that there's a company that was doing like, "I need a caterer." And so it was like a service for finding caterers and like the whole thing was basically spreadsheets behind the scenes, right. There was no, aside from like "Tell us where you're at and your email address," everything was just people getting an email in their inbox, they'd go to a spreadsheet and say, "Okay well here's caterers in your area that you can contact" or something. That's an MVP. You're testing an idea, you're letting people use it. There's zero code to it.

Courtland Allen 0h 44m 29s

Exactly, so you can't place too much faith in your initial thoughts about whatever it is that you're trying to build. Definitely don't place so much faith in it that you're willing to put your head down for six months and code something that, in all likelihood, people aren't going to care about. So the last thing that I'm going to talk about is something that I try to bring up in every interview, which is psychology. What do you think, Clifford, are the biggest psychological hangups that affect founders and what should people watch out for?

Clifford Oravec 0h 44m 56s

Right, yeah, yeah, yeah. And to spell that out explicity is really crucial. We're saying rather than sit on something for six months to a year, you're working your weekends, your nights. You're dreaming about this, right, for that time frame. And then you go to finally put it in front of people and you find out nobody wants it or the market's not big enough. Rather than go through that nightmare of an exercise, reduce it as low down as you can before you have something that you can put in front of people and start to get that feedback. But expect that everyone's going to go "meh" when you show it to them out the gate, you know. Unless you've really nailed it, in which case kudos to you. But that's not really how it works. It can take you a solid year just to get initial traction. And to get it built up to a point where it's, you know, the kind of money that you're probably looking for you're probably talking two to three years in a lot of cases especially if this is your first go-round. It's not something that just happens overnight. It takes a lot of work, a lot of refinements, a lot of feedback. Once you've done it a few times you might get better at it but you're always going to have to go through this product market fit little song and dance. You can cook up whatever you want in your head. If people don't see how it solves a problem that they give a crap about, that they're willing to give you money for, it doesn't matter how awesome it is, you know.

Courtland Allen 0h 46m 21s

It's demoralizing to hear no over and over. I think a lot of the things you talked about are very interesting because they create kind of these selffulfilling cycles that make your business a lot less likely to succeed. So for example let's say you're a perfectionist. Let's say you're super nervous about people not liking what you've built so you just don't show it to anybody because you don't think it's ready yet. And then you keep working on it. And it gets further and further away from what customers actually want because you're not getting any customer feedback because you're not showing it to them. So now you're even more embarrassed about it. And you're more likely to build a product that fails. And the cycle continues until you end up just quitting because you built something that nobody liked and you didn't want to show it to anyone. It happens all the time. Or maybe you don't have a good support network of other entrepreneurs who understand what it is that you're doing and so you end up just getting terrible advice from people who don't understand what you're doing. They tell you, "Hey, your launch didn't work out. You should just quit." When any entrepreneur would probably tell you to keep hacking at it. Here's what you could learn. Here's what you could improve to make it better next time. So obviously if you quit early then you're not going to build a successful business. Just a whole lot of things like this that if you're not aware of, could easily sink your business. And my favorite hack, which I think is just a super quick and dirty hack, is just to be radically transparent about everything. Go online, go to the Indie Hacker's forum. Go on Twitter and follow some people who are entrepreneurs and founders. And the just every other week or every month or so share what you're working on. Tell them how much money you're making. Tell them what your marketing plans are, your sales strategy, share screenshots of your product development and ask for their feedback. And at the very least what I've found is that people will be encouraging and tell you to keep going. Which is really what you need to hear because it's probably going to take you years of going to succeed. And the worst thing that you can do is quit early because you got discouraged.

Clifford Oravec 0h 48m 13s

That's a big topic. I mean there's a number of things that can go wrong in that department I guess. It depends on, you know, who you are as a person and the things that you're more sensitive to, right. You know, one of them is going to be if you're not a social person to begin with, getting out there and talking to complete strangers over something that you've placed a lot of importance on can be just fear crippling. And so there's a lot of fear that you have to overcome for a number of reasons. One, you're afraid of failing, right. I think that's one of the biggest ones. I'm afraid of putting myself out there and getting shot down because I need this to work. Well the funny thing about that is if you never put yourself out there you've already failed, right. So the other side is there's actually people who are afraid of succeeding. They don't know what to do when that happens. Maybe they think they really want to quit their job but they're really not ready for that. So they're afraid of it succeeding. And that's a tough one too. What's nice about communities like Indie Hackers is it's bringing together people that are going through this type of experience. And I would recommend that you talk to people that are going through this type of experience because you can have someone to relate to. One of the things that I find is that, unless you're over in Silicon Valley where everyone's got a side hustle going on it seems, if you're in just like a suburb or something like that you're probably not going to have a lot of people that you know that are trying to do the same thing. So your support system is really limited. You're going to have a lot of pressure from people that don't understand what you're trying to do to spend time that you don't want to spend. So after work if you're working on your startup or on weekends if you're working with your startup, well they're all not working on a startup. They punch their clock and go do their thing. So there's going to be some weird things like that where the way that you're living your life, at least for now, you're going to need to find people that have like a shared experience that you can relate to. Because you're going to feel very out of place, very alone. And having that community can really help you. So I'd encourage that you find those things. So, you know, kind of fear, loneliness or not fitting in, those are two things. I'd say depression is something that people don't talk a lot about but should be talked about. Because this is a very frustrating experience. If you're easily discouraged, if you're easily put down, you've got to temper your expectations. That's the only way that you can do this. Because otherwise if you come in and you're pushing hard and you're not getting anywhere, you're going to start to think, "Oh I suck. I'm a failure. I'm not going to go anywhere." And that's not the truth. The truth is you're learning a new skill. So just like when you were trying to learn your first, build your first program, you know, usually we all start with "Hello, world." You don't start with building an enterprise application as your first program that you ever write. Well same thing here. When you're starting out and you're learning how to market, learning how to sell, this is your "Hello, World". Your code is going to suck. Your marketing, your sales skills are going to suck. And you have to put in the time to get good at them. But because we're so used to feeling good, we're all professional software developers, we feel good that we know how to write code. And we feel good that we know hot to be good at our job. So we think that we should be good at everything that we do, right. And it's a different world with sales and marketing because you have zero experience. It's a different world altogether. And there's rejection, right. With code I can get angry at my IE and I could just bang at it until I get it to do what I want it to. Well you can't do that with people, you know. People do what they want to do. And so if you go up to people and you're like, "Hey, I want you to check this out" and they're like, "No." You do that enough times and you're going to start to feel not good about yourself. It helps just to hear other people say, "Yeah I've been there and you're not alone." And the cool thing is when you start taking action and you take action on a regular basis, and this is the other reason why you got to push this stuff out, if you wait six months to a year you're getting no feedback, right. If you're pushing things out week after week you're getting constant feedback. You're getting constant either validation or you're getting the data that you need in order to correct things. But if you're not putting things out on a regular basis you're just, you're wallowing away in a cave, right. By constantly making progress rather than just constantly spinning your wheels. And to me the definition of progress would be that you're putting something out that's demonstrable. Spinning wheels is I'm just working on the same thing but I'm not putting anything out. By doing that you're going to feel better about yourself. You're going to actually see progress. So always look for demonstrable progress that you can get feedback from or validation from.

Courtland Allen 0h 53m 4s

Cool. And on that note we'll end the episode. It was awesome having you on the show, Clifford. And for those who want to learn more about Clifford's writings and his startup search for "The Epic Guide to Bootstrapping a SaaS Startup from Scratch — By Yourself". That's his Medium post or series of posts on Medium. And if you're running a website and you want to know exactly why your visitors are signing up or what's causing them not to sign up, head to GetTamboo.com where Clifford's product will show you actual visitor recordings so that you can know exactly what's going on as if you're looking over their shoulder. That gettamboo.com. If you enjoyed listening to this conversation you should join me and a whole bunch of other indie hackers and entrepreneurs on the IndieHackers.com forum. We talk about things like how to come up with a good idea and how to find your first paying customers. Also if you're working on a business or a product of your own it's a great place to come and get feedback from the community on what you're working on. Again that's www.indiehackers.com/forum. Thanks, I'll see you guys next time.

Loading comments...