What's up, everyone? This is Courtland from IndieHackers.com and you're listening to the Indie Hackers podcast.
On this show I talk to the founders of profitable internet businesses and I try to get a sense of what it's like to be in their shoes. How did they get to where they are today? How did they make decisions at their companies and what exactly makes their businesses tick and the goal as always is so the rest of us can learn from the examples and go on to build our own successful online businesses.
Joining me in this episode are Cameron Yarbrough and Keegan Walden the founders of Torch. Torch helps leadership teams within companies become better at their jobs through a combination of software and coaching. It's pretty fascinating stuff and I'm really excited to get into it. So Cameron & Keegan, welcome to the Indie Hackers podcast.
Thank you for having us.
Thanks so much.
Cameron as CEO, you've had 15 years of experience as an entrepreneur including creating and selling an e-commerce business. Keegan, you're the CEO of Torch and you have a PhD in Clinical Psychology, 10 years of experience as a UX designer and in the past you've led a research team at a national provider of Behavioral Health Services.
So you guys are really the perfect duo to start a company that helps leadership teams grow and become better at their jobs. How did the two of you meet and decide to work on this idea together
Keegan and I met in a master's program in graduate school for counseling psychology. I actually remember the first time we met we met in the hallway in between in between class.
He was this kind of towering man standing above me but he had this very powerful yet warm presence and I was so I was just immediately drawn to him. I had no idea that 10 years later. We would be building a company together, but I there was a chemistry right off the bat.
Following that moment we took classes together and then we ended up in a practical course together where we participated in a communications lab called T Group, which actually originated at MIT was popularized at Stanford and is a format for developing communications and relationships skills for business leaders and we participated in that group together for a year and a half and got to know each other very well.
Yeah, ten years between when you guys met and today you're running Torch together as co-founders and you guys are providing services to companies like Reddit and Twitch. So to start with let me ask how does Torch work exactly? And what happens when a company decides to sign up for you guys to serve?
Yeah, okay great. So when a company starts up with Torch, usually what we're doing is committing to help a certain number of leaders at that company grow and by virtue of the fact that in the professional world today, you don't have many opportunities to get feedback on where you're strong and where you're not so strong the first thing where we that we want to do is give both the client and their coach (who is provided by Torch) as much insight as possible into what their strengths are as a leader and what the challenges are.
So the first thing that happens is they go through a complete 360 review. So that looks at their leadership across 11 different domains piece of things like empathy mentoring facilitating groups being inspirational and so forth and for every person who goes through it, they self assess their leadership and then everyone that they work closely with also assesses their leadership.
So their peers their direct reports their manager and that generates a tremendous amount of feedback that helps them understand. Okay. I'm really good at I'm really empathic but I'm actually not so strong in this other area or whatever the case may be and then the coach will sit down with them when I sit down with them and happens virtually over Zoom.
So they'll meet with them and try to tease out the basic themes that they want to work out in terms of like where they want to go as a leader what they want to improve upon.
And then once those are identified what we do is we create learning goals out of the basic goals that people want to work out and get better at and what a learning goal is is it's one of the domains that we look at in our system and our could be another domain that the client really wants to look at there but their their company really wants to look at and by making it a learning goal - what you do is you're nominating several colleagues that you work with to give you ongoing feedback on your progress. If I want to become more empathic, I might say I want I want I want the help of two or three or four of my colleagues that will give me ongoing feedback and regular feedback on the extent to which I'm starting to become more empathic or not become more empathic.
Either way. I'm getting feedback that helps me grow and develop as a leader and eventually all the feedback and all the growth that comes out of that feeds into another 360 - 6 or 12 months later and all along were capturing data that's really helping clients grow.
This is pretty involved stuff. I mean you guys are helping people become better at their jobs. Yes, but the qualities that you're helping people improve and get better at or also qualities that will translate into their personal lives as well. If I become more empathic not only will I be a better leader, but I'll probably be a better boyfriend, a better friend and a better colleague all throughout my life.
It's sort of like yoga Courtland - people come to yoga and the first place because they want to have bodies that look better but what you actually get as a result is a more overall physical and emotional and psychological health as a result of the committed practice and we're doing something very similar with Torch where the value immediate value proposition is increased business performance.
But what people actually get is it greater self-awareness and therefore more balanced mental health and well-being.
And we've had many clients comment on the fact that the challenges that they face in their work life are really parallel to the challenges they face in their private lives, whether it's being defensive or lacking confidence or having confidence before whatever reason not to not being able to inspire or lead their team in the way they want to or feel disconnected from from a deeper source of meaning in their work.
Whatever the case may be - there's almost always some overlap in the Venn diagram between personal and professional.
So people start companies for a lot of reasons. I think sometimes we see something broken or less than ideal going on in the world and we want to fix it. Sometimes you just want to change their own lives and become financially independent or spend their time doing what we love or not have to work for a boss. What would you say motivates the two of you to be founders?
For me, it is an absolute prerequisite that whatever business that I'm creating is in alignment with my personal values.
Honestly, I wouldn't have created this company if it wasn't very similar to what we're actually doing because I'm not interested in building a business just for the sake of building a business. I'm interested in building a mission and it just so happens that it has a it has a very strong potentially successful business model attached to it.
So that's what motivates me what motivates me is building a dual bottom line business. One bottom line being to generate profits for shareholders and the other bottom line being to generate a positive impact for humanity.
And for me ever since I was much much younger I've always been really excited and galvanized by working with people one-on-one to help them move in whatever direction they're trying to go.
So I did that as a psychotherapist to individuals, to groups, to couple as an executive coach and if there's an animating force within me, it's helping people achieve their potential.
As a therapist and as a psychologist to working clinically with people in a one-on-one setting while I really enjoyed that and well was tremendously meaningful - I always felt like I could be doing more, I wanted to have more impact on wanted to have wanted to give this gift that I have for the world in a larger way.
And I just no matter how many clients I saw. I never felt like that was the best way to do that. I never felt like I was able to have the impact that I wanted to have.
I was told I could do more and so when Cameron I started talking about how we could do this at scale and Technology business, I could see immediately that that would be the opportunity to do so and then the second factor is it's kind of paradoxical to think that this would be the case, but I had an absence of leaders in my life growing up.
I didn't meet my dad until I was 25. I didn't really have mentors when I was early on in my career. I got some later on but I haven't much rolling on and I had to do a lot of work to kind of catch up. I had to do a lot of therapy a lot of individual therapy. A lot of couples therapy, this is me as a client now. I had to sort out a lot of issues and challenges and things that I just didn't understand and so having done that I thought it prepared me to do this kind of work having walk that walk in my own life. And so Torch is just an opportunity to do that on a on a on a larger scale drawing up on everything I learned.
Yeah, that makes so much sense and I think going through those types of issues and really being able to experience the solutions to them by seeing a therapist and in doing that work on yourself gives you an appreciation that a lot of other people won't have for how impactful this can be and leads you to start a company like the one that you have.
I want to talk about the early days. You just mentioned that the two of you guys got together and started talking about working on a company what led to that conversation. What did that conversation first look like?
After my father passed away back when I was running my last company was this kind of trigger point in which I had it sort of it was extremely disruptive experience for me losing my dad and three months later my daughter was born.
And as I was grappling with that major dilemma of a loss and a birth at the same time, it rattled me so much that it forced me to do something very different with my life. So I quit the current company that I was running at the time and decided to go off on my own to become a full-time executive coach.
Which was really more deeply in alignment with all of my past, my professional and my personal history. So at that time I reach back out to my buddy Keegan and I said, hey, I'm doing this really cool thing now and it seems to be working for seems to be a lot of demand for it. And I think you'd be really good at it.
Are you interested and Keegan said hell, yes I'm interested tell me all about it. And the next thing I knew we were sending clients back and forth and sort of collaborating as executive coaches and we essentially built a consulting firm together.
Now that consulting firm started to grow legs and after some period of time we said hey, there's really something we've really got something here. Let's build software and in order to build software you have to raise money because it's really hard to do and it's expensive. So that's really what led to the founding of Torch.
Right and I think for me there were there were a couple of experiences I had in my personal life that really sharpen my focus and my results.
So first thing was that my father passed away and he died in April of 2017 and like I said earlier, I didn't meet him until I was 25 and so I really only had maybe a decade with him until his dementia started to get to the point where it let's just say I had less of them than I would have liked and so I was really thankful for that time.
But once he once he passed away and I think people who have. Who have not experienced the parent dies, but then experience the death of their first parent. There's a way that that that just hits you and helps you understand that like you're not going to live forever.
You are mortal and especially given that my dad died when he was 80 and I was 41 at the time I'm thinking okay there's a decent chance that I have maybe 40 more years in which to do something meaningful with my life.
And while I had done things that felt really good to me and meaningful earlier on - it just sharpened my focus and my resolve and made me think like okay now is the time I really need to get going doing what I'm going to do in the most major way that I can and then the second thing that happened right on the heels of my dad passing away is that I got cancer.
So I would just first preface this by saying I basically got the kind of cancer that you most want to get of all cancers across every possible system of your body. So this is not going to be a brush with death - however, and I can, I got it treated it was fine.
But there is a way in which being diagnosed with cancer is jarring and like losing your first parent makes you really think about what you're doing with your time and with your life and I just came to the conclusion that time is precious life is precious.
And I was just I was coming out of a PHD program and the few years out of a PHD program looking to find something to do that would be a broader impact.
Like I said apart from having a private practice in doing the research that I was doing and so it all just kind of came together very quickly on the heels of those experience.
So you guys are both dealing with these life-changing and potentially traumatic experiences at the same time that you're growing as consultancy and thinking about writing software so you can scale it up and turn it into a bigger and more impactful business.
How did you guys strike this balance between one to do something that has a positive impact on the world but also, coming up with a viable business model that could reach as many people as possible there any trade-offs that you had to struggle with where there any lines that you brush up against that you refused to cross or was it pretty straightforward in strategizing how to do this?
For me, it actually made me more focused because there's something about losing someone that you love and then gaining a new person that you love within 3 months that pushed me to this epiphany that I can spend absolutely no time on this planet doing something other than what is my absolute truest path.
What am I here on this planet to do the question I asked myself is what is the path that's going to allow me to have the greatest possible impact on the people around me on this planet and on the business world, and that was the creation of this company and so for me the low loss and the birth were actually greatly were events that helped me really focus.
Yeah, I can imagine and I think often times there's this dichotomy between starting a company that has a positive impact and starting company that can grow and be as successful as possible as fast as possible. Have you guys struggled at all with making that trade-off?
The trade up come a little bit later. They didn't come in the first idea of how to structure the company how to set it up but I think that the challenges come once you start to grapple with the the power of the technology you're creating.
So we bend over backwards to create a product that has Integrity in terms of measuring in a valid way the different aspects of leadership that we're looking at in terms of producing insights that are clear and coherent and sensible and also in terms of like charting the progress of the leaders that we work with in a way that accurately reflects what's happening because we understand that if we if we get that wrong or we do a job of that that's good, but not great it can have real repercussions for people's lives.
And so we take that very seriously and I wouldn't say it's a trade-off quite in the way that you you framed it Courtland, but I think it's a responsibility that just increases with the passage of time as the product becomes more complex than as well working with more and more people and we just,, we can't think enough about it. Typically the last thing I think about when I go to bed and the first thing I think about when I wake up,
Let's talk about this transition from being a consulting company where the two of you were executive coaches for hire to being more of a product company that can scale and reach a lot more customers.
A lot of people have run consultancies and want to figure out a way to make their businesses more scalable, but have trouble doing it. What have you guys done sort of make this transition to success and what were the first steps that you took?
In order to scale any kind of consultancy, the first thing that you would think about is how to build software that's going to automate systems and services.
So that's that's how that's how we approached it. We thought to ourselves. Okay, what kind of software that could we build that's going to amplify and empower the services that were already rendering and what kind of software is going to enable this scalability of the software of the services that were rendering.
So that was really the what the transition looked like. A consultancy is generally made up of people rendering service and you have basic administration and operations that enables. That service but it's generally not happening at scale unless you're BCG or Bain - or a large management consulting company.
Those companies require many decades to build but if you want to build a consultancy that scales really really fast at the scale of a venture-backed startup, you've got to build software. So that's that's what we did.
And in fact, the first thing we built was a piece of software that would automate the recruiting funnel of coaches. So it determines the strength of the applicant based on their ability to detect subtle emotions - human faces that are kind of ambiguous.
It looks up their cognitive ability from a few different lenses measures the personality of look at their past experience and looking to strengthen their training in different ways.
Without having to go through any interview at all it already provides you with quite a bit of data on what it perceives the strengths of each applicant to be and so that makes interviewing and onboarding coaches go much faster. Right and we're as we develop or building out different pieces of software that automate different aspects of the business.
Looking at coaching now, it's kind of like a cottage industry made up of individual practitioners each of whom use either no tools or their own kind of 360 or the Myers-Briggs or whatever kind of assessments are using and so, part of how you scale is just to sell to the organization that employs a lot of people menu.
You can work with a hundred, two hundred or five hundred thousand people at a time instead of one at a time but in order to do that, you've got to renovate that cottage industry and so what heads of HR don't want is to have to manage 30 different coaches each of whom are kind of doing different things all over the place meeting at different cadences.
What they do want is to manage one vendor who's taking care of all of that for them again as Cameron said through the use of software and that's that's essentially how our business works.
Yeah seems like softwares is this commonality between every part of your business where it's what allows you guys not only scale up, but also I think make a more compelling pitch to these heads of HR that you're selling to.
Are either one of you software engineers? and how did you guys go about getting sort of V1 of your application written?
Neither of us is an engineer if you can believe that however in the first chapter of my career before I became a psychotherapist and then psychologist, I worked as a UX designer and I work for big banks and small consultancies and nonprofits and had my own kind of shop.
I understood how to create a product at least visually that would be sensible and that people could navigate through without getting terribly confused and I'd worked with engineers for years and worked with engineers for 10 years - every day. So I knew how to manage them and work with them in such a way that something coherent and useful would be built.
, would it have been nice if on some level I was a software engineer? Yeah, I think I could I could have contributed to it in a different way that might have been might have sped things up a little bit but I had enough facility with this kind of thing to know where to start and how to build and who to hire and how to approach the overall process.
My response to that would be that I'm an entrepreneur and Keegan is a data scientist and a ux designer by training and really are what our company consists of is a business side of the shop and a technology side of the shop and a data side. So really we had the first two we have the business experience.
We had the data experience and now we needed the software experience. So what do we do? We went out and we hired a CTO. We went and found the best CTO that we could find that also shared our values and we hired that person.
What do things look like financially and these early days. I mean you guys I'm sure we're generating revenue through your consulting and your executive coaching but you also mentioned that in order to write software you felt that you needed to raise money. So how much have you guys funded your early business was you guys raising money? And how much was it sort of reinvesting your profits back into the business?
When we first started we were just reinvesting our consulting profits back into the business to build MVP versions of the software. So using very sort of low tech solutions like SurveyMonkey and basic HTML tools we were able to build the MVP versions of what we wanted to do and once we did that we then pitched to angels.
That original angel round it was difficult to raise as raising money always is - but we had at least enough to show these angels and we had enough credibility already in the industry that were able to raise a few hundred thousand dollars. Then from there, we applied to YC. Y-Combinator is really spectacular when it comes to incubating current companies at an early stage, helping them to kind of think about what their what their first versions of the product are going to be YC is great at keeping people from making terrible mistakes early on and they're even better at helping them raise money.
The way they do that is by putting them on a stage in front of the most powerful investors in the world to showcase their companies, and that's really how we funded this.
You guys are one of many companies that I've talked to in the podcast who have gone through Y-Combinator and I also that many people who haven't gone through Y-Combinator people who might have mixed feelings about it. One of the most common situations. I come across people who've applied because they wanted the funding.
They wanted the validation. They wanted the mentorship but they ended up getting rejected and as a result, they feel some sense of bitterness or they feel discouraged about their own idea. How do you think things would have turned out for you guys if you'd never got into YC and you still be able to build a business that you have?
I think we probably could but it would take longer., the YC ecosystem is great to be able to sell into and the network is just useful in a variety of ways and it is kind of a badge of legitimacy and credibility that that is really helpful.
But even without that, investors are essentially interested in traction and growth and if you can show that, and you went to YC great if you can show that and you didn't go to YC, that's also great.
I think we'd be, it would it would have taken us longer, but we would eventually would have gotten there.
They're also a lot of people listening in who are staunchly against fundraising. They might understand the benefits that you can grow a lot faster than you have sort of this extra network and financial support but at the same time raising money really ratchets up the expectations of your businesses and raises sort of the minimum bar that you need to hit to be a success.
Do you guys ever worry about this? And if so will there ever come a day when you decide to stop raising money?
So I self-funded two of my last businesses and so the benefit of that is maintaining a hundred percent control and when you don't raise money, you have to optimize for profitability. And there's something very very powerful about that something very sound about that. Right? And so I got to enjoy 100% control of the company and I was pushed to maintain and create a profitable enterprise which was very helpful.
But what I what I sacrificed was the speed and scale and so when I created this business I want to do something different. I wanted to see what was like to build a company that could grow really fast.
And so I think that there's also one thing that needs to be acknowledged that there's a window here. There's a window of opportunity. Coaching is not going to be a field that's dominated by individual practitioners for very long. It just makes too much sense to try to do something like what we're doing and if we were to do that just out of the profits we were able to generate from our consultancy.
I think we would have missed that window. We just wouldn't get there fast enough. It would it would take us a long time to generate enough revenue to hire one engineer then 2 then 3 then 4 and in that time you're just not getting up to speed quickly enough and someone else is going to come in and do it.
And so I think there are probably some businesses where it makes sense to not raise - those businesses I imagine existence in seams between different industries that you wouldn't attract a lot of investment attention and wouldn't attract a lot of attention from founders and you can probably exist in there and kind of grow more slowly.
But in any sort of industry where there's clearly money to be made - if you don't rise pretty quickly during that window of opportunity then you're just going to miss out.
That's pretty fascinating. I mean essentially what you're saying is that you guys are in somewhat of a winner take all market where the first to capture the market is going to have a tremendous advantage over somebody who's moving more slowly or somebody who's a late entrant.
Why do you think it's the case that no one's really built a business like Torch before why hasn't someone applied software to executive coaching to scale up to reach many more customers?
Well, actually,, I don't know that it's a winner take all market. I'm not sure that's true. I actually I suspect that there will be several companies that do well in the space, but in order to be one of those companies, I think you still have to grow during this window of opportunity that I was talking about though.
So, I'm not sure that's true the whole learning and development market is. over a hundred billion in size. I don't think one company is going to come in and be doing, 30, 40, 50, 80 billion of that a year in revenue. I think they're just too many to many different pieces of that of that world that you'd have to capture. So, I'm not sure that that it would quite work out that way.
Also speak to your question Courtland as why haven't other why haven't other people done this. One thing is that is that scaling a Services business is actually really hard. What we're trying to do is we are trying to build a SAS product and we're trying to build a marketplace at the same time.
That's a very complex and difficult problem because at the core of our business are going to be hundreds and hundreds of coaches. So that's very difficult to do is just it is just the operational problem of scaling up a very large marketplace of service providers. I think that's one reason why this industry has been slow to adapt in terms of technology.
But I also think that the other the other reason is because it's executive coaches are often times more kind of the types of people that are more focused on their craft and their science then they are in, building technology and I so I think that was opportunity for us. I think that we are sort of even though we're not software engineers were technologically oriented people.
And so I think we were in a unique position to see an opportunity.
Let's talk about growing Torch. I think it's fascinating what you said about the fact that you're trying to scale up what really is a services business and it's it's not just pure software. You actually have to bring on additional coaches if you want your business to get bigger.
What was growth like in the very early days and what's the story behind how you found your first customer and what are some of the challenges you faced to start onboarding your first customers?
So in the early days, we were selling to our networks. So having worked in an Executive coaching in the valley for at a high level for some years Cameron had a large roster of clients who we could sell to and we did and then eventually we reach the point after maybe six months or so where that had been exhausted.
We really had to figure out how are we going to sell to organizations and enterprises beyond that and that's when you really start to tackle your go-to-market strategy in terms of what is the story that's going to be compelling to the heads of HR, to the heads of learning and development, to the individual founders who are interested in growing their careers and their skills. And, we're obviously still in that right?
We haven't completely figured that out but we're large enough now that we can think about that as strategically and do a/b testing and test different messages with different folk and let the data guide us and show us the most effective way to do it.
Do you remember exactly how much time passed between when you guys first sat down to write the software that you're selling now and when you got your first paying customer?
Well, we had our first paying customer before we had any software because we basically had a large group practice or a large consulting practice made up of high-level exec coaches who again all use their own tools. So we were already generating income from that and then we started to build software prior to YC so maybe after a month or so and then from YC onward we were really focused on the software and in parallel with that also growing our coaching course.
We could match every incoming client with someone who was a good set in terms of their personality, in terms of what they were looking for dope.
Where a typical SaaS company will actually spend about 24 months on average before they actually sell their their product meaning it takes about 24 months to develop a full-fledged SaaS product before they can go to market.
We were able to go to market immediately with our service and then we just slowly, incrementally built software around our service to amplify it and accelerate the scale of the services. That's really how we built this company.
Yeah, that's so advantageous because then you can learn from the experiences that you're having with these actual customers and have that sort of feedback into the decisions you make in terms of what should actually go into your software will people find valuable rather than spending 24 months building something kind of blind and not knowing where people will actually pay for.
Exactly, which is which is not the YC way. So from the from the very Inception of our thinking about software. Everything was run through customers, bounce off customers, came out of an interview with the customer. Whole features in our product came out of something someone set off hand and then we tested it or evaluated in some way.
So one thing we just definitely did not want to do - one pitfall we wanted to avoid and one of the main pitfalls that YC tells us is don't build something in isolation and don't assume it's good because you like it that will always lead you astray. Everything should essentially be pulled out of the customer.
What are some other things that you learn from YC or from early mentors? Maybe early experiences as an entrepreneur that sort of steered Torch in the right direction early on.
What do ? Founders are optimists and and YC would argue and I agree that oftentimes to a delusional degree are optimists. They do a really good job of deconstructing and breaking down the delusions that Founders tend to have because there's so excited about their idea. They're so excited about what they're building one of the key lessons that I remember is,, the difference between YC's definition of product Market fit and what you might think product market fit is left to your own devices.
So YC's definition product market fit is there's so much demand for what you're creating that you just kick. Your company is breaking and it's just seizing to function because you just cannot keep up with the demand.
I think as founders you can be lulled into a false sense of security with regard to product market debt and and think that you've established it because you have some paying customers or, someone told you that they want to buy your product or you show them a demo and they were excited.
It's just important to differentiate between product Market fit as a function of your desire for what you're doing to be born in a big way and true product market fit that we just totally unmistakeable.
Couple of things that I think I really got out of Y combinator one is I think that YC does an incredibly good job of shattering any amount of hubris that might exist inside of the founders.
They do that by presenting case examples of all these startups that have raised tremendous amounts of money and have been failed. So they have incredible case examples of people who got really proud of themselves because they raised a bunch of money from Sequoia or Andreessen or, this top tier VC or that top-tier VC only to go out of business because as they didn't listen to their customers or they didn't manage their operating expenses.
So that by itself - that lesson by itself is was worth the seven percent that we gave to YC in my opinion.
I think it's a lot of lessons that can be extracted from you guys own story that might be helpful to listeners who are trying to build their own businesses.
So to start with I want to talk about having a co-founder. Having a co-founder can itself be a double-edged sword sometimes. It results in a situation where the two of you add up to something greater than sum of your parts just as often having a co-founder leads to fighting and disagreements that destroy companies you guys both have a background in psychology and mindfulness.
You guys have known each other for 10 years prior to starting this company. How's that played into your relationships as co-founders and what can other people do to sort of make sure they choose the right partner to start a business?
Well, I think you want balance across your team co-founders, whether it's two or three or four or whatever the case may be and in our example, I'm I'm a skeptic.
I'm a deeply skeptical person. My natural skepticism that I was born with was compounded by six years at Northwestern getting a PHD. To get a PHD in Psychology these days essentially you're being taught how to show that a particular piece of research in front of you is flawed in some way.
That's helpful as a Founder. I can look at the product and say I don't think this is going to work that's not going to work. We should probably do this and not that but that deep sense of skepticism on its own is not a good recipe. I well would not make a good single file.
Cameron is an optimist and a visionary and and he thinks about where the company could go if we did this, or this, or this. Without me I'd like to thin , the wheels might come off in a different way, but between the two of us, we get optimism and broad-minded visionary thinking and we also get prudence and restraint and skepticism and I think for anyone thinking about starting a company.
Never mind, the fact that it's going to be a stress that no single human should have to endure on their own you want to kind of symmetry in terms of how you reach wired such that 1 plus the other plus 1/3 plus the fourth equals a pretty balanced human being that has all the notes that that you need to head. In order to just endure the the years you're going to spend working on that company let alone drive.
I think there's a really simple framework for this. I read this book called the founders dilemma by Noam Wasserman. He's a professor at Harvard business school and he did these longitudinal studies on Startup Founders, and he eventually developed this very simple framework that I've really taken to and that framework says the successful co-founders typically have symmetrical values and complementary skill sets.
So I had this framework in mind when I started thinking about who I would partner with in the center and I couldn't think of anyone who fit that framework better than my friend Keegan.
Keegan and I share the same values when it comes to politics, when it comes to money, when it comes to spirituality, when it comes to the culture that we want to create.
In the way that we treat other people in the world and then we by contrast we have very complementary skill sets. Keegan is very analytical. He's very data-driven person. It's very scientific. I on the other hand and more of a visionary thinker I like to imagine possibility and I'm optimistic as Keegan said.
So when you put these complementary skills together, you amplify or you broaden the reach that you can achieve as two people as opposed to. a singleton founder so that's the I think the best argument for why it too wide to recruit a co-founder is because startup is really hard and it's really rare that one person has all the skill sets that you need to create a successful startup. So by adding a partner who compliments you, you can you be more places at once.
And I want to say also that even despite all that Symmetry and all that complementarity that Cameron I both mentioned,, we still have plenty of tensions we have to work on. In fact, we go to co-founder therapy.
And in that therapy we talk about the ways in which we annoy each other. The way Cameron does things that irritate, the things that I do. Ways that I can be dismissive or contentious that really bother him. And we have a regular forum to work through those things so that they don't accumulate.
Meanwhile. We're not dealing with them and we found as coaches that those kinds of tensions left unaddressed can really interrupt and tear companies apart and we have a vocabulary having trained together and psychotherapy school and then also being co-founder therapy together to really work on the tensions that arise before they become huge and enormous.
So we're walking the walk in that sense and now. Also teaching the people that we work with how to do some of the same things.
Do you guys think that co-founder therapy is something that all co-founders should go through or should you wait until things sort of reach a potential breaking point where you start to see warning signs.
So the conventional wisdom is that couples come into therapy. I'm talking about romantic couples about six years too late and I've experienced. This is a couple therapist in an earlier chapter of my life where they come in and they're so at each other's throats and there's so much hatred and so much resentment and there's been so much there's been infidelity.
There's been domestic abuse is in all kinds of problems. It's very hard to put that back together. It's possible but it's very difficult. And so I think the same logic around going to co-founder therapy early and. Learning how to argue and co-founder therapy.
Learning how to not be defensive and co-founder therapy learning how to own your mistakes and repair and cope under therapy is really key and you want to do that as early as possible. It boggles my mind that people can run companies without doing that ever at any point. It just makes no sense to me.
Another thing. I think you guys are pretty knowledgeable about at this point is obviously helping people to become better leaders, you're working with companies are developing software sort of coach these executives and help them run their companies better.
What are some lessons that you've learned from that that potentially early-stage founders maybe people running one or two-person companies can take away and become better running their own startups.
Okay. So what have we learned? I think primarily we've learned that you've got to have a growth mindset. The concept of growth mindset, which was coined by Carol Dweck - a Stanford psychologist is that it’s essentially the belief that you can get better at just about anything with hard work, better strategies and and importantly ongoing feedback from others and so in our work with people we come across clients that don't quite have a growth mindset because they don't have a growth mindset.
They tend to lean heavily on the leadership skills that they think they're good at or they know they're good at. And ignore the things that they think they're really not good at and so much of our model and the coaching we do is helping them pivot away from the sense of well, I'm going to be seeing so I'm just going to do all my leadership stuff using these skills and toward the I'm not so good at these things, but I bet I can get better at them with some hard work and better skill and increases feedback and once they make that shift from relying on what they know to being willing to face what they don't know.
That's when all the growth really opens up and starts happening and we see it person after person after person. That's what all of our coaches do each in their own way and able to buy our software. But essentially it's at the heart of what we do.
Self-awareness is such a key part of what we're doing in such a key part of our mission.
So I would expand on that. Self-awareness at its core comes from mindfulness meditation and it sort of made its way in the Silicon Valley as this sort of very popular term but it has its roots and in the possum meditation and essentially what it means is our ability to pay attention to ourselves, to pay attention to what is happening.
The mission of Torch is essentially that. It's to know yourself so impeccably well that you become a better communicator, that you're able to be less reactive. Therefore focus on the things that really matter and so our software and our coaches are our way of codifying that process.
I think another thing that's really fascinating about what you guys are doing and challenging in a way is that you mentioned becoming a better communicator. You mentioned becoming more empathic you mention the positive meditation a lot of the benefits here are intangible and difficult to value.
If I run a company and I hire a sales person and they bring in. $200,000 in revenue for the year, then it's easy for me to calculate what they're worth. My servers are on fire and I can't serve my customers and bringing somebody in to fix them as kind of a no-brainer.
If I'm running a business that's going more or less okay and you guys show up telling me hey, I can improve the quality of the leadership in your company that might be worth a whole lot. But it's also hard for me to tell exactly how much it's worth.
I imagine that makes it a harder sell for you guys as it's been a challenge for you at all and if so, how do you explain to customers who might not be aware of the value of what you're selling?
So let's just say that your company is doing really, really well. Everything is up in the right you're growing, you're adding users and users are sticking their using the product more but let's just say you treat your colleagues badly.
Let's just say you're a little bit of an aggressive jerk. So the company's doing well, but you're an aggressive jerk. All right, you are going to get that feedback from your colleagues. Your colleagues are going to be willing to find a way to tell you that you need to work on your character.
So essentially what our company does is it provides a medium for that kind of feedback? Now, let's say you are someone who's not an aggressive jerk at all. You're actually a really, really nice person. You're so nice that you have a hard time giving hard feedback to somebody else.
Your direct reports are always struggling to find out. How can they can do better? What Torch does is it provides a medium for that feedback so that you get the feedback that tells you hey, I really like my manager, but I really wish she would give me more hard feedback from time to time so that I know how to improve.
So to answer your question. Even when the company is already excelling most people can still become better leaders. So our company is built around developing infrastructure to make that possible
That's great. I don't forget anything to that.
I'm curious about how your business model works for customers paying you guys a monthly fee for coaching. Is it an upfront payment? Is it contingent on results in any way?
So we sell the organization and we might sell that organization to coach five people or 10 people or a hundred people are 300 people are 500 people. But because we sell the organization we can say look give us this number of managers.
Well do an exploration period at the beginning where we'll really get to understand your culture and the challenges you face in the strengths that you have and then will transmit all that knowledge we get in the exploration phase to our coaches to give them extra context and extra sort of framework to work with in terms of understanding what the organization's mission is and what the organization's objectives are for the coaches and the coaching.
Then each client gets to operate within that so that they can have their goals and their aim their objectives for what they want to develop themselves and it all kind of fits together seamlessly. So the business model is sell larger engagements to organizations.
We don't put any constraints on how long it should be because we're very comfortable with the quality of what we're offering and we find that once the company starts working with us they typically will work best for a long time 12-24 months or beyond and we're finding we're refining it as we go customer by customer.
I've been thinking a lot in recent days about how beneficial it is to run a business kind of like yours where your average revenue per customer is going to be pretty high. I think lots of peoplel, developers especially, want to start businesses that will charge customers something super low like five or ten dollars per user per month…
…but I think if you do that, you're making it really hard on yourself, because not only do you suddenly have to find many thousands more customers to work with to turn a profit but you also can't really afford to spend very much money acquiring each customer are providing value to each customer because there were so little to you.
Where in your situation each customer is probably worth so much that you can theoretically spend a lot of money finding the perfect customers and put a lot of effort and resources into providing beneficial services as that worked out that way for you guys?
It has actually it does cost us quite a bit to acquire a customer but once we acquire that customer the period of pay back is only about two and a half months. So the beauty in that is we can spend money to buy a new user but we pay that money back really, really quickly. That's a huge advantage for a services business.
What are some of the ways you guys spend money to acquire new users?
We spend a lot of money on high-quality content creation. One of the unique advantages of our businesses is there's all kinds of very, very interesting content that you can create around leadership and the content is so engaging that we're able to distribute the content to through to our influencers and they're very happy to redistribute it because it's valuable content to put out in the world. So people read the content and they want to engage with it and they come to our landing page and fill out a form. So that's the kind of basic way that we acquire customers but that process of creating really high value, high quality content cost money.
So I'll let you guys get out of here with the final question. You guys have both spent a while working on Torch, a while as executive coaches. Cameron - you've had pretty long journey as an entrepreneur. What do you think are some of the biggest lessons you've learned as founders that brand new people - people who are considering starting companies, people who just started their companies should take to heart?
So I think having been an executive coach and seen people go through pretty much every phase of that. It was remarkable how much I was still surprised by the challenge of the path of leadership now that I'm experiencing it firsthand. I should know better. I've worked with people and seeing every just about every possible challenge that a leader can face.
But, if I was to give a piece of advice to anyone thinking about starting a company it's, get ready. It's not for the faint of heart. It's a new challenge every day. It's up, its down. You really need to have your life be, well, I think things will go better to the extent that your life is stable and solid and that you have the kind of awareness that you need in order to do this effectively. And, by that, I mean you really need to know what your challenges are as a leader.
What is it that you don't like to do? What is it that you think you are terrible? How is it that your fear is your anxiety your depression your thoughts about yourself your whatever are likely to show up. Once the pressure is really on and things are growing or not grow.
Either way. It's a different challenge and it's a different set of trust and the more insight you can come into the the founder experience with - the better you're going to do the better co-founder you'll be. a coach can be really helpful in that regard a therapist can be really helpful in that guy that regard. It's very difficult to learn all this on the fly.
What I'll say, is that something that I've learned from this company is that your strength as a co-founder pair is only as strong as your own ability to reflect on your weaknesses your own vulnerabilities and be okay with those things and talk about them with your co-founder to the extent that you try to hide them - to try to hide your weaknesses to the extent that you try to pretend that you've got it all taken care of - that relationship will see will suffer or even fail.
So what I'm learning from my work with Keegan is that in order for us to create a successful co-founder relationship and therefore a successful company we have to be willing to be wrong. You have to be willing to admit our failures. We have to be willing to admit when we have something to learn and how to ask for help.
Those are the kinds of things that I do every single day and the fact is is when you have not only a co-founder, but you have an entire organization of people but whether it's 20 people, or 50 people, or a thousand people - your weaknesses and vulnerability will be seen because you're on such a stage.
So you should not take that position if you aren't willing to look at yourself off on a daily basis. That's what I'll say to everyone who's thinking about starting a company.
I would just add that it's particularly important for Cameron to admit that he's wrong because it happened so much and it's so rare. No, it is.
You really need to have a sense of humor because you have to be willing to take being teased from your co-founder and make being made fun of I think that's actually a really important skill so Keegan and I really great at giving each other a hard time and being playful. Yeah, I would add that a great co-founder pairs have to be able to do that really well.
I can second that because I work on Indie Hackers with my twin brother and we've got a 31 year history of ragging on each other. So. All right, guys. Well, thank you so much for coming on the podcast sharing your story sharing your tips. It was really thoughtful I think helpful episode.
Thanks so much for coming on the show guys. Can you let listeners know where they can go online to learn more about Torch and about what's going on your personalized if you guys share that kind of information online as well.
So if they want to learn more they can go to our website which is Torch.io and in terms of our personal lives,, when you're running a company there isn't time for much else.
But whatever time we do have certainly goes to our kids in our lives. I've got two kids Cameron got some kids and they keep us grounded and every ounce of energy that I'm not spending running Torch I'm spending with them and I want to give a special acknowledgement to my wife who support really makes all this possible.
It'd be completely impossible to do anything like this, but I didn't have such a rock for partner and that's just beyond.
I will add that it's really important that any founder has a really stable relationship with their spouse because if you don't it's when you create a start-up any amount of instability that you have at home is only going to be exacerbated. So I feel very grateful to balance relationship that I have as my with my wife as well that's just the foundation of any successful companies - having successful relationships at home.
Alright. Thanks so much guys for coming on the show.
Thank you. Thank you for having us.
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