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Sage Advice (and Reasons You Probably Won't Follow It) from Jason Cohen of WP Engine

Episode #088

Not only has Jason Cohen (@asmartbear) bootstrapped a software company from $0 to over $1M in revenue, but he's done it four times! The stories behind Jason's successes are plastered all over the Internet for anyone to find, so I decided to take a different approach: I skipped Jason's backstory and instead proceeded to squeeze him like a sponge to extract every ounce of advice I possibly could in the hour we had together. The result is a wide-ranging discussion about the best path for reaching your first $10k/month in revenue, the lies we tell ourselves as founders, and why you probably won't take the advice that Jason (or anyone else for that matter) gives you.

  1. 6

    EXCELLENT interview. Jason is one of the best, and still my favorite MicroConf speaker of all time (that 2013 keynote was absolute 🔥).

  2. 4

    I hadn't really followed @asmartbear in the past, but this was fantastic! Of all the IH interviewees, he was arguably both the least dogmatic and the most nuanced. I'm not surprised the business results are also as much most (if not all) the others combined!

    This part was also particularly striking:

    "People are worried, "Oh, I've got three customers (or thirty), so I'm restricted. No you're not! You can do literally anything you want. You can change the price however you want. You can change the brand. You can change the name of the company. You could do anything!"
    ...
    "99.99% of anyone who will ever visit your website or any customer you'll ever have is in still your future and has not seen you yet. It's not too late. Now WP Engine, my current company is now nine years old with 100,000 customers so... (various caveats)"

  3. 2

    My Main Takeaways:

    • It’s hard to learn from both failure and success because there are a lot of factors that are not in your control. You could try the same thing twice at different times and get a different outcome.

    • Know who to listen to for your advice: You can hear two experts giving opposite advice, but it depends on the goals of the person that the advice is targeted toward.

    • Take the advice that your resonate with most: Given CONFLICTING advice, take the advice that resonates with you most.

    • Sometimes people need to learn from experience: As entrepreneurs we will often want to “pave our own way” which requires “not listening to others”, so when we receive advice, we may ignore it and only believe it after we've made the mistake of not following it.

    • Learn from people 2-4 years ahead of you, no shorter, no farther: These people are far enough ahead of you for it to be significant, but close enough toward you that they are relatable.

    • If you’re not willing to work nights and weekends, just stay at your comfortable day job at Google.

    • There’s nothing wrong with starting a business for ego.

    • Self-funding forces you to focus on profitability.

    • Jason says that the first milestone of a bootstrapped company is $10,000 per month per founder.

    • Major Key: Focus on HIGH price points with a FEW customers when bootstrapping: Go for businesses that generate at least $100 per month PER CUSTOMER, because you will only need 100 customers to generate $10,000 per month, and this is much faster and more manageable to achieve using direct sales since there’s only a few customers. (Jason says that it usually takes years to get to 1000 customers, even WP Engine took 2 years to get to 1000).

    • Prioritise annual pricing over monthly pricing for higher cash flow.

    • Rule of thumb: The more someone is paying, the less they churn.

    • Don’t think of price and product separately: The price is part of the product. (e.g. you will see two identical watches differently if one is $10 vs $10,000)

    • Convert your idea into a business by validating it with customer payment.

    • Do customer interviews until it gets boring: Do customer interviews until you feel like you are not learning much more from the customers based on your current iteration of the product. Jason did 50 interviews over 4 months until they started getting repetitive and he knew he had enough data for that iteration.

    • Execution is more important than idea: Jason says that very few first ideas survive, but great ideas cannot succeed without execution.

    • Work on your idea on the side first: If it succeeds in a timely manner you can quit your job then scale, otherwise pivot in order to find a better product market fit.

    • Love your customer and love solving their problem.

    • Co-founder vs Solo-founder may be based on your personality, i.e. Extrovert vs Introvert: Jason (an Introvert) prefers being a solo-founder, but says that some other people (extroverts) would be better with co-founders. Courtland (an introverted solo-founder) says that this is the same for him.

    • Jason says that people should NOT: [“read TechCrunch”, “pay too much attention to competitors”, “charge too little”, “try to be unique”]

    • Your product doesn’t need to be unique as long as you differentiate on brand recognition: Dropshippers literally sell the same products, the only way they differentiate is through marketing.

  4. 2

    May I ask when the transcript will be available? It's almost a month since publishing!

  5. 2

    I really loved the questions. Great interview, thanks both.

  6. 2

    Fantastic interview. Thanks for the wisdom!

  7. 2

    Great questions. And answers.

  8. 2

    Dear lord... Just started reading this man's blog. I feel so small, all of a sudden. This guy's experience is incredibly humbling, cannot wait to listen to this one!

  9. 1

    Where's the transcript for this?

  10. 1

    One of my favorite podcast episodes so far

  11. 1

    Really found this helpful, thanks! Especially the part about $10k/month/ founder, and thinking about the length of time it might take to find 1000 customers ... it really got me thinking about pricing (a part of the product itself, like a "car")... thanks!!

  12. 1

    👏👏👏

  13. 1

    Really enjoyed this :)

  14. 1

    The idea of pricing in the higher range has always made sense. It's just math after all. The challenge is as someone bootstrapping to come up and market a product that can charge that high of a price point. Maybe if you can get enough to convert to higher tiers.

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      I think it might be easier to start by thinking of valuable customers instead of first looking for valuable ideas.

    2. 1

      thats my issue at the moment. My product is simple (and I want to keep it that way), so its hard to raise the price(4.99 for basic or 9.99 for premium) just because

      1. 1

        Not a problem. You just need 2000 customers to be sustainable (ie fully support yourself).

  15. 1

    This is going to be fire.

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    This comment was deleted 5 years ago.

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    This comment was deleted 5 years ago.