Mark Fershteyn (@markfersh) always knew he wanted to start a business, but there was just one problem: He didn't know what that business would be. Of course, this wasn't enough to stop a determined founder in his tracks. And so, fueled by raw optimism and a refusal to lose, Mark embarked on a years-long journey to build a promising business, discovering and overcoming dozens obstacles in the process. In this episode, Mark shares the story behind his business, Recapped: recovering from failures and false starts, dealing with the stress caused by a dwindling bank account, finding product-market fit through sheer persistence and faith in what he was building, and learning new things about himself in the process.
What’s up everyone? This is Courtland from IndieHackers.com, and you are 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 do they make decisions at their companies and in their personal lives, and what exactly makes their businesses tick? And the goal here, as always, is so that the rest of us can learn from their examples and go on to build our own successful businesses.
Today I’m talking to Mark Fershteyn, the CEO of a company called Recapped. How’s it going, Mark? Welcome to the show.
It’s going well. Thank you for having me.
Thanks for coming on.
I first met you almost exactly a year ago. I think it was last March at the first Indie Hackers meetup that we ever have in San Francisco. I think you were the one who suggested the location that we all meet up at Southern Pacific Brewing Company. Do you remember that?
Yeah, I do. I can’t believe it’s already been a year. I mean, I love that brewing place. It’s perfect for meetups.
We still have meetups there every now and then.
The last time I talked to you was just a few weeks ago, and you were so hyped about your company. You had just broken through some sort of wall. I’d never heard you that excited to talk about Recapped. Why don’t you tell us a little bit about what’s gotten you excited in recent dates?
Yeah, absolutely. I’m really hesitant on saying we found product market fit, because there’s 20 different definitions out there, and for some people that means we have 20 million customers begging to give us money, which isn’t the case. But I’d say we are very close there to actually figuring out exactly what people want, and for me, that’s really been the biggest challenge for the last six months, or really the past year.
We had really identified the core market that we were going after, the problems we were solving, and really started working on that messaging and getting it to a point where it’s actually clear. So now when I tell people what we do, now all of a sudden, they’re not giving us this confused look.
Now their answer more often than not is, “That’s really cool. Give me your business card. Let’s schedule a time.” And that’s what really has been getting me excited.
Well this is why I’m excited to have you on the show, Mark. I’ve talked to so many people on here who are building these huge companies. They’re doing millions or tens of millions in revenue. They have dozens or hundreds of employees. And they don’t quite remember what it was like to first have that transition where people’s eyes no longer glazed over when they would tell them what they were working on or how it was supposed to solve their problems.
You are at the point now, Mark, where I would say that you’ve struggled a lot and you’ve learned a lot, but you haven’t made it so far that you don’t remember this early pain. Would you say that’s an accurate portrayal of where you’re at?
Absolutely, and I’m excited for where we’re -- we have millions of revenue and dozens of employees, but right now I think this is the really fun stuff, where I’m in the pits. I’m on the phone calls. I’m helping close our key customers. Yeah, everything is breaking every day, and that’s -- for me, that gets me really excited cause otherwise I’m just going to be bored and not as productive as I should be.
So give us a sense of where you are, in terms of revenue if you share that, or employees, customers, etc.
We have four employees now. We have a couple thousand in monthly revenue coming in, and we have, all said and done, about 1500 customers, but a gross majority of those came in from a lifetime deal that we did through a partnership with AppSumo.
Okay. So let’s go back to the beginning. Not the beginning of Recapped, but even before that. When do you think it was that you were first inspired to do your own thing, to work on your own projects?
Good question. I think this is from the early days. I think this is something that’s always been a part of my identity. For example, back when I was even in middle school, my dad got us a CD burner and we were one of the first ones in the neighborhood.
So every week, I would burn a mix of songs and sell them for $5.00, so it would have these Mark Mixes, and that was just an early hustle for me to start making money. I’d been doing stuff like that all through high school, all through college. So I think very early on I knew I wanted to do my own business. I just didn’t know what it was.
Would you say other people in your life would have described you as an entrepreneur in the making, or did you project that you were on some other path?
Great question. So I think I fought it for a large portion of my life. In college, for example, everyone kept telling me to go into sales. And most people, when you think of sales, or when I thought of sales, I pictured this greasy, slick-back hair, someone that’s trying to sell you snake oil. And for me, that’s not what I wanted to associate myself with. But actually when I ended up getting my first sales job, I realized how right everybody was. So I think it’s something that everyone described me as, but I didn’t identify with it for a very long time.
One of the cool things about going into sales is that I think it really illustrates the fact that everyone is a business, even if you’re an employee. There are a lot of jobs where you just sort of get compensated, just a normal salary, but as a salesperson, you’re getting commission, so you’re incentivized to go out and do the thing that you’re supposed to do. I think it’s much closer to the realization of being an entrepreneur than most other jobs.
Absolutely. It’s funny. There are so many different parallels between sales and other aspects. Like sales and dating, it’s pretty much the same thing. You have -- everything is sales, and there’s a couple great books on this, that if you can sell, you can make so many other parts of your life be more successful.
So when did you start your very first business?
My very first, I guess official, business was actually when I was working, still in sales, at Citrix. I was a sales manager at the time, and I’d always been -- I’m a huge nerd, so I’ve always been playing video games and I had this idea for a mobile app with some of my friends. We created this company called TryHard Games just as kind of a joke, because we were a bunch of try-hards.
We created this mobile game which ended up being a huge flop, but it was probably the best year of my life in terms of pure fun because after coming home from work, every day at 6:00, we would still work on it for two or three hours every night, and every Saturday and Sunday for about 12 hours.
And not once did it feel like work, which to me was kind of the realization when I realized that my skill set and what I like to do falls very much in taking something from zero to one, rather than from one to ten, for example. That’s what I wanted to do for the rest of my life.
I know a lot of people who work in sales. I don’t know a lot of people who work in sales and have the belief that they can just up and start a video game company. What gave you the sense that this was even possible?
I think anybody that knows me knows that I’m incredibly optimistic, almost to a fault. I’d say it’s one of my biggest strengths and weaknesses. I overestimate, or I guess underestimate a lot of things. I’m just like, “Yeah, how hard could it be?”
And it always, almost always, comes back and bites me in the ass, but I still enjoy it because when I thought about it, it was like, “Oh, this app will take us one month to make and then we’re going to make $3 million off of it because it’s going to be great,” like what other alternative is there? It took about a year and a half. We made $4,000.00. But still, I think that’s really where it comes down to. I’m so optimistic, ignorantly so about most things, actually.
I think that optimism is pretty common with founders, with creatives types who actually start things, and I think it’s because of the fact that it leads to this kind of self-delusion. I’ve been in the same place where it’s like I’m going to start something new, and it’s going to be this huge thing in this short period of time.
And I think if you don’t believe that, it’s harder to take the first step. But if you do believe that, you take that first step and then you’re committed. It’s hard to quit so you have to keep going.
For sure, and then your ego starts playing into it and you’re like, “Well, I’ve already told my friends that I’m doing this, so now I have to keep doing it.” For me, one of my biggest inspirations -- and this is probably going to get a lot of flak, because Kanye West, who is the poster child for self-belief and this ignorance that comes with it, and I think that’s kind of been one of the things that helped me channel that.
So walk me through the process of starting a video game company, especially as someone who’s working a fulltime sales job. What’s the first thing you guys did?
I’m one of those people that I have my note section on my phone. I probably have a new business idea at least once a week. And so I have this huge list of hundreds of ideas and I was sitting there playing, I think it was Tetris on my phone one day and it was like, “It would be really cool if Tetris did this instead.” So immediately, my first natural instinct is to write it down and start drawing it out.
I had my iPad at the time, and I sketched out what the app should actually look like. So then I put that away, about a week later came back to it, kept adding to it, and I just found myself really drawn to this idea. The game was, you have these different dots that are dropping from the screen.
They’re multiple colors and you have to connect them or connect the same color ones before they hit the bottom of the screen. So kind of like Fruit Ninja meets Tetris. Very simple idea, but I get really competitive and for me it’s those little repetitive tasks that get me going. Immediately I walked into my roommate’s room at the time, who was also my best friend for 18 years, told him about this idea.
He’s like, “Alright. I’m on board,” because he got pumped off of my enthusiasm for it. But then we realized, that’s great. We’re these two guys who are both in sales. We don’t know shit about coding. So we’re like, okay, we need to figure that part out. Luckily one of my best friends also was a developer at IBM at the time, so we got him on the project.
He brought on his other two friends. Next thing you know, there’s six of us in my living room eating pizza and drinking Mountain Dew every day of the week.
So what’s your role here? Are you lead game designer? Are you sketching out how the game’s going to work? Are you putting your sales abilities to work and trying to land some sort of deals?
In hindsight, I don't know why anyone actually works with me. I literally was just like, every month we would change focus and try and do something differently. And it’s because I would try a new game and be like, “Wouldn’t it be really great if we could do this instead?” And looking back on it, working with me was probably just the biggest pain in the ass.
I was sketching ideas. I was designing the game. I guess I was the creative director at the time but with no real training in it, and zero execution skills. I think really it was just the pure enthusiasm. We had nothing better to do. At the end of the day, it was really fun, and I think that’s what kept us striving.
So you’re not working on this game today, which means that you eventually stopped working on it. How did that come to pass?
The project that was supposed to take a month and get us a couple million dollars was about a year and half. We finally released it. I still think if I were to go back and do a third version of it, it could be really successful and that’s on my agenda to do later down the road.
So we released it. It actually did get Top Ten Action Games on the Apple store for about three or four weeks, so we got a ton of different downloads. But what we realized is we are these hardcore gamers who are playing World of Warcraft and are in these serious rating guilds at the time, and really literally hardcore gamers. And we were trying to make this game for the casual market, the mom that’s sitting in a grocery store in line playing a game, and those two do not line up.
So one thing is, A, we didn’t understand our market and B, we didn’t play to our strengths. So if we had actually made a competitive game for competitive people, or a casual game for casual people, I think we would have seen a lot of success, and those were I’d say probably some of my biggest learnings from doing that, is you really just have to understand who your market is.
For example, if you’re 45 and you don’t use social media, you have no business making a social media startup. Leave that to the 18-year-olds that are in college that are using social media every day. Focus on what you know best, and for us that was a very heavy lesson to learn.
This is where the downsides of the wild, entrepreneurial optimism come into play, because yeah, it gets you started. It gets you to take that first step, that first leap and start a company where most people would be afraid to, but you’re so confident that you do it. But then it might cloud your judgment and stop you from asking some of the tough questions about whether or not your business idea is actually a good one.
Yeah, absolutely. And for me I think that’s one of the things that, later in my other projects when I would look for a cofounder or someone to work with, I knew I needed someone that would be more factual and down to earth, where when I have these crazy optimistic things, they tell me, “Okay. That’s great, Mark. I love it, but let’s take a step back. Let’s focus on the details. How are you actually going to do this, or what about this one factor that you didn’t think about?” And I think having that yin and yang balance can be really, really powerful.
What are some of the things you guys did right when you were working on this video game company?
Good question. I think amount of downloads and the success that we had on the app store, all of it came from word of mouth. So in some aspect, the game was enjoyable, and at the end of the day, we had fun with it. And I think a testament to that is after working on it on a year and a half, everyone on the group still actually played it, which -- I think that’s really rare. Because after a year and a half, the last thing you want to do is play something that you actually had been working on.
So one of the things is, we did actually make it enjoyable and we made it fun and ultimately that’s the end goal for video games and I guess really most entertainment in general. I think that was our biggest success.
I want to move on and talk about your current business, Recapped, but you mentioned that you were a hardcore gamer and that you played a lot of World of Warcraft with your friends back in the day. I’ve only had one other guest on the podcast who played World of Warcraft. That’s Patrick McKenzie, aka Patio11, and we talked about it for a little bit, so I have to talk about it with you as well, because I also played a ton of World of Warcraft back in the day.
In fact, Channing, my twin brother who runs Indie Hackers with me, was my co-guild master, and it’s funny. You just start playing this game and you pour a lot of time into it, and eventually at the highest levels it would get super competitive and before you knew it, Channing and I had this tiny guild of ten people and we kept recruiting and growing.
Eventually we had 200 people and 40 of them would sign on every night to do raids. And we appointed officers to lead their units and we hired a developer to build out our website and our forums. And it’s crazy, cause you’re just a kid playing this game and you don’t realize that the things you’re doing are kind of the same things that people running businesses are doing.
Yeah, it’s so funny. I think in my first sales interview after college, when they asked me if I had any leadership experience, jokingly I told them that I had experience leading a World of Warcraft guild. And clearly the person interviewing me had no idea what video games were, but I think he knew -- you hit on such a good point in that the lessons you learn there can be applied to a lot of different things.
At the end of the day, there’s a strict schedule that we adhere to. Granted, we were high school and college, every Tuesday and Thursday at 7:00 p.m. Eastern, we’re on there. We’re ready. We’re good to go and you have 40 people that you’re playing with. Having that kind of teamwork and having that specialization, that can be applied to anything, whether you’re in a marketing role or you’re doing sales or you’re the cofounder, you have to work with other people. So you have communication. You have discipline, and then really, I think just the competitiveness.
For us, where we are playing, each of these servers would have rankings of guilds, and everyone was competing for that number one spot. And for me, that’s really what drove me. I didn’t give a shit about accomplishing something. I just wanted to be better than someone else.
Just wanted to win.
I just wanted to win. I hate losing. Winning is alright. It’s cool. But losing, nothing infuriates me more in the world than losing. I was playing ping pong against someone the other day, and they’re like, “Oh, don’t let me win because you’re trying to win my business.” And I put the paddle down, I looked at him, and I said, “No, you don’t know me. I will never lose on purpose.” And I think, for me that was the biggest driver.
Yeah, I remember doing what essentially amounted to PR every month so that we could show how good we were and recruit better players than the other guilds on our server. It’s just so much. There was a culture thing, too, whereas the guild leader, you always just wanted your team to do cool things, but you would start attracting these players who were just in it for the loot, and you had to deal with that somehow. There’s the fact that the team you’re leading is 100% remote, and I think at Recapped you also have a remote team. Is that right?
It is, yeah.
World of Warcraft, it’s a bunch of kids all over the world. You have to somehow get them to coordinate and learn these things and work together, so it’s -- I wonder how much predictive power there is behind somebody running a World of Warcraft guild and later on starting some sort of tech company.
That’s so funny. I didn’t even think about the remote workforce.
Yeah, man, this is 14, 15 years ago, too. It’s just crazy to think about. Anyway, enough about video games. You eventually shuttered your video game company after working on it for a year and a half. What was it like making that decision?
For me, this is something I ultimately want to come back to, and I think once we see the success that I want to see with Recapped, my next passion project is going to be launching another indie video game company. I see myself doing that for a very long time, just because that is so integral to my childhood and what I value, and really just a creative outlet for me.
So after we released it, we worked on another app, but by that time I had moved to California to help lead up some sales teams out there. It was really difficult. Not being in the same room lost its magic, so ultimately, we ended up just winding it down. But again, since it was only just for fun, the day it stopped being fun is when we decided we can all step away from this.
While we had such a great team that we were working on it, at the end of the day, we also had jobs that were paying us a lot more money than this ever was, so it wasn’t a hard decision. In fact, we’re all still really good friends and we always joke about, and send memes to each other, about something like Dot Drop! which is our first game that we released.
Would you describe yourself as a future-focused person? When you say you quit and you didn’t really have any regrets and that you guys were just ready to go, were you excited about new adventures in the future?
Oh, always. Again, I think going back to my ever-optimism is, one thing I’m working on right now actually is meditating and working on the present, because of how much of a future-focused person I am. I want to run, and I want to fly before I can crawl usually.
What were you excited about after winding down your gaming company?
I had just landed my first real sales leadership position in San Francisco at App Academy, which is a coding bootcamp similar to Lambda School and you had Austen Allred on. I was now stepping into,” the big leagues.” I was director of sales. I was 27 at the time. I wanted to be taken seriously. So it fell very much in line with shutting down, for one, stopping the focus on any side projects. And it made a lot of sense at that point to just put my head down and focus on being the best sales leader I could be, instead of maybe saying 80 or 90% in this cushy role that I had before that.
So when you first went into this video game company, you were boosted by but also plagued by excessive optimism. Was that the case as a sales leader? Do you feel like your optimism drove the way that you approached this job?
I think so, and I think ultimately that’s one of the reasons that I was hired. I saw a lot of different avenues. And I really do believe that coding is modern day magic. You have an idea, and all of a sudden you go, and you create it.
To me, as someone that’s been, quote/unquote, “learning the code” for the last five years unsuccessfully, that’s one of the coolest skill sets to have, and the value that you can create or the life change that you can create just by learning how to code really stood out to me. It was something that I really resonated with.
And for me, that was -- I saw these 10 different avenues that we could go down. Selling something that you believe in, I ultimately think is the easiest job in the world. It’s unfair how much you can make doing that because it feels so fun. You’re already going to be talking about this and now someone wants to pay you a lot of money to do it. That’s the ultimate win.
How much of sales does it matter, having this enthusiasm and optimism? How much is it having the right tactics and the right knowhow? Because most of us have no sales experience. Most of the founders I talk to have no sales experience. What do they need to learn besides to just be jazzed about what they’re building?
That’s a really good question. I think ultimately -- and I was going to do a course on this as a “selling for founders,” just because I do think of sales almost as a framework if we compare it to engineering. A lot of people will look at sales and think it’s this mysterious black box. It’s like, oh, you have to be natural at it.
I really disagree with that, because I think almost anyone could be pretty decent at it. There are methodologies and frameworks that you can employ and actually get pretty good results. But here’s the thing. Even if you have the best sales tactics and you’re not doing it organically and authentically, I think you’re going to get bad results.
But I think the reverse is not true, so if you are passionate about something and believe in what you’re doing and believe that your solution or your product is going to make someone else’s life better, than that will win out even if you don’t have the sales tactics.
And then ultimately, I think the other aspect of it is, sales is a numbers game, and the harder you work, the more likely you are to succeed. So even if you have the worst tactics and some enthusiasm, if you just work your ass off and put in twice the effort that someone else does, you’re probably going to be successful to some extent.
A lot of this aligns with advice on what kind of company you should be building as a founder. People say to follow your passions and work on what you like, and maybe that’s not sufficient, but it should be necessary. Because if you work on something that you really don’t like, how are you going to sell it to anybody else, like you just pointed out?
Like you said, with sales being a numbers game, that means you have to get out of the building and talk to people. As a founder, I think it’s very easy to just sort of shut yourself up in your room, especially if you’re a programmer to just code for 12 months at a time, not talk to anybody. And the numbers at that point are zero. How many people have you talked to? How many people have you sold to? How many people have you gotten feedback from? Absolutely nobody.
No, absolutely. But in some aspects, that’s the easier option, because you’re not being vulnerable and you’re not getting rejection. Cause rejection sucks, and the worst thing out there is having this great idea, and then you go and talk to 10 people, and they all shit on it. And now all of a sudden, you’re like, “Oh, well maybe this idea was stupid.” And that’s a lot harder, I think, than just sitting in your room for the next 12 months and working on something by yourself.
Yeah, arguably the thing that you need the most as a founder in the early days is rejection. You need people to tell you why they’re not going to buy the thing that you’re building so that you can find the people who will buy it or so you can make it better.
And it’s so easy to do the opposite and just convince yourself that no, what you actually need to do is just work for three or four more months, and then people will love what you’re building and then you won’t get rejected. But in actuality, if you do that, you’re just setting yourself up for the ultimate rejection.
Exactly, and I think that’s a really easy trap to fall into, and I’ve been there myself.
So obviously you did not stay at App Academy forever, because today you are fulltime on your own business, Recapped. When did the idea first enter your mind that you might want to start another startup?
One of the reasons -- actually when I first started my sales career, I was in North Carolina, in Raleigh, working at this great company called Citrix, pretty big conglomerate. Ultimately, I knew at the end of the day that when I first started working there, I would end up in Silicon Valley in some aspect.
Growing up, this was seen as the Mecca. And as someone who had this intersection for new technology, always being immersed in whatever new tech is out there, and also the sales, it just made so much sense for me to end up there.
So ultimately, I got very lucky in that we had a couple open positions in Santa Barbara, California, so I went down there for a while. And then when I took the position in App Academy in San Francisco, I knew all of that would eventually lead me to either cofounding or starting my own business. So I’d say immediately.
You’ve got this ideas list that you carry around with you all day. You’re adding to it. You’re probably refining your ideas. What was it about the idea for Recapped that stood out to you compared to the other ideas on the list?
For me, honestly it was just something I needed. We were working these larger deals and we were working -- I don't know how familiar you are with business-to-business sales, but on average it can be really, really difficult. You have, especially with complex sales or with bigger ticket items, you have six, seven, eight different people that need to sign off on something.
And there was all this technology out there that helped us find leads and get people’s phone numbers and their LinkedIn email address, but the actual working and collaborating with those people, there was nothing. For me personally, it was just something that I needed for my team, because I was tired of us losing all these deals, and that was a direct hit on my compensation.
Frankly, I just wanted to make more money and I wanted to save my reps some time. When I looked in the marketplace, I couldn’t find anything out there. So going back to the naïve-ness that I had, I was like, “Oh, how hard can this be? I’ll go ahead and create it myself. It should only take a month.” Fast forward to about two and a half years later, and here we are.
It’s fascinating to me when people describe this process of working a job, really needing a tool, not finding anything out there that does the right thing and then creating it on their own. Why do you think no one else had built this tool?
It’s a great question, and something that -- I was just at a conference the other day and someone was like, when I showed them what we do, their immediate reaction was, “Why is this the first time I’m hearing about this? Why hasn’t someone done this five years ago?”
I think it’s really easy to just take things for granted as this is the way that it’s always been. Sending 20 different follow-up emails and cc’ing five different people and hoping that something is in Dropbox and that proposal’s somewhere else, and all these different things are scattered, that’s just the way it is, and accepting it as the status quo, whereas I’m incredibly lazy. I think if it’s not -- I want to make everything as efficient as possible.
I think really it was just the lucky intersection of, this is something I needed but also something that didn’t seem that difficult to implement and that it should just be already implemented. But I think it’s really is to just not think outside of the box and just say, “Okay. This is the way we’ve been doing it. This is the way it will always go.”
I think all of us run into ideas or potential ideas, problems that could be solved that might be valuable, and we just sort of -- they don’t really land. you know what I mean? They don’t really hit as something that, “This can be a potential business idea. I should work on this.” It’s just like, “Oh, this is annoying,” and you go about your day.
So it’s interesting to see the moment at which that light sort of clicks on in your head and you’re like, wait, this is something more than just a problem. This is something that I can solve and turn into a business.
Well yeah, and ultimately thanks to you and your brother, I think that’s what -- Indie Hackers was a big involvement, I think, in my personal creation of Recapped, because you say that. You’re like, “Oh, this is just this little thing.” But then you’re doing interview podcasts, and this is a year or two years ago when I first started being part of the community, you have someone that solves this really small point.
For example, they do a widget for locating maps. And all of a sudden, that widget is bringing in $10,000.00 in recurring revenue every month. And that realization that even though it seems so simple, if it’s providing value for someone, you can have a great lifestyle business off of it. And that’s one of my favorite aspects of what you go at Indie Hackers, is it shows that you don’t have to have these billion-dollar, Silicon Valley, 21-year-old raised $50 million type business.
That’s the goal, man, and I’m glad to hear that it played a role for you. I remember reading a lot of your posts on the forum before we had that meetup, so this is 2017. I actually pulled one up right now. It’s called, “Tear my website apart. Sales Enablement startup” by Mark Fershteyn.
You said, “Hey, all, we’re getting ready to launch and we’re hoping to get some feedback.” And this is well before you actually launched. You’re just getting feedback on your idea, you’re landing page. Do you remember putting this post up?
Briefly. I know I’ve done a couple versions since then, so I’m really curious how terrible the pitch is.
No, it wasn’t bad. People liked your post. I think you explicitly requested them to tear your landing page apart, and the feedback you got wasn’t even that harsh, so you got off easy.
But at the time you made this post, you had already committed to this idea. You’d put in the work to actually decide this is what you want to work on, and I’m curious about what it took to get to that point. So tell me about that validation process and how you settled on this one idea over all the others.
Great question. At that point, we had, I believe, this was an alpha version of the app. I paid some coders to just scrap it together. It cost me a couple thousand dollars. And from that, with no marketing and really just putting it up on my Facebook, I was able to get 10 paying customers, which sounds like a lot, but it was like, I don't know, $200.00 a month.
At the time I was just getting jaded at work and I wasn’t really enjoying what I was doing, because I kept thinking about how I want my own thing. I helped drive millions in revenue the year before and even though I was being paid very handsomely, I still got a very small percentage of that. And I think for me it was that realization, coupled with the fact that I had these ten customers and I’d spent no time attaining them.
So again, being naïve, I said, “Okay, if I got ten customers and I spent five minutes, what could I actually accomplish if I spent 40 hours a week doing this.” And that was the turning point there.
That’s a very common thing among founders and indie hackers, which is this belief that your employer is not really going to pay you as much as you could make if you brought all of your skills to bear and started your own company or did something like that.
I kind of referenced this earlier when you were talking about sales. I was saying that everybody is a business, and it’s really true. If you’re an employee, you can look at yourself as a business that has one customer, which is your employer, and you’re selling your services to them in exchange for your salary. That’s kind of your pricing.
And when you did your interview, that was basically you are selling your skills. That was you doing sales. And your competitors are all the other people who could have your job, basically. So it makes sense, if you look at yourself that way, to be sort of frustrated with your current position and say, “I want to turn myself into an even better business where I have more one customer and I can charge more for my services and I don’t have as many competitors.”
So it’s not surprising at all to see you get frustrated with your job if you’re thinking through that lens.
I think for me, ultimately it even came down more so to the control versus the rewards. I know I’m a difficult person to work with. If I believe something, it is going to be very stubborn and good luck changing my mind. I realized that I would rather make 30 to 50% of what I was making but do it on my own time and with my own energy and with my own brand, than keep working for someone else. At this time I also wanted to travel, and I wanted to go spend a month in Thailand which I still haven’t done. But I wanted that freedom and I couldn’t get that anywhere else.
Let’s talk about this phase where you actually built something and started making money. You paid a bunch of programmers to build a prototype. You posted about it on Facebook, and pretty soon you had 10 customers paying you $200.00 a month total. Walk us through that process and how this actually worked, because so many people never get to this point of turning their ideas into dollars online.
Well keep in mind, at this point I had been working on it and thinking through how to actually implement the app for about a year and a half. The last six months there is really when the coders came in and brought it from mockups and wire maps into actual quote/unquote working app and barely did anything.
I think really the biggest thing is, I had already been spending so much time working on it and I was the ideal customer for it. I was the VP of sales. I had this product that needed to be sold to these people. So I think I was very lucky, and this is why I always recommend, solve something that you would pay for, because you don’t need to go out and interview as many different people.
You can just fix your own problem. Granted, you still want outside influence and feedback, because you’re going to lie to yourself, and I lied to myself as well while I was doing it. But it really did help that I was essentially the target market.
Tell me about some of these lies you told to yourself about your early product and who was going to want it.
For a couple of these, I started working with, for example, account executives. For anyone that’s not in sales, account executive is the person who’s actually making the sale. They’re not usually entry level. They’re working up. And I would start working with these account executives and then showing the product and they’d be really excited about it, and they’re like, “Yeah, I can do this through email. I don’t need this.”
Then I started changing the product to better suit them, instead of realizing that this is not my target market. What I should be talking to is their boss or their VP of sales who’s just going to mandate that they use it and then they really have no say in it anyways.
It’s so easy to get caught up and take this rejection seriously. I actually had a couple months there where I started second guessing and thinking through other ideas that I had, and I was like, maybe Recapped isn’t it. I think it’s really easy to do that, and for me even just lying to myself. I think you really need to know yourself.
For me, I realized pretty early on that I’m not someone that can sit in his room for 12 hours a day hacking away and putting together a product. I personally needed to be in a room with five other people who were just as excited and that would challenge me and keep me accountable, because otherwise I would just turn into this lazy piece of shit who did nothing and would get depressed because I had no human interaction.
But on the flip side, if that’s how you gain your energy and that’s how you’re the most effective, then you should do that. And I think you really need to ask yourself, when did you have the most fun? What was that environment like? When were you the most productive? When were you the most stressed? And take all of that and help facilitate that into how you’re building a product or a business.
That’s really difficult to do, because especially in the beginning of the business as the founder, you’re wearing all the hats. If someone needs to sit in a room for 12 hours, that’s got to be you. How did you work around your limitations? How did you get to the point where you could do the things that you like to do and the things that you were effective at?
This is a great question, and this is still something that I really struggle with. For us, we’re remote. We’re actually going to be raising a round of financing here shortly. I know it’s not the indie hackers’ way, but once we do that, we’re going to be hiring a bunch of people in New York, and for me, that’s kind of going to be the next pivotal point of Recapped, where we can start having that internal network.
And I do think for our engineering team it’s probably always going to be remote and that’s fine, but the people that I interact with on a regular -- with the executive team and the sales team, I need them to be in person. So that’s going to be the big step.
And then also I realized I need to -- once a week I go to a different meetup in New York City. I’m very fortunate that, in New York, every single day there’s something going on. So every Wednesday go out. Every Thursday I try and go on a date. Every Friday and Saturday I’m out with my friends. But Monday through Wednesday, I’m really, really working. I’m head down. And I think for me, that’s been a really good balance just to keep my sanity.
Let’s talk a little bit about the way that you’ve validated this idea. You tried to sell it to account executives at first. They weren’t having it. They said that they would just stick with email and that was good enough for them. You didn’t know immediately that you were talking to the wrong people. You just thought that this wasn’t going to work. What kind of process did you go through to figure out that that’s what was going on, and how can other indie hackers do the same thing?
We were having these conversations with account executives and I was like, “Okay. Maybe I was just lying to myself because this was my idea and maybe no one is going to want this.” I actually foolishly ended up believing it, and right around October we ended up doing a campaign with AppSumo, which does a lifetime deal discount.
We launched it. We’re like, “What the hell. Let’s work with them.” They had reached out to us, and we were big fans because myself and my cofounder at the time were always buying different AppSumo products. It’s great. You pay fifty bucks whether you use it or not, it doesn’t matter. So when we launched it, the feedback and the reviews that we actually got were incredible.
But what’s funny is, the users that were using it were not account executives. They were actually consultants and freelancers, and maybe digital marketing agencies or someone that’s doing marketing or web design or whatever. And for them, they immediately started telling us, “Oh, this is great. This is a collaborative proposal. It’s half proposal, it’s half project management.” And immediately I was like, “Yeah, that’s exactly what it is.”
Immediately we had almost a thousand people that started using it literally overnight. And for us, that was really the turning point because we’re like, “Okay. Let’s abandon this sales effort and let’s just go towards proposals.” So we started doing that for about three months.
Then I realized, again, through these conversations, that it’s still solving the exact same pain point, which is just communication with your client and really just making sure everyone stays on the same page. There are 20 different avenues that you can go down that with, but I wasn’t even talking to the right people.
And as I was working these deals, where I was trying to get an agency on board, I found myself still using Recapped to try and close these deals. And then it clicked in my head, and I go, “What the hell was I doing? I was just talking to the wrong people. Business-to-business sales teams still absolutely need this.”
And ultimately that’s what I was most passionate about, versus, it’s great to do proposals but that was a market that’s already really crowded and I think there are some really good products out there that do this, whereas actual sales collaboration between people, that’s an exciting space that no one is doing properly, aside from us of course.
For me, that was wanting to take over this new market, and that’s really what got me excited about it. So we ended up starting in sales, going to agencies, going back to sales and that’s been the focus ever since.
Oh man, that thrashing back and forth, not really knowing what your idea’s going to be, changing your idea in your mind, changing how you describe it to customers, and really just having a ton of uncertainty with what is going to work is exactly what it’s like to be an indie hacker who hasn’t found product market fit yet. How do you deal with the emotions of working so hard and not really knowing if you’re going in the right direction without getting discouraged?
When do I not get discouraged? I don’t think that actually changes. I’d love to get your thoughts on it. But I think one of my biggest suggestions, when people ask me what are my tips for starting a company, is have a support network. Being an entrepreneur is fucking hard.
If I knew it was going to be this hard, I don't know if I would have done it. And I think you hear other people say that, but until you actually do it, you don’t realize. At the best of times, you’re celebrating for a day, maybe a couple hours and then all of a sudden something breaks, or your biggest customer calls you and they want to cancel.
And that’s literally a daily roller coaster, but on the flip side that’s also what keeps me really energized and excited, because there’s always something new that’s happening. So I think it’s so critical to have a cofounder that you can rely on or a spouse or a best friend. This is the same reason why Y Combinator recommends cofounders or at least groups of two, because it’s so difficult.
And I go through this every single week, and even when I talk to my mentors and people in my network who have these successful multimillion-dollar companies, and when I ask them, “Oh, well everything must be like peaches and sunshine. You’re drawing a good salary. You have dozens of employees.”
And they look at me and they’re like, “No, you’re so wrong. There’s always something and I’m always having that second doubt.” I think really just the challenge gets bigger and it’s not, can we afford to pay our employees this week. Now it’s, can we afford to take over this new market or go after a new city or whatever your product is.
Honestly, from my perspective, I think it’s uniquely challenging when you’re in this early phase and you don’t have that much traction. You think that you might be building the right thing, but it’s totally possible and it’s always a question in the back of your mind that you are investing months into building something that is going to be a dud. What does your support network look like that could get you through this time period where you were still trying to figure out what Recapped is?
Excellent question. For me, all my family lives on the East Coast, specifically in New York, and so that was one of the reasons I ended up leaving San Francisco when I started Recapped and going to New York, is because I needed that support network.
I knew that if I was sitting in my room by myself in San Francisco where every other day on Tech Crunch someone just raised $30 million and I was struggling to get a customer, that would not help my mental state. So shout out to my best friends and my brother, who I think every single day I bombard them with shit that they have no business being a part of, and they almost are my therapists.
That’s my support network. To everyone else, I try and show that everything is fine, everything is dandy and yes, we’re growing a lot. But the internal network knows the vulnerabilities I’m go through, and I think everyone needs that.
I think you had quit your sales job by then. How were you supporting yourself financially during this time?
In April last year I ended up quitting. I was fortunate enough. I knew that I wanted my own business for a while and as Recapped started picking up traction, I put all my head down. I cut my expenses as much as possible and I put away about $50,000.00 to last a runway of what I thought would be a year.
And going back into it, I was like, “Oh, if I can’t make it in a year, I deserve to go broke.” Luckily, by the ninth or tenth month is when we started seeing the results. Again, it took way longer than I thought it would, but I was living off savings and trying to do anything possible. Did some consulting gigs on the side.
Luckily, I built up a little bit of a brand from a sales leader and thought leader, so I’d have people reach out to me asking these questions. I’d go, “Oh, that’s great. Why don’t I come in and do this training for your team and you guys pay me a couple thousand dollars?” So that, mixed with just doing everything possible really helped fund Recapped in the early days.
That’s another stressful part of being a bootstrapper. You are either quitting your job, at which point you have to watch your back account dwindle down to nothing as you try to build your business, or you’re working nights and weekends on the side of your job, which means you’re not going to have that much time for your friends and family and hobbies and stuff like that.
For me, with Indie Hackers, I just did the same thing you did. I quit my job. I was working fulltime as a contractor. I quit that and I had about a year of runway. For the first six months, I think I just messed around. I worked on projects that didn’t have very much potential. I wasn’t really marketing or advertising anything that I built.
Then I checked my bank account and I was like, “Oh, crap. It’s time to get serious,” and I had to have a lot more discipline in what I worked on. Did you find you had the same effect as well, where watching your bank account dwindle you got more disciplined, more serious about your business?
Oh, absolutely. I agree 100%. In the early days, immediately when I quit, I was like, that first month I really did nothing. I sat around and hung out, because I was waiting for this product to be built. Then I started working with this cofounder and we were taking the alpha version to a beta.
So I was like, “Oh, I can just sit around. I know this will be successful. I’m going to be a millionaire overnight. Why not?” Then fast forward three or four months later, I’m like, “Holy shit, I’ve already eaten through 30% of my savings,” and I had nothing to show for it. And that’s really when it started to light a fire under me and I actually started saying, “Okay. Now I need to go do this because in eight months, we will be running out of money, and then I have to go back to working for someone else.”
And now I just spent the last six months telling all my friends and my whole network how I’m never going to work for someone else again, only to put my tail behind my legs and go find another company. So that started kicking in, and this is actually something that I don't think a lot of people know, is before we did that AppSumo campaign, I had burnt through my savings a lot quicker than expected, with the move and relocating to New York, and we were about two months out from going bankrupt as a company.
So AppSumo actually ended up saving the company, because it reinvigorated. It got us like a thousand customers overnight, and from that we were able to get a bunch of paying customers. So that was our launch. I don't know what would have happened if we didn’t go down that path.
So you did this AppSumo launch. You got a ton of people in the door. They’re basically convincing you at that point in time that what you should be making is proposal software. You eventually move away from that because you realize that’s a crowded market.
You realize that you’re still using your own product, Recapped, to handle your sales processes though, and you figure, “You know what, why don’t we go back to the initial thesis, be a sales organization selling software to salespeople?” What did that process look like and how did things go from there?
That’s a great question. The really interesting thing about our product is that we have about 25 different industries using us, ranging from financial advisors to digital marketing agencies, to sales teams to onboarding teams. For us, the product didn’t actually change, because early on I wanted it to be very adaptive and very essentially open to whatever use case the person wanted.
We wanted to give them the freedom to use it how they wanted, within a certain guideline of course. So for us, the product really didn’t shift that much. Sure, we had to scrap a couple things off the road map because they wouldn't be as integral to a sales team, but the cool thing is -- and I this is, I think, very unique to us, the product itself didn’t have to change.
Really, what had to change was the focus of getting new customers, and also the messaging. But now, if you go to our website we have Recapped for agencies and we have Recapped for sales teams and the messaging is completely separate, but the product is ultimately the same. And I think for us, when someone asks me what I do, immediately my first question is, “Well, what do you do, because there’s three different pitches I could give you.”
And for us, that was a really cool opportunity for us, in that we didn’t really have to start over or change from scratch or do these huge pivots. It’s just, okay, now instead of calling a director of business development at San Francisco digital agency, now we’re calling the VP of sales at Stripe.
Walk us through this process of how you’re making these calls nowadays. Because with App Sumo, that was more marketing. That was a ton of users coming your way all at once, whereas nowadays, you have to actually go out, pound the pavement, make these calls. What does that process look like?
One of the reasons I knew I wanted to launch a B2B tech company is because the first six years of my careers was in B2B tech sales. So I had, up until this point, built six or seven sales teams from scratch for the various companies I worked at, where literally we went from nothing to multimillion dollars in revenue cold calling and doing just cold outreach.
So I was like, okay, well it would be really stupid for me to go do a B2C consumer app, where I know nothing about. So for me, very early on, I knew I wanted to do B2B sales because that’s what I was good at and that’s what I knew. So for us it’s grabbing leads, calling people and just literally grinding. It’s not a pretty sight. It’s a lot of rejection. I think it’s 99% rejection.
The hardest things in the early days is, you don’t even know -- you barely know who you’re calling but you don’t even know what you’re saying because you don't know what’s going to resonate from a value standpoint. I think that’s where talking to your customers is so powerful, because they’ll actually give you the words to use on your other calls.
So for that point, I had to go back, start doing some more customer interviews, and saying, “Okay. If you were to pitch Recapped to your coworker, what would you say?” I would take notes, and I’d throw them all into Excel sheets and come up with these sentences and work from there. But I think just like anything else, it’s taking something and just improving it 10% every week, and finally you get to something that doesn’t look like dog shit.
You know, I don’t hear a lot of stuff like this very often, because most founders don’t do sales. They don’t talk to a lot of people in the very beginning. They have no idea how many people are going to reject them and if they tried doing a couple of sales calls and got a no, they might decide that they have to reconfigure their entire business.
How do you know what the line is between your getting rejected so much you need to go back to the drawing board and change things, and you’re getting rejected a lot but it’s only a matter of making more calls and talking to more people?
This is a really great question. I was actually thinking about this the other day, where you have these two different mindsets. You have one where you’re telling yourself you have to believe in yourself and you have to do it foolishly and you have to keep powering through.
And then the other one is, well you have to listen to your customers. At what point do you balance that? I think luckily, for me, the only thing I knew was sales as a funnel. You start with 150 calls a day. Of those you will talk to 10 people. Of those, you will book maybe four or five. Of those, three will show up. Of those, you might close one.
And I knew that that was the process and I knew that we just -- if I put in enough at the top of the funnel, the end result you can predictably guess. And so for me, the only thing I knew was, okay well, pound 300 calls and that will get me two customers.
If you don’t know that, I think it can be really daunting, because after a couple hundred calls you’re like, “What am I doing? Why am I wasting all this time on this?” But for me, that was just the standard of business-to-business sales, and that’s really all I knew.
You’re bringing your expertise into this. I think a lot of people who start companies, most indie hackers are software engineers, and their expertise is building software. So they’re all about adding new features and making things faster and writing tests and refactoring their code and that’s what they spend their time on.
But I think as a salesperson coming into this, it’s a little bit advantageous. Because the challenge of building a new business is usually not building a product. It’s usually getting it in the hands of customers and convincing them to say yes and giving money.
Yeah. For me, I think that was one of the biggest challenges, is I kept going back and being like, “Oh, well if we just had this one extra feature,” or, “If we fix this one bug, people would buy.”
How rarely is that the case? That’s never the case. But instead if you could have someone who works with you and that partners with you and believes in the vision of what you’re building, and that vision might be a year down the road, that is so much more impactful than, “Oh well, don’t come to me next week when we build up.”
It’s like one integration. Because if you’re solving a big enough pain point, they will use it no matter how shitty your product is. If you look at the early versions of Segment and Dropbox and all these hacker news postings from eight years ago, people still wanted to use it because it solved a key problem for them.
You’ve been through a lot of highs, a lot of lows in the past year, and things have recently started working out for you pretty well. But let’s say you could go back in time one year. What would you do differently?
I think there’s two big learnings for me here. One is, I would have been more patient. I always recommend people, don’t be so eager to jump into your ideal full time without really substantial income coming in. Making that shift and now all of a sudden eating through your savings makes a pretty big psychological impression on you.
And all of a sudden, you start holding yourself accountable to things that you didn’t even think about. It’s this daunting task of all of a sudden you have no money coming in and you’re eating through your savings. And soon it’s like, okay, do I really want to add guac when I’m at Chipotle? And all of these little subtractions are not good for your mental state and they actually get you to start working on the wrong things or making difficult decisions, or even the wrong decisions, because now you’re starting to think short term, instead of long term.
So as much as you can afford it, keep working on that side hustle. Put in the hours during the week. I promise you, if you cut Netflix out of your life, you probably will gain a couple more hours a week that you can work on stuff that you really believe in. So one is, be patient. I wish I would have had a hundred customers before jumping in. But on the flip side, how long would it have taken me to get those hundred customers, if ever? So I think there’s a good balance there.
And then the second thing is, really stick to your guns. I wish I had learned more about product discovery and customer discovery. I wish I didn’t spend the first three months interviewing account executives, because that was the wrong audience. If I had only just spent time really having that belief in myself and my use case and really finding other people like me, AKA VPs of sales, that would have maybe saved six months, and who knows where the product would have been? I think those were the two big learnings for me over the past year.
Okay. Let’s do the opposite. What are some things that you did well for the past year that you would definitely do again if you could go back in time?
One of the things I’m really proud of myself for doing is actually just doing it. Earlier when you said that if you’re an employee you really are a business but you’re selling to one person, I think the only difference between someone that’s successful as a business owner and someone that’s an employee, is the business owner just went ahead and did it.
And yes, they may fail, but just taking that first step and actually taking the plunge is so important. I think a lot of people hold themselves back from doing this just out of fear or having -- I understand if you have a family and you have a mortgage, that’s very difficult. But if you’re single and you’re in your early 20s, that is the time to take the risks and I’m really glad that my mentors pushed me to do that.
When they pushed me to leave Raleigh, North Carolina and go to Santa Barbra, California where I knew nobody, or to quit that job and to go to San Francisco, or to quit that job and launch my own company, I’m really just proud that I actually did it. And that was my number one thing to people, is just fucking do it. Stop making excuses.
With your back against the wall you’ll probably figure it out, and if you don’t, you’re going to learn some stuff and it’s going to make the next time easier. Or you may find out you don’t ever want to do it again, and those are all really good things to have, because I think of myself as the regret minimization network or framework.
For example, Jeff Bezos will talk about is, if I’m 60 and I’m looking back at my life, what am I going to regret not doing? That is a big push for me to actually do.
Well listen, man, you’re saying just do it. You’re just doing it yourself. It’s been really cool to watch you go through this process, watching you post on the Indie Hackers forum asking for landing page feedback, now looking at you today so happy with where your business has come, employing people, generating enough revenue where you’re not worried about putting guac on your burrito at Chipotle. Can you tell listeners where they can go to learn more about what you’re up to at Recapped, and maybe about your personal life as well if you share that sort of thing online?
With Recapped, it’s just Recapped.io. If you’re a freelancer, a consultant, highly recommend you check it out. If you’re in sales, no brainer. But then also I’m decently active on Twitter. I think it’s one of the things I want to work on, and that’s Mark Fersh, M-A-R-K-F-E-R-S-H.
And then of course LinkedIn is where I do 90% of my stuff. I have another sales blog as well, sellsomemore.com where I do some recent updates.
But going forward, if you subscribe to Recapped.io, you’re going to get YouTube videos that we’ll be posting. We’re going to be posting a lot of sales content going forward on tone and how to get customers and how-to cold call, and really just like these tactical one-minute clips going forward. So I would check that out, plus everything& Twitter as well. So that would be the best way to find me.
All right, Mark. Thanks so much for coming on the show.
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