Amy Hoy (@amyhoy) didn't merely survive the 2008 recession: she built multiple profitable online businesses that grew to support her and, eventually, to generate over $1M in annual recurring revenue. Amy and I sat down for a casual conversation (which we livestreamed to YouTube) about the looming recession, how Amy made it through the last one, and how founders should be thinking about their businesses going forward.
I think maybe a good place to start is, what even is a recession? I think the median age of the Indie Hackers listener is something like 32.
Which means that they weren’t really functioning adults in the business world the last time we had a recession. There are many people who are much younger than that who’ve only been building businesses through this upswing time. So what is a recession? Are we in one?
We are. I’m not an economist, which is important to state. I do read a lot, but I’m not going to be like one of those jackasses on Medium who says I’m not an epidemiologist, but here’s what millions of people should do. I’m not an economist, but here’s my understanding.
I have lived through two recessions so far when I was paying attention to business stuff, the first one being the dot-com crash of 2001. I’m 35 but I was doing freelancing and stuff then and paying a lot of attention to tech media. I was paying attention.
And then 2008 was the great recession, which was caused, of course, by the crash of the real estate market. I think that what economists are saying is that we are not necessarily in a recession yet, right now, but something is 100% coming.
Three or four weeks ago they were like, “One in three chance of recession coming,” and now I think the consensus is that it’s definitely coming. It’s not going to necessarily be global. Other countries are doing a much better job than we are in the U.S. I think that’s positive.
The real estate situation affected all major economies, probably except China, but China then had less demand. So, the real estate situation in the U.S. and England and Ireland and Europe was bad all around. Similar mechanism.
The reason that happened was so much of the entire countries’ economic activity had centered on real estate and the idea that it was going to continue to go up and up and up. Then they made bad loans and they sold parts of those loans to people pretending they were good. When the housing market crashed, because people couldn’t afford their homes anymore, everyone got screwed.
What’s happening now is a bit different because there’s nothing fundamentally wrong with the economy, leaving out issues of inequality and wealth concentration. This is an external event that has a limited duration. It’s not going to dry up consumer demand if the consumers get paid money from the federal government, for example.
The problem is a lot of people are losing their jobs because restaurants and things have to close for safety reasons. If the federal government pumps money into them so that they can all keep their salaries, the economy situation will officially resolve itself over time, whereas all of the investments going into real estate, where it was completely unsound, there was no way to get that back. It’s more of a pause.
It could be worse. I think some people are saying it definitely will be worse. I can’t say. I think it all depends right now what the federal government does to help the bottom of the economic pyramid, service workers.
They just passed a $2 trillion stimulus bill to do just this, to try to help bail the economy out, to help compensate.
It’s not a very good bill, unfortunately. It directs most of the aid at large companies and it doesn’t even require them to keep people on their payroll from what I understand. The direct benefits to individuals, aside from increasing unemployment, is a one-time check.
The other side of this equation is, even if this bill was good, even if we did help, there are a lot of asymmetries and damage being caused in how you repair. For example, if companies have fired people, have companies have missed payments, it takes longer to hire someone than it does to fire someone. It takes longer to repair your relationships than it does to go into bankruptcy, etc.
Very, very, very true. Just like in the real estate crash, there were institutions that were not particularly harmed. However, it spreads because if people can’t buy consumer products, then the companies that make those consumer products then spend less on professional services and it filters out from there.
I think we’re going to probably see a very similar dynamic. There are a lot of companies that are going to do well, like my company did well during the last real estate recession. And there are of course companies that sell software to restaurants or whatever who are going to be screwed, at least in the short term. So, a big question is, who are your customers and who are their customers?
Let’s talk about your companies during the 2008 recession because you were already a startup founder at that point. I think you started two or three different companies. That’s how you set yourself on the path to being self-employed rather than working for others. What did you do to build businesses that survived the recession and made it out through to the other side, doing quite well?
Right. I think the fact that it was more than one business is an important lesson to learn, especially. In 2008, I had been doing consulting with my friend John for another year. I had quit my regular job and gone back to consulting. We were doing interface design work for a wide variety of companies, but we were charging $250 an hour, pretty good money back then.
We had made and shipped Twistori, which was a stream of Twitter emotions that people just loved. The ad people saw it and they wanted to do it, so we had a lot of consulting work for companies like Pepsi and Ford and their ad agencies. We did a lot of work for them. Instead of being long running, we’re building software that makes your business. It was promotional-type money.
Businesses do promote in a recession, because if there are fewer consumer dollars to go around, they need to try to get more of those consumer dollars. It’s something that went on for years. It only stopped because we decided not to consult anymore.
It was nice, clearly defined projects. It had a deliverable that weren’t long running internal projects. A lot of long running internal projects for designers and developers who were consultants or freelancers, are ego-driven projects inside a company.
That’s why they tend to go on forever no matter what you try to do to get people to make decisions and ship the software, in my experience it just goes on and on. Those types of projects get cut.
You mean these are the pet projects of some exec?
They’re pet projects. They’re like, “Well we need to be shown to be doing something with, I don't know, ecommerce. So we need to have this project.” Then everyone tries to weigh in with their ideas and it drags on forever.
Then at some point even though it’s their own fault, they’re like, well this isn’t getting anywhere so we’re going to cut it. I think everyone who’s been any kind of freelancer has experienced this on some scale.
We did things that promoted our skills, and then we got these different types of projects. We weren’t the only company doing this sort of thing. There was another company called Stamen that was well known for their visualization projects. But they were a much bigger company than us and therefore they charged a lot more.
We were in the middle. We weren’t bottom and we weren’t top. We were in the middle. So when companies cut their budgets but still needed to get work done they came to us, because they still wanted it to get done but they didn’t want to spend as much. So that was a major bonus for us for the consulting.
The reason I didn’t quit consulting and start products and just hope the runway would work was because I am risk averse. I think that in good times it’s easy to say, “Take the risk. Quit your job. Save up six months of money.” I would never do that. I would never, ever recommend someone save up six months and quit their job.
Usually you would be able to get another job, but what if you can’t? That’s the situation we’re in right now. I believe in diversifying my income. So while we were consulting, that was when we built out Freckle, which is now called Noko, which is time tracking software.
We built it out because we knew everyone like me, who was consultant, I knew so many consultants, we hated to track our time. All the tools sucked. And so we just sort of faked the hours at the end of the moth or whatever so we could get billing, and guaranteed, losing money. So, I designed something that was as simple as possible to log the time as you went along, and I launched to my mailing list. It was mostly Ruby developers.
That was what made you famous in my eyes at the time.
What, the Ruby stuff?
What I wanted to build was Freckle. You would post about it. I think you were blogging at Unicorn Free or whatever your blog was back then.
I was reading a lot of 37Signals, Jason Fried and DHH about running profitable businesses. Meanwhile I was doing the exact opposite thing, building just to get into Y Combinator. Not charging anybody any money, running out of funding, and looking jealously at what you were doing, which worked without other investors needing to come in and prop you up while you lost money every month.
I feel like consulting for so many years and working with so many people who had these cool ideas that never worked inoculated me against the startup world completely, because I heard the same stuff from those people as the clients that I had known and worked for so many times. It was déjà vu.
I went to startup school, Y Combinator Startup School in 2007 in Palo Alto, I guess. That’s where Stanford is, right? There were eucalyptus trees. I talked to Paul Graham. I had pitched him an idea. I had missed the deadline.
He said to apply and I said, “Do I need to move?” He’s like, “Yes.” I’m like, “Well I’m not going to leave my job that pays good money for $3,000.00 and uproot my life to go to Cambridge. Never mind.”
It’s probably for the best that you didn’t, because back then if you did anything regarding YC, it was all like, how do you emulate the success of the best startups? And the best startups at that time, at least the ones that were sort of the golden children, were Facebook, Twitter, these companies that had no business model.
Courtland, you have no idea. In 2007, Twitter wasn’t out yet. Facebook had just been opened to non-college students for a year or two at that point.
What was that, Reddit and Digg then?
Digg was huge.
This was pre-pre-big internet startups.
It’s a long time ago. The thing that I pitched was a product that would have been something that we would have charged money for even then. I don't know if we would have been accepted but he told me to apply, and I was like, “Never mind.” I feel good about that.
Well what happened when I did it in 2011, even four years later, is my cofounder and I decided to start charging money, and everybody in YC’s like, “No, don’t do that.” It’s just constant discouragement. “How are you going to grow? How are you going to get to millions of users?”
I think it’s different today. If you look at most of the big startups coming out of Silicon Valley, they charge money. They have some sort of revenue model. But back then it was lunacy and there was no encouragement. It was constant discouragement from charging.
It was lunacy and it was the same reason that people were paying ridiculously high amounts for crappy houses in random places. It’s the idea that someone will pay you more for this later. It’s an expectation versus actually building real value.
So that was three, four things we had going on. Then in December 2010 we had the project from hell, the last project from hell from Ford. It wasn’t Ford’s fault. It was their ad agency. I fucking hate ad agencies so much. I was just like, “I’m done.”
I had known so many people like you, Courtland, at that time. In 2010 you wanted to create businesses like mine and yet were doing the most random stuff that I didn’t understand. I realized they didn’t have an understanding of what business is, what people pay for, why people pay for things, how to come up with things that people will buy. So 30X500 came out of that. It was Year of Hustle at first. It evolved over time.
I had all these different types of income streams. I had software as a service, which was growing slowly because that’s what it does. Subscription over new grows slowly, generally speaking. I had workshops which were semi-monthly for technical topics.
This mindset of diversifying your activities, your income streams, I think for a lot of people it’s hard enough to get one successful business off the ground. They find it hard to justify spending time on multiple other ones that might distract them. How did you make it work, and why go that route?
That’s a valid point. I’ve known people who, unlike me, focus on one thing, for example Nathan Barry. I know that Hiten Shah told him to focus on one thing so he shut his info products down and of course ConvertKit is now huge.
But for me it was a safety issue. I did not grow up with money. I didn’t even grow up in a financially comfortable household. It was very stressful to me and I left home very early. I left home when I was 16 years old, so that was very stressful.
I’ve always been doing freelancing. I would take whatever work would come my way, so I’ve done all kinds of HTML design stuff, interface design and programming, and I did technical editing. I did magazine article writing, technical magazine article writing back when you could just get those jobs online.
I did all this stuff, so it was very natural for me to be juggling 15 balls at once. It was nice and relaxing for a little while to have a job. But then I had people at the job I didn’t like. People always call me brutally honest and the thing is, I’m not. I would be professional at the office and I would be dying inside.
I was working with people I didn't like or who were stupid, or sabotaging the projects, who were completely undermining my work. Some of them were getting paid more than me, so the rage just built. So I prefer to be stressful doing multiple things at once than working with people I hated every day and having to do it with a smile on my face.
For me, doing all that stuff, it was stressful. It was a lot. However, it was less risky because I knew that I could launch this or that and make a bunch of money, maybe 10 grand, 5 grand, 30 grand doing a launch and then I would have that money to operate on, which is really useful, and then I didn’t have to work or I didn’t have to do the things I hate the most and I also didn’t have to be afraid of being poor. So to me, that’s worth it.
I’ve read some studies on entrepreneurs, specifically around why people start businesses, and one of the most common characteristics is a disdain for working for other people. Also, an inherent belief that if you work for others and you get paid a normal salary doing a normal job, then you’re always going to be underpaid.
You’re always going to be undervalued, because you bring multiple skills to the table. You’re maybe less adept at playing this political game and getting paid more to do less. It seems like you fit the bill.
I’ve also read those and I’m like, “That’s definitely me.” I would rather serve in heaven or reign in hell. I don’t know which one of those would be me.
You prefer to reign in hell.
I think I do.
You're an entrepreneur. The entrepreneur ethos.
I think I do. I much prefer to reign in hell. Yeah, I would rather be my own boss of a crap ship than a cog in a well-oiled machine. I’m not going to lie. Sometimes I do wish someone else would make my decisions for me.
Well the thing is that if you’re good and you're assessing your skills and your abilities to become an entrepreneur effectively, then it won’t be hell. You’ll create something that works.
There’s a higher upside than working for somebody else. You can create your own culture that you want and make the money you want and work with the people that you want. It’s not always hell.
No, but there are moments of hell. I’ve never worked at a bad job. No one ever harassed me or anything like that. Nothing bad ever really happened to me. It just drove me crazy.
Then some things have happened in businesses that were extremely stressful. Right now, it’s stressful cause I’m the one in charge and I have to make all the decisions. Someone else’s salary is my responsibility. So there are downsides. I don’t want to say that there aren’t.
It’s not hell to run your own business, but there are always downsides. Are you going to have to eat shit, or are you going to have to shovel shit maybe is the distinction? I would much rather shovel shit than eat it.
So you’re in the recession here. You’re juggling all these different balls, and it sounds like your goal was to transition out of consulting and progressively further and further into your own businesses. Freckle made something like $27,000.00 in revenue in its first year.
That’s not enough to sustain you. How did you get it to that point, despite the fact that in a recession people are buying less, and they’re saving more and they’re being pickier about what they’re spending? They might seem to be less willing to take a risk on an unproven startup in a recession. How did you grow your business?
I’m going to address your last bit first. I don’t think that in 2008 people were quote/unquote worried about unproven startups, because the wave of things being shuttered was not like it has been now.
But also we did, from the very beginning, emphasize that we were in it to make money, to create a sustainable business, and also very initially immediately we made it so you could download all your data. We did reassure people of that.
I did pitch it immediately to people who were like me in my audience, by which I mean my cohort of people rather than people who just followed me. When people say audience, they usually mean their mailing list in 30x500 that mean your addressable market, the group of people who hang together online and talk about things and share resources and buy on value.
Do you remember how much you were charging?
Yeah. Our plans were 12, 24 and 48 I think. For solo was $12.00, one person. Then 24 was a small team and 48 was a larger team, like ten plus.
Okay. That’s pretty cheap.
Pretty cheap. We didn't have a lot of features. We focused on time entry and reporting and made it simple. There weren’t commissions or anything like that. You couldn’t reset your password. We had to do that for you. You had to email us.
It was quite a few customers initially, more than I expected. Growing it was a bit hard at first because I had to figure out what kind of content marketing would work. But then we created some cheat sheets targeted at people like you, so it was about how do you charge credit cards, back when that was complicated. You had to learn so much to charge credit cards. It was horrible. So I created a huge multi-page cheat sheet.
These were the pre-Stripe days. It was extremely hard to charge for what you were building, part of why people didn’t charge.
I’m sure that had something to do with it, cause you had to get a merchant account. You had to go to a bank. It was a whole thing. Stripe is so much better. We get to handle all of our own subscription services, subscription billing.
I think we used Jam (ph) and modified it or something. It's been a long time, but I vaguely recall that. It was a lot of work. We also had a free account then. We still have free users, but we don’t have signups for the free account right now. I think that’s what we may revisit at this time.
We grew a lot by word of mouth. People liked us because of the interface, and they shared it with people. We have Git integration so you can log time from you commit messages and things like that that the developers loved.
I cannot express to you how bad time tracking software was at the time. It was extremely, extremely terrible. We grew primarily through word of mouth and reputation. We’ve never been big on SEO.
Do you think that starting this business during a recession changed some of the decisions that you made around how to grow your company? Would you have perhaps spent more money growing it or used less organic methods, or would it have been the same playbook?
No, because I lived through the banner ad crash. Advertising on the web crashes regularly, and I think if you haven’t been watching it since 1999 you don’t notice. It crashes. People inventing new advertising mechanism, it pays so much money and then it crashes because then it becomes ineffective.
People ignore it.
Ignore it or they get ad blockers. Text links, those little banner ads you could get on the side of popular blogs, we definitely paid for those, some in the beginning and the conversion rate was ridiculously low.
Growing by word of mouth and reputation is the most durable way to grow, because people will recommend your product. There’s nothing better and you can’t buy it. If they love your product there’s also no competition. People will recommend your product before someone is searching for it, which is great, too.
I’m extremely pragmatic in terms of finances, like I’ve said. It was a rough way to grow up. I was always about saving money, earning money, not spending my money on frivolous stuff. So to me, a lot of the growth mechanisms are dangerous looking.
Yeah. They require a lot of optimism where you’re investing quite a ton, and if it doesn’t work out .
Optimization. Yeah, hope that Google won’t one day just shut it off. They have hurt so many businesses by changing stuff, including legitimate businesses. Sol Orwell from Examine.com has written about how Google completely fucked their traffic over. I think it dropped to 25% of what it was before for no apparent reason.
They’re an extremely legitimate source of information. They don’t do any shady stuff and it was a whole thing. They’re growing back, but can you imagine if 75% of your revenue disappeared over night? That would be horrible.
Pretty frightening for the same reasons and of course building on the back of any other platform, Facebook, same story there. Suddenly you wake up and you can’t publish posts to your followers unless you pay Facebook.
Yup. That happened.
Mysteriously, hundreds of businesses dead.
Yeah. I don’t trust anyone in that way, and that has served me very well. I don’t want anyone to get between me and my customers, and so far, that has worked well. Have you had years where we shrank a little cause I didn’t work at all? Yes.
Have we lost big customers because they went out of business and I didn’t know they were there? Yes. I’ve made mistakes, but one mistake I have never made is, no one can shut my business off. I don’t trust platforms. I don’t trust Google. I don’t trust Search, things like that that change constantly. I just don’t trust them. People have made fun of me for this a lot.
Yet Freckle’s still around. I mean, it’s called Noko, but it still exists.
It’s still making money.
It has not been crushed by the downfall of Medium or YouTube or Google or Facebook or any other platform. It’s totally fine.
That is correct, yeah. In fact, the only big loss we’ve ever had was recently we had this huge account. I’ve written about this vaguely on a growth stacking blog. I’ll go into it in more detail at some later date.
We had a very large customer that I didn’t know exists, and they were paying us - this is embarrassing. It’s not related to the recession that’s going on. They were paying us $5,000.00 a month and I didn’t know that they existed, because they wrote into us once and then never again.
Typically, the larger accounts, we have several accounts in the $500 to $1,500.00 range. They like to get support. They ask for discounts. They write in and talk to us. This people did not. I had no idea how large the account was. Their business model was failing, and if I had known they were there I would have anticipated that because (inaudible) small (ph) doesn’t sound very sound at all. So we lost 10% of our revenue recently.
Right. It's better to have a self- inflicted wound though, than a wound that you can’t control. Because that’s something that you can learn from, and you can do things better next time.
That’s true. But that is a great example of why I have always said that a thousand customers is better than one client or one boss, but one customer that’s worth 100 other customers is risky also.
We now have profiling, so I can tell you how many of the other large accounts we have. I learned that lesson the hard way. But so far, we’ve lost only a handful of accounts because of the coronavirus situation, and I anticipate that that will continue to be the case.
So we have a question from the audience. Chris Biscardi is asking, “Do you think you should have charged more from the beginning? You’re talking about Noko’s plans being basically under $50.00 a month. If you could go back and do it over again, would you have changed that?”
No. I think that it was valuable for us to get those customers in the door when we weren’t living off it. We were able to almost live off it the second year, and had the other stuff going on.
The thing about pricing is you can’t know what works and what doesn’t work until you test it. Now we have much higher pricing now. We switched to a per-seat pricing model and we have a lot more accounts that pay a lot, but those original accounts if they’re still with us, still have their original price, unless they volunteered to pay more to get some features that were segregated for the new account levels.
I think that you can’t go wrong by offering a reasonable price. It is a no-brainer when you don’t have a reputation. Once you do have any kind of reputation, that’s a great time to raise your price.
However, if you are able to charge more and it’s a matter of survival, then I would 100% charge more. I wouldn’t charge less because it’s the nice thing to do when you’re dealing with businesses, because everyone’s a business. They can either choose to pay or not. It’s valuable to them or not.
But we’re looking right now at offering discounts to all of our freelance customers of a couple bucks which is 10%, but if that will keep them around, then that’s well worth it. That’s the sort of thing that you have to think about when economic things are going haywire.
So obviously economic things are going haywire translates into people are spending less money. They haven’t stopped spending money. They still need things. But they’re more judicious about what they’re going to buy. They prioritize aggressively. They cut off the cruft.
How did that shape your decision to work on time tracking software, if at all? There are a lot of Indie Hackers who are trying to decide what kind of business they want to build. Should the fact that we’re in a recession change their ideas? Should it change what they should work on?
Definitely. I think so, definitely. Here’s the thing. I’m going to give you guys advice that I give to everyone all the time, because my advice has never changed on this. You want to create value for your customers that’s hard to deny.
The best way to do that is to either save them money or make them money. Saving money is a proxy for saving time, because they can save how many people you have to hire or how quickly you get your work done and how much more you can do, et cetera, because it all comes down to value which is somehow tied to money. The more explicitly it can be tied to money, the better.
Time tracking, if I were to do it all over again, I wouldn’t pick time tracking because it is something that, at the heart of it, people hate to do. No matter how nice the software is, it’s like a trailing indicator, too.
It doesn’t empower people to do their work. They use it to track their work, which to some audiences makes it very dispensable. I would do something that’s more proactive, and we are working on those features for Noko to make Noko more proactive. I wrote about this before any of this started going down on the growth staking blog. We are looking for ways to make Noko more active rather than reactive, if that makes sense, in terms of people’s workday.
We want to get more integrated into people’s workday in a positive way, rather than just taking this task that they hate and making it not hate-able. If you could go the other way and make something more impactful, easier to do et cetera rather than removing pain, that’s good.
But one of the reasons Noko has done as well as it has despite my neglect is that it makes money for people. It does help people recover lost billing time. It helps them charge more. It helps them see how much they’re spending on clients for a time that they can’t bill for, like sales, so you can work that into your hourly rate.
It’s all money related, but I would be even closer to the value production, and that’s what we’re doing with features. That’s my suggestion. My suggestion has always been to focus on making money or saving money, which is almost the same thing, or killing serious pains that stop people from achieving their goals.
I love the fact that you said do something where you can explicitly tie it to the money that people are making or saving, cause it’s all for naught if you're helping people save money but they can’t figure it out in their heads how you’re doing that. If they have to think too hard about it then they’re not going to understand the benefit you’re providing and ultimately, they’re not going to pay you if they don’t see the benefit.
Extremely true. It has to be explicit. You have to really spell it out, and I think that we’re beginning to revise some of our sales messages on the landing page copy to be even more explicit.
For example, a lady who had the very first consulting agency wrote in and asked if she could pause the Noko account. I said, “Absolutely, and here’s how you do it,” because of the economic stuff that’s going. I was like, “I’m a small business, too. I would totally understand it if it would you to offer you a discount. Here are some more features that we’re working on that will be even more valuable to your team in the future during this chaotic time.”
She was like, “Sold.” So instead of losing the account, and I said specifically, it was not a very big account so I was like, “If it saves you one or two hours a month, it will continue to pay for itself.” And she was like, “Absolutely. You sold me,” and so I kept her.
So that’s the message, and that’s the message we’re using to all of our customers who are concerned. We’re offering them a discount and saying, “This can still pay for itself and then you don’t have to disrupt your routine and switch to spreadsheets,” and so far it’s been working well.
The example that always comes to mind for me is a good friend of mine, who I’ve had on the podcast before. She’s an indie hacker running her own business now. It’s doing great. She’s a solo founder. But she used to work at a company. She’s a very social person, and she’s -
Is it Lynn?
It’s Lynn, exactly. Very social person. She’s a chatterbox. She would run back and forth to everyone in the company. She would identify problems in one area, figure out who to talk to, and she was providing an immense amount of value to her employer.
But there’s no way for them to measure that. There’s no way for them to know about it. So she just felt tremendously unappreciated, because ultimately she’s not being rewarded because the value she’s providing, even though it exists, just wasn’t explicit.
Whereas if you’re a salesperson, you can point to a number, and someone can say, “Oh, you made this number go up. Here’s how much we’ll pay you.” Or if you’re a software engineer, maybe it’s not as explicit as a salesperson, but people can say, “Hey, people buy our software. You're the one who’s creating it. You’re valuable.”
I think it’s the same in business as it is if you’re an employee. If you’re not doing something that’s easy for people to explain how it makes them or saves them money, then it doesn’t matter how much money it makes or saves them.
And so then you have to learn how to do that and make sure that you are. I have an old blog post on Stacking Up the Bricks. I think it’s called Do You Deserve Your Salary or Do You Earn Your Salary, which is about exactly this problem.
Even as an employee, you need to make that messaging clear to your employer, because a lot of times people are idiots and will fire one of the most valuable people on their team because they’re just doing their work and not communicating aggressively what it is that they’re doing and how they’re working. Then suddenly they have to hire 30 people to replace them.
So people are fucking stupid and you have to spell it out for them all the time. Most people I’ve ever worked for, I’m like, “Your bad at business.” It was really astonishing to me. So I would assume that if you have a job that your boss is bad at business and that you should work to make your value as explicitly clear as possible, so they don’t do something real stupid.
Let’s talk about how you do then when you’re deciding what kind of company to build. Because I talk to a lot of Indie Hackers who will make some random idea. They’ll go like, “Oh, I’ve made an app so that when you start up your computer, it automatically opens up these applications, which saves you 20 seconds a day and that saves you, I don't know, 20 minutes a year and that’s worth $15.00, so here’s $15.00 a year that I’m charging you.”
And I’m like, “That’s not going to work. It’s not a valuable problem. It’s going to be hard for you to sell to people. They’re not going to pay a lot for it if at all.” I think a lot of people think all the valuable ideas are taken. Someone’s already built a time tracker. I have to do something completely unique, something no one’s ever done and solve a totally unsolved problem, and they end up solving these trivial problems that nobody cares about.
Noko, as it is, is a tiny, tiny little player, because for the past several years, I have been too sick to promote it or work on it, so we’ve maintained it and we haven’t done anything else. And it’s still making over a half a million dollars a year for us steadily, minus that one large account that we lost. And anyway, we’ll be able to grow again once things are going fine.
So the idea of competition is not really an issue, because there are millions and millions of people, assuming you’ve picked the right type of audience and solve a powerful problem, millions of people who need this thing. No one thing is going to solve all their problems.
It doesn’t matter how popular it is or how good it is. There are always going to be areas that require changes specific to an industry or specific to an industry or specific a way of working or a mindset or preferences or even requirements in the industry.
When people are used to paying for a product, it’s much easier to sell them on a different version of it than if they’re not paying for a product. The idea that you find people who are underserved and who don’t pay anything for anything because it doesn’t exist and that you’re going to go in there and change their lives, don’t do it. Because the fact that they’re not paying for anything is actually an indicator that other people have almost certainly done that and failed completely to sell them on anything.
Whereas, if you see a whole industry, time tracking is a huge industry. There are so many people with so many projects making millions and millions of dollars. You can probably carve out a small piece for yourself if you find a specific way to tackle the pain that resonates with a subset of the audience that is not being served well by their current product that they’re using and already paying for.
So it’s much easier to commit someone to switch than it is to start paying for something new that they’ve never tried. That’s the competition side of things. Now people are probably a bit more conservative right now, so it might be harder to get them to switch. However, if some companies are using super, super expensive tools, they’re quite likely looking to go to a more middle range tool.
For Noko we have two strategies I’m currently working to build out and design, changing my growth strategy which I’ve laid out in the book because things happened. We want to see if we can get some of these other companies that are on much more expensive products to flow downhill our way, and we also want to offer a less expensive offering to people that I can already reach who are not necessarily in the market for time tracking that have time tracking-related problems that I can then sell for $9.00 a month rather than $19.00, which is what Noko currently costs.
So we’re coming at it from both angles, and I haven’t decided which to tackle first thinking about it, because $9.00 a month’s easier to sell than finding enterprise companies and getting them to switch, but of course enterprise companies pay more and are more stable.
I think that studying the market, what people buy already, what people are already spending money on, and assuming that they may want to change because of pricing or because of emerging needs now that everyone’s working at home, et cetera, or you find out based on what they say on the internet if they're all super conservative and don’t want to change anything.
It’s funny cause this is one of those areas where, I think especially as a first-time founder, your intuition is 180 degrees backwards. Your intuition might be, “Oh, people are already paying a lot of money for stuff. There’s no way I can get in there and compete. I’ve got to do something that no one’s paying money for.” But it’s the exact opposite. Looking at what people are paying money for is almost like having the answers to the test.
What am I going to build that people find valuable? What do people already find valuable and do that.
Don’t copy your neighbor’s product but copy your neighbor’s insight.
Yeah. The problems they’re solving, copy that.
You know, make a different type of product, a variant. Don’t copy their interface. Don’t copy their actual marketing text. Yeah, you want to look at people who are succeeding, who are getting something that done that works in a large way and figure out how you can carve off a little bit of that pie for yourself.
As for the ideas that people come to us both with, those are good time economic ideas when you can just dick around and have fun. If you really want to make a business, you have to find out something that people will pay for first, before you create anything.
It’s fine to make hobby projects. I think everyone should do it if they enjoy it, and I think you shouldn’t ruin your hobby project by pretending it’s going to be this. Try and make your hobby your jobby. That’s something I’ve been saying and hating myself for, but.
Don’t make your hobby your jobby.
No. That’s so terrible.
The other half of this is what you’re saying, which is look for problems that people are solving that they’re willing to pay money to solve. You don’t want to copy your competitor’s products. Again, this is where I think it’s exactly the opposite of many people’s intuition.
When I look at Indie Hackers, the products people are building, very often they look like just clones of other products. So they’re solving these totally unique problems that no one has proven that they’ll ever pay for, getting too clever there, and then they’re not getting clever enough with the solution. They’re building a solution that looks completely undifferentiated from everybody else’s.
They say, “Peter Levels has a ‘Made by Peter Levels’ Twitter link at the bottom right of his website. I’m going to have the same thing.” And like, “Oh, these websites are white with dark text. I’m going to have a website that’s white with dark text.” It’s all identical and I wonder why that its. Why do you think people feel the need to build the exact same product as everyone else but solve these completely unique, trivial problems?
I think the real root answer of that is human nature. We are built to mimic what goes around us. That’s how children learn to talk and walk and everything. So we look for what feels right and what feels right is something that’s familiar. So we just copy stuff by default.
When I was younger and I started making websites, I was a complete mimic, so I’m not going to rag on anyone for doing that. I think that as an adult you have to be like, “What’s going to suit my purposes? What’s going to get me the result I want?” And you have to override that impulse.
But I think that everyone has that impulse. It’s just some of us are better at ignoring it and being, “Okay, that’s a feeling. It doesn’t mean that’s the right thing to do. I’m going to go look for some evidence instead.” This stuff is an unknown for a lot of people, so of course they copy what they see and they don’t necessarily even think through whether the thing they’re copying works for the person doing it.
I see why people copy stuff that isn’t even successful, and I think it’s because they are unconsciously mimicking because they’re already in the frame, so they’re like, “This time tracking app should require you to select the project before you track your time.”
Most of them do. Noko doesn’t because I was like, “What’s wrong with these tools?” You have to question all of your assumptions and really be deliberate about what it is you’re going to make, rather than getting an inspiration, which is usually just, I think, a memory in a lot of cases.
You were talking about the coronavirus earlier, and I feel like I see the same thing. When I talk to friends or family or acquaintances who live in a certain place, they tend to mostly copy whatever everybody around them is doing.
So whether they’re updated on the correct response or not, a lot of my friends in Georgia are like, “Well no one here seems to be taking it seriously, so I’m going to copy what everyone else here is doing.” I talk to my friends in California and they’re like, “Everyone here is taking it really seriously and sheltering in place, so that’s what I’m doing.” Whether they’ve read up on it or not, it just seems to be, “What is the response the people around me are doing? Let’s do that.”
That is a known situation in crisis response. A fire alarm goes off in a building. If people don’t see the fire, they’ll look to see what other people are doing to decide how seriously they should react. I think we all do this to an extent, and we have to override that impulse.
Yeah, let them do it.
Yeah, herd instinct.
So let’s say we’re looking out into the world and it’s a recession, and we’re trying to figure out what people spend money on. What do people spend money on during a recession? It's definitely not super trivial apps and little website that aren’t adding value. What would you say an entrepreneur should be looking at if they’re trying to decide what to start?
There are two poles here. There’s the trivial stuff that you’re talking about. People do, in recessions, spend money on affordable luxuries as a replacement for less affordable luxury.
For example, it’s a known fact that people buy fancy soaps and then they cancel their salon appointments. So massage therapists lose out, fancy soap makers do grow, for example. Things you can make it home instead of going out to restaurants, things like that. That’s a known thing that people definitely, 100% do in a recession.
Those are consumer items, though, and I think it’s extremely risky and hard to break into that. I think that some game people, like game makers, will do very well in this recession, maybe even better than before because people have other options to do with their time. But that doesn’t mean that you can break in with something new at that time. I wouldn’t recommend it. Consumers are very fickle.
So the other thing is that businesses have needs and people have needs that they cannot get rid of, so they will maybe go through substitutes but they won’t stop doing the thing. So for example, businesses absolutely still need time tracking, especially if they’re going to be invoicing clients or if they have to do internal reporting for their budgets, stuff like that.
They might consider downgrading to a less expensive product, but they’re not going to eliminate that need entirely. However, some freelancers, especially on the lower end are going to go out business because they’ve been relying on work trickling down and not knowing how to get work reliably and not having the value statement so they might just go poof.
Other people might be spending more on things they need to work at home. For example, Zoom is doing well right now. Other products like that have an opportunity to expand because it’s a replacement for something that has to get done, and they’re being done now in a different way.
What would you say to people who are looking out into the landscape now, because this is a unique recession. As you said earlier, it’s not necessarily caused by some sort of naturally occurring thing. Indirectly it is, but it’s more caused by a response to a pandemic, in which case we’re laying off tons of people, closing businesses. I saw a graph that showed the spike of unemployment compared to the last few decades.
And what we’ve seen the last week dwarfs the 2008 recession in its entirety. It’s crazy. As a result, there are all sorts of habits that have changed. People are staying at home, obviously. Like you said, Zoom and other video conferencing and remote software. Slack has seen a huge uptick.
Yes, Slack’s the one.
People are engaging in this behavior. I think a lot of entrepreneurs are seeing this and saying, “Well here’s an opportunity. People’s behavior has changed. There’s a differential that maybe I can take advantage of, like start a business that will target one of these behavioral changes.” Does that seem shortsighted to you? Does that seem at odds with perhaps just sticking to what’s tried and true, or does that make a lot of sense to be opportunistic and look at what’s changed?
All business is opportunistic. There are different types of opportunistic, right? Like, “I found boxes of masks at Home Depot so I’m going to buy them and sell them on eBay.” That’s evil opportunism, also illegal in most places.
Then there’s, “Everyone’s working at home and this thing sucks and people know it, and they’re spending money on software so I’m going to get in there.” That’s good opportunistic. The chances are that once things have cleared up, however long that takes, because who the fuck knows, the new habits formed from working from home, some people will absolutely drop.
We can’t know for sure that things will continue as intensely as they are now. I doubt that they will because some segment of the population likes going into the office. But tools that enable remote work are going to be probably in the most cases still useful for in-person work, for documentation, or half the team’s remote.
Things like that I think are potentially a real boon and will continue to be valuable. You might have a dip when things suddenly change, but I would think that solid tools that support the work habits people are creating now is something that could be a long-enduring business. That’s my perspective.
It’s interesting to think about what things will endure, because whenever there’s an emergency, certain things endure. Certain things fade away. After 9/11, a lot of things were closed. A lot of things were cancelled. Life returned to normal, but we still have the TSA, and now airports have always been a hassle since 9/11.
I’m sure there are going to be some things that endure here. Maybe remote work will be something lots of people discover and decide, “Hey, this is something I want to keep doing.” A lot of these remote work tools will see a boost and end up being permanent. A lot of other things will go back to normal. Is there anything that you’re in particular looking at, any changes for Noko?
Sure. I’ll just walk you through some of the ideas that we’ve been kicking around over here for our business. Focusing on the two businesses, Stacking the Bricks, 30x500, entrepreneur education business and then Noko, the time tracking business, or let’s call it the SaaS business.
So obviously Alex and I teach a class called 30x500, which is $1,999.00. We just launched it. Obviously, our launch did not do as well as it has historically, which we fully expected based on the situation. What we plan to do, Alex and I, one is to create a tighter community of people who are already in 30x500 so we can help each other out, which is why I pasted the link to this in the chat room.
And two, we’re going to look at emphasizing, refreshing, and creating more lower-priced products for people who still want to get started or who need to solve some problem in their business but who don’t have $2,000.00 to spend, which is going to be a lot of people.
Because it’s a recession, we are looking at things in the $9.00 to $99.00 price point, maybe a little bit more, maybe adding and enhancing Just Fucking Ship, is the book I’m talking about. We’re looking at refreshing that, adding some more support tools, which also segues into some of the things we’re doing for Noko.
On our roadmap that I mentioned before, we’re going to be bringing on a focus mode, which is that intention that you want to work on and (inaudible) timer, but we also can track it at the end.
What I’ve been doing in my business recently has been setting my daily three priorities on paper which I have also written about. I’ve created a whole worksheet for myself. But I want that to be software, and I want that to be software that’s integrated with time tracking.
So you can have your three priorities, and then you can track whether you’re getting them done or not, and you can track your time with them. That also can communicate within teams. So one, if you’re running around crazy and you just need something to hang on to get anything done, to help clarify the three priorities is a great habit for individuals. It’s been so helpful for me.
Two, if you’re in a small team or whatever, that can help. It’s a communication mechanism so you know what’s going on, rather than constantly asking each other questions in Slack. So that’s what we’re looking at.
I think there’s a crossover there, which is another thing I want to emphasize. It’s always emphasized. Work with the things that you already have, the apps that you already have, the people you can already reach, the people you already understand, because why would you throw away that advantage?
You especially should not throw that advantage away now. So, that and the gold feature for Noko, which we’ve been working on for a while already. We’re about to ship it. So you can say -
It’s fascinating to hear how many different things that you’re doing. This is something you spoke about in your launch, not going as well as it previously had in other years, but you’re aware of that given your situation.
That’s something that I’ve seen with Indie Hackers as well, where it’s, “I’ve had momentum going in a certain direction. I had plans. This is what’s going to happen in March. This is what’s going to happen in April.
And suddenly, the global conversation’s completely different than I expected it would be. Certain things that I thought were important a month ago now seem completely trivial.”
I recorded, for example, a podcast episode with DHH and Natalie Nagele about work/life balance, because they had two completely different approaches to it when they both started their companies and I thought that would be something useful to have, a discussion or debate around that.
I was really excited to release that this week. And this week all three of us are like, “You know what? It’s not the time.” It's not the time to release it. It’s arguably evergreen but you’ve got to be nimble as a founder and realize a lot of your plans and your momentum don’t work anymore. Things are changing rapidly.
That is so true. I hate it.
It’s a pain.
Everyone’s like, “Amy really has her shit together.” If you think I wasn’t going, “Ha-ha-ha” behind the scenes for a little bit at first, of course I was, just so you know. I don’t like it either. This is the result of two or three weeks’ worth of thinking that I'm sharing with you right now. I didn’t instantly come up with that, just so you know.
Makes me feel slow, number one, listening to you, but also looking back to a time before Indie Hackers had much of anything going on. I could be as nimble as I wanted to be, react to anything instantaneously. I didn’t have backlogs of things built up.
I didn’t have long term plans, whereas now, I’m realizing when you’re a little bit more established, when you're a little bit further ahead, it’s harder to react to things. As a brand new founder just getting started, you’ve got maybe fewer advantages that you can rely on that already exist, but you also have more ability to do whatever you want at any point in time without any cruft or anchor dragging behind that you have to figure out.
That is absolutely true, and I was just thinking about this yesterday myself, because I said we’re launching this goals feature we’ve been working on for a while. Some of the things we’re going to have to figure out when we launch. Do we do permissions for goals now in our new feature?
Everything gets more complicated the older it is, the longer you’ve worked on it. It’s undoubtedly true. It really is sometimes a blessing to be starting out, because exactly what you said. I would be curious to hear, has Indie Hackers traffic changed over this situation?
It has, so this is one of the things that we’ve been worried about because Indie Hackers traditionally is almost entirely about people discussing their problems and their issues and their challenges with their startups, so it’s very educational.
It’s not Hacker News. It’s not sharing links about what’s the latest happening in the world. And if you analyze the problems that drive people to go visit a forum or go read a website, they all correspond to different frequencies, different tension curves.
For example, if your website is primarily educational, like Indie Hackers has been, it’s very prone to people graduating, which is just a nice way of saying churning. “Hey, I figured out what I needed to learn. I’ve seen 20 examples of people starting companies. I’ve decided I don’t want to do this, so I’m done.” Or “I’ve decided I’m going to do it. I’ll see you in a couple years.”
In the beginning of the whole coronavirus pandemic blowing up two weeks ago and becoming a little bit more serious for people, we saw our traffic started going down regularly. Almost every day it was slower than the day before.
We’ve since switched to becoming a little bit more newsy, a little bit more focused on current events. It just feels incredibly tone deaf. I think if we could just publish the content into this conversation of people talking about economy crashing and lives being lost and doctors making these life and death decisions, and we’re like, “Here are three tips to grow your startup faster.”
So we’ve been more about, “Okay. Well how does the news apply to Indie Hackers?” I’m not an epidemiologist. I can’t tell a country how they should prepare, but I can tell other Indie Hackers and founders what’s going on with other founders in this space, which they’re worried about. What are other people doing? What decisions are they making? And that’s the kind of stuff that people want to read regularly.
So in the last week or so, we’ve seen those numbers turn around, and this is going to the first recession or coronavirus-related podcast episode that comes out as well, Amy, so you have that distinction. A lot of this comes down to reacting, figuring out what’s going on and changing, because it’s not the same times as normal so you can’t just run business as normal as a founder.
It’s very true, and that makes a lot of sense to me. It also makes a lot of sense to me that things are turning around a bit now, because initially everyone was probably reloading CNN or whatever, Twitter, all the time, and that starts to wear off.
So then we’re like, “We have to have some semblance of normalcy.” And problems are starting to appear in my life and my business that I have to figure out, and so we then have to go back. I think one thing that we all really need to do, and this isn’t me telling me how to do your job.
This is advice I told myself as well. Alex and I have been talking about this. We just need to figure out how to help each other hang together. That’s why even though I was quite tired, I am doubling up. I’m a very tired girl.
Is that coffee and a Red Bull?
It is. I’m very tired. I think it’s just bad allergies because I haven’t gone anywhere or seen anyone in weeks, but we have to help each other stay sane and realize this is happening to all of us. There’s no one who’s not going to be touched by this some way.
We have to let go of all those ideas that we had about how our future was going to play out. At least for the next 6 to 12 months, it’s gone. It’s not going to happen the way we think. That’s just it. We have to admit that’s happening and that’s exactly what it feels like.
We’re grieving things and we have to figure out how to change what we were doing in a way that will work. It’s not easy for anyone, including for me, even though you said I quote, “talk so fast,” unquote.
One of the interesting things is, I was young and not involved in the business world during the last recession. I was still in college. But it feels like this recession and this pandemic are playing out so much faster than in the past.
We know what’s going on. We’re predicting what’s going to happen months before it’s happening, whereas in the last recession I felt that there was such a long period of uncertainty. What’s going to happen? Are we going to be able to dig ourselves out of it?
It just unfolded in slow motion over the course of almost a whole year, whereas now first months we were closing down businesses and we’re instantaneously like, “It’s going to be a recession,” before the recession hits. We’re battering down the hatches. We’re passing stimulus bills. Do you think that catching things early gives entrepreneurs a special chance to take advantage of this early, or implement measures that would help them survive earlier, also (inaudible)?
That’s a good question. This is going to sound like I am just humble bragging or maybe just bragging, but in 2006 my now-ex-boyfriend’s mother was like, “Oh, yeah. You guys should buy a house.” I'm like, “No, I’m going to wait until all these people buying these houses go broke, and then I’ll buy one cheap.”
I didn’t a hundred percent foresee the whole cascade of the recession because I knew that I didn’t know about credit default slots or whatever that was. I didn’t know about that shit at all. But I was like, “This can’t sustain itself.” And so I legit played into my general “I don’t trust” when things are going so great, because if they’re overinflated, they will come down. This is not the case of what’s happening right now.
It’s a completely different situation. It's not like the restaurant business was over inflated. The restaurant business was tugging along normally. Nothing weird was going on with restaurants and now they have to shut down for public safety. In that way we didn’t see it coming. I did not see that coming. But having a sense that you have to change now I think is going to be a benefit.
Yeah. You can start saving money earlier. I read a post from a founder today back to himself in 2008. One of his top points was, “Hey, you have all that money in the bank that you think is not enough. It is enough, you idiot. Don’t spend all your time trying to raise money. Just be frugal. Learn how to be frugal with the money and spend less.”
Obviously, back in 2008 he didn’t understand that. He spent all of his money way too fast. He didn’t adapt fast enough. But I guess if we can see this coming we know that hey, it might be time to cut some of those unnecessary expenses, and realize that if our customers are doing the same thing, are we one of those unnecessary expenses? How do we change that?
That is exactly true. I have always advocated that people keep as few staff as possible. Don’t hire a bunch of people on the basis that you’ll have more income. If you’ve already don’t that though, it’s cold comfort, I think, cause now you have to make hard decisions, and that’s not great.
I do think that any business that can survive or even grow or start during this time will be much better position to go even better in the future. Because being frugal, making the most of what you have, selling on value, understanding, and serving you customers, can make a sale when times are tough really hardens you to be successful forever. Not forever, but for the known future.
There are papers that show that businesses that are started in recessions tend to do better over time because these built-in frugality and practicality and skills that you need to make the sale when things are hard also work really well when things are good.
Yeah. It’s almost like the advice to build a successful business during a recession is the same as the advice to build a successful business out of a recession, but it’s with an asterisk, “Take this advice more seriously.”
Do it harder.
Yeah. Do it harder. It’s always good to be frugal. It’s always good to be careful about your spending. But now it’s an issue of life or death and you will not survive if you’re not frugal.
Yeah. I think that that is true, unless you’re one of those companies that’s suddenly booming. I don't think Slack is going to have any issues right now or for the foreseeable future, for example.
Rand Fishkin made a good post on his blog, I think yesterday or the day before, about how difficult it is to engage in marketing now. You have to be very careful, because I think there’s a fine line that is easier for some people to spot than others, between exploiting a human tragedy and growing a growing business and communicating with your customers well.
How do you see that line with Noko? For example, if you were to offer some sort of promotion that’s somehow in line with what people are going through during the times of a pandemic, how might you phrase that? What would you keep in mind to make sure that you don’t come off the wrong way?
Did you see that post that I 100% agree with that? Also, Animalz with a Z, they do content marketing stuff. I’m not sure where that name comes from. You hear animals with a Z, and it sounds like something very different.
They do content marketing strategy and they did a great recent post that people need voices in leadership, and they have specific advice in there. I have 100% always been about understanding the customers’ needs, being respectful of them as people and showing how we will help them. Servant leadership is the idea.
Everything in the 30x500 world, all my business advice, is always about respecting your customers as people, which means understanding their needs and serving their needs and being honest and helping people through those techniques.
I feel I’ve got that on lock. However, I had not written a covid-19 announcement email for the Noko customers, because I don’t want to be like all the random people I’m getting emails from about that stuff.
I’ve gotten so many of those emails.
I don’t want to write anything until it’s like, “Here’s how I can help you.” I don’t honestly think that anyone cares that we’re a remote company. I’m not going to be like, “Here’s how things are working at the Slash7 offices.”
No, it’s like, “Here’s how we can help you” is the only thing worth saying right now, I think. So I want to put together some resources for freelancers as to how they can weather the business. It’s the same type of advice I’m giving you but tailored because I was consulting at that time as well.
I’ve been a freelancer. I’ve been a freelancer who made ten bucks an hour and couldn’t eat anything but Ramen noodles. Then I was a freelancer who made $500.00 an hour and chose to quit. So I’ve been there, and I want to offer support and possibly cite some programs to help people with the no-code bill.
If we can keep them, if we can both give up something and stay in business and they can keep using our product to run their business, I feel that’s a win-win. But I have to come up with what exactly that is.
That’s my advice, is don’t go telling people what you want to say. Tell them something that they will benefit from hearing one way or another. I think, be real. Alex paused our newsletter. It’s preprogramed with weeks of content that we’ve written before. Many people don’t see this, so people see new stuff every week. He paused it because it’s tone deaf right now. That’s what we’ve been doing.
We don’t send out the normal Noko newsletter, which is one of the problems I want to fix. Now is not a time to start with generic freelancing content. So I think being respectful, not being in denial, I think focusing on people as humans who have concerns is the way to go. But I think it’s always the way to go.
I think it’s perfect because you’re talking about being customer-first and helping people, which also requires you to understand your customers and problems they’re going through, which is the step a lot of people skip.
If you’re only thinking, “Okay, well I’m a business owner. What do I need? I need to keep the lights on. I need this. I need that.” No one cares what you need.
They really don’t. I think to a small degree if your customers enjoy your product that they want you to keep your lights on. But they don’t want to just read about that, understandably. I think that focusing on the recipient is always the way to go.
I read How to Win Friends and Influence people when I was a young teenager and there’s a whole chapter where he rips up a letter that he received from someone and he just destroys it. It’s all about a radio company that wants him to pay for a subscription or something like that, old-timey yet weirdly topical at the same time.
He says, “You want? You want? I don’t give two figs for what you want, you unmitigated ass. I only care about what I want, and what I want is blah, blah, blah, blah, blah.” That hit me so hard and I figured I would live my corporate life that way.
The customers don’t care what you want, except where it aligns with what they want. And even if it’s the same thing, you should talk about their needs first. I think that’s a good rule all the time, but especially in this time, because no one wants to be dealing with a bunch of crap and then hearing some tone-deaf corporate email.
One of my favorite emails that I’ve gotten so far, honestly it wasn’t particularly caring. It wasn’t particularly empathetic in any of the stereotypical ways. But it was empathetic in terms of how much the people who wrote that knew what I cared about.
It was from a company in San Francisco called Creator, and they have a whole robot-created burger assembly line. Their whole email is like, “Here’s how we’ve outfitted our line to minimize human contact.” They even have a picture of their burger coming out of a slot in a window. It was completely wrapped in plastic and a delivery driver grabbing it so they wouldn’t have any contact with it.
And I’m like, “This is someone who gets it because they under what I’m concerned about. I just don’t want to get infected with coronavirus.” So they’re telling me how their product is going to help me stay safe. They’re appealing to that emotion.
That is such a great example, because what you said, they’re empathetic. When people say empathetic, they’re like, “Oh, I know how you’re feeling” type of empathetic. They’re empathetic in a functional way. You wouldn’t want a heartfelt letter about suffering from your burger company, in that context.
No. But they’re empathizing with your desires and just going straight to it, rather than touchy-feely empathizing. That’s a great example.
Yeah. I’ve gotten lots of emails where it’s like, “Oh, I hope you're staying safe” and “Here’s how we’re staying safe,” and then they’re doing nothing whatsoever to help.
Yeah. “Our offices will remain open.” We have a truck and GM Financial is the worst. We hate them. They’re so bad that when we tried refinancing, they didn’t send the paperwork, so we couldn’t refinance it. That’s how bad they are. We can’t escape them, literally. Their covid-19 email was like, “You can pay your bill online.” And the thing is, we already did. We’ve never paid the bill over the phone or whatever, so they’re just reminding us there’s no fee.
That’s one way to reduce churn is just prevent people from leaving.
They’re the Bank of Comcast. I don't know, on the West Coast, if you know Comcast. They’re famous for refusing to cancel you. They’ll say that they will and then they don’t do it.
One of the most hated companies of all time.
It’s true, and for good reason. So, a lot of tone-deaf emails. I would rather send you nothing than send a tone-deaf email, honestly.
You’re much better off not doing that.
So much better off.
This has been an informative discussion. Obviously, you and I are both going through this, you with a real business, me with a project that doesn’t make any money whatsoever.
What would you say to people who are considering starting their very first business? I talk to a lot of Indie Hackers who have been making plans for months to start their business and them trying to figure something out, and now the entire landscape has changed. What do you think they should take away from your experience here?
I think the first advice that I have, actually, is to minimize your risk. If you have a job that pays okay and you’re not dying there, keep it. If you are freelancing or consulting, I would say you definitely want to invest in that right now to make sure that you have as much financial continuity as you can.
This is oxygen-mask situation. It’s important to protect yourself because the worst thing is to think, my business has to make money tomorrow, and it doesn’t. That’s such a horrible situation. If you have any better way to make money that is more reliable or safer right now, I say do that first. Secure your oxygen mask first, before you try anything.
Second, I think it’s time to let go of the idea of passion projects as businesses, not for fun. You should do whatever things that make you happy for fun, all you want. It’s very important. Now is the best time to get real about what do people actually pay money for and to research your customers.
I teach with the Sales Safari workshop in 30x500, and all the things I’ve written. If you study what people actually do, and what companies are making money and continuing to make money and figure out how you can carve out a little bit of that pie for yourself, that is honestly the safest thing you can do. It’s always good advice, which is why I’ve been giving this advice since 2010, to just understand that when things are good, people will spend on a lot of frivolous stuff. They couldn’t survive during a bad time. And you don’t want to be one of those.
So you definitely don’t want to start one of those. If you already have one, now’s the time to figure out how to pivot to people who will get measurable value from it and charge them money instead. If you haven’t started anything, you haven’t dug a hole for yourself so stop digging.
Great advice. Amy, thanks for taking the time to have this chat with me. Hopefully, we’ll have some more productive chats over the course of the year. Can you tell people where they can go to find out more about what you’re up to with 30x500 and Noko and anything else you’ve got going on?
The website you should go to is stackingthebricks.com. That’s like building a wall little piece by piece, which is the way that I suggest people build their businesses. We have mailing lists there. I will be updating some of this discussion, recession advice and links to our best articles and stuff on the newsletter soon. So now’s a good time to join the newsletter.
I highly recommend it, listeners. Some of my favorite guests who have built some big businesses and have come on to the Indie Hackers podcast learned everything they know from Amy. So visit Stacking the Bricks and check her out.
So many of them have made more money than me, which is half embarrassing.
But I’m proud of it at the same time. So I’ll take a small amount of credit.
Quite a few Indie Hackers as well have made a lot more money than I ever have. Thanks so much, Amy.
Thank you so much for having me, everybody. Hang in there.
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