April 12, 2019

I'm Jason Cohen, founder of WP Engine. #AMA!

Hi Indie Hackers!

I'm Jason Cohen. I’ve started four companies, all of which surpassed $1m/yr in revenue, all profitable, two exited (Smart Bear, IT WatchDogs), and the most recent one I'm still at (WP Engine) with $130M ARR.

All companies were bootstrapped; two years into WP Engine I raised angel and institutional money (about $400M combined). I write about startup strategy on https://blog.asmartbear.com, and I was recently a guest on the Indie Hackers podcast.

Ask me anything!

I'll be back to answer your questions live at 2pm PST on April 24th.

  1. 16

    If you had to start over from zero today, with technical skills but no network / blog, etc, what would be your process for bringing a product to market and gaining your first users / early traction?

    1. 13

      I'd use the technique I used for customer discovery at WP Engine: I went to LinkedIn, used its search to find people with the right title/company that "should have" wanted the product, then reached out offering them to pay them whatever hourly rate they felt was appropriate for a one-hour conversation, to get their feedback. No one actually charged me, but the fact that I showed up-front that I valued their time got me the conversations.

      The other thing is to follow something I'm deeply interested in. I don't mean "follow your passion," although that can be good (it can also lead to things which are worthy projects but not companies, monetarily). I mean interest. So if you like programming language X, use X. Regardless of whether X is popular or on the up-swing. If you love solving specific kinds of problems (I like optimization and at-scale coordination so hosting made sense), find a way to have to solve them. This keeps burn-out away and energy high, which is important early on.

      1. 1

        thank you, really candid and helpful as usual.

  2. 7

    I bootstrapped a (UK based) company. It's profitable. Growing. '7 figures'. Team of 10. I've hired a CEO (who is also now shareholder). A while back I decided that to step back from the day to day running of it. I'm almost there!

    I'm happy to hold onto it as an owner and let it keep doing it's thing. But I often wonder about selling it, or parts of it. I wouldn't know where to start with that though. If I did sell it, it would have to be to the 'right people'. I wouldn't be able to live with myself if selling it had a negative impact on the business/people.

    We run global events/conferences plus have an online learning platform + community for software testers.

    Any advice on how I would go about finding a buyer and also valuing the business?

    1. 3

      First, question why you want to sell. You just said it's doing fine and you like its progress, so why change? Because you want cash? To reduce risk of future failure, i.e. take some money off the table now before more risk appears?

      Getting to the root of what's driving that, is the key, because it allows you to brainstorm other ways of getting what you really want. "Selling the company" isn't really the goal, it's a means to an end. It might very well be the correct means, but it might not be. By ID'ing the end, you can think of other ways to achieve it.

      For example, there are other investors who might trade some cash for an equity position. Something like Indie.vc or Tinyseed or Earnest might be interested if you're still involved or if you're not.

      Sometimes customers would like to invest. Often employees do, but don't have the capital, or are not in a total financial position to do so, but business customers sometimes are.

      Or don't. See it as an annuity, enjoy that, and optimize for profit rather than growth.

    2. 3

      I would be happy to speak to you about buying your share of the business, Rosie.

    3. 3

      Not to steal Jason's thunder, but cc'ing @ThomasSmale @KevinSureSwift who might have thoughts on this!

      1. 3

        Thanks for the mention @csallen and apologies for hijacking Jason's thread!

        Lots of factors that go into valuation @rosiesherry - I would suggest having a read of this post: https://feinternational.com/blog/saas-metrics-how-to-value-saas-business/ - should give a solid foundation of how valuations work for businesses that are similar to yours.

    4. 1

      Would you consider selling your share to the workers in your company? You might be able to get some advice from The Hive (https://www.uk.coop/the-hive/) on how to do that.

      1. 1

        It's on my list to investigate. I'm put off by the potential admin nightmare that might well come a part of it. I also don't think the workers would be able to invest much if any at all. I do wonder about selling shares to the community.

  3. 4

    Hey Jason!

    Can you talk about the process you went through when you validated your ideas via LinkedIn? What sorts of things did you ask and how did you approach people?

    Thanks!

    1. 4

      I started with a list of theories of what I thought was true. Things like:

      1. Freelance web developers have 20+ customers.

      2. Freelancers have to log into 20+ sites all the time.

      3. Freelancers are annoyed trying to store passwords for everything, so they use something insecure (same password everywhere) or difficult (google doc)

      4. Freelancers' customers want their sites to be faster and are willing to pay for that.

      Then I make a list of corresponding questions that would not lead the witness. For example for #3, leading the witness question would be "Are you annoyed having to store lots of passwords for sites?" A better question would be "How do you manage passwords for sites?"

      Open-ended questions are better because it leaves room for discovery. The one above might point out they don't log it at all, or they use a password manager. Asking something like "Do you have at least 20 customers" is binary and leaves no room for learning something brand new.

      Then I asked those questions, and took notes. Asked follow-up questions of course, especially since they're open-ended.

      Quickly you realize some theories are right, some are wrong, and there's new stuff that wasn't in the list. So I'd update the list of theories, update the questions, and proceed.

      I didn't stop until it became boring, meaning when I stopped finding new things. That means that process isn't creating more learning, so it's time to stop. That was 20-30 for me. Here's more: https://blog.asmartbear.com/vetting-startup-ideas.html

      1. 2

        This is amazing advice. I think this a key area as many people struggling with this exact part. They are doing customer development but binary, is this exact idea going to work or not, as opposed to finding out what it should or could be. Asking good questions is a lot harder than it seemed. The tricky bit is that even when one knows all this it's very hard not to simply ask about the specific idea and "lead the witness"

      2. 1

        Thanks for this. As a follow-up, what kind of response did you get from linkedin, ie. how many people did you have to contact to actually speak to 20-30 people?

  4. 4

    @jason there's a ton of legit questions you have here. And the questions are amazing.Just to get straight to the point

    1# did you feel like you sacrificed certain things like relationships you could have had to get where you are today.

    1. if you could go back, what would you change?
    1. 2
      1. Yes. https://blog.asmartbear.com/sacrifice-your-health-for-your-startup.html

      2. Nothing. That doesn't mean I haven't made mistakes, or taken the long way, or could have been ahead somewhere. But that's life. If you admit a few things, you probably have to admit 100 things -- hires you wouldn't have made, features you wouldn't have built, features you would have built, market positioning you would have made, really everything.

  5. 3

    Bootstrapping is tough. A lot of the founders here will be trying to find their early customers and struggle without any funding. What is the best way to approach getting those first 100, then 1,000 paying customers?

    1. 4

      There's no "best way." If there were, everyone would have 1000 customers.

      It's not about bootstrapping versus funding. Nowadays you don't get funding until you've bootstrapped something that works and people are starting to use (in small numbers that pay or large numbers that aren't). There is however a strong component of access, i.e. most people aren't in a financial or physical position to do something that large on the side.

      The answers are already there -- build something people need, that is self-explanatory, that people want to talk about either because that is part of how it is used (i.e. "viral") or (100x more common) because they just love it, whether they love the product or the company.

      Generally if you can't find early customers through the obvious channels -- picking up the phone, linkedin, Google ads, publishing the existing common spaces, door-to-door, existing network -- then maybe it's either not such a good idea (since people aren't responding) or you're not the right team for that idea (since you don't have a way to sell it). In that case, maybe it's a different idea that is needed.

      1. 1

        Hey Jason - thank you for this response.

        I think the points you made about not being able to find the early customers through LI, Google Ads, existing networks is key here. You've got to get that validation to the first 500+ customers imo.

        I'd be interested to know your thoughts on funding in general? Do you take the stance of you need funding to grow? Or do you think it is better to go with slower, more sustainable growth?

        1. 2

          You can't raise money anymore without traction, except from unsophisticated angels (i.e. "friends and family"). So you have to build a small business regardless. I would approach as a bootrstrapper and evaluate raising money later when you have something running.

          BTW that's exactly what I did with WPE -- boostrapped for 2.5 years, then we were in a position where raising money made sense for th ebusiness, and I decided I wanted that path at all. (Initially I just wanted to Bootstrap)

  6. 2

    I recently watched the recording of a great talk you gave in 2013:

    "Designing the Ideal Bootstrapped Business"

    https://vimeo.com/74338272

    If you were to give that talk today, is there anything about your advice that you would update/change?

    Thanks!

    1. 1

      I think it's all still correct. I don't think the economics of bootstrapping have changed. Sure some things are cheaper/easier (e.g. cloud, tools) but also customer expectations have increased (e.g. 100% uptime, scale, service). Everything is still fundamentally hard. You still need to charge $50-$150/mo, you need 150 customers, pre-pay is smart, picking a market that matches things like "not 24/7" and "having recurring value" is still right.

      I could add to the end, where I briefly mentioned the important thing is "know thyself" and stay true. That's a whole topic in itself, and people don't do it. They still chase whatever they think other people think they should do. Even when they run away from the "Techcrunch expectation" (which is great!) they're running toward "whatever DHH would think is good." It's hard to really figure out what's correct for you.

      Also hard is knowing when you're wrong. e.g. "I'm going to run an organization this way, with no meetings or managers because those are dumb and I'm going to hire well instead." That always fails around the 10-20 person mark. Sometimes people figure that out, but not always. So "doing it your way" might be missing things that really do matter. It's hard to tell which is which; adding some stuff about that could be useful.

      1. 1

        Thank you Jason! Really appreciate all the wisdom you share with the bootstrapping community.

  7. 2

    How do you decide to stick with a business?

    I am currently in year three of building a SaaS for a conservative German industry. On the one hand there is a real need and a good opportunity, on the other sales cycles are long and require building a lot of trust, there are compliance stumbling blocks and I am tired of living on a shoestring budget.

    Thanks for what you put out into the world, you're a huge inspiration!

    1. 2

      You can't know. You can read The Dip by Seth Godin, and what you'll learn is "sometimes you should push through the pain, but sometimes you shouldn't." Others here can probably comment on whether there's something more to it.

      What I know about Mittelstand, however, it that it's likely to work exactly like you describe. Slow but steady. Long cycles but once a customer, a customer for a long time. Valuing quality over flashy features. Valuing relationships over speed.

      That's not the "SaaS American" way of course, but I think it's a great way, and one to cherish and embrace. Of course I don't have to live it, so it's easy for me to say. But I wish we had that sort of pride in America. I think it's a better mental model especially for bootstrappers, but you need cooperation from the customers as well.

      1. 1

        Thanks for taking the time to answer and these words of encouragement!

  8. 2

    How are you able to consistently find such ideas, and grow them into viable businesses? You could attribute some to luck, but there seems to be a pattern. Any thoughts on identifying these opportunities?

    1. 1

      Yup luck is there for sure, and could even explain 100%: https://blog.asmartbear.com/business-advice-plagued-by-survivor-bias.html

      Some is being there. That is, it's luck, but are you out there in the market, trying to do something, so that when good luck strikes, you're there to take it? Are you picking up the phone trying to talk to customers, so when good luck strikes, you're on the phone with it? More on that point: https://blog.asmartbear.com/how-much-of-success-is-luck.html

      Some is being honest with yourself. I had other ideas for companies before WP Engine, which I vetted in the same way as WP Engine (described in another answer on this page), but I decided against doing it. Was I right to discard? We'll never know, but I discarded things that weren't crystal-clear, even though I had a personal attachment to my ideas. I could have pushed through that, but I waited for yet another idea that was even better. That part was judgement and introspection and honesty rather than luck. Here's how I did that: https://blog.asmartbear.com/good-startup-ideas.html

      Apologies for all the blog links, but that's how I think about it!

  9. 2

    In your IndieHackers interview you talked about how founders often avoid offering services with their software, yet services can be a great way to boost revenue while helping your customers be successful with your software...

    I recently launched a SaaS product in the customer insights space (https://advise.us) and am finding in my customer discovery that most customers want services to help them facilitate the conversations in their customer advisory boards.

    I'm contemplating giving away the software totally free as a "lead-gen" to sell the high-margin services on top of the software (which tend to be bought by established companies). Since it's a "productized" service using software I've developed I can deliver these services at a decent profit margin.

    Do you think it's crazy to use software as a free lead-gen tool to sell high-margin services, or should I try to monetize on both (as the site currently shows)?

    1. 1

      I do not think that's crazy. However, I would encourage you to charge for the software. People value things they pay for, and don't value things that are free, whether or not that is rational.

      You can still have the same net effect on price. That is, you could say, "look the software is usually $X/mo for what you want, and also you want to spend $Y/mo on services. We have a special arrangemnet with customers who want both, in which we discount you a flat $Z/mo [or whatever] if you're a client both of our services and software."

      Here you fit into the same budget, but the customer feels she is getting "a deal," which is a good feeling, and also values both software and services, which is good for you.

      Who knows how this will evolve in future. By establishing real value for all things you provide, you could change or pivot without a problem like "oh, now we want to partner for services and only have software in-house, except we haven't been charging for it, so we can't."

      1. 1

        Thanks for the reply, Jason - super helpful.

        You're right - offering the software for free could devalue the overall offering. Plus, being able to say we're giving a bit of a discount for the customers buying services makes it feel like they got a deal.

        It also gives us leverage down the road in case we decide to offer services through partners.

        Thanks!

  10. 2

    What was your sales process for SmartBear and WPEngine for customers 1-50 like? Did you do a demo then ask for the sale? Any advice or references for someone in that stage?

    1. 1

      Smart Bear I would demo; WP Engine I did not. Smart Bear was money up front and not SaaS, so there was more of a "sniffing" process before the purchase. Then again, after the purchase they didn't have to keep paying, so the decision wasn't as difficult.

      WP Engine has precedent in hosting, in which people expect to pay monthly but cancel any time and not get a demo. I had a free trial at first which surely helped, although 2 years in I killed the "14-day free trial" and replaced with "no free trial, but 60-day money-back guarantee." This actually increased sales; when asked, people said they felt like 60 days was enough time to try it, whereas 14 wasn't. I made the decision initially because trial conversion rates were 85%, so it seemed like all I was doing was giving away 2 weeks of revenue and making it easier for spam/fraud.

      It just goes to show, there's no one answer to how to do that. Better is to figure out how customers think about evaluating products, and match that, and maybe try a variety of things.

  11. 2

    How do you decide when is the right time to make an exit?

    Slowdown in revenue growth?

    Increase in competition?

    What are the three key drivers?

    Thanks

    1. 1

      Once you see slowdown in revenue growth it's too late, unless you're talking at-scale when revenue growth is supposed to be slowing (but not too quickly), e.g. $50M-$100M/year in revenue. Then you'll get a small revenue multiple. You might have gotten more by selling sooner with high growth on a lower revenue base. Of course it's too late by then, but I'm just stating how it works.

      Increase in competition generally means you're in a good market, and should stay. If you sell to a competitor, then "increase in competition" is a great time. If you sell outside of that, it might or might not depending on the perspective of the buyer. For example, if the buyer has been wanting to enter this market anyway, and now competition is hot, acquisition is likely the only way in quick enough, and selling can be done at a premium. But for example if the potential buyer already isn't that interested in the market, and now it's even more difficult to compete, that makes the prospect less interesting. Overall, however, more competition means better market, which makes the company more valuable.

      I don't know why there should be three key drivers!

      Mainly I see "wanting to sell" as almost completely an emotional personal decision on the part of the founder. Founders who love what they're doing, don't sell, and don't ask when to sell. They have a defiant attitude towards everyone else. I don't mean the VC people -- they often don't sell because VCs don't want to. I mean bootstrappers. I've seen passionate bootstrappers go up and down with the market, to the point of zero employees, just to stay with it, because it's meaningful to them. DHH won't sell for anything, regardless of "three key drives."

      OTOH, a founder who is ready to quit, needs to either sell or get recharged through some other change. If the market is bad, the founder will say she's selling because the market is bad so it's better to get some cash out and stop. If the market is good, the founder will say she's selling because the market is good, so it's a great time to get extra cash out before it turns. Either way it's not about the market.

      I think you're asking because you're not that interested in continuing non-stop for another 1-10 years. For your own reasons. Which, of course, is perfectly natural and normal!

      Often it's burn-out. Sometimes that's avoidable, sometimes not. That's an entire other topic. Here's a talk I gave about that at SaaStr: https://www.youtube.com/watch?v=Kn5MbZoSRNM

      Sometimes you can reverse that. Firing someone that shouldn't be there, getting reenergized about a product or customer, deciding to pivot and hiring a CEO or raising money, going away for three weeks, etc.. But sometimes not -- it's personal.

  12. 2

    What resources would you recommend to a startup which gets the wrong type of leads? Our most successful customers are 5 million in revenue and up, and we get tons of 0-1 million revenue company leads.

    1. 2

      Who else sells to those companies, and how do they get leads? Are there competitors, alternatives, or adjacent markets where the answers could be?

      One thing to not do is continue to advertise wherever you're doing it now.

      Presuming your price point is high, a physical sales force might be in order.

    2. 1

      Depends what you're selling, but one possible solution is to price so that it's a great deal for $5M+ companies and unaffordable for < $1M companies.

  13. 2

    If you could only give someone one piece of advice about doing a startup, what would it be?

    1. 5

      Focus on getting 100 customers at $100/mo and do nothing that doesn't directly help that along. Which probably isn't more features.

  14. 2

    As a founder, should I be doubling-down on my strengths (in my case technology and product dev), or working on my weaknesses (in my case general reluctance to talk to people unless I really have to). Where do you draw that line? When does it make sense to delegate some of the weak areas to others as opposed to try to learn-then-do those myself? (BTW, awesome IH episode - thanks for that - learned a ton!)

    1. 1

      10x your strengths. Work around weaknesses. Only one or two key things will make or break the company in hindsight, so your strengths are where that will happen, not in weakness.

      How do you work around weakness? One way is delegation as you said. Another is ignore it -- sometimes the fire can just burn and it's OK. Another is to design workplace, work style, features, market, customers, product, UX, etc around the weakness. For example, I suck at design, so my stuff was always ugly, but also I sold things to audiences that don't care (hosting is always ugly, ITWatchDogs was sold to IT people who don't care).

      Here's how to hire around strength/weakness: https://blog.asmartbear.com/next-hire.html And when you hire others, hire to their strengths as well: https://blog.asmartbear.com/complex-decisions.html

      Of course there's such a thing as a weakness yoiu need to shore up. Not be amazing at, but shore up. If you just can't work with others, and you need to hire people (maybe work around that instead?) then you have to become better at hiring and managing, and just saying "I'm a bad manager" is shitty for everyone -- the employee, yourself, and the needs of the company.

  15. 2

    Hi Jason we had a call on the phone 2 years ago through Clarity.fm and I thank you for your advice.

    We built an app that is like Infusionsoft for people who want to start a business.

    It's got a low price point (starts at $27 per month) and people love it so we are at $50K in MRR one year after launch but it is in the french market (we have only a handful or customers in the english market).

    My question is: do you think that building a great product at a low price (to attract more users) while being boostrapped is a good strategy in the long term?

    We are already profitable and my goal is to get to $10M-$20M in revenue without raising money.

    Since you both boostrapped and raised money I would love to hear your opinion.

    Thank you Jason!

    1. 2

      I think you can have any price point, but that the product and market and business model needs to match. Specifically: https://blog.asmartbear.com/pricing-business-model.html

      In general I don't like low-priced things because in general it's hard to get 1000 customers at any price point. Obviously there are lots of exceptions, so it's a rule of thumb, not a rule.

      But as a bootstrapper I would rather make 200 sales and run tech support for 200 customers to make $15k/mo, rather than 1000 of each.

      1. 1

        Hi Jason thank you for your answer. I read your article and listened to your interview on IH it makes perfect sense for someone launching a new app but imagine we already have 1500 paying customers and we are profitable, in the long-term is it better to have a low-price or a more expensive offer?

        I feel that having a low-price offer allows you to attract more customers and make more money in the long run (for example Aweber starts at $19 per month and it's a $20M a year business and Mailchimp is free up to 2000 subscribers and it's a $400M a year business when both companies started around the same time).

        Would love to hear your opinion on this point.

        Thank you

        1. 2

          There's no definitive answer to that question. It's very easy to find examples of bootstrapped and non-bootstrapped companies successful at every price point. If you have traction, I'd advise to follow the success you already have.

          The advice above is for someone starting out with 0 customers and trying to minimize risk. I think it's higher risk of getting to $10k/mo/founder to charge $10/mo or $1000/mo.

          Also none of these ideas are in a vacuum. If you're selling to consumers you generally need to charge less unless it's a luxury brand. If you're selling in medical you need to charge a huge amount of money.

          Rather, in that "ideal business" talk, I believe there's a set of things which lower risk, not that it's the "only path!"

          Aligning to a "thing which already recurs" is another example of this. If you make invoicing software, it will be easy to charge for it monthly. If you make a tool that's used only occasionally (e.g. code profiler), it will be hard to charge monthly. Not impossible but hard.

          Once you have traction, IMO "traction wins the argument." :-)

          1. 1

            Definitely agree with you, thank you so much for your time Jason!

  16. 1

    Your revenue and sales recommendations for starting a SaaS are very clear and make perfect sense. I know this is not your area of expertise necessarily, but do you have any recommendations for a marketplace style business? I.e., the customer is people wanting to sell their product.

  17. 1

    Why is there no Hosted WP platform like WPEngine/Kinsta that is hippa compliant?

  18. 1

    I just wanted to say that I have been witnessing WP Engine's success since its introduction to the market. Congrats! What a great value proposition. You guys are my heroes!

    1. 1

      Thanks so much! It's difficult (of course) so it's always lovely to hear encouraging words!

  19. 1

    It seems to me infoproducts and productivity apps as a niche is overly exhausted. Apart from those, Which niches do you consider of interest to try something?

    1. 1

      I'm not exploring niches at the moment, so I don't know.

      You could look at what are the key features that larger companies are investing in. Large companies only attack large problems. But when those problems are adjacent to their main business, they generally don't do a great job at it. For example, Google+ was bad.

      Speaking from the web hosting space (since I have more examples at tips of fingers), you can see Wix, SquareSpace, most of the WordPress hosts, all attacking eCommerce. Competing with Shopify sounds daunting, but it definitely is huge. So you might find a niche inside there.

  20. 1

    My main question is at the bottom. If nothing else, please have a look at 3. below.

    I'm slowly getting to the conclusion that what is important for new startups is that the founder(s) choose a niche and then work in it for A_PERIOD, until they reach some product market fit.

    For a bootstrapped business it seems to me that one should endure long enough so that customers have time to refer others to you and for market to "know you", but also to give you time to do any small or big pivots as needed.

    1. I've read a couple of posts on your blog about initial ideas, but I'm wondering if you have any further comments on above.

    2. What is a good value for A_PERIOD if startup is cash flow positive, but cannot support the founder as only source of income?

    3. As most tech founders I struggle with charging USD50+ for small featureset. I've tried identifying areas where a small idea can bring lots of value, but I'm having difficulty with this. What are your pointers.

    1. 1

      I agree -- see other answers here for more on this question of "how long" and "what price."

      But quickly again:

      1. No, it's just hard to have ideas which are both good, and which there's a business to be had around them.

      2. If it cannot support the founder, it is not cash-flow positive. That's a joke that founders tell themselves, so they don't have to admit the business has been in the red since day one. So the answer roughly is "until the founder runs out of patience or money." As in another answer, I think the answer is one year after launch, max of two years.

      3. Stop struggling with your inner turmoil and just do it. :-)

      1. 1
  21. 1

    In your interview with @csallen (https://www.indiehackers.com/podcast/088-jason-cohen-of-wp-engine) you said that companies that don't have to be unique to be valuable but uniqueness certainly helps. Earlier in the same interview you made a comment that made me think it was to not good to have to educate my users. (Heavily paraphrased but "Does it take 45 minutes of a customer interview for them to see that they have the problem you're solving for?")

    It seems that in a lot of ways you are either unique or you have to educate the market. How do I balance those two things?

    1. 2

      "Unique" means "doing something differently from competition." It's in the solution, not in the problem.

      If your customers can't understand the problem you're solving, or how your product actually solves it, that doesn't make you "unique," that makes you confusing, and probably wrong. Or maybe totally right on the product, but totally wrong on how to describe it. None of that has to do with being unique.

      Describing how the solution is unique is a good form of education. For example, a company that is unique in that it gives back to charity is a good form of education.

      But the quote you have, which is correct, is that you shouldn't have to spend 45 minutes for the customer to even realize you're relevant to them.

  22. 1

    Hi Jason! Thanks so much for doing this. I really enjoyed your recent podcast episode with Courtland, I learned so much.

    In your episode, you talked about your process for validating ideas, and how you did so with WP Engine. Could you share some more details about how you did so? What was the original seed for WP Engine that prompted you to start doing customer development? When you talked with potential customers, what was your strategy for essentially validating whether they would pay a decent amount X for solution Y? Did you ask "five why" type questions to try and get at fundmental pains, evaluated if they had their own workarounds, etc.

    As you were validating your idea, what was your MVP, and the process for building it, and then getting customers for it? The MVP I'm imaging for WP Engine doesn't seem like the easiest thing to build, so I was wondering how you de-risked it (e.g. through only validation, or some simple MVP, etc.).

    Thank you!

    1. 1

      As for the process, I answer in detail in a different question above, so please see that.

      As for MVP (but I prefer my own version, SLC: https://blog.asmartbear.com/slc.html), first I did validate with 30+ interviews, which took 4 months. Then I was able to make the first version in just three months. The trick was a few things which made a large difference, so people had a good experience, and doing everything by hand or scripts rather than "automating the world" from the start. It's tempting to do the latter, but it's better to really understand everything and be able to change quickly, and then automate when it's truly mundane.

  23. 1

    HI @asmartbear - I'm curious what was the fastest project you shipped alone, and how did you get your first paying users?

    Thank you for doing this AMA!

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      WP Engine was 4 months of customer calls, but then 3 months after that to launch. How I got users I answered above. Thanks for the question!

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    Have you had a cofounder in each of your companies? Do you think it's a hard requirement? Why yes or why not?

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      No I didn't, and no I don't think that's a requirement. So which one to pick?

      First, personality. I'm better alone at first. Some people would burn out or go crazy without a partner to lean on. Being introspective about this is vital.

      Second, beta. Most successful startups have co-founders, which makes sense because there's twice as many people to do work, and possibly a wider skillset to apply to the problems. But also in several different studies the #1 cause of startup failure is "founder strife." Also for obvious reasons. This means it's "high beta" in financial terms. As a bootstrapper, you can decide whether you want it "more extreme on both ends" or not.

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    Hi Jason, thanks for sharing your knowledge with us!

    You're presenting yourself as a successful founder of four companies. Do you mind to share your success/failure ratio? How many projects have you bootstrapped in total before counting in these four today?

    Assuming that you have enough failures to tell, do you have a pattern now to easily tell if a project is worth pursuring or not? Would you say that now you're able to save yourself money and time by stopping a failed project earlier in its development?

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      Great question. I don't know the ratio, because I have a lot of projects! It might depend what you call a "failure" rather than a "project that stopped."

      In some sense they're all successes. But then if something lasted only 3 years was it really a success? (My first one.) If it was sold but ultimately I only made about as much post-tax money as I could have working a high-end software developer job, was that a failure because of the lack of upside relative to the risk, or was that a success because I got to run and do tech at a startup for years rather than working at IBM? Smart Bear and WP Engine are definitely successes, but how do you rate everything else?

      Finally, I agree with your sentiment generally, and this is what I think about it: https://blog.asmartbear.com/business-advice-plagued-by-survivor-bias.html

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    Are there any business challenges for which a great solution might be to "go talk to other founders," assuming a community of such founders existed?

    Or, stated differently, how might you go about making a community like Indie Hackers more impactful for early-to-mid-stage founders? Can you imagine yourself participating in a similar community when you were under $250K ARR?

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      Yes, it's huge. It's not great when people are using it for self-promotion, but it's fantastic for a few things at least:

      1. "Am I crazy?" Sometimes yes, usually "no, but you need someone to talk to about it."

      2. Things that have objective answers, like how to get different kinds of insurance, or accounting stuff, or standard tips on firing or handling a troublesome customer.

      It's less good for specific advice that's right for you, because no one knows your business, or knows you, both of which are important (besides also experience) for that. But you might find some people who eventually develop that with you, and then that's back to being very valuable.

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    1. What are your thoughts on remote / distributed companies ?

    2. What are good ways to find a suitable CEO to replace oneself?

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      1. I think it works when 100% of the company is distributed, but very hard when <80% is distributed. Too much happens offline, exactly because online is (yes, still) difficult to communicate with the same fidelity and bandwidth as sitting next to people.

      I also think you need something big to focus on, like obsession of culture, or the customer, or a larger problem in the world. Something people can latch onto even without physical contact.

      I think it's a wash when it comes to communication. Some things are much better, some are much worse, tools help but do not solve.

      1. Approach it like you're hiring a co-founder. In many ways, you are. How much would have to be right? On which dimensions? That's what you have to solve for.
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        Thank you, it does make a lot of sense. I'm really inspired by how you built a great company and managed to keep doing what you love at the same time (instead of staying CEO). I hope I can follow a similar path!

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    Hi Jason, I loved the podcast with Courtland the other day, thanks for doing a follow-up AMA :)

    I'm starting a non-profit at the moment, and I'm very aware of how important it's going to be to build a community, as much as a clientele. Do you have experience building communities and, if so, do you have any advice?

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      It's hard to build a community on purpose. Generally communities appear and then nurtured. Sometimes it happens, like in open source; you might look at the history of some of those for examples, because all of the information is available.

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        I see what you're saying. I mean in the most practical/literal sense though, all communities are deliberate in so far as the space within which they inhabit is built on purpose. Whether they grow and become thriving/active spaces is much more a matter of a.) luck and b.) once it gets momentum, nurture it.

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    Hi Jason! I am a big fan of your blog, and appreciate all of the value you share. The article on building a proper MVP really helped me out.

    I just listened to the podcast that you did with Courtland, and heard all about bootstrapping VS getting funding, but I still feel unsure about the best path forward with my startup, ShotCrew.

    BACKGROUND: ShotCrew is a managed service marketplace for product photography: lifestyle, white background, etc. We enable brands to easily outsource their photoshoots (and content creation for social media), to talented creators. We add value by hand-picking talent and managing every shoot from tart to finish.

    MY PROBLEM: I've been talking with brands and agencies about what we do and the response has been very positive. I've been landing paying customers and growing, but not well enough to go full-time. To hit the numbers I need to go full-time, I believe that I would need more customers than I would be able to manage (with my full-time job).

    SOLUTION 1: I stick to bootstrapping this, and grow it in a sustainable fashion. I'll likely have to create more efficient processes and automation to save time so I can manage more customers.

    SOLUTION 2: I raise an angel round (~100k) to enable me to go full-time on the business for 12-18 months. I would have the time to quickly build out the systems and automation that I need, then focus on sales and growth which is one area that I'm great at.

    I'd appreciate any advice you have here, even if it's short and simple :)

    1. 2

      Try to raise the $100k. Not because I think you necessarily should go that route, but rather because you will learn (a) whether you actually should, (b) what would that entail, (c) is anyone even interested and (c2) if yes, why, because you might hit that double-hard or (c3) if no, why, because that might be a flaw in the business, or a reason why the business is fine but fundraising is not an option.

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        Thank you very much for taking the time to answer, Jason. I really like this approach.

        I know I would learn a lot by diving in, and I also think action is better than analysis paralysis which is what I've been stuck in.

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    We're starting to build a tool to help our team stand out amongst other dev shops/freelancers. Basically, a client facing page that replaces long ugly emails we usually send them. The hope is once we nail it for our use case, we'll be able to figure out who else this applies too and sell to them.

    My question is: What can we be doing NOW and for the next few months while we're building/iterating that will help us sell it to other businesses when we launch?

    BTW -- WPEngine is a life saver for us and our clients ;)

    1. 1

      Thanks for the kind words!

      I would focus on it increasing your business rather than on whether it will help others. I find consulting tools are often like that, i.e. other consultants often do like tools you make for yourself, provided you've built the UX and the internals such that it's not ideosyncratic or difficult to parcel out.

      If you really want to know the answer, find 10-20 other agencies who should be customers, and give it to them for free (for a long time like 1-2 years, or ideally forever), in exchange for giving feedback while you're working on it.

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    To sell startup or to not?

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      If you have to ask, the answer is "yes, but you won't get the money you want."

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      Great question; I answered elsewhere in this AMA!

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      No, it was 150 at $70/mo, so that it's $10k/mo. And that's for one founder; I think you need $10k/mo/founder to really be going, because everyone needs to be doing it full-time.

      Of course you should adjust those numbers for cost of living in whatever country and whatever personal circumstance; that was just a rule of thumb to provide the ballpark figures.

      I still stand by those numbers.

      I wouldn't work on something longer than one year (after being in market, maybe two years if you had a protracted development period before v1). At Smart Bear it took me 1.5 years but that was 17 years ago when there was no SaaS, no international selling platforms, and 1/1000th of the people buying things online.

      Also I would focus on those numbers. I think often when this doesn't happen, the founder is focused on building features instead of getting customers. Because features is fun and you know how to do it and people ask for them, and because sales and marketing is hard and isn't in your control and you're shitty at it and it doesn't match your personality to do it.

      If you're not focused on it, you're not being a good founder. If you're focussed on it and can't get 100 customers in a year, maybe it's not working out.

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