Omer (00:16.240)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode, I talk to Josh Ho, the founder and CEO of Referral Rock, a SaaS product that helps businesses to design, launch and manage a customer referral program.
So you've got a great idea for a SaaS product, but no one else seems as excited about it?
Does that mean it's a bad idea and you should move on to something else?
Not necessarily.
In 2013, Josh was at a car dealership waiting for his car to be serviced and he overheard a conversation which got him curious about how brick and mortar companies like car dealerships got referrals and if there was a way to automate word of mouth referrals.
He did some research that evening and thought he'd found a gap in the market.
He was excited about his idea, but he didn't like what he heard.
When he interviewed prospective customers.
No one seemed excited about his idea, but being a bit stubborn, he decided to build an MVP anyway.
He kept things really simple and cobbled together a few different tools and technologies to quickly build an mvp.
And he started getting the word out any way and every way he could.
And slowly he started getting people signing up for his product.
About a year and a half later, he had around 500 users signed up.
But there was one big problem.
Josh wasn't charging any money for his product.
He had hundreds of users but no customers and no revenue.
One day, a close friend told Josh something that he really needed to hear.
He didn't have a real business until he was charging for his product and generating sales.
So reluctantly that weekend he added a paid plan.
And to his surprise, a week later, he had his first customer paying him $59 a month.
Today, Josh runs a hundred percent remote company with 12 full time employees and he's generating $70,000 in monthly recurring revenue.
And his business is totally bootstrapped at every step.
He kept second guessing himself and questioning how big his business could become.
But he kept executing, trying new things and taking action.
There was no magic bullet or hack that helped him grow.
He kept doing small things to see what worked and if they did, he figured out how to scale them.
And that's what he's still doing today.
It's a great story and Josh talks candidly about both his successes and his failures.
So I hope you enjoy it.
Josh, welcome to the Show.
Josh Ho (03:01.220)
Hey, Omar, how are you?
Omer (03:02.740)
I'm great.
Good to have you here.
So I always like to ask my guests what gets them out of bed, what inspires or motivates them?
Is there a quote that you can share with us?
Josh Ho (03:12.200)
I'm not really much of a quote person, but we have some.
Our mission here is I take very much of a people first approach.
So that always kind of keeps me going in terms of helping people.
It helps me focus on our internal team first, even ahead of our customers.
If we had investors, they'd even be ahead of those as well.
But generally a people first approach and just helping people just get better every day is really helps drive me every day.
Omer (03:37.880)
So tell me a little bit about Referral Rock.
For people who aren't familiar, what does the product do, what problem are you trying to solve, and for who?
Josh Ho (03:45.710)
Referral Rock is a referral marketing software.
So we help businesses generate more word of mouth referrals.
Our goal is to put word of mouth on autopilot by helping customers run refer friend types of programs.
You know, the Uber, the Dropbox, that type of thing that those have made very famous.
But we try to do all the heavy lifting that's involved for most businesses that they can't handle.
So it's a lot of the widgets and tracking, managing incentives, sending nurture emails.
We largely view it as a funnel, just like any other sales funnel, but you're taking your back end of customers and basically trying to help to get them to refer new customers into the top of the funnel.
Omer (04:25.420)
And how did you come up with the idea for this?
Josh Ho (04:27.180)
It was interesting.
I was actually in a car dealership at the time and I think I was getting some service done for my wife's car.
And I'm sitting there with my laptop and my free coffee and someone walks in and walks up to a salesperson and starts asking them about, oh, so.
And so my friend sent me in and said I should talk to you about getting a new Accord or whatever the car was.
And you could just see the glaze on the salesperson's eyes.
And he had like no idea what she was talking about.
And then in a snap, they kind of snapped to it and just went to salesman.
Oh yeah, yeah, so and so, whatever.
But I was like, did they really know that person?
And then it just started getting me thinking, like how a business like a car dealership dealt with referrals.
Because like I said, you've, you see the Dropboxes, the Ubers, all these, all these things going on.
I'm like, okay, but who does it for everybody else?
Like E commerce, great, all these things.
So, you know, as anytime one of these ideas strike me, the first place I go to is Google.
So querying, looking and saying like, does anyone do this like for other businesses?
Who does it for a yoga studio, gyms, things like that?
And I didn't really come up with much, fortunately, right at that point.
So I think probably a little while later, as my ideas progressed for myself, if you ever looked at my domain name account, you would see a trough of other ideas.
Because my next step, once it goes past that, is I buy a domain and then it kind of sits in my brain for a little longer, a little more commitment to it, but that's where it came.
Omer (05:56.850)
How many domains have you bought that you never did anything with?
Uh, let's see.
Josh Ho (06:01.190)
Well they do tech a cycle, so they do, you know, maybe after a year or so, if I'm like, yeah, that's not a great one, or I have better ones, I. I let those expire.
But I probably have at this point maybe 70, 80 domains at this point.
Omer (06:15.190)
Wow.
And so how many business ideas had you tried to work on before you started working on Referral Rock?
Like, was this the first business for you?
Josh Ho (06:26.600)
No, this was not the first business.
I would say the first business I ever actually had as my in terms of any ownership outside of, you know, had a salary job back 10, 15 years ago, maybe 15 years ago.
And then the first one was actually, coincidentally not technology.
Even though I was in software, it was a. I got became a partner of like this performance car shop.
So that was a crash course and a lot of reasons.
I won't get into it too much, but you know, just be sure of who you're getting in bed with in business.
So.
And it was also in a downturn.
It was like, you know, then I think 2008 hit and stuff like that and everything kind of people used to be spending more money on their cars and it kind of, you know, sucked that market dry.
So.
But after that or around that same period, I also started an MBA program and then quickly realized I was learning a lot more by getting in the trenches and doing things in a business.
So I didn't have time for it anymore and I, after one semester I stopped taking classes.
But around that time I also started a.
Like every indie hacker slash developer first product I did a notes program.
So this was in the days before Evernote even was out there.
Yet I think they did have a desktop product.
But me and another buddy were really big fans of like note taking.
We were always like having to port stuff on our flash drives and things like that at that time.
And we created UberNote and it was online notes platform and again it launched a little bit before Evernote, but they kind of took the cake and the market and everything at that point in time.
So we did get a little bit of funding, we did go through an accelerator.
It was like a part time moonlighting thing with me and a partner.
Kind of meandered on that for a few years and definitely made the mistake of the build it and get acquire users and not charge anyone and then later on figure out how to monetize.
And that didn't really work out very well.
We got burned out.
And then we, when we did finally flip the switch and say let's try to get our 100,000 users to pay for something, it was like crickets.
And that was the biggest burn in my like, kind of like I love SaaS, I love online stuff but like consumers just, you know, it's tough at that point.
I think it's turning a little bit now, but consumers are just hard to get them to, to pay for anything, especially in that day and age.
This was even early on in the days of iPhone and other stuff then.
So.
Omer (08:51.240)
Yeah, and it's always so tempting.
I think when you're sort of starting out to, you keep looking at the product and you just keep thinking, if I could just add that feature or if I could just make that one thing better, then people are going to stop paying.
If we're truthful with ourselves, a lot of the times it's like, well, I'm kind of scared about asking people to pay and I'm kind of, you know, the more I keep working on the product, I keep pushing that out.
Right, so you, you were consulting at this time, right when you came up with the idea?
Josh Ho (09:21.920)
Yeah, so I'll speed up to that.
So through UberNote, when it eventually kind of just died out and I would say I got a little burnt out by it.
And then I also since having a software development background, I picked up some consulting work and had some, some decent clients.
And essentially that was also early on when I think first got married and had some kids.
I have two little kids now.
They're both six and eight now.
But at that time it was a good time for just like resetting my clock on entrepreneurship.
It was like I definitely burned out after UberNote and spending so much time and commitment to it.
And I say through that period of consulting and just Getting back into like working directly with people and getting that response when you build a nice interface that people are using every day and you get a lot of satisfaction of that.
But I always had the itch to get back.
It was like, well, let me just wait, I'll just wait my time until I have the right idea, the right thing, the right one.
I want to kind of push on.
But I definitely didn't want to sell to consumers again.
So that was one of the ones that burned into me at that point in time.
Omer (10:29.560)
And so in terms of consulting, were you a developer?
Josh Ho (10:32.390)
Uh, yeah, I was developing and kind of a little bit of project management and everything.
I kind of was a one stop shop for a few customers.
I had the customers directly.
So I did oftentimes like the specking out and I'd, you know, work with the teams, gather the requirements, build the products, support the product, stuff like that.
A lot of it was some internal tools.
I did a lot of like risk management tools for some banks where I got into some, I guess I had some pretty decent relationships so found some, some contract niches that worked really well for me.
So I had a few.
So I was not beholden to any one given customer and everyone knew I had other ones.
So it did still allow me to have some free time so.
Cause it's like, oh well, he's only working on this like these hours or these X days.
And everyone pretty much left me alone.
And I, you know, show up a week later with like, okay, hey, I deployed some new stuff, let's walk through it.
So it was honestly it was a pretty sweetheart type of thing.
So.
Omer (11:27.350)
So I love your story about your MVP for referral rock because you kind of went out and you started getting feedback from an initial group of people and all the signs were you weren't hearing what you wanted to hear, right?
Josh Ho (11:46.150)
Yeah.
Omer (11:46.510)
But you built the MVP anyway.
Josh Ho (11:47.910)
Yeah.
So I guess for me, back to the story where.
So after I had the idea this was I think you know, December of 2013 I believe.
So over the next course of the months I'm like, okay, I know a lot of small business, I'm going to ask people.
So you know, I got the list together of like real estate agents, like I think a mortgage broker, some family friends, some roofers.
Like anyone you know, I've had some little minor work or had any relation to.
I just, you know, basically you just go in, you're creating your list of anyone you know, sent them out, all out in email, did a survey asking people, people and Basically drilled into some of the customer development process and got a set of people that would actually have a sit down interview and discussion and things like that.
And yeah, that end result was not very enlightening.
It was not the moment you look for where you say, hey, yes, here's my money, take it, give me where's the product?
Type of thing.
But I just, I don't know, I didn't really follow it and I didn't like what I heard.
So I just sort of thought, you know, I can, I can patch this together like still minimally to get my toe in without necessarily building out the full product.
I had enough of a, some frameworks of some development tools that I've already built.
So at that time, being a consultant, you know, you, you end up with a, like a, you know, bag of tricks of sorts.
So the very first version was really, really rough.
I was like, I am not going to build, I'm not even going to build a database.
So it's like, let's do.
I had resource files that were picking off like each individual customer.
So if you were a customer domain that match, you'd pick up these language strings that would be your customizations.
And I had people filling out their customizations on a. I think it was a, I think I used Wufoo or SurveyMonkey, one of those form tools that essentially was my admin interface.
And early on, like, no, you know, I didn't get any of the people I think I initially talked to, you know, none of them signed up for anything.
And yeah, it was just, I can't say that, you know, I actually talked to another entrepreneur the other day about this too and it was kind of one of these things.
I was like, yeah, I probably wouldn't advise it but at the same time there's definitely a certain amount of conviction after seeding through different ideas and throwing things at the wall to seeing if they stick.
It was just like, there's something here.
There's a market for this, obviously for E Commerce, for all the other companies and it works.
There are people searching for it on Google, things like that.
There's gotta be something in there.
Omer (14:13.530)
So you coupled this thing together and I think that was smart because you really weren't sure whether there was a business there or not.
But it's tempting to spend a lot more time trying to put together an MVP because we want to impress people, right?
It's like, yeah, we want to wow them when they look at the product.
But I think that was a really smart thing to do.
And what I'm trying to figure out is like from the point you launched this MVP and from the signs of it, there wasn't really much of a big launch.
Right.
You just kind of got this out there.
But within a, a year or so, maybe a bit longer than that, you had about 500 businesses signed up.
So talk me through like how you went from launching this cobbled together solution with everyone sort of telling you they're not excited, at least the people you talk to, to getting to these 500 businesses signing up.
Josh Ho (15:07.780)
Yeah, I mean, I think a part of my initial strategy was just getting out there and trying to be in the conversation.
So I did launch on a site called Beta List.
So put some things out there and that gave a little bit of a spike, but not too heavily.
Maybe like 20 people or so signed up.
So can't say that that was really getting, I mean it was kind of getting the ball rolling, but that didn't lead to, you know, the massive amounts of people.
I think at that point I posted on just about any site that would have like list your startup types of things here.
In addition to, I was on Twitter and I tried a couple little Twitter hacks of like starring anyone or favoriting anything that when people were talking about referral programs and whatnot, I can't say that actually tracked too much.
I couldn't attribute it to anything.
But we did see start to seeing an uptick in just general like search queries for us.
So I don't know if it was either I bothered enough people or was in enough places, but that was my kind of just being in that conversation when people are talking.
And I started with some ethio.
Sorry, go ahead.
Omer (16:10.350)
Yeah, sorry.
I was just going to say it wasn't like one big thing you did to grow.
Was it more like just these little things that you were doing every week that you think added up?
Josh Ho (16:21.670)
Yeah, I think that was most of it.
So then it got to the point where it wasn't uncommon to see, you know, two, three people sign up in a given week.
And you know, it started just.
I don't know how exactly all of them found me, but I did, I think put up a little questionnaire and just most of it said Google.
So it was like people would select that as a dropdown.
So I can't say how or exactly where, but it was just trying to be a little bit of everywhere doing random little things and just, I mean I enjoyed it.
It wasn't necessarily I dug deep on any specific topic.
We did early on start writing content and doing some inbound things.
Which was mostly probably because I was writing about some just terms that were so either low level that you could rank decently for it, but no one else really cared, but it was enough to kind of just get them all rolling.
Omer (17:08.630)
I'd say tell me a little bit about like how what this MVP actually did.
Josh Ho (17:13.950)
The first concept was essentially people being able to create a page where you could have someone register for your referral program and once they put in their name and email address, so sort of like a portal for a given customer.
So it was multi tenant.
So someone would sign up and they would basically design their little registration page which would lead to just some sharing widgets or just, you know, sharing Facebook, you know, sharing Gmail, that type of thing.
So once those people would, when they set that all up, they'd essentially set up a way for anyone to join their refer a friend program and actually, you know, click any of these buttons so they can share out to their network.
And that was essentially it.
So we didn't do much tracking of it.
It was essentially, can I get this there?
And can, can someone set it up so that other people can register and see if it helps them?
Omer (18:06.480)
And as you said, there was no database, so you weren't storing any information.
And also, is it true that like even if somebody wanted changes, they had to contact you to change their form?
Josh Ho (18:18.000)
Yeah, they had to submit a new form.
So yeah, I mean, hey, you know, it was nice that they had like I didn't have to build out like oh, just upload for your image and worry about storing it.
They essentially put the file right on there.
I mean, and you know, in any of these survey software you can say add a file, attach a file.
So I would take that, export it out to a CSV and retranslate it into the resource file.
So yeah, that was love it.
Omer (18:45.660)
Okay, so you kind of got this MVP launch.
You're doing everything you can, you can think of here and there to try and get the word out.
Year and a half later, you're still only working on this business part time, four or five hours a week maybe.
And we've got these 500 businesses signed up.
But then you have this aha moment when you have a conversation with a friend because you had these business signed up but none of them were paying you.
Josh Ho (19:09.850)
Right, exactly.
Yeah.
Omer (19:12.490)
And tell me about that conversation you had with that friend of yours.
Josh Ho (19:16.410)
Yeah, I mean, it's another entrepreneur that has done a bunch of things and it's kind of one of those things where you're probably give yourself that same advice.
But he kind of gave it to me straight.
He's like, so you're doing this, you're getting some feedback.
At that point, I think I might have actually built out the database.
And he's like, so where are you going with this?
I'm like, what do you mean?
I'm going to keep doing this and get more feedback until I'll make it public.
He's like, okay, but what's the point?
And I'm like, well, so eventually I'll charge for it.
And he's like, okay, so why not charge for it now?
And I was like, no, it's the tip.
Just you feel very self conscious, like it's not ready, people are using it.
But he's like, are they getting value?
And I'm like, I think so.
You know, they keep coming back and they, they're, they get people to enroll and whatnot.
And he's just, you know, kind of just grilling me on it, just putting his finger right on that spot.
And you're just like trying to wiggle free.
And you're like.
So he's like, just, just go and do it.
He's like, what is it going to take you?
Like, how long is this going to take?
I was like, oh, I got to build out.
He's like, nah, come on, I know you're a scrappy developer if you want, want it to be.
And he's like, you don't have to build out everything you did to MVP like that.
Like, what's, what's holding you back?
And I'm like, okay, fine.
I was like, look, I'll spend, you know, this weekend or tonight.
I forgot what it was.
Exactly.
He's like, I'll try to go in and set up stripes, set up a charge thing and we'll see what happens, you know, so kind of he's just like, just go do it.
And I pulled it out that weekend, flipped it on, went from having the beta to actually putting up a paywall.
So I think it really even was just during the signup process.
And it, you know, probably within, fortunately for me, within probably, I think about a week or less.
I had a paid user and I was just kind of flabbergasted.
So, you know, we first put it up.
I never saw much of the, I always thought this was going to be like a $50, maybe at most $100 a month type of product, but person paid in and saw $59 come across the board.
And you're like sitting there going, huh, okay, that's interesting.
And then maybe a couple weeks later, another one.
In the meantime, I still had my beta up.
The people that were beta using it were still using it as they were.
And slowly over the course of the next couple months, I just, instead of flipping off, totally, I'm like, hey, I'll just reach out to the people that are most actively using it.
Offered them a coupon.
And I think most of those converted, the people that were actively using it.
Just, I gave them, I think, hey, thanks for being part of the beta.
In another month or so, we're going to turn on paid, and here's some other features on the roadmap we're building out.
And here's a coupon for, like, this is the price, and here's a coupon for 50% off for like the next three months or even for the life it.
I don't even remember off the top of my head, but I just wanted more validation on, you know, users that were.
That were willing to pay.
And, yeah, that's kind of what started the ball on the roll.
I mean, it started the ball rolling on the getting paid for it.
And I can definitely credit my friend because I honestly don't know how long I probably would have just avoided seeing if that feedback would come or who knows, maybe if in two months no one paid, how that could have changed the whole trajectory at that point.
It's these little bits that make all the difference of which direction you're going.
Omer (22:24.780)
Yeah, Yeah.
I think I read somewhere that you kind of felt like if you hadn't got customers when you put up the paid plan.
Yeah.
Maybe you'd be doing something else right now.
Josh Ho (22:36.160)
Yeah, I don't know if I would have totally shut it out, but I probably could.
You know, you never know.
So I hang on to things too long at times.
And it could have been.
It could have been a couple months and it could have been something.
Or I might have flipped it back off.
Who knows?
I can get a little squirrely sometimes.
Maybe I'll go back and, you know, you would have always had that safe spot, so who knows?
Omer (22:53.680)
And so how long did it take you to.
So you got that first customer, $59 a month.
And I think from, like, it took you a few months to get to like a couple of thousand, like $2,000 a month.
Josh Ho (23:08.570)
Yes.
Omer (23:09.010)
So.
And what was going on there?
Like, was this just based on you reaching out to the existing users, offering them these sort of lifetime deals?
Josh Ho (23:18.410)
And that was the Initial part.
But I think like at that point there was enough of a swell of, like I mentioned before, getting a few users or a few signups a week and it probably turned into, you know, a few a day at a certain point.
And at that point I was just, I think I made a couple little changes.
I did move the paywall instead of immediately I started tinkering with that and moved it to like a 14 day free trial.
Just started kind of playing with that as a, as a way of like what is stopping people from getting at least me getting initial information or getting an opportunity to talk to people.
But yeah, there was enough in there and there was enough staying that, that I would, you know, support them in chat.
I started some of the onboarding types of emails.
As I now started investing a little bit more time into the product.
Like I mentioned about having a roadmap, we started building out some more of the features that people required.
I think the first, it wasn't too long before we actually had what I call like the pro version, like an upgrade one where once you had people paying and you kind of hear the requests for different features, it kind of has a different sound to it, like money.
But instead of just like people just, you know, asking you for random stuff and you're like, I don't know if I want to build that, but I mean I had people asking for like a custom domain.
So you're like, okay.
And I'm like, right, would you, you know, pay more for that or how much would you pay for that or type of thing?
And I had a pro version at I think $109 a month once and added a custom domain.
So there's the ability to, you know, add your own custom domain to the portal instead of it being a subdomain of referral rock.
Omer (24:53.410)
Okay, so this is almost two years since you initially come up with the idea that you've got to around $2,000 in MRR and then you start thinking about moving full time on this business.
How long did it take you to sort of say, okay, I'm going to stop doing all that consulting work and really go all in with this idea?
Josh Ho (25:17.030)
It probably was when that point of reaching a couple thousand dollars and that was then, you know, you wake up in the morning and you're like, oh, there might be more than you.
If I've been doing this so far with this much effort and like what could be done, you know, by putting more effort and making a real strong go at this.
And I had this same kind of moment with UberNote as well.
When I was, I think, working full time and before I quit to do that, it was just like when I reached the point of where you just couldn't think about doing anything else.
And it was like, didn't even really feel like a choice, if that makes sense.
It's just like you wake up, you want to build this, and then you get blocked by other things you have to do.
And it's like, why am I blocking myself with these other things and why not just go ahead and.
I'll be honest, it wasn't much of a potentially binary choice with my consulting.
There's probably a point where I just didn't really need to go try to find new clients.
Most of the ones I had at that point in the lifecycle building some of the software, most of them were on like support mode type of.
So it just required me not necessarily having to go try to find new clients.
So it was kind of like, oh, well, let's continue riding on this.
This is bugging me.
I'd rather just work on this and see where this goes.
There's definitely a different feeling of talking directly to customers and many of them and seeing them see all the same problems and wanting to solve them in one or two strokes versus just for one customer.
I mean, the engineering heart of it is like, what can I do with one stroke of the keyboard to, you know, help a lot of people?
So it, it definitely felt like that as I wanted to work on Referral Rock.
Omer (26:52.290)
So I know you, you kind of really resisted the idea of having to talk to people.
Josh Ho (26:57.890)
Yeah.
Omer (26:58.770)
And like all the support you were doing was either like over email and chat, but like you wouldn't talk to people, right?
Josh Ho (27:06.130)
Yep.
Omer (27:06.610)
But there was a point that changed.
Josh Ho (27:08.770)
Yeah, it just, it, it got annoying.
It just, you know, you, you get on these chats and, and everyone's been on slack or chats, even with friends and stuff.
At some point you're just like, like, I can't, I can't explain this.
It's going to take me longer to ask you the five questions.
And it's single threaded.
Right.
So it's just like you're waiting for someone to respond and you're like, just, I just want to like paint the picture and say this is what you need to do or let me hear it in your voice and, and you just get annoyed.
Honestly, it's like chat has its constraints and so I started just asking people quickly.
I was like, it's just more of your own self preservation.
So I was Like I can solve this problem much faster if we just like go on a screen share.
So I offering people that and I'm like, hey, do you want to just get on a quick call or I can share my screen.
I don't think I was quite using Zoom yet then, but it was some other screen sharing software is all about.
So you get on there and yeah, talk to real people.
And then it had almost definitely different feeling than just these email requests.
And you start like this conversation, you just start getting to talking to people.
It's nice to hear it solve problems.
And then they have questions and you start to understand why they're asking for certain features and you know, getting that person to person thing I'm going and I think also helped what I didn't realize was forge relationships for them.
Like that I was a real person, that this isn't just fly by the night type of software on there that I'm going to disappear the next day.
They talk to you and I think a certain level of trust is established.
And you know, all this is typical sales stuff but to me I didn't know what that was.
And they were talking to me and all of a sudden they started buying.
Like more people would buy.
So and I started backing, looking on.
It was so obvious.
That was like, okay, I talked to a person and you know, half of them buy or two thirds of them buy.
And I was like, okay, I got to start doing this.
And just as a matter of that same self preservation I'm like, okay, how can I make this easier?
Who wants to talk to me?
So I started putting up a scheduling form just for people to schedule a demo with me and started a. Yeah, just splitting out my schedule so that I wasn't.
So I could go into modes of like when I'm talking to people versus when I'm coding.
So it wouldn't be too interruptive.
So at that point you would see me the every other day calendar blocks of like this is when I talk to people, this is when I'm like coding, this is when I'm talking to people and usually flip flop each day from a morning or afternoon so I could give, give people in different time zones some variety.
Omer (29:34.680)
So you're starting to talk to people, you're getting these, you know, doing demos, you're seeing that actually wow, this is actually turning into more sales.
There was a point that you got to where you felt like I need more help.
Like how much were you generating with the business when you started thinking about like hiring somebody?
Josh Ho (29:53.999)
I think at that time I was.
It was mostly not for necessarily the things I was doing, but it was probably for all the other little things like writing support docs and things like that.
So I believe it was probably like six months after that first that when we started getting to paid.
So this was probably around.
I'd probably say we're around 3,000 mrr or so.
And I hired a person that would basically be able to help with the general support and also just document a lot of the things that I had in my head.
So, you know, writing help docs, things like that, so I could expedite the support aspects of it.
But that was around the time when I hired someone.
I think I found someone on some contractor site.
I can't remember off the top of my head, but they don't even exist anymore.
But I found this person.
She was great.
She worked at a past SaaS, business was like a mother.
So she had limited time and it was part time.
Omer (30:46.540)
But you still had a lot of doubts, right?
I mean, in terms of how big this business could be and whether you were going to keep getting customers.
Josh Ho (30:53.980)
Yeah.
So you kind of always have that in the, in the back of your head.
And at that point I think I started looking at where the leads were coming from and then started being like, okay, how am I going to, where is this going?
So I started looking at the trend lines and things like that.
So looking at where revenue was, looking at site traffic.
I think at that point we were probably getting maybe three or four thousand users to the site per month just to the marketing website, versus probably like the year before.
I think even six months before it was probably like half that.
So you're starting to look at that and you're talking to people, you're hearing real validation that people are getting something out of the software.
In addition to around that time, we also just about six, six, eight months in is around the time we're again talking to people on the phone and getting a sense for them.
We had some people request a couple features that were like way down on my roadmap.
But I think it was like to add gift card fulfillment, that was like the first big thing.
And it was another one of these things like the domain name where I'm like, oh yeah, I can look into adding that.
And there's something about it.
Once it was a customer that did these big water filtration installations, so they were getting them a new referral was worth like $10,000 or plus to them.
So it got me thinking about, I was like how much is this really worth to people?
Like, I've been doing this for 50 bucks a month, sending them all kinds of, you know, helping them get more referrals.
Like maybe there's a much bigger, this is much bigger than the $50 a month or $100 a month.
And it was funny as they actually kind of questioned the price.
You could kind of sense it in their voice.
They're like, it's only $50 a month.
And I was like, oh, but if I add that other feature, it'll, you know, but it's coming.
And I got on a call with them the next week and said, yeah, we're going to build this out.
And I changed, I changed prices overnight and pretty much, I think practically doubled them.
And they actually were happy about it.
They're like, oh yeah, that's great.
Oh, and you're going to be able to do that feature or no, it's on your premium line or I forgot what we called it.
It might have been called established business then, but it went to I think $300 a month for the top line one.
And they actually sounded happy about it.
So this was another head smacking moment where I'm like, there's something to charging a little bit more.
And they felt better about it.
They knew that if, even if I got them one referral over the course of the year, essentially it could pay for their program costs.
Omer (33:18.750)
So that's a really good insight because when we think about pricing in the early days, you often think, you know, am I charging too much?
And we're often, you know, kind of try to keep the price as low as possible and you know, maybe that's the right thing to do in the early days because it kind of lowers the barrier and gets more people, you know, willing to try your product.
But also pricing too low can, can actually work against you because as you sort of described here, I mean, there are going to be customers who come along and it's like a business customer or an enterprise.
They're probably going to be concerned if they're using a product which is 50 bucks a month.
Josh Ho (34:00.060)
Exactly.
Yeah.
And they need some trust that you're going to be there.
Because if I'm going to, their time is worth a lot more than that.
So if they're going to spend their time to set this stuff up and you're going to vanish in a year or two or six months, or you decide that this was a just a nights and weekend project and don't want to put the effort in on it anymore, Then they're kind of wasted their time.
Omer (34:20.549)
So, so when you went back to this customer and you, you kind of came up with this new plan and it was like, you know, 300 bucks a month.
You said, how did that go?
How did that conversation go?
Josh Ho (34:31.509)
It actually, I didn't even bring it up.
I updated it on the website and when I had the call, they said, oh, I saw you updated the price on the website and you're, you're starting to put something on for the features that we want in that version.
So they kind of call.
I was, I was a little nervous going into that, seeing if they would see it or seeing what would happen.
But I had an easy out.
They brought it up first and you know, it just, the level of, like I said, the level of confidence in that call with them was just a lot higher.
I think it was very different than the first conversation.
They were asking these questions, but they sounded a little, I guess less confident.
But after I had that up there, I don't know why, you know, that, that flipped that bit in terms of giving them a level of confidence.
And yeah, I kind of just went from there.
Omer (35:16.890)
So you get to probably about a year after you start paying and you got to kind of close to I think 100 customers and there was a point where you decided that you wanted to start scaling your sales, growing faster and you decided to hire a salesperson.
But it didn't go too well, right?
Josh Ho (35:41.470)
No, because I didn't think I was doing with selling.
Right, you kind of, I just thought I was helping people, which you'll hear now is like the new selling.
But it was, you know, for me, I'm a developer engineer at heart, so I, and I just like talking and helping people.
So it was, it came very naturally in there and, and obviously my time got started to get a little restricted because it's a very, you know, time consuming type of thing and it takes a lot of energy.
You know, you do two or three calls in a row and you're just kind of spent at that point.
At least I was.
And I still needed to move the product forward to help the existing customers and things like that.
But yeah, I mean, I had the typical kind of view, I think that most people see salespeople, you know, they see going back to the car dealership.
You see a used car salesman, you see this pushy person, you see the guy that solicits and knocks on your door and asks you to, you know, sign up for something and I'm giving you a deal and it's 50% off, but only today.
And it's like, it just makes your skin kind of crawl and you just gotta be like, goodbye.
And I did not want to be that guy.
And I didn't think I was, I didn't, I didn't think I was that guy.
But that's what I thought a salesperson was.
Because I'm like, if I can do this and I'm not a professional salesperson, like what could actually having like a real salesperson do?
So yeah, I went on the hunt and tried to find a remote salesperson.
And yeah, I did what I thought.
I hired someone that sounded like a salesperson and I fell flat on my face.
It was bad.
It was just, I think for this was about a year later.
So then I gave, I think I just gave a couple days of training.
Like I kind of walked her through the product and I noticed soon after that I just started like feeding her half the leads for her to schedule.
And it was just, it was, it was awful.
She actually, you know, she thought she had it wrapped around the product.
I think the sale wasn't right for her.
The what she was used to selling.
And it just had a. I don't think she closed any sales.
And I probably gave her at least, maybe at least 50 leads or so over the course of like two, three months.
And I just was baffled at that point.
And I thought just like, I don't know what I'm going to do because I can't scale myself at that point.
So it definitely had me kind of had this moment of like, how can this continue?
I can't do all of this.
Like, what should I do next?
Omer (38:09.560)
So back then you were doing less than 10k mrr.
Today you're doing around 70k, you know, seven, $800,000 a year.
What's been the main driver of that growth over the last few years?
Josh Ho (38:31.600)
I would mostly say it's been scaling out all those many things that I was already doing.
So if you took that microcosm of that first year, two years, and it was doing this, what is now called inside sales, taking inbound leads and talking to them and being a consultative help to them, it doing a little bit of, you know, the marketing aspects, like we said, just like being in different places, you know.
Eventually we started doing a lot more blogging and you know, once I kind of figured that piece out and where the customers were coming from, we doubled down on that.
So it was doubling down on the inbound, it was doubling down on the inside sales.
And then Going through the rough years of actually trying to build this, scale out a team to do all of these things that kind of I initially was spearheading.
So.
Omer (39:21.710)
So, I mean, that sounds kind of really simple, right?
I mean, you're saying, yeah, right now, just speed up.
Yeah.
I mean, in terms of marketing, it's like, yeah, we did content marketing and we just kept on doing the things that you were doing to sort of get the word out about referral rock.
And then we just try to do a really good job with inside sales and help people when we spoke to them.
Josh Ho (39:45.510)
Yeah, it does sound really simple when you say it like that.
Omer (39:49.510)
Hey, don't knock it if it works, right?
Josh Ho (39:51.150)
Yeah, yeah.
Omer (39:52.390)
So, I mean, it's a great story.
I mean, you know, going from when you were sitting in that dealership and kind of overhearing that conversation, which I guess was like five years ago.
Josh Ho (40:04.230)
Yeah.
Omer (40:05.350)
To, you know, doing a business which is doing around 70K MRR.
And, and how many people you have on your team now?
Josh Ho (40:14.700)
We actually just had our 14th person start today.
Omer (40:20.620)
Wow.
And obviously you're self funded, you haven't raised any money, right?
Josh Ho (40:26.620)
Correct.
Omer (40:28.219)
So, I mean, it's a great story and it's like, it sounds like everything went really well and, you know, everything went to plan.
And tell me a little bit about the hard times, some of the mistakes, some of the things that kind of makes this a little bit more real for people who are kind of going through that journey.
Josh Ho (40:43.560)
Yeah, I'd say, yeah, I mean, definitely the building the team to get, it's just.
So I did get very fortunate in that after that smack in the face failure on the sales thing, someone kind of dropped in my lap.
So luck happens too.
I had someone reach out to me on LinkedIn that was local also in the D.C. maryland area.
And he reached out and said, I saw one of your ads, like looking for a salesperson.
I think I could do it.
I'm like, okay.
I don't know if I'm ready for that.
But you know, he, he ended up speeding up his story.
He just, you know, he came in kind of with a little bit of, I'd say like some confidence.
He's like, I can do everything you can do, but code.
And I'm like, okay.
And I basically at that point was done with kind of just trying it the other way.
I'm like, I just threw him in there and just like fed him the leads and let him go.
And in a month he started turning out sales.
And this also helped on the front where it just took that whole area away from me in terms of time and all of a sudden I had half my time back and yeah, going through that was just, that was like the biggest kind of shining light in that era of like in that moment of like not knowing where to go next.
And then I started having some belief in like finding the right people and the right people in this team is really the key at this to get to that next level.
So within that we scaled him.
He now is still with us.
He runs the sales and customer success.
So he kind of forged through with sales and all stuff he never necessarily did a whole lot of before, but I got really fortunate.
He's the closest thing to like adding a founder, you know, two years in.
But he's, he's pretty much in it with me.
So that definitely helped on the funding end on just, it's, it's lonely doing a lot of this yourself.
But he was the, he's the closest person I have to kind of being able to share, share a lot of this with.
But among that we've suffered a lot in bad hiring, in hiring for areas that we didn't have enough experience in or just under investing.
Honestly the customer success side we didn't invest enough on early and that hurt us through probably the past I would say in year three the most.
So we were closing sales and getting people in the door and we'd say okay, great, here's we'll still chat support.
We went to a, was it like a reactive kind of mode which people expected.
But once we decided to actually put a full time CS person on there and really invest in them and invest in onboarding, invest in actually reaching out and helping customers, it kind of reset the wheel on back to where I was in the beginning of talking to customers and finding out what they needed.
And I think aside from the consultative sell, I would say rounded out the rest of us now it took a while.
We definitely had to churn through customers that either would have been good customers, but we weren't proactive about helping them.
And some people just sign up for software and never use it and eventually churn out.
And you know, you definitely learned that winning that customer was the hardest part and keeping them should be relatively easy if you at least just, you know, you didn't sell them something that you didn't do.
So there was a lot of pain in there.
And watching the churn go, watching, thinking we're just watching the sales line and building out the product and seeing the churn come in and seeing it get up to maybe like 10% churn in a month or some months where you almost get to zero on like hey, we sold these two or $3,000 in new MRR and we lost 2,500.
And you do start to again question how far this is going to go.
Am I selling something that's not working?
You start to reset and look at trying to help the people again.
And most of it was having the resources.
So we, we didn't necessarily have the financial resources to invest in all the sectors we wanted to, but at this point now we have and our churn is probably like, I'd say like less than 5% now even in the SMB or I'd say close to mid market.
It depends on the price point.
But yeah, that helps.
The raising prices did help too.
Weeding out a lot of small businesses that have good aspirations and they're great businesses but sometimes they fail themselves or they run into just, you know, running out of money problems, things like that.
Omer (45:02.190)
There's going to be a lot of people listening to this who are kind of in a similar situation to where you were a few years ago.
You know, maybe they've launched a business, maybe they've got the first few customers, maybe they're generating a few thousand dollars in MRR.
They're still trying to get to let's say 10k MRR.
Based on your experience and kind of what you've gone through, what are some key lessons that you could share with those people?
Josh Ho (45:31.720)
I would say, you know, if I was to go back, you could see just there's a lot of hesitation in kind of committing to it.
Like as we talked about even like getting to paid.
I think it goes into the way you price things as well.
All of those just manifested as like not 100% sure that this is going to work.
So honestly I would just like look at any elements of the success you are having or if you aren't talking to customers, you definitely should be talking to your customers and figuring out you might find there's a bigger price point.
You might find, you know, certain trends and things or even just like I said, there's merit in just talking to them anyway and in trust and them actually buying your product and things like that.
So obviously if you're not talking to anyone directly to the customers, definitely do that and commit to it.
If you find some element of success any little bit that just seems like a pattern, just double down on it.
You know, we did that with the inbound early on and that made the inbound and the inside sales.
And that had made a significant difference.
And I'll be honest, like it, the product has over.
Over time as my time started getting split.
When you're not funded and you essentially don't want to get funding, you have to decide on where you're placing your chips.
So we were all in on building out the team for those, for those couple years before.
And I would say the product lagged a little bit.
There was more development we could have done.
And I'll be honest, there's still parts of the product that are.
I'm embarrassed about today, but we're making our headway and trying to set our priorities around that.
And I've always kind of held myself to not worry too much about it, because then I just look back at the last month and I'm like, people are still buying it.
People are buying.
People are still using it.
Like, yes, I would like a better widget.
Yes, I would like all these shiny things.
And those could move the needle.
But I know doubling down on the team will move the needle.
I know having relief on that or training up a new sales guys or doing some better internal training for our people, that will move the needle, that will help them every day, versus me making a new version or a new UI in the product.
Because I could always go if people were paying already, like, it's something like, look at your past success as like a basis to go from there and check yourself before you're kind of forging into new paths.
Because I know as an entrepreneur, you always want to go.
It's like the amount of times I'd love to just spend a weekend and go build out a different product or do these other things.
And definitely the focusing on doubling down on what is actually working and definitely helped us get where we are today.
Omer (48:02.810)
Yeah, those are good lessons.
Yeah.
I mean, I was talking to a member in our SaaS club plus community yesterday, and he was kind of in a situation where he'd kind of gone out and shipped his product and he'd started selling it to various businesses, and he was kind of attracting some larger customers, and he was kind of reluctant to go and talk to more of those types of customers.
And I was like, well, why?
Because.
And he was like, well, because there's a lot of stuff in my product which kind of isn't ready yet.
And, you know, I want to kind of get that right before I do that.
And I was like, well, do you already have those types of customers?
He goes, well, yeah, I do.
I have, like, you Know, one or two.
And I was like, okay, so they're paying for the product.
They're using the product.
They've told you that there are areas of improvement, but they haven't canceled their account.
And they're still telling you that they still like using the product.
So it's kind of important to understand that because we often just look at
Josh Ho (49:03.750)
what we don't have.
Omer (49:04.990)
Yes, exactly.
Yeah.
But if people are paying for it just because they give you some feedback about, yeah, it would be better if it did xyz.
It doesn't mean that you need to get all those things done before you go and try to find more customers or try to scale your efforts.
Josh Ho (49:22.210)
Yeah, I feel like you're always going to be embarrassed about parts of your product, and you just have to get over it.
And you have to look at the timing, too.
It's like you get these guys knocking on your door.
They're looking now, and that doesn't mean.
And you might say.
And if you're honest with them, like, hey, this is where we're at.
If this is important to you, we can put on the roadmap, you know, or, hey, do you want.
And it doesn't work.
Hey, do you want me to call you in six months when we do have that?
You know, it's.
But you have to talk to them.
You have to use that opportunity.
Because, I mean, there are a lot of businesses that we have that I didn't think we necessarily were, like, ready for, but now.
Now that's not as much.
Nice decision.
I've got sales guys that are hunting them down when they come in the door.
But we ran H and R blocks, referral program this past year that came in through inbound, and there's a couple.
We have, like, I think a division of Forbes.
We've got division of all these ones.
I was telling my wife the other day, like, names that she would know.
It was like kind of a.
Who's that?
Like, Hunter fans.
I was like, it's a Home Depot thing that does.
You know, I always see them at Home Depot selling fans and things like that.
It was like, there's ones that people will know these.
I was like, okay, this is.
Omer (50:27.960)
Wow.
Josh Ho (50:29.000)
Yeah.
And, you know, big kind of.
This is who you are.
Be upfront with it.
This is.
I'm not trying to hide anything.
This is.
I mean, I think that's when you get into trouble, where you're saying, I can do this, or, yes, it does that.
And then having to scurry to figure that out.
Fortunately, I'm largely out of the code now, so I couldn't even do.
I mean, I could, but I don't want to.
I have other things that I'm now like realizing that there's many more important things I should be doing than necessarily getting in the way of my, my dev team at this point.
But yeah, don't be embarrassed.
I mean, everyone, I think, who is it that there's a quote of someone that's like if you're not embarrassed, you launch too late or something like that.
I don't recall.
Omer (51:08.910)
Yeah.
Yeah.
All right, let's wrap up.
I'm going to go into the lightning round.
I'm going to ask you seven quick fire questions.
Okay?
So let's get going.
What's the best piece of business advice you've ever received?
Josh Ho (51:21.550)
Launch and charge earlier.
I know I'm cheating a little with that one from my friend, that debt, but that was it.
Omer (51:27.100)
What book would you recommend to our audience and why?
Josh Ho (51:29.900)
I'd probably say it's probably been said, but the hard things about hard things.
It just was a good narrative and just lets you kind of really understand what this journey is like.
Omer (51:40.540)
What's one attribute or characteristic in your mind of a successful entrepreneur?
Josh Ho (51:44.780)
By far, empathy.
It's a big one that just seeing things through other people and having a good feel and sense.
I think it can help from a sales perspective to marketing, to design, to all kinds of things that just, I feel like it's, it's a very underrated, less talked about type of a character trait.
Omer (52:02.310)
What's your favorite personal productivity tool or habit?
Josh Ho (52:05.670)
Recent habit has been scheduling a day in the middle of the week for taking like zero meetings.
It's helped me as a stopgap to kind of catch up with all the things I said I wanted to do for the week on Monday, like on Monday and don't get to.
And it also allows me to just have more of a.
A free thinking day or time to schedule different things that otherwise aren't team things.
So that's been a huge, a huge difference to me.
Omer (52:31.940)
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Josh Ho (52:36.740)
Recently I've been working with some other entrepreneurs as well and we also here recently did okrs and things like that internally.
And I feel like a. I don't know if I'd bought the domain yet, maybe I shouldn't say that, but I wanted to build or do something along an idea of a peer to peer app to keep people accountable on an individual level, there's just some merit to having someone else that you have to reply to.
I mean, helps me with sports and other things.
I have people that I meet to work out with every certain Thursday afternoons and Tuesday afternoons that it could easily slip your mind.
But knowing that there's another person to keep you accountable or someone else you have to like fess up to that you did or didn't do something I think would make a huge difference.
I see people do it for their own habit types of apps, but I haven't seen anything or found anything easily with a Google search that does it on a peer to peer basis.
So like, you and me could do one and be like, hey, Josh, did you do your stuff this week like you said?
And be like, crap.
Or I'm like, oh, I'm meeting with Omer today.
I got to finish that so I can say yes.
Omer (53:44.340)
So what's an interesting or fun fact about you that most people don't know?
Josh Ho (53:48.340)
I've had one outside, like by a professional haircut in my life.
So what?
Yeah.
Imagine the money I've saved and the time.
But my mom used to cut it when I was a kid and probably by the time I was in middle school, I learned to use some like trimmers and stuff like that.
And I was the guy that you would bring Taco Bell to in college that would be like, oh, you know, bring me two chalupas and I'll cut your hair.
So I learned to cut my own hair.
I cut other people's hair.
Yeah.
And just throughout, you know, once you learn is like that the kind of curvature of your head in the back is the hardest part.
But I know I could do it blind and I practically do do it blind.
But so, wow.
Omer (54:31.180)
And finally, what's one of your most important passions outside of your work?
Josh Ho (54:34.380)
Definitely family and handball.
So I mentioned about the Tuesday and Thursday.
So I. I've been playing handball since I was a kid.
It's kind of the sport that's more of like in a racquetball court, you hit the ball hand.
It's a small ball that I think the sport originated in Ireland, but started playing with my dad and there's like small communities that play it all over the place.
And it definitely keeps me at a good even keel mindset.
Just that the stress of everything I'm doing and you can just hit the crap out of a ball for.
For two hours and it's like you don't think about anything else and everything and you know you're getting some exercise.
You're getting out of the house and you're.
I'm always looking to constantly improve.
I played tournaments.
I have won a couple small, like, national championship titles, but as I got older, in age brackets and things like that.
But, yeah, those things.
Family handball and Referral Rock right now just run my life.
Omer (55:27.440)
Good.
I mean, it's been a great conversation.
Thanks for joining me and kind of sharing your story and going back and talking about a lot of things that kind of were, you know, probably fade away, and it's hard to remember a lot of those things.
Josh Ho (55:42.640)
Yeah, I try to write down notes, but I don't know if I'll ever get to putting those into a blog post or not.
Omer (55:48.720)
Yeah.
But, yeah, no, I mean, definitely.
I love your story and, you know, congratulations on the business that you've built and are continuing to build and grow.
If people want to go and find out more about Referral Rock, they can go to referralrock.com and if people want to get in touch with you, what's the best way for them to do that?
Josh Ho (56:11.450)
I'm relatively active on Twitter, so you can look for me there.
My handle is jlogic.
J L O G I C. Great.
But, yeah, happy to meet with anyone and chat with anyone on there.
Great.
Omer (56:23.530)
We'll include that in the show notes.
Josh, thanks, man.
It's been a pleasure.
Wish you all the best.
Josh Ho (56:28.330)
All right.
Thanks, Amar.
Omer (56:29.690)
Take care.
Cheers.
Josh Ho (56:30.770)
Yep.
Bye.
