Omer (00:10.000)
Welcome to another episode of the SaaS Podcast.
I'm your host Omar Akhan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode I talk to Arvid Kahl, founder and editor at the Bootstrapped Founder.
He also co founded Feedback Panda, a SaaS productivity tool for online teachers.
Arvid was working as a software engineer in Germany.
He had to commute to his office three days a week and the train journey was a five hour round trip every day.
He didn't have a great cell phone reception on the train, so.
So he spent a lot of that time reading books and listening to podcasts, including this show.
Arvid is actually a longtime listener of the SaaS Podcast which he's been listening to since 2015.
Now, Arvid always wanted to start his own business.
He had worked on different ideas over the years, but never had any success with any of them.
So for two years on his train journey, he soaked up as much information as as he could about what it takes to build a SaaS business and do it successfully.
Eventually, he and his partner Daniel came up with another idea in 2017.
It wasn't a super innovative or groundbreaking idea.
In fact, it was pretty simple.
But by 2019, Arvid and Danielle had turned that idea into a successful SaaS business and they were able to sell the company for seven figures.
In this interview you'll learn how Arvid and Daniel bootstrapped their SaaS business from zero to $55,000 in monthly recurring revenue in two years.
We dig into what Arvid did differently with this idea that made the difference between success and failure.
And despite a successful exit, you'll also learn about some of the mistakes Arvid made and the decisions he still regrets today that created a lot of unnecessary stress and anxiety for him.
Now, I did have some audio issues with this interview.
The good news is that it only impacted my voice, which isn't that important.
And you'll still hear Arvid clearly.
I did think about re recording this interview, but I wanted to be respectful of Arvid's time and I also wanted to practice what I've got printed on the wall next to me here which says done is better than perfect.
So my apologies for the sound issues and I hope you still enjoy the interview.
Arvid, welcome to the show.
Arvid Kahl (02:46.340)
Thank you very much for having me.
It's an absolute joy and pleasure to be on.
Omer (02:50.660)
Thank you.
Do you have a favorite quote or something that inspires or motivates you or just gets you out of bed every day?
Arvid Kahl (02:57.060)
Oh yeah, absolutely.
Recently I found the quote by Robert Heinlein to be really, really impactful in my life.
And that's when one teaches to learn.
Ever since I started writing, that has been really inspirational to all I've been doing because just talking about my experiences, I learned so much more about underlying concepts and just things around these kind of experiences than I thought I already knew.
So yeah, when one teaches to learn, that would be mine.
Omer (03:25.530)
That's a great quote.
So for people who don't know about Feedback Panda, the company that you founded and sold in two years, tell us a little bit about the product.
What does it do, who is it for and what was the main problem you were helping to solve?
Arvid Kahl (03:48.900)
Right.
Feedback Panda still is software as a service application.
It's a web based SaaS for online English teachers who teach English as a second language online that are hired by Chinese online schools that themselves try to teach Chinese children.
So as specific as I can get, right, it's this kind of freelancer economy right now and there are all these people who work from home and this has been going on for a couple of years, just people who speak English natively and they teach Chinese kids over the Internet to speak English in like 25 minute lessons, couple of lessons every day.
There are teachers who teach like 20 lessons every day, work for 10 hours.
And these people have one big problem and that's student feedback because they need to give feedback to the parents of those kids.
How did the kid do in the lesson, what can they practice for the next lesson?
These kind of things.
And that still is text based, they still have to type it out.
And I found a Feedback Panda with my partner Danielle, she was such a teacher at that point and she figured out I am teaching so much I don't have time to type.
I cannot type all of these little statements about how the students did and what they should be doing next and all these things within the five minutes between lessons.
I just can't fit it in.
So she actually needed to do this after teaching for 10 hours.
Because the problem is student feedback is mandatory to be paid for all these kind of freelance teachers.
So you need to write it, but you don't have time to do it while you work.
So you have to kind of add two hours every single day to that.
So what we figured out is that you can automate a lot of this, you can template a lot of this, and we build a system that use templates and a browser Integration, browser extension to integrate into these classrooms and make Feedback a thing that lasted two hours and turned that into something that lasted five minutes every single day.
So we saved people effectively two hours and we priced it at like, ended up at 15 bucks a month.
So it was a very clear tool for people to buy.
And that's what Feedback Panda was.
So that the audience was teachers, online teachers, but working part time remotely from home.
Omer (06:00.980)
So you picked online teachers who teach English as a second language, that teach Chinese kids how to speak English.
Arvid Kahl (06:11.620)
That's right, yeah.
It's a, you could say it's a niche.
It's definitely the most precise niche of an audience I've ever targeted with a product.
I've been doing other startups before this and they pretty much either went nowhere or imploded on impact or, you know, the kind of 10 years of startup history that every successful founder has that they don't talk about too much.
But with this niche in particular, we knew that it was a good one because first off, Danielle was part of it.
So we had an expert from the niche already on the team.
When we thought about like what product we would build, what, what kind of business this would be, she knew exactly what the critical problems of her audience or our audience would be.
Because she experienced these problems.
It was absolutely clear to her that student feedback was an issue.
And since this was a Chinese online school, everything was pretty much predetermined, right?
The kind of lesson you would teach, the kind of PowerPoint slides you would have, the kind of things you would work on, this was all done in advance.
This was all pre formatted for the teacher to just use and go through the slides.
So every teacher out of at first a couple thousand online teachers, and over the years like 10, 20, 50, 70,000, that's at least where our audience size when we sold the business was at.
Every single one of these teachers would have to do the exact same thing.
So obviously a productized service like Feedback that would template things for people that use them over and over again was a good idea, or at least a good potential solution to a very clear critical problem.
Omer (07:51.890)
Let's do a mini market segmentation exercise here because I think one mistake that founders make when they're trying to start a new business is going too broad.
Right?
So maybe saying, I'm going to do this for all teachers, you can maybe you go down that next level and say, well, I'm going to focus on online teachers.
But you and Daniel went so specific.
Did you ever at any point think that maybe this is too small.
Maybe there isn't enough here for us to build something that enough people will want.
Arvid Kahl (08:31.570)
Well, you would think we would have thought of that, but we didn't.
And the reason for that is that we were in a.
Let's call it an emerging market.
Like I said when we started out, when Danielle was really still teaching, and we toyed with the idea of building something.
You know how all of these ideas are just like a glimmer of an idea in the back of your mind at some point, and then they take shape before it took shape, we were looking at an audience of 5,000 teachers.
The school that she was teaching for, they had numbers that they put into the public because they were also funded by a couple of big names in the VC world.
So they kind of were trying to show that they were growing this kind of school.
So they were saying, we have 5,000 teachers.
And then a month later they said, well, we have 7,000 teachers.
And if you see growth in that kind of speed, you think, okay, this seems to be like a market that is really expanding at this point.
And it was expanding the whole time.
There was 5,000 people when we started.
There was 10,000 when we were a couple of months in.
There was 20,000, 25,000 when we were a year in.
And then like 50, 62 years in, ended up being around 75.
And that was just the official number of one school in China, of which there were hundreds at that point.
So we never thought that there wouldn't be enough market for us to pivot into or something, because we saw it was an explosive, like a terraforming kind of movement in China with online education at that point.
And one of the things about Chinese industries is, like, once an idea takes hold, a lot of stuff gets moving.
Like, this was one of the first schools.
The school that we supported first was one of the first schools to do this.
And then people cloned, copied, improved, built other schools, not just for English, but for other languages all over the place in China.
So the concept was proven, and then it just exploded into this wave.
And that was.
We saw this, right?
It was very apparent to us that numbers went up every single day.
More and more people were talking about it in North America because it was a really good option to make some money on the side early in the morning when it's like late in China and you're not at work yet, if you're a teacher or doing whatever, right?
You still have a couple of hours to squeeze in.
Might just as well teach a couple of kids for 20 bucks in the morning.
And that really as an alternative income stream.
Before COVID 19, right.
This was something that has been working for the last couple of years that made it very interesting to stay at home.
Parents and people who had a job in some brick and mortar place, an office or a store, but had time that they wanted to make like a second job happen.
And all of this became very interesting.
And their marketing was intense.
I think the school that we first supported, half of their staff, which numbered thousands of people, was marketing just in China, both marketing towards the Chinese and towards the teachers that they were going to recruit from North America.
So there was a lot going on and we just really hooked into this wave and we just went with it.
So we never really looked into, or we never asked if we were in too small of a niche, but we did with always look into adjacent schools because the teachers that were teaching for the one school that we initially supported also taught for other schools in China.
Because you can sign up for as many as you want, as long as you get bookings, as long as you find Chinese parents who want you to teach their kids, you can make money.
Right?
You just have to kind of deal with the scheduling there.
So other schools popped up that most of our customers also were working for.
So we just looked into our own audience and saw, okay, maybe 20% of our existing audience is interested in this other school.
Might just as well build an integration for that too.
And then we did that and that's how we kind of organically expanded into multiple integrations, into multiple schools.
But we started with the first and biggest one that we could find in China because that's also the one that Daniel was teaching for at that time.
Omer (12:29.190)
Now, you didn't just wake up one day and say, oh, I've got this idea and I'm going to build this SaaS business.
This was something that the story goes back to a few years before that when you were spending a lot of time commuting back and forth on a train to your day job.
Arvid Kahl (12:49.160)
That's right, yeah.
I'm a software engineer by trade, right.
I guess I'm a self taught software engineer.
But I am a software engineer and it's hard for me even to now call myself an entrepreneur or a writer because it's been so ingrained that I'm a software engineer.
And that's all I did for.
I think I started out in 2003 or four with my first job in the industry.
And ever since then I've been working as a programmer, coder, or an engineer, whatever you want to call it.
So in 2015, I was working in Hamburg in Germany, which is a town in the north, and I was living in Berlin, which is more towards the east.
And there's a distance of, I don't know, like 250something kilometers between those two towns.
And since I don't have a car, I commuted by train, which is a high speed train that goes between the two cities.
And I had a job that where three days out of any given week I would have to be in Hamburg and two days I could work from home.
So for three days I would commute two and a half hours there, two and a half hours back.
So that's 15 hours in a week that I would sit in this metal tube just shooting through Germany with barely any cell phone reception, because Germany has great cell phone reception in cities, but it does have zero cell phone reception along train tracks because it's way too vast and too expensive to put up towers there.
Or at least that's how it is right now.
Germany is always a bit lagging behind on the rural development, I guess.
So I had nothing to do, couldn't play any games or watch any YouTube, but what I could do was read books and download, I mean, prior, I guess, download podcasts and listen to them on this commute.
And your show was one of those shows that I tried to listen to every single day, or at least on the days when you would release new episodes.
And, and it was such an incredible learning experience to be able to just sit in this train and siphon all this knowledge of these incredible stellar guests that you had on the show and just learn from them while I was on my way to my paid job in another city.
So at that time it was just really a blessing that podcasts exist, a blessing that books exist, and I tried to devour all of them because even though I knew that I was a well paid engineer at a German software company and we did interesting things in the IoT field with like long range sensors and all these kind of things, I still wanted to build my own business.
I still felt I really in, in the end, this needs to be something that produces value for me instead of me producing value for somebody else.
So that's where it all started for me in particular, this kind of avalanche of knowledge.
I mean, I'd been dabbling in startups or like trying to find companies with friends and people that I knew colleagues before, but those really didn't go anywhere, at least not compared to what Feedback Panda finally ended up Like a successful acquisition.
Right.
The other things still exist or don't, but the other projects were just projects where I didn't know what I was doing because I wasn't really tuned into how bootstrapping worked and how building a business worked.
But that time that I had on this commute really gave me the opportunity to just digest as much as I could and let it brood in the back of my mind.
So that when the time came when we had this idea, when we had this understanding of a critical problem for well defined audience and we had the idea that there was a solution somewhere that we could turn into a product that would fit their workflow, then I could actually execute it with Danielle and build this business.
Omer (16:20.150)
That's a great story.
And it was probably a blessing that you didn't have a very good cell phone reception on that train journey as well.
Arvid Kahl (16:28.070)
Yeah, yeah.
Oh, absolutely.
I probably would have watched videos or worked on other things, worked on the actual job that I was going to be paid for a couple hours later.
Could have happened, but didn't.
So thank you, Germany, for not having great cell phone reception.
But honestly, yeah, I think there's a lot of contingency in these kind of things.
Right.
A lot of things you do in life, they end up making sense way after the fact.
The fact that I studied computer science and dropped out of that because I had a job in a web agency.
We built websites that was interesting, much more interesting than the actual studies, which I found way too theoretic.
And I guess we were learning Java in 2005, 6.
It really wasn't too interesting with all these new web languages coming up at the time and our professors just didn't know that, didn't care about that.
Really was too academic.
So I dropped out of that.
Then I went to a different town and studied political science and philosophy because I wanted something completely different, which now in retrospect, actually helped me understand complex human behaviors and the kind of institutionalized systems that operate on a.
On a national level that you can also implement if you're smart about it on a business level.
So all of these things at the time seemed like failures, right?
Drop out of computer science.
Then I dropped out of philosophy and political science.
Then I had a little thing where I worked for Silicon Valley company for a year and a half, which was very interesting.
First job I really ever had that make me any meaningful money.
Learned a lot there.
Startups here, other businesses that I tried, other jobs that I did.
All seems very random, but in retrospect, all of these Things taught me one thing or another that culminated in building a business.
Omer (18:12.610)
Okay, so you've identified a very clear market and a very specific market.
You've identified a problem, and you've identified your ideal customer profile, which is Danielle somebody, a real person who has this problem and needs some help.
And you see that opportunity there.
So what did you do next to sort of figure out, is this the right.
Is it worth solving?
And then how do we get started?
Arvid Kahl (18:46.680)
Right, yeah, validation.
That was a very important part.
Because if there's one thing that I had learned in all these failed attempts before, not validating my assumptions would always lead to ruin in some way, or not validating them enough.
There's always this little remnant of guessing, of guesswork that you have to have as an entrepreneur, but a lot of things you can actually validate.
So we definitely looked into this from multiple angles.
First off, we thought, like, is this something that people would pay money for?
Because that's always one of the.
No matter what solution you build, if people are unwilling to pay any money for anything at all because they're all hobbyists and they hate to spend money on professional tools, but some industries are like this, or some niches, some audiences, then whatever you build, it won't work.
So we looked into this and we saw, well, here's another thing that these teachers seem to be paying for.
They were buying a software called manycam, which allowed them to integrate their webcam with the customizable background videos or little things that they could put on screen to just give the kids something nice to see, just change their video ever so slightly to make it more interesting.
And they were paying money for that.
So interesting.
People already understood their teaching to be an actual business.
Right.
We were not just selling to teachers who were employed by schools and got a salary.
We were selling to, or we were going to be selling to teachers who were freelancing as English online teachers.
So they were business decision makers, all of them, every single one of them.
And we understood that they have a budget for this, even though they may not understand really, that their businesses in themselves, they do have a budget for these kind of tools because they see that there's something that can be done better.
So that was the first validation that we did.
The second one was, well, is it a critical problem?
And the criticality, I kind of explained it already.
But these teachers had to send their student feedback within 12 hours of the actual lesson or they wouldn't get paid for teaching.
Like, they could have taught a stellar lesson and not sent any feedback.
They would not be paid.
Because the text, the feedback text was the thing that Chinese parents really valued.
So if they didn't have that, they would have to, I don't know, watch the whole 25 minutes and nobody has time for that.
So you had to do it as a teacher was unavoidable.
You couldn't delegate it, you couldn't like push it off for next quarter or something.
You had to do it right there, right now.
So the criticality of the problem was very clear.
It was also a painful problem because typing what often amounted to three or four paragraphs of text, like we were learning about apples and the color red and orange today, we used this kind of word to describe that.
And then we went through these kind of verbs and all these kind of paragraphs.
Typing them over and over is like mind numbing.
That's not fun, that's not enjoyable.
So it's a painful process.
And facilitating something that would cut that process out was also a very clear sign that the solution would be valued on some level, that it would actually generate value for the customers.
Finally, people already had what April Dunford often calls competitive alternatives in place.
So it's not a competitor actually had some sort of software that solved this problem, but people were using alternative products that compete with the functionality or at least the problem solving component of the tool that we wanted to build.
So people had already built their own templating systems.
People had worked documents and Excel sheets full of little sentence fragments where they would just copy them, paste them, change the name, copy the next fragment, paste it, change the name, or maybe change the pronouns because the initial fragment was written for a boy, but they taught a girl these kind of things.
People not only had these kind of templating systems in place, they also had started sharing them amongst each other, which was such a clear indicator that this is a common problem amongst all of these people.
They had a Google sheet that were like a kind of shared sheet where lots of hundreds of people would share their little templates and copy and paste it from that one singular sheet.
So we knew that there was something in there where people already were kind of grasping for straws, trying to find a solution to this very clear problem.
But it hadn't been built in a custom way that really understood the problems and I guess unique circumstances that these teachers had in their day to day workflow.
And that's what we built finally.
Omer (23:15.770)
So tell me what the first version of the product looked like and how long did it take for you to build it and ship it?
Arvid Kahl (23:22.090)
So the first version was something that completely replaced Danielle's homebrew, Word and Excel file collection.
It was a SaaS that she could log into.
I built that within, I think must have been three or four weeks that it took me to build this because I was still on a day job.
So I was essentially moonlighting building this project using the same technology that I was using on my day job, which is Elixir and Phoenix, a rather niche programming language, but really, really useful for a platform like the one we were building.
And yeah, it took me a month and it had all the components that it needed to have to actually be usable for any teacher.
So it wasn't even a prototype.
We built this thing with a stripe integration from day one.
Because I've been building web platforms and applications for quite a while and I thought if I built this just for her and then I have to integrate a logging mechanism or a payment provider or you know, these kind of adjacent but super relevant things to turn it into an actual SaaS.
Might as well do this from day one.
So I did.
She was essentially the first customer of the product and then she tested it out for a couple weeks and we saw a couple things, couple problems here or there.
This screen didn't make sense.
The generation didn't work as well as we thought, so we had to fix it.
But she was the first customer, the test customer.
And once she was happy with the product in her day to day workflow, knowing that everybody else had the exact same workflow, we really just released it to our customers because it was such a niche, such as well defined and specific niche, that there was barely any deviation between the actual experience that our customers had.
Omer (25:02.690)
How did you release it, how did you get the word out and were you charging for the product?
Arvid Kahl (25:07.890)
So let me answer this in reverse.
We offered a 30 day trial from the beginning because having read Nerial's book Hooked, I understand that if you want to build a product, a habit forming product, you will need to give people the time to actually form a habit and see the value in the product.
So we thought 28 days usually is how long it takes to build a habit.
So why just well, gift in 30 days.
But after that we charged straight up.
We started with a $5 a month limited tier.
You could have like 100 students or something.
And then we had a 10 bucks a month unlimited tier.
That was our biggest plan.
Knowing that our audience was very price sensitive.
These were people who had to work second or third jobs to make ends meet.
So we couldn't charge them like 100 bucks a month just wouldn't work out.
So we started with a fairly low pricing.
We removed the $5 tier at some point because it was just not worth it.
But we kept the 10 bucks a month.
So that was our initial price.
So when we released a product, we didn't really push it anywhere.
We had a very clear understanding of the community that we were going to serve.
Our audience, which was very tribal.
Like the teacher community is a tribe.
Lots of people know each other, they exchange a lot of information.
And if you go by Seth Godin's tribe approach and you put yourself into this community and you market from within, then you don't want to push stuff.
You want to suggest things for people to try, but you don't want to push it onto them.
So what we did, and that was maybe our really only active first marketing effort, was a comment under a question on Facebook where somebody asked, how do you deal with your, with your feedback?
That's just so overwhelming.
And Danielle at some point just really replied, well, I use Feedback Panda.
Just that, not even a link.
And then people ask, well, what is Feedback Panda?
Well, it's this SaaS product.
And then she put the link and then people clicked on it.
And then that was our first day.
That was a launch.
I think we had a hundred something signups on our first day.
And that I guess dwindled over the next couple days and weeks to a very solid 30 signups every single day.
That kept around 30, sometimes going up to 50 or something for the next two years.
It was almost like a weirdly static sign up number that we had.
But that just kind of explains to you how the industry itself grew.
We didn't need to do any further marketing, at least not active marketing.
We didn't ever have to pull ads or something, do these kind of things.
We really were building almost exclusively word of mouth approach.
And it started with this one comment under a Facebook post for somebody asking how other teachers would deal with feedback.
It's very organic and it immediately kicked off the community because they looked at it, many people started using it and then they just started recommending it to other people asking the same question, which always happened like every single day.
A new teacher that had been recruited by this Chinese company because they were trying to grow their numbers would come into this community, either find the link or ask how do you deal with feedback?
So we had this consistent loop of marketing that happened for us by our customers in this Facebook community and other communities that they were part of.
Omer (28:27.070)
You mentioned that you knew that your target market was price sensitive, so I know you priced it very low, but did you still get any kind of pushback, people complaining that it was paid or it was too much?
Arvid Kahl (28:41.710)
Yes, but in a non obtrusive way.
There will always be people who don't understand how you could charge for something that is apparently simple.
And Feedback Panda was a very simple tool in the sense of that it solved one problem really well and nothing else.
Right.
You have a list of students, you have a list of templates, you have a list of lessons you taught, and then you click on one thing or you click on the browser extension, it pulls it up, you save it and then it's done.
It's a very simple operation that the system provides.
And it's deceivingly simple because there's a lot obviously going on in the background.
We had machine learning systems doing automated pronoun translations on templates for us, all these little complexities, but people wouldn't see that.
So even for 10 bucks a month, which to many people is a Netflix subscription, they would say, well, this is way too expensive for something that I only use for five minutes a day.
Not understanding that without using the tool, they would work for two hours that very day.
Right.
It's just the awareness of some people to pay for tools.
Particularly in a, I would say, low income or high price sensitivity audience, you can expect everybody to be aware.
But the thing is, even though we had these people complaining about it with a 10 bucks a month plan, or even five, the community was so taken with our product that we had people literally stating publicly, I would pay $25 for this every month gladly, just from the time that it saves us.
We never raised the prices to 25, we only raised it to 15 one year in.
And even that was completely agreeable with most of the community.
So we raised prices and obviously we have people cancel because for some it's already on the verge of what they want to afford or can afford.
But most people had zero problem paying a higher price after that.
And we grandfathered in all the old customers, or we allowed them at least to extend their existing subscription for a couple years.
So it wasn't really an issue.
And people still signed up and people still converted.
So I guess we could have priced it higher.
But the thing is, we really didn't want to.
We were still at the end when we sold the business two years, almost two years after starting it, we were at $55,000, MRR.
So a business that was just Danielle and me, we had zero employees, everything was automated.
I mean, why would you need to push this even further, right?
That's just greedy.
At some point we were happy.
We were serving the audience we wanted to serve.
Serving was critical problem.
People were extremely loyal.
Like we had sub 3% churn rates and all these kind of things.
Stuff was awesome.
Like there was no need for us to push this higher.
And that's why we didn't experience much pushback either, because we never really tried.
Omer (31:28.630)
So aside from the post, Daniel's post in Facebook telling people that she uses Feedback Panda, what else did you do to find customers?
Arvid Kahl (31:42.720)
Well, the thing is, we really didn't do anything to find customers.
We knew that there was word of mouth going on.
So what we did was we just really amplified the existing messages that people had.
So on Twitter we would retweet.
On Facebook we would like or comment and shout out people.
We had a lot of growth strategies in our business that were kind of really amplifications of existing channels.
Like we didn't try to invent anything new.
We didn't try to have a big marketing campaign or anything.
We did one video once with an ex colleague of Danielle's back from Canada.
Danielle is a trained opera singer, so she comes from a completely different field.
And in Canada, at a university, she met a lot of people.
And one of these women there also was a teacher for this platform because people want to make money online.
So she did a wonderful video for us and that one is still on our homepage to this very day.
And I think that's the only like media based marketing expense we really had.
We had a newsletter where we would highlight our customers, random customers or customers who stood out because they were super interesting, had interesting stories, or they were super generous with the community.
We would highlight them every single week.
And the feature we called the VI Panda and Feedback Panda stories, you know, it would just give people this kind of sense of community and then we would bring it into their communities.
We would post about it on Facebook, we would share it through the newsletter.
We would go into other communities where teachers would hang out and celebrate them right there in plain sight of all their colleagues and all of their tribe members as well.
And that kind of building a community around the brand, around the business.
With Danielle being a teacher, being an advocate for teachers and how their work should improve and what, what things should be taken care of and you're just being like a person in this community, that really helped.
We didn't really need to look for people because they found us and then either we convinced them through with a having a good software as a service solution or other people from the community convinced them to try it out.
So that was mostly, like I said, almost exclusively word of mouth because it was such a tight knit tribal community that was without a doubt the best growth strategy, like sustainable growth strategy for us.
We fostered a lot of discussion in the community.
If people asked something, we would talk to them.
We had a really, really good connection with people through Intercom through our customer service chat tool that we both meant.
Like Danielle and I, we responded to every sing customer for the whole time of the business.
Whenever they had a problem, we would be there for them, which led to a lot of sleepless nights and a lot of automation built by me to deal with the stuff that customers were talking about so I didn't have to get up and respond to it.
We built relationships with people through this channel.
I still recall lots of names and faces just from talking to them about their little bugs and problems that they found.
Because whenever we had a person I would say slightly enraged about some problem with the software, I would take my time, sit down with them, talk to them through chat, go through how they could solve their problem, tell them that I'm on it, maybe even build a solution within 30 minutes, then deploy it and surprise them with the working software like 30 minutes later.
And then I would ask them how they're doing, what they're doing, what is their future looking like, who are they teaching for, how are the students doing?
I would try to build an actual relationship with each customer as far as I could, which was harder at scale.
At the end we had like 5,000 something customers, but it was still something that we aspire to every single day.
And that brand, that kind of being there for every single of your customers, should they have a problem or just want to chat with a lot of people who just really wanted to chat because they were sitting alone at home at 4 in the morning, the kids were still asleep, husband was already off to work or something and they just wanted to vent about something.
We would listen, we would reply and we would chat with them for 10 minutes.
And that's just the kind of brand that we built.
And I think that is what led to all this word of mouth growth in the end.
Omer (35:59.380)
So you made your customer the hero, not your product.
Arvid Kahl (36:02.820)
Absolutely.
Omer (36:03.419)
You focused on promoting and celebrating your customers successes and indirectly that led to other people discovering and trying feedback.
Arvid Kahl (36:16.580)
Panda Yes, I think particularly with teachers that market is extremely underserved and it's Underappreciated as a profession, we all know how little teachers make all over the world.
Doesn't really matter where you look.
And particularly teachers who are paid so little at their actual teaching job that they still have to wake up at 2 or 3 in the morning and teach two more hours before they go to work teaching.
Kids like these people don't get much recognition.
So it was obvious to us that not only did we want to help them, we wanted to empower them, we wanted to elevate them, we wanted to make them feel seen and feel heard and recognized.
And honestly, as somebody who now is a teacher of sorts, at least I think I am writing a lot and sharing my learnings with people at this point.
I know that teachers need to be appreciated.
Not because I want to be appreciated now, but I had a lot of teachers on my way to where I am and I really appreciate them.
So every single teacher can and should be appreciated.
And that's what we did with all our marketing, with all our customer outreach, customer success, every single piece of communication, every newsletter we sent was celebrating teachers.
The product, like I said, was pretty.
It's a scalpel kind of product.
It's a very precise tool for one very precise problem to solve.
So the product itself is not the most inventive product, so doesn't really make sense to highlight that, but the people using it, every single one of them is very special and does an amazing job every single day.
Yeah, I love that.
Omer (37:56.760)
That's a great way to think about it.
And I think it also emphasizes the point that if you find the right market, you find the right problem and you find a solution and it doesn't have to be a clever, never done before, innovative thing.
Just do a good job solving their problem and a lot of the pieces will fall into place.
Arvid Kahl (38:22.550)
Yeah, absolutely.
The recognizing what people's problems truly are and the criticality of them like that we always want to solve the person's most critical problems because that is the thing that stands in their way the most.
Most often, it's most annoying, it's most painful.
Right?
That's what.
At least as a Bootstrap founder, I think that's what you should go for.
Because if you can solve that, then first off, all the other problems are not as big anymore.
I mean, it's just you solve the biggest thing so you give them the most value you can produce.
And also it gives you this opportunity while figuring out what their biggest problem is, to really understand your customers.
There's a lot being written and said about customer exploration and customer validation, like finding the right niche, finding the right audience, figuring out if it's a good market or not.
But nothing beats actually talking to people, being part of the group that they are, either by like Danielle being one of these people that we wanted to sell to, or like me at a later point, just really diving into this community, understanding their problems, the things that they worry about, the threats to their livelihoods, the kind of potential pitfalls in their jobs and the politics.
Like, you know, all these little things that when you think about, oh, I'm going to build an email client, well, you don't think really about the office politics of the people using the email client, but it might be an interesting thing, right?
If you dive into this audience, you figure out, oh, maybe a CC all is a big problem for you.
Like you should really prevent people, people miss clicking that CC all button and it turns from being a funny little feature into a really important part of understanding the problems of your customer.
I mean, this may have been a bad example.
I just really pulled that one out of the hat right now.
But the idea is the better you understand your audience, the better you become part of the world that they inhabit, the more you will really get why they have this problem.
And then you can dive into how you can solve this problem.
But the why is much more important because what to some people is a gigantic problem, like reporting to other people is not.
Some people don't have to do as much reporting, so obviously it's not a problem to them.
But there are industries if you don't do reporting well, and I think, funny enough, student feedback is some form of reporting.
The if you don't do that well, you suffer.
So it really depends on who you're talking to.
If you ask is reporting a problem?
And then you really need to understand the customer and even not just the problem, but also the workflow in which the problem occurs.
Many people built interesting software product or built an interesting software product to solve a interesting problem, but completely neglect that this problem occurs between an input and an output.
It right?
Something comes ahead of it and something comes after it.
And if you build a software tool that doesn't take this into account, then you build a tool that is thought of in isolation and supposed to be used in isolation, but it's not.
People won't use it if they can't use it within their workflow.
And I say this because feedlack Panda had a browser extension we integrated into the web portals that our customers would teach through, so we could have just said, well, go to feedbackpaner.com and select the student and then select the class and select the template and you got your feedback.
That would have been the manual steps, but we thought, no, we really need to understand that the input for this is I have just finished teaching this lesson and the output is I want to have a piece of text in my clipboard that I can paste into the field in wherever I need to paste it so I can send it and get my money.
So we built the integration to really put a little panda button into their classrooms so once they were done, they could immediately click the little button.
And since Danielle had figured out from the beginning that the classroom URL had these unique identifiers in there, these numbers that didn't really make sense, but we later figured out were the student id, course id, classroom id, we could automate all of the following steps.
Didn't need to select a student if you have an ID already on hand.
Didn't need to select the course if you have a course ID and you didn't need to select the template if you have a template somewhere.
So we could turn this select three things on a different website into just click the little panda where you already are and it would automatically pull up everything and generate your feedback with one click.
So that is important to me to say here because I see so many software products that forget integrations and extensibility and how important this is for the fitting into the workflow.
It's like the product workflow fit, right?
You have a lot of product market fit discussions.
So will these people be able to use it?
Well, yeah, maybe, but do you think they're going to massage the data so it will fit into your tool if you don't provide an easy access pattern for the data to flow into it from the beginning.
So product workflow fit is a thing that I figured out, particularly with feedback.
Panda is essential to the success of a SaaS.
Omer (43:36.220)
So it sounds like a great story.
Going from an idea to a seven figure exit last year in about two years.
What's one thing that you look back and you wish you'd done differently?
Arvid Kahl (43:56.220)
Well, I said earlier we never hired.
And judging by my anxiety levels that I had two years into the business and the fact that I'm still kind of recuperating from this now, a year after selling it, we hired way too late because we never did.
Right.
We only really hired our replacements when we sold the business.
So up until the end, it was Danielle and I and 5,000 customers that had their Little issues here and there.
And that was.
Not only was there a lot of customer service to do, I mean, we still kept it fairly low because from the beginning we followed the idea of automating and documenting as much as we could so we could just, yeah, really have time to work on the business and not just work in the business.
So there was a lot of automation going on.
We had a knowledge base with lots of articles if people had problems.
And Intercom has this nice feature where they automatically suggest the most fitting article and then they later added features where you can have certain automatic replies to certain particular questions.
I don't know.
We had this thing when people would log in with Facebook sometimes and with Google they would get into two different accounts even though they just forgot which tool they used to log in.
So instead of me having to tell them, having been at the computer, whenever we found logging problem or can't log in with Facebook, we sent them an automated message saying, well, have you tried logging in with Google?
Often people use different blah, blah, blah.
You know, they just kind of automate customer service thing.
But still every day there would be 10, 20 messages that would come through and would require my immediate assistance.
Either I would need to deal with the data somewhere restore some, I don't know, something in the database or somebody's account was closed because they didn't pay and now they paid and it wasn't reactivated, these little things.
So it drove a lot of interruptions into my life as the technical founder, but also Danielle's life because she couldn't really work on the design and the product because there was always interruptions.
So that was one problem.
The other big problem is if you have a business with 55k MRR and you are one technical founder and one non technical founder, any downtime of the product immediately impacts your business right there.
And I need to get up.
Like if there's any issue with the database or with the servers or even a tiny glitch somewhere, I would leave bed.
I would be called automatically by our monitoring solution and I would need to bring it back up and restore the system and fix whatever the problem was.
And that even though it didn't happen often, it happened often enough for me to develop severe anxiety for my phone ringing.
I still to this day, whenever I hear either the intercom noise or I see my phone ringing, I just get like a heightened pulse.
It's just still anxiety, physical response to this kind of traumatic experience because at some point it just really forces you to drop everything you're doing and Deal with Feedback Panda and that happens every couple of weeks and I really was not looking forward to that.
So that level of dependency on me being the person solving every single problem and the consistent interruption we should have hired for.
Should have hired a customer service person to deal with the interruptions and only get the things that they wouldn't be able to solve to me or to Danielle.
And we should have hired some sort of software engineer DevOps Hybrid to deal with building the software, keeping the integration updated, which was a hassle like a browser extension that integrates into a classroom where you never know if it's going to change.
If it breaks, you need to immediately build a better version of the integration at again any given time of day doesn't matter if it breaks.
There's 5,000 customers who do rely on it.
So should have hired somebody to really filter these particularly anxiety inducing jobs into more manageable chunks.
And we didn't.
And yeah, should have done.
Omer (47:54.670)
Why didn't you hire somebody?
Arvid Kahl (47:55.910)
I thought I could deal with it.
Honestly, I thought I could deal with it.
I thought well this is not.
And that was like in retrospect one of my more stupid thoughts.
But I'm still glad to share it.
I thought if it isn't worth a 40 hour a week position, we're not gonna hire.
I to this day do not understand why this was on my mind.
If it's not a full time position, we're not going to hire anybody.
If it's not full time, I can still do it.
The fact that a part time position or person on a retainer would have made perfect sense obviously in retrospect.
But back then I thought, nope, I can still deal with it.
And I made many mistakes in just misjudging my own ability like that.
Not hiring or being a bit too ambitious.
When we founded the company, I also rushed the founding of the actual business itself and I turned it into like a sole proprietor limited version.
In Germany we have two different kinds of limiteds and I was the only shareholder.
And then Danielle wasn't even on it and we needed to get her onto the shareholder on the cap table I guess later.
And that was a lot of additional thing.
I just thought I knew what I was doing, which was a big mistake.
I thought I knew better than anybody else what I was doing.
I thought I could do it by myself.
And I think that is something that I really regret in retrospect.
And that is also why we didn't hire Danielle suggested it, I thought nah, I could deal with it.
And that's just my selfishness in thinking I'm great, which I'm not.
Just a normal person.
I think I'd like to call myself a 0.8x engineer.
You know, I'm kind of lazy.
I try to be as lazy as possible, automate as much as I can so I don't need to do the work.
But I thought I could deal with it.
I thought I could juggle all these things and be this great solo or not solo, but duo founder and deal with all these things and be amazing.
But I shouldn't have and I know that now.
So the next thing we're going to do or that I'm going to do and hiring is going to be maybe not a day one thing, but I notice once I feel like even a tiny bit of anxiety, I know what I'm going to do.
Omer (50:00.700)
There's so much more to this story that we can't cover here, but you have written a book which goes into more detail and guides people through the process.
So it's called Zero to How to Start, Run and Sell a Bootstrap Business.
And you can buy it on Amazon.
We'll also include a link in the show notes to that.
And I would definitely recommend, if you've enjoyed listening to Arvid, check out the book and you can get deeper into the story and basically continue picking his brain.
Let's wrap up and move on to the lightning round.
So I'm going to ask you seven quick fire questions.
You know the drill.
You've probably heard this enough times.
Arvid Kahl (50:44.150)
Yep.
Omer (50:45.270)
Are you ready to go?
Arvid Kahl (50:46.630)
Sure.
Let's go.
Omer (50:48.390)
What's the best piece of business advice you've ever received?
Arvid Kahl (50:51.510)
I think it's built to sell.
You don't have to sell the business.
But building a sellable company is a company that's well structured, organized, hands off and generates maximum value.
So that is the best advice I've ever had.
Omer (51:02.800)
What book would you recommend to our audience and why?
Arvid Kahl (51:05.520)
Well, you just recommended an interesting one, but I would actually recommend John Warrilow's book Built to Sell, which fits in pretty well because that explains how a sellable company works and how you can turn your own existing or even aspirational business into a sellable business.
Omer (51:21.040)
Yeah, I second that.
Great book by John.
What's one attribute or characteristic in your mind of a successful founder?
Arvid Kahl (51:28.090)
I think kindness with a willingness to empower others around you.
You want to be, or I think at least facilitate the tide that lifts all boats.
Omer (51:37.850)
You're probably the first person who said kindness and I couldn't agree with you more.
I think that's often a very rare quality.
What's your favorite personal productivity tool or habit it.
Arvid Kahl (51:52.220)
So I've been very active on Twitter recently, and I found a tool called HypeFury.
I've been using that for the last few months, and it really turned this experience of Twitter from a nightmare into quite wonderful experience.
It's a scheduler, so I schedule all my stuff days ahead of time and block some time for thoughtful tweets, and the tool just does the work, and that really freed up my time to write.
So that's super helpful.
Omer (52:13.580)
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Arvid Kahl (52:18.260)
Well, I'm a fan of virtual reality.
I got VR goggles and all that stuff.
But I'd really love to work on the idea of the holodeck as portrayed in Star Trek.
Like holographic projections and stuff that would revolutionize remote work and human connection just in general across the planet.
And I'd be super interested, but I guess that's still a bit too crazy to actually have any meaningful work done on it, but that would be it.
Yeah.
Holodecks.
Omer (52:41.940)
Isn't it amazing what they were covering in this?
Oh, man.
Arvid Kahl (52:46.780)
Yeah.
I mean, sorry.
You have an iPad, which is from Star Trek.
You have to communicate.
We have those phones in our hands every single day.
Like these shows.
These utopian and positive utopian shows have been so good for technology, it's not even funny.
It's crazy.
Omer (53:02.780)
What's an interesting or fun fact about you that most people don't know?
Arvid Kahl (53:06.860)
Well, recently I've been stocking up on literature on how to raise ducks.
Because once we make our move here from Berlin, where we live right now, to Canada and to a much more rural place, I want to start dabbling in duck farming.
I think that would be fairly interesting.
I mean, I'm a German.
I play the accordion, but that's not shocking, I guess.
My aspirations to become a duck farmer is probably much more interesting.
I love that.
Omer (53:30.370)
And finally, what's one of your most important passions outside of your work?
Arvid Kahl (53:34.050)
I think I've learned that teaching what I know has been the most important passion for me ever since we sold the business.
Teaching, lifting up others, celebrating their journeys.
I think that has really culminated in my life right now is one of the biggest thing I can do.
The most impact I can have, just helping other people be on their own journey.
Omer (53:54.890)
Awesome.
If you want to go and check out Feedback Panda, you can go to feedbackpanda.com if you want to go and connect with Arvid, he hangs out@thebootstrappedfounder.com and if people want to get in touch with you, what's the best way for them to do that?
That?
Arvid Kahl (54:09.120)
I think Twitter was the best way to do that.
It would be a R V I D K A H L can find me there.
Awesome.
Omer (54:17.680)
Arvid.
Thank you.
Thank you for joining me.
It's taken a while for us to set this up, but I'm glad we finally made it happen.
And congratulations with everything that you've done.
Thank you for putting up with my voice and listening to so many episodes.
I hope that wasn't part of the anxiety.
Arvid Kahl (54:34.080)
No.
Omer (54:35.090)
And I wish you all the best with what you do next.
Arvid Kahl (54:37.170)
Thank you very much.
It's been an absolute pleasure.
Thanks so much.
Cheers.
