Today's episode is a little different. I don't have a guest. It's just me. And you!
Earlier this week, I published episode 50. I can't believe there are already 50 episodes of this show.
So I thought this would be a good time to look back at the last 6 months, reflect on the awesome conversations I've had with so many amazing guests and share some of my own personal insights and lessons with you.
A year ago, I couldn't even have imagined that I'd have my own podcast. I think of myself as a pretty introverted guy, so the thought of putting myself out there to the world made me very uncomfortable in the early days.
And when I say the 'world', I mean a good part of the world. The show now has listeners in over 100 countries. That just blows my mind!
Even though doing this podcast pushed me way out of my comfort zone, I'm so glad that I did it. I've learned so much about building and growing a successful software business.
And I've heard so many inspirational stories. I've interviewed entrepreneurs who bootstrapped their software business and I've met entrepreneurs who've built companies doing over $10 million in annual revenue. And most of them are just normal guys, like you and me.
So how come they were able to get that level of success? That was a question that I've continued to ask myself and my guests. And now with 50 episodes 'under my belt' I'm starting to see patterns and am able to start connecting the dots for myself.
So today I'm going to share with you 7 hugely valuable lessons that I've learned from interviewing 45 successful entrepreneurs.
In case you're wondering why I've done 50 episodes, but have only interviewed 45 entrepreneurs, it's because some of the interviews were split into 2 episodes.
Here are my 7 lessons:
1. Ideas are everywhere but don't fall in love with anyone of them
I always imagined that entrepreneurs who built multi-million dollar companies had these amazing moments of insights when the big idea just popped into their minds. And then they sketched out a business plan, found investors, and built these amazing businesses.
I discovered that in most cases, the reality was quite different.
Many of us struggle to find the right business idea - the one idea that feels right. We want to have the reassurance that this idea will help us build an amazing product and business. As a result, we often get stuck. We find ourselves, waiting for that one big idea before we can get started.
But when I started interviewing successful software entrepreneurs, I realized that very few of them came up with that killer idea from the start. In most cases, they just spotted a problem and decided that they were going to solve that problem.
Some entrepreneurs just wanted to scratch their own itch. They were struggling to get something done and decided that software would help them solve that problem. Some weren't even thinking about launching a business or making money. It was their desire to solve a problem or natural curiosity that drove them.
For example, Brian Gardner the founder of StudioPress (maker of the Genesis theme for WordPress), didn't start out with an idea to build StudioPress. He was curious about WordPress and spent his spare time learning as much as he could. And he eventually released a free WordPress theme with no intention of making money. But then a strange thing happens - people started offering to pay him to customize that template for them and that started him on the journey to building what we know as StudioPress today, which is a multi-million dollar business.
For others, they knew that they wanted to work in a certain area such as social media or with a particular group of potential customers such as marketers. And so they started spending time figuring out what problems and frustrations people had.
For example, Adam Schoenfeld and his co-founders at Simply Measured, knew that they wanted to build a software business in the social media space but weren't sure exactly what they wanted to build. They started out by launching their business which at the time they called Untitled Startup and started coming up with ideas on how they could solve problems in the social media space. Their first product was very basic, but it solved a problem for marketers. Today, Simply Measured generates well over $10 million in annual revenue.
But in nearly every case, these entrepreneurs had to be flexible along the way. They had to listen to the market and pivot until they found the right idea. And the idea that they ended up working on, wasn't necessarily the idea that they started out with.
The key lesson I learned was that ideas are everywhere. And you don't need an amazing idea to get started. You just need to find a problem that you can solve. And then start small, go and solve that problem - even if it means doing it manually.
And once you get started, you'll figure out a lot of the details along the way. And you need to be flexible and open-minded. The idea you start out with might not be the best idea to keep going with once you understand that market better, but that's ok.
It's more important to get started than to wait for the perfect idea.
2. Work on something you're truly passionate about or you'll run out of steam
Sometimes we have a tendency to be attracted to a business idea because we can see there's an opportunity to make money. But if you're not passionate about that product, market or customers, then you will inevitably run out of steam.
There were some entrepreneurs I interviewed, who launched and started generating revenue right away or reached profitability in their first year.
But in the majority of cases, it took several years for them to get meaningful traction. Most of them viewed their journey and their business as a marathon, not a sprint. They knew it would take them a long time to build a meaningful product and business.
And so, if you're not truly passionate about what you're working on, then you'll find it very hard to keep going.
Here's a story that Patrick McKenzie, founder of Appointment Reminder told me about a conversation that he had with Peldi Guilizzoni, founder of Balsamiq:
I was talking to him [Peldi] about Appointment Reminder a few weeks before launch, at a conference. And I was saying 'this is going to be great, it's going to use Twilio integration, I'm going to be able to charge customers x, y and z! It's going to decrease their no-show rates. It's going to be fantastic!'.
He says to me 'Patrick, Patrick, Patrick. Stop for a second! Is what you what to spend the next 5 years of your life on, optimizing scheduling at dentist's offices?' I said 'No, of course not! I don't care about scheduling at dentist's offices, but this is a really great business.' He was like 'Stop now! You're clearly not passionate about this. Do something you love.'
'And I did not listen to his advice. That was a mistake.'
The key lesson for me here was, to be honest with yourself. If you're not truly passionate about what you're working on today, then it will be even harder to get motivated tomorrow. Can you see yourself waking up year after year and being excited to work on that business? If not, then the sooner you figure that out the better.
3. You don't need a software product to launch your business
For those of us who are developers or technically inclined, the first thing we want to do when we have an idea is to build a product. Most of us know that it's a mistake doing that. We know we should be talking to our potential customers and figuring out what problems they have. But it's so damn tempting to start building that product.
One thing that really surprised me was the number of entrepreneurs who were able to launch a business and start getting paying customers before they even had a software product.
Some entrepreneurs started out by building a services business and eventually transitioned into a product business. For example, Jim Belosic, the founder of Short Stack Labs started his business as an agency. And as he learned more about his customers, he was able to get a deeper understanding of their problems and how his company was uniquely positioned to help solve those problems. From there, building a software business seemed like a natural transition and today his software business generates close to 8-figures in annual revenue.
There are many other examples of entrepreneurs who launched without having a software product. Brecht Palombo, founder of Distressed Pro started out by selling a PDF document to his customers and built a software product later.
In other cases, these entrepreneurs launched a 'concierge MVP' product. Here's what Guillermo Sanchez, the co-founder of Publitas told me:
Basically, we co-developed the product by initially selling it as a service, and while we were delivering the service, we were automating the tasks to provide the service, which eventually led to the product. And at some point, we even sold them the new product and collected the money, before we had even built the product. So they basically fronted the money for us to and build the product.
Today, Publitas generates over a million dollars in annual revenue.
As you can see, there are many examples of entrepreneurs who launched without having a software product. They didn't get hung up on building a product before they could launch their business. They focused on what problems their potential customers had and how they could help those people.
The key lesson here is that it's not about building a product; it's about solving a problem.
4. Get your MVP to market fast but make sure it doesn't suck in at least one area
We know that we should build a minimum viable product (MVP) before we build a full-blown product with a ton of features.
But many entrepreneurs make some major mistakes with their MVP. They either build a product that's so 'minimum' that it's really not a viable product. And others try so hard to build a 'viable' product, that they spend way too much time building that product with too many features.
There's a delicate balance between finding the essential set of features that you're going to launch with and making sure that those few features work really well.
From the entrepreneurs that I interviewed, it became clear that many of them stripped down the feature list of their MVP until they were solving one problem really well.
For example, Sahil Lavingia, the founder of Gumroad, had the idea to build a product that would make selling digital products as 'easy as sharing a file'. He built the first version of his product over a weekend and launched in 2011. Even now, he feels that he's got another decades worth of work he could do to that product.
You don't have to build your product in a matter of days. But you should get it to the market as soon as possible. Focus on solving one problem. You can always add more features later.
For example, Paras Chopra, the founder of Wingify and maker of Visual Website Optimizer tried to build an alternative to Google Content Optimizer but realized that he was trying to do too much. When he refocused on just feature - A/B testing, he started to see a real breakthrough. Today, VWO generates almost $10M in annual revenue.
The key lesson here is - get your MVP to market as soon as possible. Solve ONE problem, but solve it really well.
5. Start marketing as soon as you start building your product
The entrepreneurs that I interviewed were also effective at marketing their products. Many of them started to market their product from the day they started building their product. If you start marketing your product after you've launched, then you're probably too late.
And marketing doesn't necessarily mean content marketing or running paid advertising. It simply means getting the word out about your product to your potential customers.
For example, Josh Pigford, the founder of Baremetrics just started tweeting and sharing his experiences about building and launching his product. And within 8 weeks of launch, he was generating about $2000 in monthly recurring revenue. Today, the number is closer to $30,000 in monthly recurring revenue.
In another example, Rob Walling the founder of Drip started building his email list from the day that he started building his product. By the time he launched, he was able to start generating over $7000 in monthly recurring revenue from the first month. Not bad for a bootstrapped product built with one developer. Today, he's doing about $30,000 a month.
The key lesson here is that your product marketing shouldn't be an afterthought once you've launched your product. Make it part of what you do every day as soon as you start building your product.
6. Don't be afraid to charge right away and charge more than you think
Most of us know the quote from Reid Hoffman, the founder of LinkedIn - "If you're not embarrassed of your product then you've launched too late". But if we're that embarrassed, how do we charge people to use our product while keeping a straight face? It can be really hard. We know all the flaws of that product. We know how much better it could be. We know how much more value we could deliver to our customers.
You need feedback from your potential customers. But the reality is that the only type of feedback that really matters is people being willing to get out their credit cards and start paying you for your product. And then when they tell you that they want your product to do x, y or z, you can listen and act on their feedback. All the other feedback you get from people not paying to use your product is mostly a waste of your time, money, and energy.
So start charging from day one. For example, Stu Mclaren the co-founder of Wishlist Member launched his product and started charging right away. He knew the product wasn't perfect and that there was still a lot of work to do. But he wanted to know if he was really solving a problem for people and the only way to know that was to get them to pay for his product. Today, Wishlist member is doing 7-figures in annual revenue.
And also don't be afraid to charge more for your product than you think it's worth. Pricing is very subjective and it's really about how well you're solving a problem for someone. Ask yourself this - if this person wasn't using my product, how would they be solving this problem and what would they be paying? So don't be afraid to charge more if you believe that you're delivering great value.
For example, here's what Rick Perreault the co-founder of Unbounce told me what happened when they removed their lower price plans and started charging more of their product:
So even though the volume of accounts went down a little, the value per customer went up. I'm going to say that probably around the time we made the switch and dumped the sub $50 plan, and even today we focus the $50 a month plan towards startups or early stage companies. But when we dropped all those plans, our average revenue per customer per month was sitting at around $30, today it's around $80.
The key lesson here is - start charging from day one. That's the only real way of validating your product. And don't be afraid to charge more for your product than you feel comfortable with. Focus on the value that you're delivering and believe in your ability to create great value.
7. Think big(ger) but don't bite off more than you can chew
We're often told to be realistic with our goals and that's fine. If you need to achieve a task this week, you need to be realistic about what you can accomplish given the time, money and resources that you have. But that doesn't mean you should be realistic with your vision.
Many of the entrepreneurs that I interviewed had big bold visions for where they want to take their business in the future. They had a vision that excited them and scared them a bit too. But this is how they were able to challenge the status quo, how they were able to deliver more innovation, how they were able to build successful businesses against the odds.
The key was that they thought big (or bigger) but they didn't bite off more than they could chew. For example, Peter Coppinger and Daniel Mackey, the co-founders of Teamwork were able to bootstrap a $14M SaaS business. They dedicated one day a week (while they ran their services business) to focus on building their product. And kept doing that every week until they were generating enough revenue from their product.
And they're not done yet. They have their eyes set on becoming a $100M business and I believe that they'll do it.
At one point, I asked Peter what would you be doing if you weren't working on this business. He had a number of ideas, but the two that stood out most for him were transactional email service (he didn't think anyone was doing a particular great job at this) or he'd want to compete with Amazon Web Services, who he thought was doing a good job, but he felt they could do better.
Then I asked him why he felt so confident that he could do better:
Simply because of the tenaciousness. I wouldn't stop until it is better. I would work night and day on it. I'd plan it, I'd talk about, I'd dream about it, I'd eat and sleep it. Just until we get it to where I want it to be. I try to instill that passion in everyone here. We want to make the best software in the world. We don't want to make mediocre software. We're not going to accept ok. We want to have the best software in the industry.
The key lesson here is to challenge yourself to think bigger than you're currently thinking. Believe in yourself and your ability to solve problems. And then execute smartly in manageable steps.
What's Your Biggest Lesson?
So those are the 7 key lessons that I've learned over the past 6 months interviewing 45 amazing entrepreneurs. And I can't wait to interview more amazing entrepreneurs in the next 6 months.
And I really hope that you found these lessons and insights useful.
But what's the biggest lesson that you've learned so far? I'd love to hear from you.
