MBA2626 Extended Interview: Rob Walling - How to Build and Sell Your Business without Regret

What really goes into building a business you can actually sell—without second-guessing yourself later? Why do some founders walk away from negotiations feeling confident, while others are left wrestling with burnout, regret, or even an identity crisis? If you've been wondering about the mindset, strategies, and emotional prep behind a smart, well-timed exit, this episode is packed with insights you'll want to hear. Today, Omar sits down with Rob Walling—founder of Drip and TinySeed—for an extended, no-fluff conversation on building and selling your business without regret. You'll get behind-the-scenes insights on what makes a company truly sellable, practical ways to get exit-ready (even if selling isn’t on your radar yet), and an honest look at the personal journey of moving on after a sale. Plus, we’re pulling key lessons straight from Rob’s new book, Exit Strategy, co-written with his wife, psychologist Dr. Sherry Walling. Ready to future-proof your business (and your sanity)? Tap that play button at the top of the page and dive into the strategies, wisdom, and real talk that can help you build, scale, and—when the time is right—exit on your own terms. Watch the episodes on YouTube: https://lm.fm/GgRPPHiSUBSCRIBEYouTube | Apple Podcast | Spotify | Podcast Feed

• 0:00Speaker 00

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• 0:45Speaker 00

  Marketers know that feeling. They optimize for the numbers that look great, like impressions. But then we don't see revenue. LinkedIn has a word for that: bullspend. Instead, you can get the highest ROAS of major ad networks with LinkedIn ads. Cut the bullspend, advertise on LinkedIn. Spend $250 and get a $250 credit. Go to LinkedIn.com/MBAShow. Terms apply. Today on the podcast, I sit down with a well-known founder and investor, Rob Walling. Rob Walling is the founder of Drip, which is one of the most popular email marketing softwares out there. He sold that business and then started one of the most successful incubator accelerator programs, Tiny Seed, that invests in over 200 companies.

• 1:30Speaker 00

  He's also the founder of one of the best SaaS conferences I've ever seen in my life. I've attended twice. It's called MicroConf. I highly recommend it. He's got a highly successful podcast called Startup for the Rest of Us, as well as a growing YouTube channel. I'm so excited to sit down with Rob and discuss all things business, but in particular, building a business to sell one day, to exit.

• 1:58Speaker 00

  Welcome back to the $100 MBA Show. I'm your host, Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business.

• 2:12Speaker 00

  I reached out to Rob because I wanted to sit down and talk about this topic because he just recently released a new book, one of many books that he has ran, but this is his latest book, Exit Strategy, co-written with his wife, Dr. Cheryl Walling, which is really cool. And she is a psychologist. She specializes in helping founders, not only in the exit phase of their business, but just going through the struggles of being an entrepreneur and a founder. Now, if you're not thinking even about selling your business, maybe you haven't started yet, you're in the right place, because we're going to be talking a lot of things that you should keep in mind, even if you think you'll never sell your business, because it's good to have options, it's good to know what is possible, what's not possible. Every time I talk to Rob, whether it's at a conference in person

• 2:55Speaker 00

  or online on X, I get something out of it. I think he's one of the smartest, most humblest people I know in the industry. He's been around the block. He not only has been successful in SaaS, but he's had freelance jobs, he's worked manual labor as an electrician, he's sold info products, he's marketed, he knows his way around business and hard work. So I'm so excited to sit down with him and talk about this topic of what to expect in terms of the journey, the emotional journey, the mental journey of preparing for an exit, exiting your business, and then life after exit. What is it like when you have to redefine yourself, reinvent yourself in a lot of ways? And it's a little bit meta, because as many

• 3:37Speaker 00

  of you know, I sold my software company, Webinar Ninja, after 10 years of growing it recently. And I share some stories, I share what I went through, and hear what he had to go through as well, when he sold his company, Drip. So, without further ado, we're going to jump into that chat with Rob Walling. Let's do it. Rob, so happy to have you on the call. We've known each other for years. I love doing interviews with people that I have known and had interesting conversations with before, because it's just a comfortable conversation. So, thanks for being here, man.

• 4:05Speaker 01

  Absolutely. Thanks for having me.

• 4:07Speaker 00

  I just want to just say at the top of this conversation, for those who are listening, if you are thinking about building a business, you're in the trenches right now, you're growing a business and you're like, I'm not sure if I'm ever going to sell. I don't know if my business is even sellable. I need you just to suspend disbelief for a moment for at least the first 15 minutes because trust me, you're going to get a lot out of this episode, out of this conversation. Just because I know Rob so well and I know his history, I know his background, very similar to mine, you know, just grinded it out for years before he created a SaaS, before he created Tiny Seed, his venture capital fund and accelerator and all that kind of stuff. So, you know, freelance developer, agency owner, created content, just did everything to make it happen. And actually,

• 4:50Speaker 00

  I love that history because it probably makes you even a better SaaS founder and a better business owner in general. Would you agree with that, Rob?

• 4:59Speaker 01

  I would. It's kind of like I wished it had gone smoother, faster, and that I had to learn fewer skills to get there because I had this talk I did called 11 Years to Overnight Success because it took me 11 years from the time I started doing side projects until I had my life-changing exit, you know, where I could retire. And I don't know if 11 years sounds long or short to some people. To me, it sounds long compared to a lot of folks who raise venture capital and are suddenly rich. But I agree with you that now that I'm here though, and I have the skills that I've built, I still pull stuff from my info product days, from my e-commerce website days, from my agency days, all of that into what I'm doing today.

• 5:36Speaker 00

  Yeah. And I think your history and your scrappiness and your, like, I would say, variety of experience has helped even now when you're advising and helping startups through Tiny Seed, which is a great accelerator that helps people that are bootstrapped and they need a little bit of funding to kind of get to the next level. But I think a lot of those SaaS businesses I've found, at least in the SaaS community, lack the experience of like selling their products, selling their idea, marketing, understanding that, you know, it's hard to do this without an audience. If you're invisible, you don't exist, all that kind of stuff. So I think your history has served you in that way. It's funny how that works, you know, because for me, my history was I was a teacher for 10 years and that has helped me big time when I, when it comes to sales and marketing.

• 6:20Speaker 01

  Yeah. And if you've ever seen, there's a Steve Jobs graduation commencement, I think it's Stanford. And he talks about these three things that he did as he was growing up. And it was like learning typography in junior college. And I don't remember the answer, but it's these random things. And then he ties them all together. And he's like, and that's why the Macintosh was so different. And that's why Apple is so different, because I developed this taste over years. I feel the same way when I talk to, you know, I'm in SaaS. That's my, my thing today, software as a service. But I can still do a landing page teardown. I can still like, look at someone's copy and say, that's not good enough. Why? Because I did info marketing, because I was an agency owner and I had to write a bunch of copy to sell.

• 7:00Speaker 01

  You know what I mean? And I had to learn to sell. And so it, to your point, learning these skills. It's just oftentimes we're like, what do I need next to do the next thing? And that, and that's true. And we're all in a hurry. But also, a lot of this stuff, five, 10, 20 years later, this stuff sticks with you.

• 7:18Speaker 00

  Yeah. I want to get into this concept of why you should practically think about building a business that is worth selling. And the reason why I want to get into that is because I was a diehard, you know, I'm never going to sell. I'm going to be, you know, the base camp of the world. And I'm going to just build a business that's going to fund my lifestyle. And it's going to be my identity and all that kind of stuff. And obviously that didn't happen. I, I did sell and, and Webinar Ninja got acquired. With our, our software company. But I think what changed my mind, and maybe you can talk to this, but what changed my mind is I realized that it's going to be very hard

• 7:54Speaker 00

  for me to be able to build wealth that will be able to sustain my lifestyle and be able to sustain my ability to continue to work. Like, I started to realize, I don't have the, the ability to take so many blows as I got older. To continue to do this in my, you know, 50s, 60s, 70s. I need to figure out a way to make sure that I don't starve for the rest of my life. While, just in case if I can't work so hard. And that's when the idea of like, maybe I should think about, you know, building a business or crafting or changing my business that's sellable. So that one day I don't have to worry about that so much. So I want to get your thoughts on this because I was definitely one of those guys where it's just like, you know,

• 8:38Speaker 00

  I'm going to, I'm going to build a business that's just going to fund my lifestyle. But then I changed my tune when, when I just had a few heartbreaks and a few challenges, which is like, okay, I need to, I need to revamp my thinking.

• 8:49Speaker 01

  Yeah, and the thing is, is when you are in the early days, and you and I have both been there, where it's like, maybe you're working a day job and you're doing a side hustle, you do have to just be scrappy and do whatever it takes to get that side business off the ground and to make a thousand a month, five thousand, 10,000, to the point where you can quit the day job. So at that point, I wouldn't be thinking, how can I make this business sellable? Because that is like the 10th thing on the list, right? The first five things are like, selling more, fulfilling, get some money in the bank, you know, getting some, some margins, so to speak, in your life. But at a certain point, if you've quit that day job, you can fall into the trap of, well, what got me here, which is being super scrappy and doing everything myself and making as profitable as I can, it's

• 9:33Speaker 01

  not going to get you to the point of even making a, maybe let's say a half million dollar a year business, or, you know, a million dollar a year business, like you, you, it's so, so rare. You'll hear these exceptions, and the reason they're, they're on X Twitter, or they're on whatever social media is, they really, really are very rare of like, I'm a one-person business doing a million or two million a year. It happens, but don't count on it. And

• 9:55Speaker 00

  Yeah, right market, right person, right everything, you know, everything in their favor.

• 9:58Speaker 01

  Yep. It's just every, the Venn diagram totally hit, and you kinda, there was hard work, there's luck, but there's a lot of, hard work and skill, but there's a lot of luck in that. The idea behind building a sellable business is, A, keep your options open, because nobody works on the same business for 20, 30 years, almost no one, especially in this day and age of internet businesses, you know, again, whether it's an agency, consultancy, a e-comm, SaaS, whatever, the world changes, you change, and you want to be prepared for that. But the other thing is, it's unlikely that you, as a motivated, interesting entrepreneur who wants to learn new stuff all the time, is gonna want to grind on that same business

• 10:39Speaker 01

  for five, 10, 20 years. Like, can we think of any, aside from Basecamp, who has done that? Because even look at like Larry and Sergey, they started Google for crying out loud.

• 10:49Speaker 00

  Right.

• 10:49Speaker 01

  They're not even barely working in the business anymore. You know, I mean, these, these really big startup founders, for crying out loud.

• 10:56Speaker 00

  Right.

• 10:57Speaker 01

  They're not even barely working in Business anymore. You know, I mean, these, these really big startup founders have created these incredible things. You, you just want to move on. You have like self-expression and self-development that you want to do. And eventually you do kind of get tired of the same thing. So, uh, building a business you can sell, a lot of it is just having it not rely so much on you, on you to sell, on you to market and you to fulfill. Right. To fulfill the, you know, again, if it's a consultancy, you're doing the work. If it's SaaS, maybe it's, uh, you know, being, building the features or whatever. And the more you can separate yourself from that over six months, 12 months, 24 months,

• 11:38Speaker 01

  the more sellable that business becomes. And if you never decide to sell it, what an incredible asset, you know, you've, you've, right? You've moved yourself to working on the business, not in the business, which is really where all of us want to go. And that is something that's, it's not obvious. Usually if you just started a business, it's not obvious that's where you want to get there. But I actually think that should probably be the goal for everyone is to not have to work in the business. And then you, if you want to work more in the business, then do it.

• 12:06Speaker 00

  Yeah. And I think it's just this concept of understanding that you cannot be the single point of failure in your business. So you have to have, by setting up to be ready for sale, to be, to have your SOPs in order, to have procedures in place. You can theoretically leave your business for a few months and somebody fulfill those SOPs and follow the playbook. So it's not just getting ready for sale for a buyer, but also like, what are you going to do if you fall ill? What are you going to do if you have a family emergency that becomes, you know, one week, one month, two months situation where you just can't put it in what you used to put in. And the issue is, is that when you're in the grind, you never think these things are going to happen. And the problem is, is that a lot of us who actually get to the point where they build a business of credibility, they're in their 40s and they have aging parents.

• 12:51Speaker 00

  They have things happening. Their, their health is starting to deteriorate because of what they're putting into the business. So when you sold Drip, was that a consideration? Were there lifestyle reasons why you wanted to sell? Or was it purely, I'm done with working on this project?

• 13:05Speaker 01

  For me. It was, I had never had an exit that would set me up for life. It had been a goal of mine, probably since I was like in my late teens or maybe early twenties of, at some point, I want to have freedom. I don't care about money for what money buys. I care about money for the freedom it buys. You know what I mean? I don't, I don't need the luxuries. And so I was always like, I want to make enough money that I never have to work again. And I thought that that was like, I could build a business that just throws off quarter million dollars a year in net profit that I barely have to work on. And that'll be great. And I, I built that eventually, it was before drip. And I had about, about $250, $300,000. I was clearing, I was working 10, 12 hours a week. Not, I mean, it was kind of the four hour work week, right?

• 13:51Speaker 01

  It was not the worst. And I had two young kids at the time. It was great. I hung out with them. The problem was, is it's the internet and all of that is fleeting. Like a lot of it relied on SEO and ads. I had three or four different products and then a competitor would come swipe one and then an API stopped working on another and then Google smacked another one. And suddenly I was like, this won't last. Like I had two years, three years of that and I sat and watched it and like, I don't feel, I have freedom for now, but like, what about next year? What about, I think, I live in the future. What about five years? What about 10 years? None of these businesses I thought were 10 year businesses that I could sit. And so me, two young kids, a wife, a house. I was like, what is true safety? Like financial freedom?

• 14:33Speaker 01

  I do think I need to bank enough money that I can feel safer at least five or 10 years and hopefully the rest of my life. And that was part of it. And the other answer is like SaaS, if you build a SaaS company up to a couple million bucks, a million or two million, it's just, it's worth a lot of money. Like they do revenue multiples at that point. And so you're doing, let's just say two million bucks a year and you're making three or 400 grand a year. Hey, that's great. And someone comes and offers you $10 million in cash, long-term capital gains on that. It's hard to say no to, no matter how much you love that business, no matter how much that's part of you, it's like, wait, let me get this straight. I could bank this and do whatever I want for the rest of my life. Like that is a whole, it's a click. I was not intending to sell. I wasn't a never seller because I'd sold some businesses before, but I definitely was not out to like, I'm going to build it and flip it.

• 15:18Speaker 01

  It was not that, but you see a number on a piece of paper in front of you and like, is that real? Cause that's absolutely life-changing, coming from a, you know, a working class background.

• 15:28Speaker 00

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  And my coffee-obsessed bestie?

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• 17:01Speaker 00

  Not only that, but this idea, at least my experience when I was considering selling Webinar Ninja, was I realized that a lot of founders felt this way. At the time, I didn't. I thought I was alone. But I felt like, how long can I keep this up? Like, I can say no to this deal and not take the money and say, I'm growing, I'm gonna... But how long can I keep these plates spinning? I can risk screwing it up. You know, like, and sometimes, like, one of the things I've picked up after my exit was a new hobby, which is poker. And what poker teaches you is you can make all the right decisions. And still lose. And that's the lesson of business. You can have the best business in the world that you're making all the right decisions, all the right hires.

• 17:45Speaker 00

  But the market shifts. Covid happens. You know, the interest in this area, I mean, how many things have we seen that just, you know, was hot and then flopped? What was that again? That, that app that was like a audio live audit clubhouse, right? That thing was evaluated over a billion dollars and then all of a sudden it just flopped out. So it's like, some things are completely out of your control. You're implementing perfectly. And that was in my consideration. It was just like, okay, when Nicole and I sat down and talked, it's like, we can, we can bet on ourselves again, which we've been doing for 10 years. Or we can say, I've taken it to where I can go. And right now it's time to materialize those gains. And it's really hard to speak this way on a public forum like my podcast, because it's a very vulnerable situation.

• 18:29Speaker 00

  Because you're, you're basically saying like, I don't think I can, I don't think I'm able to be good enough to keep going. And, and that's just the honest conversation I had with myself. Do you find that as well in your experience? Or do you, do you see that with other founders that you work with?

• 18:42Speaker 01

  I, I do. I mean, there's, I tell you, I want to say one thing, anyone who says that they'll never sell, or you should never sell, or one should never sell, has never been offered millions of dollars for their business, or they already have millions of dollars in the bank. If I already have 10 million in the bank and I, someone offers me 40 or 50, it's strange, but that doesn't actually change my life that much. And so there are some entrepreneurs out there who you and I could name who say, we'll never sell, we'll never sell. And it's like, y'all got 10, 20, 30 million in the bank. So why would you sell? Right? But when you've scraped by most of your life, and this is by far the biggest asset you've ever built.

• 19:22Speaker 01

  It's a different perspective, right? So you've either never been offered that, or you already have enough money that, that you don't need to. But, but back to your question. Yes, there is this concept of writing it over, writing any business over the top. As any business is growing, it's worth a lot. As any business plateaus and/or declines, I'll give you a numerical example where I had a SaaS company before Drip, where I got, I think it was a five or six times annual revenue offer for it and it was growing. And I was like, no, I'm still doing this. I'm making great money. It was super, it was 90% net margin into my bank account. It was great. I wrote it over the top. I focused on Drip.

• 20:03Speaker 01

  It went down. I later sold it for 2.7, I think, X, which is still fine. It was like hundreds of thousands of dollars. It was a good exit for, it was the most money I'd ever had in the bank account, for sure. It was life-changing at the time. It wasn't never have to work again, but it totally gave me this huge cushion. But talk about the difference in multiples, you know, and I've seen folks go from an 8X multiple down to a one or two if they plateau. And so that's the thing is like, timing your business is tough. And I don't think it's a sign of weakness at all to think about, I love the question you asked, how much longer can I do this? Will my life be so stable? Will it be, is everything gonna just be, everything's sunshine and roses today? Maybe it'll be in six months. With advent of AI, with the way

• 20:48Speaker 01

  Google is changing, with whatever else is going on in the social, political sphere of today, potential reset, you know, I mean, whatever's happening, how long does that last? And I don't know, I don't like making decisions out of fear, but I also like being pragmatic about them, especially if, as you said, you're in it, you're 10 years in, you gotta start thinking, being realistic about this.

• 21:10Speaker 00

  Yeah, totally. And just to circle back on what you said before about, you know, when you're growing a business and, you know, you're making, let's say, 50 to 100K a year, you know, you can grind out to 100K a year. You can do everything yourself. I find that somewhere around the 200, 300K in revenue annually, it's very hard to do the same thing and continue to grow. Obviously, every market's different, every, every product is different, but that's just my own experience. And one of the things I absolutely cherish from my journey of Webinar Ninja was how many times I had to reinvent myself, how many times I had to look myself in the mirror and say, Who I am right now is not going to take me where I need to go. I need to change if I want to become the, you know,

• 21:54Speaker 00

  the reality is, is that if you want a million dollar revenue business so that you can have that exit, and you don't have a million dollar business, it's because you are not who you need to be. Like, you would have it already if you were, which is really hard because I had to say, I'm not good enough. What are the things I need to get better at? What are the habits that I have? Whether it's me thinking I could do better, do everything better than everybody else? Is it me not hiring the right talent? Maybe I have bad recruitment skills. Is it me where I'm kind of burying my head in the sand when it comes to tech debt? Whatever it is, right? And I feel like in order for you to break through revenue ceilings, you need to go on and look inwards, get real, get some help, whether it's a coach or somebody along the line, or a mentor, and then break through.

• 22:38Speaker 00

  And the thing is that when you do that, I realize in that moment, oh, I'm going to have to do this again at some point. Like, this is still not good enough.

• 22:47Speaker 00

  You advise a lot of companies through Tiny Seed. You've gone through this journey a bunch of times. What is the number one thing that people need to change in order for them to scale to that next level?

• 22:58Speaker 01

  Yeah, I'm invested in 212 SaaS companies. So I interact with 320 founders. Like, it's a lot. I don't know how many people in the world are invested in that many SaaS companies. Not many, it's a couple dozen if that. I like to think about it, I say this all the time, where first you're building a product.

• 23:18Speaker 01

  And that can be a SaaS product, but that can be a consulting offering. That can be an e-commerce, whatever, right? It's a product of some kind that you're selling. Next step is you're building a business. And the third phase is you're building a company. And so that product is scrappy as hell. That's you, as you said, scraping to 50K or 100K. And you're doing everything yourself and you're just figuring it out and trying to get people to buy. And trying to find a market and the product and the fit between all those things. Building a business is once you have enough revenue coming in that you're like, well, now I kind of, I need some expenses and I need to spend those and not go under because I'm probably mostly bootstrapped if I'm listening to this. And, you know, I'm getting to 10,000 a month, 20,000, 30,000. And I may be hiring some freelancers or maybe a few full timers, but like is not a company.

• 24:02Speaker 01

  It's a bit, it's a business now. It's more than a product, but it's like, is not a company. Companies when it's like, I have seven direct reports, whether they're freelancers or not, that I'm overwhelmed. Everything's imploding on me and now I have to start thinking about org structure and like, how do I actually like, build something that is, as you said, has SOPs and is not me working in the business all the time to where you can kind of layer yourself up and be working on it. So I think aside from, I mean, there's a fundamental thing with entrepreneurs and just the ones who I see succeed. They do a lot of things very quickly and they're right enough of the time, not 90%, it's like 60%, but they're right and they do a lot of things quickly. Like that's the fundamental, just to get there.

• 24:46Speaker 01

  But the mindset shift, which is the thing you asked about is like, to go from product to business to company. And even let's be honest, company is, that's like three, four, five, you know, depending on if you're at 2 million, 5 million, 10 million. Those are all completely different companies. Once you're managing managers who manage manager or whatever, you know what I mean? It's like, it's a big thing. So that is, that's something that especially going from zero to 10 million, zero to 50 million in annual revenue, it's night and day. It's a completely different business. And so learning that skillset is exactly, I think that's what you're referring to of like, how do I? And am I, am I the right, at a certain point, is this fun for me anymore? I can do it, but is this burnout?

• 25:29Speaker 00

  Right. And that was ultimately the decision that Kla I made with Webinar Ninja where it's like, I think that this is as far as I could take it. And that's a really hard thing to admit to yourself. It's like, I think that this is as far as I could take it. I need to find somebody else who has different skillsets, different resources, a different set of tools that I don't have, or I'm not willing to kind of acquire. Because to be honest with you, when, when I got to that point where I, where I came to that realization, it was a little bit sad because I knew that it's over. Like I knew that my journey. With what we're in is going to be over soon. But at the same time, I started to feel liberated.

• 26:12Speaker 00

  I felt like, okay, I don't need to be this person anymore. I could be something new. I can change my trajectory. And that's kind of where I want to move into in this conversation. Because when we were in the process of considering selling, selling like, you know, people think that selling happens, you know, fairly quickly. For us, from the idea of maybe we should sell this company to signing on the dotted line. It was close to two and a half years, you know? So it's a long process, even if you have all your ducks in a row and due diligence is seamless and all that kind of stuff. It's a long process because one, you need to come to terms. You need to sell the idea to yourself, right? And then, and then you need to sell your company. But one of the things that we did is we read a lot of books on this topic about selling your company, the art of selling your business and before the exit.

• 26:56Speaker 00

  And we read all the articles, you know, I chatted with a bunch of friends that just sold their company via WhatsApp and whatever. And just like, what am I supposed to do here? And one of the things that I love about your latest book, Exit Strategy, co-authored by your wife, Cheryl Walling, is it touches on all the areas that get ignored in this process because most people talk about this process as a transactional, very logical kind of thing. And it's actually quite emotional. It's quite, it's quite a strange situation to be in because I say strange because not a lot of people sell their business, right? Like, if you look at the population of the world, most people will build a business at some point and maybe do well and they kind of like pass it on to their family, whether it's a brick and mortar business or whatever.

• 27:41Speaker 00

  But to build the business that's good enough to be acquired is quite rare. So you don't have a lot of people to talk to about. And one of the things I love about this book, it talks about like going through that journey of one, detaching yourself from the business from an emotional point of view. But also, what do you do after that? Like, what do you do after it's all done and dusted? And now you need to look at yourself and be like, who am I, right? What am I going to do now? So tell me a little bit about why you wanted to write this book? And why do you want to take this angle?

• 28:11Speaker 01

  Yeah, it's a bit of what you said is I also, as I was selling Drip, which was back in 2016 is when we closed, took 18 months from the time that I started thinking about it, 13 months from the initial outreach, someone cold outreach me, Clay Collins, founder of Lead, co-founder of Leadpages, reached out and 13 months from that day, we closed the deal. So it doesn't happen quick. I read all the books too. Every book you've named, you know, plus the other five you read that, you know, we haven't named here. And I was always like, oh, the mechanics. I'm a very mechanical, I was a software developer. I'm left brain, mechanics, mechanics, mechanics. I was so ill-prepared for the catastrophic psychological toll that it took on me, that it took on my relationship with my wife, that it took on my relationship with my friends. I was just

• 28:55Speaker 01

  imploding the whole time, thinking, I don't know who to talk to about this. And this is way harder than anyone has ever told me. And so as I got space from that, because I left that in 2018 and that, you know, I worked for the company for a couple of years. And then my wife, who I co-wrote this, Sheri, Dr. Sheri Walling is a clinical psychologist, but also a founder and executive coach. And she has coached dozens, if not 50, 60, 70 people through exits, through IPOs, through thinking about exits and not exiting through, you know, whatever. She started saying to me the same things over and over, like, people are not equipped for the mental strain that is coming. And it is harder than they think. And I kept saying, yeah, I have tiny seed founders who are exiting and they're

• 29:38Speaker 01

  feeling the same thing. And so where, what book should we, it was always, what book do you recommend? And it's like, well, obviously John Worlow's books, I love his books and Before the Exit is great by Dan Andrews. But we found that there was a lot of thinking that we had that just wasn't out there. And we don't just want to say, be scared, it's hard. Good luck. Right? We want to say, be scared, it's hard. Here's everything we can tell you to try to backstop yourself with friends, family, co-founders, masterminds, and also just learnings, ways to think about it, exercises in the book of like, how to ground yourself, what to do when this happens. We tried to put as many quotes in, you know, there's the whole chapter of like, the 3am what ifs. And it's like, what if my team gets screwed? What if this falls through? What if I'm selling and it's going to 10x

• 30:22Speaker 01

  from here? These are real quotes that we've heard from real entrepreneurs and we want to level set that it is hard, but it's probably still worth doing.

• 30:31Speaker 00

  I want to just frame it a little bit because for those who are listening who've never been through an exit, people don't realize why, you're like, why is this so emotional? What are you talking about? Well, I'll just share a little bit of my story. Well, when you're selling a business, one, you can't talk about this with a lot of people because of non confidentiality. You can't talk about it with your team. You can't talk about it with people outside the company. It's even kind of risky talking to your spouse about it. You know, you're just kind of, you're conscious of the fact that it doesn't take much for a deal to fall through. Okay. The other thing is, is that you have, like for me, I built a team that I work with. Some of the people that were on my team were there for eight years plus. You know, I know that there's a good chance that their future is going to be look different very soon. And I can't say anything. I can't talk to them

• 31:14Speaker 00

  about it. You're feeling like all of a sudden, you're not on the same team anymore. You're now actually on the team of the acquirer, which is reminds me of my teaching days when I went from being a teacher to becoming a head of department. My colleagues were not the teachers anymore. My colleagues now were the principal and the vice principal and management, which is all of a sudden, I gotta change how I feel around them, which is really weird. It's a really strange situation when you guys been to war together, right? And then on top of all that, you have the accountants and the lawyers going through all the finances, trying to figure out how to, you know, make sure that you don't screw things up. Things are written properly so protect you in the future, whether it's IP or until, you know, your likeness is another thing. Like for me, I was part of the brand.

• 31:56Speaker 00

  A lot of the videos had my face on it. So that whole rigmarole was needed to be sorted out. And then also like, you're about to get a lot of cash all of a sudden. What are you going to do with that? A lot of people don't think about the fact that I was one of those people. I didn't grow up with a lot of money. My parents are immigrants from Egypt. They came over. They struggled with finances all their life. They worked really hard, but they never got ahead of, you know, they never actually were wealthy. I would say we made enough money to live in a, I was the only brown kid in my high school, right? That was just the pinnacle of their, of their wealth, right? But I say that because if you've never had money before, you don't know how to manage it. You can screw it up very easily. And we hear all the stories of the lottery. So I just wanted to paint that picture for a moment because a lot of people don't understand, like, there's a lot of pressure, a lot of things happening. All of a sudden, it's just easier for you

• 32:40Speaker 00

  to be like, oh, I'd rather just, just continue to go through the grind and just work and hopefully everything works out. So you're actually transforming into something new and it's something that don't, people don't talk about. And I'd love to hear your thoughts on that.

• 32:53Speaker 01

  Yeah. So, you know, if you think about non-entrepreneurs, what are the biggest financial transactions in their life? Usually it's buying a car, selling a car, buying a house, selling a house. That's probably about it. Those are extremely standardized, especially in the US. I can't speak to every country, but there are just standard contracts for doing that. And obviously there's a, oh, should it be 2% or 3%? But it's like fill-in-the-blank NAR, National Association of Realtors. And it's, that's it. Businesses, no. Everyone is like this custom, this agonizing custom negotiation, and you just don't know what the terms are. And usually you need an advisor on your side to kind of help you. Otherwise, I know you can either get taken advantage of because you're like, I'll trust the other side. Or you're like me, and you're super skeptical of everything. And then you nitpick

• 33:37Speaker 01

  everything on the other side, which was like six months of hell for me. Because I was like, I don't trust anything they say. Oh, that bullet? I'm gonna, I'm gonna. And they're like, Rob, seriously, on these calls, you have to stop questioning stuff. Because I was like, for me as well, this is the, probably the biggest financial transaction of my life. Certainly up till that point. And I grew up solidly working class. My parents never had money more than just than, you know, the next month of living or whatever. And so for me, I was like, no, this is the, I've spent my entire adult career basically culminating to this point. So there's a tremendous amount of pressure. It's easy to screw it up. It's easy to screw it up. And that is where it can get scary. And the life-changing nature of it, you know, I've seen, between Sherry and I, we've seen entrepreneurs get

• 34:20Speaker 01

  a huge bucket of money and, and they either, there's a spectrum, they either are, they've been cheap their whole life, that was me, and they're still cheap. And it's like, bro, you have, insert million, $10 million in your bank account now. You need to just relax and get the guacamole on your burrito at Chipotle. You really need to just do that. Like buy the shirt that you didn't, it's like, well, I've never bought a $100 shirt. Yeah. Like, do something, right? Like something, you don't need to buy a Porsche tomorrow, but like, ease up. Because you have earned this. And over time, like, you need to enjoy it a bit. And then on the other side, unfortunately, we have seen folks similar, what's like $10 million in the bank, three, four years later, they have like $2 million in the bank. And they-

• 35:02Speaker 01

  They thought that 10 million was infinity million and neither of those is the case. It's trying to, how do you kind of have a sense of money? Cause like you said, people who win the lottery wind up usually being less happy. They don't know how to deal with that money. A lot of entrepreneurs don't either. And so we do talk about it in the book, but obviously there is financial planners and that, you know, there's, there's other things out there, but you don't want to work five, 10, 15 years for something and then basically piss it away. But either be unhappy for one reason or another, be unhappy because you don't want to spend any of it, or be unhappy because you spend too much of it.

• 35:36Speaker 04

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• 36:02Speaker 02

  What do I gift my mom and nieces?

• 36:04Speaker 03

  Walmart has top brands you know, like Ninja, Disney, Lego.

• 36:11Speaker 02

  Oh, dad loves music.

• 36:12Speaker 03

  Sonos can bring his songs to life with sound that hits just right.

• 36:19Speaker 02

  And my coffee obsessed bestie?

• 36:20Speaker 03

  Delongi Brew's coffee, right for mornings extra bright.

• 36:24Speaker 02

  All those great brands at Walmart? Who knew?

• 36:26Speaker 03

  We knew, now you do too.

• 36:29Speaker 04

  Shop gifts, no love at Walmart.

• 36:34Speaker 00

  So I go to a lot of conferences. I like being part of masterminds, things like that. And sometimes in my circle are people that they're not SaaS founders. They have a business that they're coaches, they're course creators, they write books. They basically sell their knowledge for a pretty good profit, like their profit margins are huge. And the more I have conversations with them, the more I hear the same thing. So what's the end goal here? And they're just like, oh, I'm just going to earn X amount of money and then I'm going to shut it down. I'm going to shut it down and just go on, on retirement and travel the world. And like, I'm like, why would you shut that down? Why wouldn't you sell it? Why wouldn't you license it? Why won't you do, there's all these other options I'm thinking of because I've been in the SaaS world and understand that that's the reason why most people start SaaS businesses is to create an asset that they can sell.

• 37:19Speaker 00

  And they weren't exposed to that kind of methodology or thinking. And they just can't think of a way of packaging this into a sellable asset.

• 37:30Speaker 00

  What advice would you give somebody who's thinking about just literally burning their business down to the ground before it's done and dusted?

• 37:37Speaker 01

  Yeah, I mean, most businesses are worth something. That's the thing that I don't think most people realize is even like an agency, a consulting firm, or even my brother. So my brother runs a electrical construction, like a contractor out in the Bay Area. And even that is worth, I forget what he told me what it's worth, but it's like, it's a very straightforward formula. And it's like one times their backlog for the next 12 months, which backlog, right? Is how many deals you've signed or whatever, how many is coming? And so it's not, this is not TaaS. This is not 5X your trailing ARR. But it's worth something because the backlog, maybe the backlog on a $10 million business, a construction firm is a million or 2 million. Like, there's something there, you know? So that's the thing I'd say is like, let's

• 38:19Speaker 01

  level set that businesses are worth something because they have, as you said, there's intellectual property, there is client and customer trust, there's a brand, there's something-

• 38:31Speaker 00

  Strategic partnerships, yeah.

• 38:33Speaker 01

  All of that, right? No, again, it may not be worth 5 or 10x blah, but it's like, it's usually worth something. The other thing to think about is, as we talked about earlier, like, kind of, everyone, everyone sells eventually. It is what happens. And everyone leaves their business eventually. How about that? You know, you can sell or you can shut it down. But if you've developed any type of, especially if you're a coach, or an author, someone who's creating courses, like, there is intellectual property there. Even if you're at the forefront of it, and your name is on it, there is still some value to be created there. So if you have frameworks or other things that you are literally going to just bail on, there probably are something to someone, you know, someone who has a course business. And so it's going to depend on a lot of things. But I hate to see someone

• 39:18Speaker 01

  walk away from an asset that is potentially worth 50,000, or 100,000, or a million dollars, you know?

• 39:27Speaker 00

  Totally. And the way I kind of look at it is that- You have competitors, right? We all have competitors. And a lot of sales are just strategic sales, or the competitor would love to absorb your customers, sell them their own products, sell them their own... Like, I mean, the cost to acquire a customer now, even in the course world, is $25+, $30+, $100+. If they can just acquire your list of 100,000 people, that's at least worth a quarter million bucks or something. You know, like, just acquiring the database, where we don't realize you actually poured a lot of money into acquiring these leads. So that kind of first thing came to mind when I was having these conversations. The other thing that comes to mind is, wouldn't you want your legacy to continue?

• 40:12Speaker 00

  Your work to continue, to live on? And that's ultimately the kind of the thing that tipped the scales for us at Webinar Ninja, was like, we knew that this thing would be bigger and better if we got acquired. And it makes me feel kind of proud that my baby has got a good home and everything's gonna be all right. And the things that we created... It's funny, because I have a greater appreciation for Webinar Ninja now that I've sold it. Like, I look at that product, I'm like, "This thing is incredible. I can't believe that we created this thing." But, and then, obviously, the company changes and all that kind of stuff. But I think that there's something that people should consider is like, how do you let your legacy live on?

• 40:53Speaker 01

  Yeah, I feel that way about Drip. Actually, I still use it almost every day. And it's email service provider, marketing automation for folks who aren't aware. But we use it to run all my businesses. And I'm like, "Gosh, this piece of software is great." And they've changed the interface and stuff, but it is fascinating. And you know what, Omar? You will... You're not the CEO of Webinar Ninja anymore, but you and Nicole will always be the founders.

• 41:18Speaker 00

  Yeah.

• 41:19Speaker 01

  Always. That never gets taken away from you. It's a really fascinating thing. And if it lives on for five, 10, 15 years, people still come to me, "Where was I?" I all do interviews with Tiny Seed, or I'll do podcast interviews. And people are like, "Oh, hey, Rob. He's this guy who kind of does stuff." And then they, "Wait, you started Drip? I love Drip." And I'm just like, "That's..." That's what I'm known for. Like of all the things I've known for, it was a software product that I sold 10 years ago. But like it really does, these things, if they keep going, can can kind of transcend you in a pretty delightful way.

• 41:49Speaker 00

  I want to talk about that. You sell Drip. Did you have something lined up afterwards? Did you know what you're going to be working on? Or did you say, I'm gonna go to Bali for six months and pick up surfing? The reason why I want to bring this up is because when I was preparing for this interview, I don't know if the algorithm is just so incredibly smart. But I got fed this post on Instagram about the Loom founder who's just sold his company for $975 million. And he wrote this post, and I'm going to read it off my screen here, says, "I'm rich and I have no idea what to do with my life. Life has been a haze this last year. After selling my company, I find myself totally unrelatable, in an unrelatable position. I've never had it to work again. Everything feels like a side quest, but not in an inspiring way.

• 42:30Speaker 00

  I don't have the same base desires driving me to make money or to gain status. I have infinite freedom, yet I don't know what to do with it. And honestly, I'm not that optimistic about life." And it's very easy to read this post and be like, woe to me, give me the $975 million, I'll show you what to do with your life. First world problems, all that is a disclaimer, we understand that. But this is a reality. I think this is applicable for both men and women, but I think especially men who perceive themselves as a provider, as somebody who, once that kind of problem gets solved permanently, it's like, okay, so what are you then? If you don't work hard and and create good in the world and and provide for your family, what are you going to do now? Like, what's your role?

• 43:13Speaker 00

  So I want to ask you, what was your experience like when you sold Drip? What was your kind of next step and how were you thinking about it?

• 43:21Speaker 01

  So back when I was an electrician, working, running pipe and wire in commercial construction sites. And I was just bemoaning the fact that it sucked. That's what my brother still does, my dad did it for 42 years. And I was like, I don't want to do this anymore. I kept telling myself, if only I had a job as a software developer, working a cushy office job, then I'd be happy. Nights and weekends, library, teaching myself, reteaching myself how to code, Perl, PHP, HTML. Then I got a job as a software developer and you know what? I was so happy for about eight months and then I was bored and then I said,

• 44:01Speaker 01

  "If only I had my own revenue stream and I was a consultant or freelancer and I was in control." And you know what? I did that. And guess how long I was happy? Six to 12 months. Then if only I had products. You can see where I'm going. If only I had a SaaS. If only I had a SaaS doing 10 grand a month. If only I had a SaaS doing 100,000 a month. Like if only I sold for each of these things. It's called the arrival fallacy. And you keep saying, "If, once I get X, then I will have arrived and then I'll be happy." And the fact is, you will be happy for about six months. So whether you go to Bali, as you said, whether you take six, 10 months off, which I did when my second kid was born, because I happen to have the luxury, or whether you take complete six months. I retired for six months in 2018, but I knew by that, I was smart enough by

• 44:45Speaker 01

  that time, I had done this enough that I knew that it was a fallacy. So when I sold, when we sold Drip, because I had a co-founder, I wasn't sure what I was going to do next, but I knew for sure that I was going to do something interesting. Because Omar, we're entrepreneurs. We are people who figure this shit out. Like, we work hard. We have these minds that need to learn. We need to go and expand and do something and you'll figure it out. And so I read, I heard the Loom guys' podcast on Money Wise. I read that post. I saw it as well. He's going to figure it out. I know he's at Atrofa Sorrow right now. I have so much, that guy is smart. Like, you don't accidentally sell a business. That doesn't, it's not luck, dog. No. That, like, he is smart. He has skills. He worked hard.

• 45:29Speaker 01

  He will figure something out. He happens to be in Atrofa Sorrow. He'll figure it out. I knew by this point, you know, I was like 41 maybe when I sold, and I knew, I don't know what I'm doing next, but I'm not scared of what I'm going to do next. And I figured, I'm going to give it time. I'm going to let it breathe. I'm going to give myself six to 12 months of silence, stillness, no calendar, no schedule. I played my guitar. I revisited a bunch of hobbies that I had left behind. Started playing D and D again, tabletop games, hung out with my kids, played the guitar, started writing songs again, none of which are any good, but that doesn't matter. It was just something to do. And on the side, for 10 years, I had already been doing a podcast called Startup for the Rest of Us. And I had already been hosting this conference once, twice a year.

• 46:12Speaker 01

  And those things were kind of percolating in the background. I didn't know, I, I thought I might sell those. I actually got a seven figure offer to sell them. To sell both of MicroConf and my podcast and toyed with the idea for a while, me and a co-founder. And then I just kind of let it, let it go. And this is the thing. You know, when you were in high school or college and you want a boyfriend or girlfriend and you're so stressed about it and you're just like scarcity, scarcity, scarcity. And it doesn't happen. And in the moment, you're like, you know what? Forget about it. And then suddenly like, there's more people there and it just happens, right? It's, I'm not a big believer in fate or the universe or whatever, but it just, is there something about the way you carry yourself, the way you feel? I think if you're like, what's next, what's next, what's next, what's next, it's not gonna happen.

• 46:52Speaker 00

  Never comes.

• 46:52Speaker 01

  It's, nope. Give it space. Give it time. Listen to some podcasts, listen to audiobooks, like give it space and let it breathe. Especially if you have enough money that you can take some time off. Let you become a new person. You transform from the entrepreneur, the grinding, I need money, I need to change my life. Good. Done. That's all gone now. So you now need to reinvent. You are coming out of a chrysalis, right? You're becoming the butterfly.

• 47:16Speaker 00

  Butterfly.

• 47:16Speaker 01

  So now, now you're butterfly. What does a butterfly look for you, right? So that, that's what happened with me and I did in the end, I almost bought the number two tabletop gaming website in the world. Started negotiating with them and then I thought, there's no margin. This is a terrible business. I love tabletop games, but I do not want to operate. And eventually I was like, I've been doing startups and writing books and, you know, all this. Basically, most of my adult life. And I was like, that's the rest of, for me, I think it's the rest of my adult career at this point.

• 47:41Speaker 00

  That is crazy, Rob. Like we have so many parallels in our, in our history and our career. And the startup that had a desk across from me at the startup space that we were working out of in Whopper Ninja. They were called Fabletop and it was a tabletop game with stories that changed every time you played and all that kind of stuff. I used to always think about, that sounds fun to play, but not fun to run as a business. The same way. I gotta use my hands. Oh, no. Right. All that stuff. One of the things that we kind of talked offline a couple of times about that I want to get into that you get in, you start thinking about what possibilities you can do.

• 48:23Speaker 00

  You know, what businesses you want to start after your exit. One of the things I grew up is with like hard work is a badge. Like you gotta work hard to get anything. You start to realize that hard work is one form of leverage, but there's so many other forms of leverage, especially when you have some capital now. You don't have to do it the hard way anymore. Right. Like you have to grind it out when you bootstrap and we bootstrap Webinar Ninja. So, so that, that, that totally makes sense. So when, when, when you're thinking about that next thing, there's that feeling of like, one, I'm tired. I don't know if I can do 10 more years of what I did. I want to do it differently. I want to do it smarter. I vividly, when I look back at my days of Webinar Ninja, I think of things like waking up at 2am to do a stand up because it's just my turn to wake up at 2am

• 49:08Speaker 00

  because my team is around the world. I think about, you know, getting paid one of the lowest salaries out of the whole team because I want to get my devs that are highly qualified and it's super competitive. I think about waking up in the morning and getting an email, learning that one of my team members got poached from one of my friends. Right. All that kind of stuff. Right. And I think, how do I do this again, but not so hard, not so gut wrenching. And I feel like the reason why you become stronger in entrepreneurship is that you endure a lot of heartbreak. What advice you'd give somebody who's exited their company, they have a bit of capital now, they're thinking, they have a pretty good idea to start something new, but they don't want to go through the fire again?

• 49:47Speaker 01

  It's really tough and it is something that is common. It's, it's behind closed doors of founders who've exited for a lot of money of them saying, I want to have an impact. I want to do really interesting things, but I don't want to go through the pain. And I don't think you can have both. You have to have a little bit of pain, little bit of pain, not as much pain as the first time, but a little bit of pain. And usually, one of the keys that I see is number one, giving it space, giving yourself six to 12 months to kind of let everything settle and then think about what do I really want to? Do again because the gut instinct is well, I'm a SaaS founder or I'm an agency founder. I'm going to start another SaaS or another agency. That may not be the right choice. And in fact, a lot of cases, why do that again? If you've learned what you wanted to learn from doing those things.

• 50:33Speaker 00

  Right.

• 50:33Speaker 01

  Why would you do them again? You know, so that's the first step is really kind of trying to sort out what it where you're being pulled to, given that you are a new human now with new resources. Right? The other thing to think about is it does depend. You know, if you sell for, let's say you sold for like $3 million. So it's not never have to most in the US, it's not never have to work again money. If you live in a major city, 3 million, if you have a family or whatever, you can't do it.

• 50:57Speaker 00

  Yeah.

• 50:58Speaker 01

  Versus if you sold for 50 million, like you do have to take into account. What resources do I have? If you have 50 million, you can kind of do whatever you want and you can just self fund it. You can be like, cool, I'm gonna drop 4 million bucks into a business bank account. And I basically my own venture capitalist at this point. So you do have some luxuries there, but you can still get sloppy. Right? At 3 million, you have to think about, do I want to maybe put one tenth of my net worth, 300,000 in? I'm going to angel invest and then I'm going to raise from other people now that I'm a successful founder. Like just because you have 3 million in the bank, doesn't mean you should put a million into your own company. Right? So it's, there's a thing about kind of having some risk involved that you're putting time and money in.

• 51:39Speaker 01

  But also still, if you have a crazy idea and you can't convince anyone else as a second time founder to invest in you. Depending on the type of business, that's probably not a good sign like that. You know what I mean? Like just because we the case in point, Sharon, I know someone who exited for, I think they took 40 million away just themselves after the exit. And on their next business, they didn't, they're like, I'm not asking anyone for permission. I'm not raising any money. It was a really bad idea and they put like five or 10 grand of their, I'm sorry, five or 10 million of their own money in because no one was telling them no. Right? They didn't, sometimes the market forces of telling you no is actually a good thing. But the other thing is if I'm saying get some money in the bank, money in the bank is in the business bank account always makes it easier.

• 52:22Speaker 01

  Yep. In your personal life, money saves you hours because you can hire someone to do your dry cleaning, mow your lawn, shovel your snow where I am in Minneapolis.

• 52:30Speaker 00

  Cook your meals. Yeah.

• 52:31Speaker 01

  All these things, dry cleaning. In your personal life, money saves you hours. In business, money saves you years. It gets you there faster. 300,000. I mean, tell me, when you started Webinar Ninja, if you and Nicole had 300 grand, 500 grand, a million, right? I bootstrapped all, I've started six companies, five of them are bootstrapped. The only one that's not is this venture fund. I know the difference that money would have made, even 100 grand, 200 grand, 300 grand, because you could have paid yourself a little more, you could have hired someone just a little more senior. That's the way to think now, if you're gonna do this again, is the biggest difference between my current effort, which is Tiny Seed and MicroConf, is that we raised a venture fund and therefore we have, you know, a seven-figure, multimillion dollar budget each year to spend.

• 53:16Speaker 01

  So the first thing I did was I went out and hired a senior operator, someone who I never could have afforded if I was bootstrapped. It's Tracy Osborne, you've met her.

• 53:25Speaker 00

  Right, Tracy's great.

• 53:26Speaker 01

  And she's great, and I never could have afforded her if I was bootstrapped. And so she takes all the, all the pain, not all the pain, 90% of the pain that I would experience building Tiny Seed is taken off my plate because she operates. So that is really, you know, it took me a long time to get there, but that's how I would think about it, is if you really want to do it and you want to do hard things, be mindful of how much money you actually have to invest. Do you need outside, do you need your own? But then hire senior smart operators that can get stuff done and you, you know, are pushing kind of the vision forward.

• 53:54Speaker 00

  I want to talk about Tiny Seed in a moment, but I want to talk about, I just want to mention, if you're thinking about starting a SaaS business, if you are in the early stages of SaaS business, if you're in the trenches right now, growing, I cannot recommend MicroConf highly enough. I've been to MicroConf in Vegas in 2019, had the pleasure of speaking in the Grob Track, and then just recently in Croatia, when we went to Dubrovnik and MicroConf Europe. It's the best conference, forget about SaaS, in my opinion, best conference to meet very nice, interesting people. Every time I go to this conference, I'm just shocked at how you're able to curate such humble, beautiful, thought-provoking, polite, not brash.

• 54:37Speaker 00

  Usually you go to these business conferences, everybody's like, you know, reciting their CV, right? They're constantly talking about their accolades. It was like the opposite there. I had to be like, wait, wait a minute, hold on, how much you make every year? That's crazy, you're... Amazing. What are you talking about? Why aren't you talking louder in this conversation? It's just incredible, humble, beautiful human beings. So just want to kind of put that out there for those who are listening and thinking about getting into SaaS. MicroConf is a conference that you want to invest in. It's a huge investment. When I say huge, not in terms of it's expensive, but it's a huge return on investment because you're going to meet some people that are doing incredible things that are just willing to be your friend, which is not normal in business. Most people that are doing incredible things are busy and they just are very selective.

• 55:18Speaker 00

  And I found that, you know, I got to meet some of my heroes and become friends with throughout the years. So it's definitely a conference that you've built that is incredible. And I want to just touch on that before I get into the tie seed. How did you do that? How did you create that vibe?

• 55:34Speaker 01

  Number one, thank you very much because I'm super blushing right now, but I really appreciate that. I think, well, I think like everything, there was a little luck involved. I also think it came from blogging and really podcasting. So the podcast is, I had a co-host and then now I'm solo with it, but it's my personality and the people who gravitate to my personality are not the, say, aggressive, like show off, like, because I try not to be that. And I think if you're aggressive and show off, maybe you go whatever towards venture capital. There are certain podcasts out there that are like that, you know, and that are really in your face. And I think that's probably it is the people that gravitate towards it really come from that. And then the tone is set.

• 56:18Speaker 01

  And in fact, we did have, there were a few years at MicroConf where we had kind of, I've said this openly. So it was like Silicon Valley bros is all, I'll just use that phrase. And they showed up as a group and they were, they were obnoxious. And I was like, these guys are assholes. And they came and they didn't fit in at all and no one liked them and they never came back. And I was like, you know, we've created this culture of like, hey, if you're here in this room, you belong here. First of all, like there's no like exclusion unless you're Silicon Valley bro and you're trying to exclude everyone. That's the thing. They were, they were really doing the whole like, what do you call it? Alpha or like I'm going to neg everyone, like be negative of like, look how great I am. But they would do, it was funny. They would come in and they hadn't actually done that much. There was like a guy who Written a book and a guy who kind of had a failed startup and stuff and they came to

• 57:01Speaker 01

  microconf acting like they were big shots and quickly they're next to some super humble person, maybe like yourself, who's like, yeah, I'm doing 10 million a year with a SaaS and I have 70% net margins and it just shocked them, right? So I think there's, it's just been the

• 57:16Speaker 00

  culture that has I think I witnessed some of that. It wasn't somebody who's super brash, but somebody who never met the person behind the company. I was having lunch and next to me was old friend Chris from Wistia, Chris Savage, founded Wistia. And he didn't know who Chris Savage was, but he knows Wistia. And he sat down and he's like, you know, talking about, you know, his growth trajectory, da, da, da, da. And he's not trying to be, you know, a jerk or anything, but he was just kind of asking, where are you at in your business? And, and Chris is super humble and he's not going to be like, you know, sharing, you know, the incredible revenue they're doing. But after a few minutes, he was like, so what's the name of the company? He's like, it's, it's a video, you know, hosting platform called Wistia. And he's like, oh, and everything just changed in

• 57:57Speaker 00

  his face. And it's just like, but the fact that Chris didn't like lead with that, and this is the type of people that you bring into the table. And that was great. And, and I think that because the majority of the people that are there are not boasting about every single accolade. And I, I feel like I met some really interesting, good people that became my friends and became mentors from afar, whether it was Chris or Sahel from, from Gumroad, or people that are just doing incredible businesses, but just willing to have a conversation over coffee, which was something that you don't really get a lot of at these conferences. So I think that that's huge. And I think that if anybody's interested, just check out microconf.com. I want to talk about Tiny Seed and I want to talk about two different angles. Why did you

• 58:40Speaker 00

  start it from a creative expression point of view, but also, why did you decide to do it the way you did it in terms of building the next level of your wealth? You know, obviously now you're leveraging other people's capital, other people's ideas, other people's intellectual property, the companies, other people's manpower, to be able to build this fund and be able to run this accelerator and also leverage your own experience in your own way to help these great founders and also works perfectly with microconf, you know? So why did you decide to like start this accelerator? And why did you decide to do it from a financial point of view?

• 59:15Speaker 01

  Yeah. So for folks who are listening, like Y Combinator is the first startup accelerator. And they invest and then they also coach. And that was a different thing, a new thing in 2005 or six when YC started. And so Tiny Seed is the first startup accelerator for bootstrap SaaS founders, basically. It's for B2B SaaS founders who don't necessarily want to go on that I need to be 100 million, a billion dollar company, where they can maybe sell for 20 or 30 or 40 million. And like, it's life-changing money, generational wealth for them, but also provides a return for Tiny Seed. Because if you raise money from traditional venture or from YC, they really do want you to go after the billion dollar outcome. That's kind of what they need in order to make the model work. I mean, the short answer

• 59:56Speaker 01

  is the reason that I started it is I, after I sold Drip, I was doing some angel investments in bootstrapped B2B SaaS founders, because they're B2B SaaS companies, I should say, because they're just super profitable or worth a lot of, you know, big revenue multiple. And they're super capital efficient. So they don't need to raise a ton of money to get there, unlike Google back in the day, which needed all this hardware, Facebook, which needed a lot of staff. You know, there's all these things that you think of Uber and Instacart and DoorDash, like they're these two-sided marketplaces, they're just very intensive. But to start a SaaS company and get it to 5 million, 10 million, 15 million, it's not that expensive. Like, you can bootstrap these businesses. DoorDash is probably an un-bootstrappable business. I don't think you could possibly bootstrap Facebook and

• 1:00:41Speaker 01

  Google. Like, I just don't think you could do it. So I started writing angel checks. But eventually, it's like, well, I have a chunk of my wealth tied up in SaaS companies. And people kept approaching me like, hey, I'd love a check. And I said, you know what? Someone should raise a fund for that. It was kind of the thing of like, someone should invest in B2B, bootstrap B2B SaaS. And people started telling me that. And I was like, yeah, someone should go do that. And then eventually I realized, oh, it's probably me, isn't it? I really didn't want to raise a fund. I had never raised funding in my life, didn't want to get involved, seemed complicated, you know. And then I found a co-founder, my co-founder, Ainar Volsad, who you met in Dubrovnik. He's the reason that like, he and I coming together, he probably couldn't have done it on his own, because he doesn't have the, it was the audience and the deal flow in there. And I really

• 1:01:26Speaker 01

  wouldn't have done it on my own, because I didn't want to deal with it. And so he and I coming together is, is what happened. And we didn't know if it would work, man. I mean, it's a two-sided marketplace. Like, you have to convince investors, hey, we're kind of starting this new thing, give us some money. Our first fund was 5 million, the second one was... 27 million, like it got big quick. And then we have to say, all right, founders, bootstrap, SaaS founders, take money and education and mentorship from us in exchange for equity, which bootstrappers are notoriously, you know, tight with. So we didn't know if the model would work, but we, we proved it out. And now we funded 192 companies. We just made another 14 offers. So we'll be over 200 companies just within Tiny Seed. And we're on our like 14th batch. We fund in batches, been going for about six years.

• 1:02:09Speaker 01

  And then to answer your second question, which is like, why did I decide to do it in terms of wealth? I tell you what, I couldn't have done it like it is a law. I couldn't have done it without money in the bank because it is a long game. Like we still haven't returned, and this is how venture works. Are, we still haven't returned our first fund, you know, like you have to pay back. If you, let's say you raised five million bucks, right? And you invest it.

• 1:02:30Speaker 00

  That round, yeah.

• 1:02:31Speaker 01

  You have to invest it in 20, 30, 40 companies. As returns come in from exits and stuff, you return five million first to the investors. Then everything above that five million, Tiny Seed gets 20%. The investors get 80%. That's how it works. That's two in 20. That's how a venture works. We are six years in and we still have yet to see a dime of return. But the early, we're doing really well. Like we're in the top 10% of venture funds that started in 2019. So 90 to 100% is where we are, like really, really good. And yet we still haven't returned the entire fund. That's just how venture works. It takes a long time. So that, to me, it's a long game of like, oh, over the next five years, we'll see the returns from Fund One with no additional work. The work's already been put in. You know what I mean?

• 1:03:16Speaker 01

  Like we mentored them, came along, we'll help them.

• 1:03:18Speaker 00

  Content's there, yeah.

• 1:03:19Speaker 01

  Yep, it's all there. And then it's not something like if, if someone was like, I want to start a venture fund or I want to start an accelerator, I'd say, get enough money in the bank that you kind of never have to work again and then do it. Because if I was trying, I mean, I take a salary below market. So do, so does ZANR. That's really all we take out of Tiny Seed, you know? The, the only other money coming in is more from like micro conf, which sells ticket, you know, it sells info products. And then I sell books. I actually do quite well with self-publishing. So Tiny Seed to me is a big bet on the future. And it really is asymmetric. It's asymmetric upside, dude. If Tiny Seed, as it works, I'm betting it'll work, but let's, it still is an if. If it works, it can be millions, tens of millions over the next five, 10, 20 years for us.

• 1:04:04Speaker 01

  But it's not something I would have wanted to do without the success that, you know, that I've already had.

• 1:04:08Speaker 00

  What was it like asking for money from your friends and people in your network?

• 1:04:12Speaker 01

  It was kinda scary at first. It's gotten so much easier because now we've proven it. It wasn't just asking for the money, it was saying, "Put money in this fund for this idea. We're gonna do Y Combinator for bootstrappers." And they would say, "Will that even work?" "I don't know, but I'm gonna try it." This is much like being the entrepreneur of just like, "I'm gonna take a flyer and build the product." Product, business, company. Like, the product is this thing that hopefully, you know, these terms that hopefully founders will accept. It was a little nerve wracking at first, but what I did also realize, you know, you have to be an accredited investor, which means you have to have a net worth of a million bucks or more. People given us 25 grand, 50 grand. It was always like, "Only give us what you're willing to lose, what you're able to lose," because that may happen. Just like every angel check I've ever written.

• 1:04:58Speaker 01

  My wife and I have 20 personal angel investments in addition to the, you know, 192 Tiny Seed Investments. And it was always like, "Once I write that check, I'm prepared for it to go to zero." And anything, you know, anything above that is great. Like, I literally write it off our net worth, you know? And so when WP Engine was our first angel investment, so when that check came, it was like, "Oh, boy, that went from zero to a lot real quick," you know? So it was, to answer your question, it was stressful, but I think you get used to it, and people realize, they only, people giving you money, from what I've seen, they only get angry if you like piss it away or make stupid decisions or don't go all in. But like, we've gone all in, and we've funded good companies, and we've built a great org, and we've built a great brand. And so if it doesn't work, it's kinda like, it's not for lack of trying.

• 1:05:43Speaker 01

  That's what I tell founders I invest in or Tiny Seed invest in, because some of them have failed, right? There's like, of 192 companies, I think we've had like five shut down, very small number. And they're kinda devastated, and someone will do a call with me and be like, "I'm so sorry." And it's like, "Sorry? Like, you put four years of your life into this, and you owned 90% of the equity? I'm sorry for you." You know, like, you're going to, like, that's four years of your life. Obviously, I wanted it to work out, but you didn't do anything wrong. It's just what happens, you know?

• 1:06:13Speaker 00

  Right. That's a good one. You get a lot of applications for Tiny Seed, hundreds and hundreds. Every time you guys open up, you go through interviews. When it comes to finding that company, approving that, what are the things you look for when it comes to, "Okay, this has the potential to be a great investment, but also a potential to kind of be a sellable asset at some point?"

• 1:06:33Speaker 01

  We look a lot, the first pass is at the numbers. And since we only, this is the luxury of basically saying B2B SaaS, that's it. So it's SaaS, software as a service that sells to other businesses. I can look, you can give me your churn, your average revenue per customer, your general industry, and I can tell you, that's a pretty good business, or not. And you give me the last six months of MRR growth and just whatever, like you get a sense real quick because we've seen literally thousands and thousands of them now. So that's the first thing is kind of a numbers check and an industry check. The other thing though, because then, then we do interviews and, and what's funny is there's

• 1:07:13Speaker 01

  an application and then there's a kind of a pre-interview and then there's 20 minutes where me, my co-founder Ainar, and our program directors are on the call and we get 20 minutes and then we decide, do we offer this person or these founders between 120 and $250,000? That's it. We got 20 minutes. If we, if we really have questions, we could reach out to them, but we, you know, when we do 35 interviews in a week, we, we kind of need to make that decision. We do. And so the entire interview is just, I have your, I have your application here and I'm just trying to figure out where the yellow flags are. What's going to break? Did you screw up your cap table? How are the co-founders on the

• 1:07:56Speaker 01

  call talking over each other? Is, are the co-founders super low energy? And when I give them feedback, hey, I, I'll often say like, your pricing's a little off to me. In my experience, I would tweak this, this, that. And I just listen for what they say. And some of them are like, you know what? We already knew that. We're kind of thinking about that. Or that's amazing feedback. We'd totally be open to that. Or, you know what? Our customers will never, they'll never do that. And our competitors are, you know, it's reason, like reason after reason. Yep. So it's coachability versus not. And then there's a little bit of, you know, do I want to work with this person for a year? Because our accelerator is a year long. And yeah, it is evaluating the founders as much as

• 1:08:36Speaker 01

  it is the business itself, I'll admit. And we do look out founders' attitude. Are they going to take action? Are they going to get stuff done quickly? Because I don't need to be right all the time. But if you don't do anything, you're never going to be right.

• 1:08:50Speaker 00

  That's a good point. I'm looking back at my own experience, my own history. And yeah, I think that that's spot on. The more open I was to feedback, the more I was willing to kind of explore different pieces of advice. You know, we hired Dan Martell as our SaaS coach when we were trying to get to the point where we can be acquired. And I could think those things like, ah, I don't know, that's going to ruffle some feathers. But my response was always kind of like, okay, why did I hire this guy again? Because I, I admitted that I can't get it to where I wanted to go by myself. I need their help. So that's good advice for those who are listening, like even if you're just getting advice from a mentor or a friend, or you're watching a video on YouTube and it's confronting. It's really confronting sometimes when it, when the advice is telling you, you're doing

• 1:09:32Speaker 00

  something wrong. And it's like, oh, but I'm working so hard. And we conflate working hard with decision making, because you could work hard as all you want and make the wrong few decisions. And it's just really throws your whole business down the wrong path. You've written many books, and I know anybody who has been on the show that has written a book, they're like, this is my last book. Writing a book is a lot of work. I don't want to do this anymore. But your latest book, you co-authored with your wife, Cheryl, Dr. Cheryl. And tell me a little bit about that experience of writing a book with your significant other.

• 1:10:08Speaker 01

  So this is the second book we've written together. This one was a more pleasant experience. The first one was a lot of conflict. We are very different. I'm very left brain. She's very right brain. She is a psychologist. I'm a developer. And we just, everything we do professionally, we go about it in different ways. And they're both probably right. We're both quite successful. But trying to mesh that into the first book, it's called The Entrepreneur's Guide to Keeping Your Shit Together: How to Run Your Business Without Letting It Run You. It's a good book, but man, it was, it took a lot out of us. Exit Strategy was much better. We hired a writing coach slash mediator, not, not a mediator, but we hired someone who basically would kind of take all of our thoughts that we

• 1:10:52Speaker 01

  had together. And Sherry and I would record these together. So we'd almost do it like a podcast, like a private podcast. We'd outline, we'd outline all the chapters, like here's the whole outline. Oh, it's 14 chapters. And then each chapter, detailed outline of what we thought we had to cover. We'd hit record in Zoom. And then she and I would talk back and forth. We're both podcasters anyways. Like I have 770 episodes. She has three or 400 of hers. So we're good talkers. And We would keep in mind, this is going to be a book, like it's not going to be, we're not going to speak like it's prose, but we do want to organize it. So you can kind of go through it. And this one was much easier because it was conversation. She would say something, I would

• 1:11:32Speaker 01

  give an example. It, we figured out, I'll just say, we figured out a way to work together better on this one. And then the writing coach would take it and she would ghostwrite bits of it, right? Take it, make it more into prose, give us a first draft, and then we would go through and edit it. So this book is far better because we collaborated on it. Now, my book, right, but this is my fifth book. The fourth book is called the SAS playbook. That is like all me and it's very left brained and it's very compact. And like, I wouldn't have, I would have, a co-author would not worked because I knew what I wanted exactly from the day one, you know, like I wanted to be this, this, that, and this. But Exeter Strategy needed this touch. I think if I'd written it my, on my own, it would have been

• 1:12:17Speaker 01

  too dense, not enough examples, not enough quotes, not enough emotion, frankly. And then I think if Sherry had written it on her own, it would have been, whatever, it would have been too much of that, maybe. I, you know, I don't know. Like we hold each other. It really is that.

• 1:12:32Speaker 00

  Nice, Rob.

• 1:12:33Speaker 01

  Yeah, I know. I know. But you know that thing of like diverse opinions and we are so different.

• 1:12:38Speaker 00

  I mean, when I was reading it, I was like, oh, this is Cheryl talking right now. I get it. Yeah. Like, you know, like, because I know you so well. Like this is not Rob. Right? This part is Cheryl throwing in the sprinkles that we need to hear when it comes to preparing yourself emotionally. I actually think this book is a great book for anybody to read, even if they're not even entertaining the idea of selling. It's kind of like, you should know this stuff before you even think about it, because it might even inform your decision on if you want to sell, or if you want to, you know, ride into the sunset. Or it, you know, for me, I wish I had this book beforehand, because it would actually help me mentally prepare for what is about to happen. Because there's a lot happening, like when you're selling, like you mentioned, like you're, you're dealing with the drama

• 1:13:21Speaker 00

  of it, all the stakes of it. You're also running your business, trying to make sure it's continuing to grow as you're going through the negotiation. You're also thinking about the future, but you also don't want to think too much in the future because it's not done yet. And all this stuff is happening. You're spinning all these plates. So this book kind of would help people just ground them to be like, okay, listen, you know, these are things are going to go through emotionally. This is what's going to happen. This is what you're going to think about. These are, these are the challenges. And this is why it's challenging. Like, this is what I found helpful was just like, okay, it's not just me. I'm not a weirdo here. I'm not like broken. You know, this is, this is a logical reason why this is hard. Would you sell another business?

• 1:13:59Speaker 01

  Yeah, I would, because I'm not going to ride my businesses until I die. Like, that's doing them a disservice. And it would be much easier this time. I know it would. And that's not, that's not like, oh, it's because it's second time bias. Like, I'm just more prepared to do it, you know? And whether it was microconf or whether it's tiny seed, I don't plan to start another business ever. I never say never, but it's like, I think I'm done. I think I'm ready to tap out. Like, these are legacy businesses for me that I can run. Like, SaaS companies you start and it's like, do I really want to run this SaaS company in 20 years? Most of the time, not. But like, microconf and tiny seed are like, communities,

• 1:14:40Speaker 01

  you know, they, they can, I think they can survive another, we've already, I mean, microconf has been around for 15 years now. I, can I, do I think it can go another 20? I totally do. And I don't think I need to get the hell out of it.

• 1:14:51Speaker 00

  If you survive COVID, that's amazing.

• 1:14:53Speaker 01

  For real. Yeah, it almost did us in. So yeah, I would sell, although not on my radar, you know, at all at this point, because I'm loving what I'm doing. But I'd imagine the opportunity might, I just, I don't think anyone should ever say they, they won't sell. That's just a, you don't turn your mind off to it, you know?

• 1:15:09Speaker 00

  I love it. Well, I just want to close off by saying, you mentioned, you know, the crowd that you bring into in microconfeder conferences, people that are approachable, humble, and you're spot on. You model that behavior as, as a person that I've met several times, spent some time, break bread together, talked about work, life, everything. And it's crazy, this is the first time I'm having you on the podcast, but I feel like this conversation was so healthy because I know I can trust Rob. I know that he is coming from a good place. I know that- He's got my back. And even if I am not ready to kind of, you know, explore a certain area or not, not ready to kind of maybe do something right now with my business in the future or whatever, and right now I'm just focused on the podcast and doing things.

• 1:15:53Speaker 00

  I know that like in the future, if I ever need Rob, he's got my back. And that is not so common in our world, especially in a world that things are changing very quickly. People are looking out for themselves, you know, people have political views and all that kind of stuff that makes it all messy. But I just want to say that it's not easy to find people like that. I think that's your number one like asset. It's like you as a person is somebody that you can trust. I know that, you know, you're no bullshit and you can, you can, you stand on what you say.

• 1:16:24Speaker 01

  Thanks, man. That means a lot. I really appreciate it.

• 1:16:27Speaker 00

  Love that conversation with Rob Walling. I meant every word, every complimentary word that I mentioned in that episode. Go out there and buy this book because this is really, really worth checking out. Exit Strategy. To pick it up, just go to exitstrategybook.com. Really well worth the read, but also really worth the reread as you progress in your business. Also, I am not joking. If you are in SaaS, if you are in software, or you want to get into software, buy tickets to MicroConf. It's the best conference I've been to in the industry. Really amazing people. I love attending. I love speaking there. I think that he pulls an amazing event together. So go to microconf.com and see if you can grab some tickets to the

• 1:17:12Speaker 00

  next one, or at least get on the waiting list. If you want to learn more from Rob Walling, check out robwalling.com. That's R O B W A L L I N G dot com. There you can find links to all his books, the podcast, the YouTube channel, so you can continue your journey learning from Rob. Thanks, Rob, for your time. Really appreciate it. And if you enjoyed today's episode, if you got something out of it, share it with a friend. Don't keep it to yourself. Let other people know that you're thinking of them and you have their best interest in mind. I'll check you in the next one. Take care.

• 1:17:50Speaker 02

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