Saas Companies that Anyone Can Start with Rob Walling

Sam Parr (@theSamParr) and Ben Wilson (@BenWilsonTweets) discuss Sam's article defending Theranos, airport houses, and conducting an end of year family review. They are then joined by Rob Walling (@RobWalling) who talks about great SaaS business that anyone could start. _____ * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. * Want more insights like MFM? Check out Shaan's newsletter. _____ Show Notes: (00:20) - Airline neighborhood with houses and hotels (06:45) - Sam on the front page of HackerNews for defending Elizabeth Holmes (12:20) - The family board meeting (18:30) - Rob Walling joins the show. About Rob. (30:30) - Why you should or shouldn't sell your business (42:30) - Rob's favorite Saas businesses that he's working with (50:50) - Rob's ideas for new SaaS companies that anyone could start (01:10:10) - Founding a company as a non-technical founder ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  There's a lot of online communities. Anyone can start one. You get a few hundred people together. There are so few people who not only run in-person events, but who do them well. And if you can do that, it is an incredible competitive advantage.

• 0:24Sam Parr?

  Okay, Sean's not here. What are we going to talk about?

• 0:28Ben?

  A few things.

• 0:30Sam Parr?

  Oh, let me tell you something. Sorry. I asked you a question that I interrupted you, but let me tell you something. So I'm doing something cool in 10 days.

• 0:39Sam Parr?

  So on the pod and on Twitter, I talked about how I'm buying a piece of property and I'm turning it into like a thing, like a, like a hotel Airbnb fitness thing. I had this guy, I'm not going to say who it is yet because I haven't asked his permission, but basically he bought like 5,000 acres in the south, in a, in a state in the south. Let's say Georgia. And he is turning it into an airline hotel or a airline neighborhood soon with hotels. So basically they're putting an airstrip in the middle of this piece of property and then they're lining up houses along it. So you could buy a house and then soon it's going to be a hotel and then they're going to have an airplane hangar there.

• 1:23Sam Parr?

  So for all airplane enthusiasts, you can keep your plane there and take off and land on this, you know, right outside your home. So it's basically like having a, a house on a golf course. Except instead of a golf course, it's an airplane runway and hangar. But here's the kicker. He asked me if I wanted to come check it out and I said, yeah, sure. He goes, all right, meet me at the Teterboro Airport in the, like outside of New York on, you know, January 25th and we'll fly my jet down.

• 1:53Sam Parr?

  So I'm flying private down. I'm going to go up to New York just to fly back down, just like it's experience it. But

• 1:58Ben?

  Nice.

• 1:59Sam Parr?

  Isn't that, isn't that sick?

• 2:01Ben?

  So is this, um, is it like super rural or is it kind of just outside of a major metropolitan area?

• 2:07Sam Parr?

  It's an hour and a half outside of a major area.

• 2:11Ben?

  Got it. So, and most of these people, most of these houses, is this gonna be these people's like full-time residents, you think?

• 2:18Sam Parr?

  No, no, probably not. It's a lot of like, older people. You don't have to be, you don't have to be like rich, rich to do this. I think you have to like, be able to afford a $200,000 plane or something like that. That could be your hobby. So you have to have some money, but it's not like gonna be necessarily like incredibly wealthy people.

• 2:37Ben?

  Yeah. So enough to afford like a Cessna or something like that. And you just fly in and it's just somewhere to fly and then you stay by your airport and just hang out and chill.

• 2:46Sam Parr?

  Yeah, that's kind of neat, right?

• 2:48Ben?

  Yeah, it is kind of cool. How much do you think he's in on this project?

• 2:53Sam Parr?

  Uh, I'll, I'll say it and then if he says I can't, but uh, nearly eight figures is the money that he's had to use his own money to do that. And then he'll uh, raise some more money.

• 3:03Ben?

  And then how many houses?

• 3:04Sam Parr?

  And he was like, he was like, oh, it's just like a side project. And I was like, what? That is huge. That is.

• 3:12Ben?

  How, how rich is your friend? What, what does this represent for him?

• 3:15Sam Parr?

  I don't know. I just met him. Um, I'm not, uh, like wealthy enough to be able to afford that, but not wealthy enough to like, I, I, like if he loses that, it's not, it's like, will be really bad.

• 3:26Ben?

  Do you own any uh, like vacation homes or secondary homes or anything like that?

• 3:30Sam Parr?

  Well, no, no, I own um, my house that I live in, I own, and then I own some uh, uh, like rentals and like a uh, now a vacant lot that I'm building a house on to sell.

• 3:43Ben?

  But nothing like this? No plane vacation home?

• 3:46Sam Parr?

  No, no, I don't, I don't, I think that vacation homes only make sense for me personally, only makes sense to me if I buy them and rent them out. And so if I can find a place in New York or California that I like, and I could rent it out and make a profit, then I would do it. So I, I met this guy the other day who is a billionaire or close to a billionaire, and this person has uh, an apartment, they don't live in New York, but they have an apartment there and it's really fancy. And then they have a place in Park City and they rent it out when, when they're not there and it pays for itself. And they're still like, it's like a wealthy person. I think that's the way to go is you, but not everyone's comfortable doing that.

• 4:23Ben?

  It's interesting to me because this idea that you're describing sounds like the inverse of what I would want. Like, I want to be able to fly places so that I could stay there. Like, I want to fly to New York so I can go to New York. But this is the opposite. They're setting up somewhere to stay so that they can fly. Does that make sense?

• 4:39Sam Parr?

  Well, it's not just that. Just imagine you're like 65 years old and like you want to like spend the weekend at this area and you want to fly there and stay there and hang out and then go on trips throughout the day and just hang out with a bunch of other airplane nerds that are like you.

• 4:51Ben?

  Yeah, sure.

• 4:52Sam Parr?

  So it's like if you're like 65 and this is your passion, I think, I think that people who are into this shit are so into it that they just want to be around other people who are into it.

• 5:03Ben?

  Yeah, I think there are a lot of opportunities like this as people, as more and more people, because it looks, it sounds like this is mostly retirees, but I think you could also do it towards remote workers of just like, people have lived places for no particular reason in the past. And I think as people can now choose where they want to live, they're going to start congregating more in groups of like, I don't know, group around their hobbies or like vegans, how they want to eat, I don't know, like random niches.

• 5:33Sam Parr?

  I agree. I think that will happen too. The day that New York allows short-term rentals, so in New York, you're not allowed to rent for under 30 days, or you gotta like jump through crazy hoops, but the day that that's allowed, I'll be buying a place there.

• 5:47Sam Parr?

  But not, not until that's allowed. Oh, okay. You want to talk about this Elizabeth Holmes thing?

• 5:52Ben?

  Yes, I do. So you, you sent this to me. Well, you want to give the backstory?

• 5:57Sam Parr?

  Well, let's say what happened yesterday.

• 6:01Ben?

  So yesterday, you sent a post to me and Sean that you were on the front page of Hacker News.

• 6:09Sam Parr?

  Yes.

• 6:09Ben?

  And it was because they had, go ahead.

• 6:12Sam Parr?

  I meant like what happened to Holmes yesterday.

• 6:14Ben?

  Oh, so Elizabeth Holmes convicted of like three or four crimes. I don't know if she's been sentenced yet, but she could serve, she will serve years of hard time.

• 6:25Sam Parr?

  Potentially up to 20 years.

• 6:27Ben?

  Yes. Well, there's 20, there's three, three counts that were, carry sentences up to 20 years and one that carries up to five. So I don't know if those are additive or if it's only up to 20. I don't know how that works, but yeah.

• 6:40Sam Parr?

  Yeah, and what happened yesterday, it actually happened on Sunday night. I got a text from a friend who goes, "Hey, you're on the front page of Hacker News." If you don't go to Hacker News, it's basically like Reddit, but like, if I said Reddit for nerds, you would be shocked because Reddit is for nerds, but this is like really for nerds, like nerd nerds, and it's all like computer nerds, and of which I am one of them. And I, uh, I got a text saying that my article that I wrote in 2015 was on the front page of Reddit, or on Hacker News, and it was getting, which means you'll get millions of visitors. And the headline to my article was, "The Coverage of Theranos Is Utter Bullshit." And I wrote this article defending Theranos,

• 7:25Sam Parr?

  Theranos, and defending Elizabeth Holmes. And it did not age well, that article. But, let me explain what the article, do you have the article in front of you?

• 7:36Ben?

  Yes, I just want to talk about my favorite, uh, like, sub-headline, which is, you called it "A Minor PR Hiccup."

• 7:45Sam Parr?

  Yeah. So, I call this a minor PR hiccup. So, I wrote this in, so I was, uh, like 24, I think, or 25 when I wrote this. So, whatever, you know, I've grown, and I read my writing, and I was like, "Oh, my God." I, I wasn't bad then, but I'm way better now, and so I was a little embarrassed. But, um, the article basically was written after people accused Holmes of, at first, doing something wrong. And they were hating on her, but previously, in the, in the previous month, in the previous few years, she was on the cover of all these same magazines. And the point of my article was, on the, on the, on the surface, it looked like I was defending her, and I was defending her. But what I really was also doing, and I say this in the article, is as I was

• 8:29Sam Parr?

  defending this idea that, like, it's, I think it's nonsense and crazy that we build these people up and say that they're like the next, you know, the next Steve Jobs or whatever it is, and we like want small businesses to win, and someone starts a business and we want them to win. But then, once they get really successful, or potentially like, uh, they're considered like a winner, we turn on them and we just hate them, just because they're doing something like, that seems really weird, and they talk funny, or they look funny, and I thought that's bullshit. So, I stand by that second half, because now that's even, the whole anti-tech is, thing is even bigger. But, yeah, I was wrong. I, I was so wrong about her.

• 9:10Ben?

  Yeah, it's just you see so many cases of a lot of these hit pieces that are totally not fair to founders that like your guard was up enough that you didn't see that this was the time that they were actually right.

• 9:22Sam Parr?

  She fooled me, man. She fooled me. She.

• 9:26Ben?

  She sucked you in with her deep voice and those big eyes.

• 9:29Sam Parr?

  Dude, she got me. I was so on board. The reason, here's why I was on board with it. And the reason why I was on board with it is really of, I can't decide if it's a good reason or bad reason, and you tell me. So their biggest backer was Tim Draper. I don't know Tim, but I used to be friends with his son and his friends, his son Billy is an awesome dude. And from what I've read about Tim, Tim seems amazing. I know that he's like this, like high integrity, very honest person. He seems like a great guy. He don't party, don't drink. And he's known for like being one of the first investors in SpaceX, I believe first investor in Hotmail. So a bunch of these like really amazing companies that helped found the internet and create the internet and everything. And he was super

• 10:09Sam Parr?

  on board with Theranos for a long time. And so I was thinking, well, there's no way that Tim Draper would do something or like would be tricked by this because he obviously didn't know. But he's like, there's no way that Tim would be tricked by this. And that's why I was like on board.

• 10:26Ben?

  Yeah. And just to back you up, just reading from the article, it's expected that a young company that's attempting to change a massive and archaic industry will mess up. It appears that Theranos made a bunch of mistakes and I'm not defending their actions. I'm also not saying that the media shouldn't point out the truths about Theranos' mistakes. You know, you just go on to say, talk about how the, the cycle kind of flipped on them. So, yeah, I mean, it is true what you're saying, but it is still funny to have an article up with that headline.

• 10:54Sam Parr?

  And I didn't delete it on purpose. So around three years ago, someone made fun of me for that article. And I was like, I'm not deleting that. We'll keep it up. It's all right. I got it wrong. If I'm gonna, if I'm gonna take swings, I gotta let people see the misses too.

• 11:08Ben?

  Yeah, absolutely.

• 11:11Sam Parr?

  All right. Want to go one more topic?

• 11:13Ben?

  Yeah, we got four minutes, so.

• 11:15Sam Parr?

  All right. So you tweeted out something that was pretty cool. What was it?

• 11:19Ben?

  Okay, so it was essentially, we started a new family tradition in my family this year.

• 11:26Ben?

  Which is, and it was just my wife and I doing it because we started, we're gonna try and roll that to my siblings and my parents.

• 11:32Sam Parr?

  But didn't she make a presentation?

• 11:34Ben?

  Yes. So what it is, is that I decided, it was kind of my idea, that at the end of the year, we're gonna make presentations about how the past year went, and essentially what our goals are for the coming year, and our resolutions and that type of stuff. And we're gonna present it at like a family board meeting. It could be a slide deck, it could be like a memo, but it's essentially called the board meeting, the family board is sitting there, and you have to present on your year.

• 11:59Sam Parr?

  It looked like she was presenting to a bunch of people.

• 12:02Ben?

  Yeah.

• 12:02Sam Parr?

  It was just you?

• 12:03Ben?

  Yeah, it was just me.

• 12:04Sam Parr?

  Oh my god.

• 12:06Ben?

  And but, so, and I should say, we're not totally crazy. Like, we did it kind of funny, all right? I dressed up as Steve Jobs, I put on the black mock neck and gold glasses.

• 12:17Sam Parr?

  I'm not criticizing you. I think it's cool.

• 12:18Ben?

  No, I know. I just know people leave the wrong idea, that we were like, getting hardcore, going over our numbers. Like, a lot of it was, was kind of funny, was played for chuckles, but it was a good opportunity to just reflect on what we'd done, and, and what we hope to do this year, and, and go over it with each other.

• 12:35Sam Parr?

  So what was the, was that effective?

• 12:39Ben?

  Yeah, I mean, some of the stuff, so, let me read some of the stuff, actually.

• 12:44Sam Parr?

  Me and Sarah, I do the same, I do the same thing.

• 12:47Ben?

  So, my wife actually collects the stats.

• 12:52Sam Parr?

  And your wife's pretty alpha, right?

• 12:54Ben?

  Yeah, she graduated from a top law school in the country, and then

• 13:01Sam Parr?

  Which one?

• 13:01Ben?

  Works for Georgetown.

• 13:04Sam Parr?

  Pretty fancy.

• 13:06Ben?

  Yeah, it's good, it's good law school. And then, she works for a big law firm now. So she took stats, she like tracks all her mother stuff, because we had a baby last November.

• 13:18Ben?

  And so, I couldn't believe some of the stuff. So like, gallons of milk that her body produced in 2021.

• 13:26Ben?

  Three hundred and fifty.

• 13:28Sam Parr?

  Gross. Isn't that crazy? How does a body do that? That is crazy.

• 13:33Ben?

  I know. That's that blew my mind. Three hundred and fifty gallons is so much. It's so much.

• 13:38Sam Parr?

  So you're, that's hilarious. You track how much milk your wife made?

• 13:42Ben?

  Yeah, she also kept track of how many nights she slept on the floor in our daughter's room. Cause like sometimes she wouldn't sleep and so a hundred and four nights. Almost a third of the year. Yeah, she slept on the floor in Clara's room. Um, the number of hours she spent nursing her was eighteen hundred. Um, and then we tracked.

• 14:01Sam Parr?

  Wait, eighteen hundred in one year?

• 14:03Ben?

  Yeah.

• 14:04Sam Parr?

  Wow, man, being a woman is so much harder.

• 14:07Ben?

  I know. That that did help me realize like, wow, that's just like, that's another job in addition to your job. Like.

• 14:14Sam Parr?

  Holy moly. That's crazy. What else? Any other stats?

• 14:19Ben?

  Yeah, um, she counted the number of times. My daughter was obsessed with this book, Monsters Come Out Tonight, which Halloween book. She read it sixty two times.

• 14:29Sam Parr?

  Why does she do all this, your wife? Just because she wants to show your kids?

• 14:34Ben?

  I don't know. She's just compulsive, actually. She is, uh, she's the type of person where in the morning she'll go, do you know what today is? And I never know because she always knows weird anniversaries in her head. She's like, oh, it's, it's ten months since this happened. And I'm like, how do you know that? Um, but she like compulsively tracks little numbers in her head. So she apparently tracks them on her phone, too.

• 14:56Sam Parr?

  Dude, your wife's Rain Man. That's sick. She's like, like a lactating Rain Man. That's lovely.

• 15:06Ben?

  Well, I might have to delete that. I don't know. I don't, I'll have to think hard before I decide whether to publish an episode in which we call her a lactating Rain Man.

• 15:13Sam Parr?

  Um, that's cool. So what are your?

• 15:14Ben?

  You mean as a compliment, though, right? You mean as a compliment?

• 15:16Sam Parr?

  Yeah, well, it's neither a compliment. Well, the Rain Man is, the lactating thing is just fact. Um, the Rain Man thing is definitely a compliment. Um, do, uh, do, do you, is she care? Is she earning more than you as you start your business?

• 15:32Ben?

  Yes.

• 15:33Sam Parr?

  That's pretty sick, right?

• 15:35Ben?

  It's nice. I don't mind it.

• 15:37Sam Parr?

  You, uh, is she paying for everything?

• 15:41Ben?

  Um, no. So she's actually still net negative because she just graduated in, um, whatever, in the summer and didn't start school until October. Um, so I, my goal is for us to never have a year where she earns more than me. Not for any like sexist reasons. I just, you know, it's a gold mine. So I gotta make more money than her this year. But yeah, in the last quarter of last year, she made more money than me.

• 16:07Sam Parr?

  So, all right. And that's actually, like, I think there's a lot of guys who are self-conscious about that. I feel the opposite. I'm like, I want you, like, I want to be the lazier of the, like, I want her to earn more and just maybe, like, not have to work.

• 16:24Ben?

  I am self-conscious about it. I, I do, like, I'm happy for her to have a career. But like, it's not so much of like, uh, self-conscious about her making money, but it is like a little bit of like, uh, step it up. You gotta get your business into a place where you're out earning me. Like, look what I'm out here doing, you know?

• 16:41Sam Parr?

  That's sick, though. It's pretty sick. I think, you know how like, there's articles that talk about like, your best financial decision? My opinion is the best financial decision you can make. Of course, this is a good decision for a lot of other reasons. But the best financial decision is marrying the right woman.

• 16:57Ben?

  Amen.

• 16:58Sam Parr?

  Or picking the right spouse, rather.

• 17:00Speaker 00

  Or just staying married, right? Did you have your other millionaire next door where they're like?

• 17:04Sam Parr?

  No, what did they say?

• 17:05Speaker 00

  It, they look at all these factors that like, most millionaires have. And this is not Silicon Valley millionaires. It's like auctioneers and construction, you know, company owners. And they say like, here are all these factors, like, most have never purchased a suit for more than, I think it's like $800. Most have never paid more than $200 for a watch. Most, and the vast, vast majority of them, never got divorced.

• 17:26Sam Parr?

  Don't get divorced, then. That's great.

• 17:27Speaker 00

  Crazy.

• 17:28Sam Parr?

  And I think, even if you get a prenup, I don't think that that, like, it, it doesn't, does a prenup only work for the earnings that you made before you got married?

• 17:37Speaker 00

  Yes.

• 17:37Sam Parr?

  So then who cares in most cases?

• 17:39Speaker 00

  Exactly. Cause you get married, I got married at 25. I was worth jack shit, right? And it's like, all the money that I've made in my life has been, since I've got married, I've been married 21 years, so.

• 17:47Sam Parr?

  Does a prenup cover, if you start a business and it's worth nothing, and then you get married and 10 years later, it's worth a lot? Does that, is this, which one does that count as?

• 17:58Speaker 00

  That I do not know. What I do know is a friend of mine got married, got a prenup, and he had crypto and he specified like this, my hundreds of Bitcoin are excluded and they've gone up in values and they're still excluded. But I don't know if company shares act the same way. I would guess they would, but you know, we'd have to get a lawyer on here.

• 18:19Ben?

  Are you constrained?

• 18:20Speaker 00

  Why are we covering this?

• 18:23Speaker 00

  It's like the worst sad topic.

• 18:25Sam Parr?

  No, here's why we're covering it because Ben's, Ben quit his job to start a podcast, a popular podcast that's going pretty well and he works for us part-time as a producer. And he, his wife is a very successful lawyer and I asked him, I said, you know, like a lot of men might be self-conscious about that, about your wife earning significantly more than you. How does it make you feel? And I was just curious.

• 18:51Ben?

  Has your wife ever earned more than you, Rob?

• 18:54Speaker 00

  That's a good question.

• 18:56Sam Parr?

  Well, your businesses are like family businesses, kind of, right?

• 19:00Speaker 00

  Yeah. I mean, she runs her own thing. Dude, I actually think, I mean, yeah. So when I left Drip two years ago, I sold a company and then I left it in 2018. I didn't work for six months, but it's like, so I wasn't earning anything. But then even after that, like starting Tiny Seed, I didn't take a paycheck for a year and she was making several hundred grand at her business. So yes, she has, but it's also like, yeah, but I sold a company. I think I'm excused at this point, you know?

• 19:23Sam Parr?

  I, my wife became a millionaire, a liquid millionaire before I did.

• 19:27Speaker 00

  That's awesome.

• 19:28Sam Parr?

  Because of, by two months.

• 19:30Speaker 00

  Was it like stock or what?

• 19:32Sam Parr?

  She worked at Airbnb for a long time and then it went public in December and I sold my company in February. So she beat me by two months.

• 19:39Speaker 00

  You didn't feel, you didn't feel bad about that at all, did you?

• 19:41Sam Parr?

  Dude, I was pumped for her. I was so, I mean, the way that everything is ours. So it was like, frankly, when she got paid, I was like, oh, I just got paid too. I mean, I thought it was awesome. We're live now, by the way, Rob.

• 19:52Speaker 00

  Oh, great.

• 19:53Sam Parr?

  Are you okay with that?

• 19:54Speaker 00

  Absolutely, sir. I'm always, I'm always, I was born ready. Yeah.

• 19:58Sam Parr?

  So this is Rob Walling. Rob, you, you, I was just on your pod like two weeks ago. Did it go well?

• 20:06Speaker 00

  Yeah, I got a lot of positive feedback, actually. What was interesting is someone said, a couple of people said, you guys have real great rapport. And I said, which is funny because we've never met. It's not like we're best friends, but they said, you sounded like you were friends. You're naturals, you know? And I said, I think it's, it's easy to have a podcaster on a show because they're just entertaining naturally.

• 20:24Sam Parr?

  And I've been reading your work for like 10 years. And so, or I forget how long, but basically Ben, we, so this is Ben. Ben works with us. He's filling in for Sean today. We, I sent Rob like an email like in 2000 and I forget, he like pulled it up, but I sent like up my first email to him like years ago, saying how much I loved his content. And then I was finally on his podcast like eight years later. So it worked out.

• 20:48Speaker 00

  Yeah, and that helps, that familiarity certainly helps. I know that people who listen to my podcast and then appear on it know what to expect and they're able to, to roll with it. Which is why before coming on here, I, I, I've listened to your show on and off over the years, but like I listened to like the last four episodes, just so I would have some familiarity.

• 21:07Sam Parr?

  What did you think?

• 21:08Speaker 00

  I think they're great. You got a great show here. I think you should change the name of the show is what I think you should, I think the name's off.

• 21:15Sam Parr?

  The name is horrible.

• 21:16Speaker 00

  I know, it's tough. And man, I have, you know, my podcast is startups for the rest of us, which I still like, but it feels long now. And I've debated whether to, to change it. Have you guys actually considered it? Cause I'm curious what would go, what would need to go into a name change.

• 21:29Sam Parr?

  The problem is, is we considered it like a year ago when we were smaller, but then we were like, back then we were like, uh, we're too big. Back when we did that, we, we were at like three or 400,000 uniques a month and, or visitor or listeners a month. And we were like, oh, but we're too big. It already is stuck. Now we did, in December, we crossed 2 million listens a month. And we're like, we're now, we're definitely like, we're definitely too big. And Dharmesh, who is the founder of HubSpot, who now owns the podcast, he was like, you gotta change the name. And I'm like, Dharmesh, it's way too late. And he was like, no, it's not. And so he thinks we should do it. I think it's too late in the game. Frankly, I think a bad name sometimes is a good, is a good thing, but the name is quite horrible. And I feel embarrassed to tell my barber and stuff. They're like, well, what's it about? I'm like,

• 22:14Sam Parr?

  I'm not sure, but not much, but it's not about making your first million, that's for sure.

• 22:18Speaker 00

  Yeah, it's not get rich quick. It's like a real business podcast. And that's, that's the thing is since you have subscribers, because what I've thought about is like, let's say we change the name of, you know, of startups with the rest of us. I think I just change it in the RSS feed. I change it with Apple and Spotify and then it just propagates. I think people, I'd need new, you know, liner art or whatever. I think people be confused for a few weeks. And I guess all the incoming links would say startups, the rest of us are my first million. But aside from that, I just don't know the backlash. It's, it's, it's less of like changing the name of a company is really hard, right? Because of the brand you've built, but changing them a podcast, I think is, I'd like to think is simpler, but I've never done it.

• 22:59Sam Parr?

  Our friend Nathan started this company called ConvertKit, which is amazing. And I'm an investor in, and it was crushing. And he changed the name to something. I forget what he changed the name to.

• 23:09Speaker 00

  It was Seva, S E V A.

• 23:11Sam Parr?

  Which apparently, does that mean something offensive in Hindi?

• 23:14Speaker 00

  It wasn't offensive, but it was, it, it, it has like a spiritual meaning. And so the back, he had backlash, right? And it was about cultural appropriation was the kind of phrase that was used.

• 23:25Sam Parr?

  Yeah, it's like, it's a word in a different language. And people were like, you can't name your company that. And I, he's not a, he's like, at the time, it was probably like a 50 person company. They probably did some research, but they mostly like just probably read the definition in a dictionary, thought it sounded cool. And then like a week later, they changed it back to ConvertKit, which I think is a great idea. ConvertKit's a good name.

• 23:45Speaker 00

  Yeah, it's, that's, that's the other thing with the name change is, okay, so you're going to change my first million. What are you going to change it to? Because naming is really hard, right?

• 23:54Sam Parr?

  It's very hard.

• 23:55Speaker 00

  I know some people who are really good at it. Most people are not, including myself. I struggle with naming. I always go too literal.

• 24:01Sam Parr?

  We would hire, I would hire one of those like naming firms. I actually think that, I think a naming firm is actually a great idea.

• 24:07Speaker 00

  Yeah, at this level and at the, at the, the kind of reach that you have and the stakes and the I guess the resources you have, it would be a no brainer. There's someone really good. I don't, I don't know. Do you listen to Tropical MBA podcast by chance?

• 24:19Sam Parr?

  Yeah, I like those guys.

• 24:19Speaker 00

  Yeah. They had a really good kind of lower budget naming person. I say lower budget. Let's say five grand, 10 grand versus, you know, you can pay a hundred grand or more. She was super sharp. It was such a good episode and she had like an ebook on how she does it. And I was intrigued by that just because I, look, you and I are going to be putting out new, whether we've renamed things or putting out new stuff for the rest of our lives. So how do we get better at this? Right? That's something I want to do.

• 24:44Sam Parr?

  Yeah. What were you saying, Ben?

• 24:45Ben?

  I, you actually answered the question I was going to ask, which is how much is a naming service? But there you go. But I mean, you know, I think like the thing about my first million, like you said, sometimes a bad name is a good name because the thing is it forces someone to react. Like someone has to have an opinion about my first million. They might not like it, but they're not going to just like, forget about it. They're like, oh, what's that?

• 25:05Sam Parr?

  But dude, my companies are called The Hustle. Horrible name. HustleCon. Horrible name. Once I had a conference on content and I called it ConCon.

• 25:14Sam Parr?

  A meetup series called Pizza in 40s. Our subscription service called Trends. Like I'm not good at, like I, like I've done, Trends is good. The Hustle is pretty bad.

• 25:23Speaker 00

  The rest of them are tough because the hustle, hustle now has this negative, or it has for several years, this hustle culture, right? Has a negative connotation. So I guess if you're leaning into that, at least it gets attention, but it's a tough one to do.

• 25:33Sam Parr?

  So Rob, how do you describe your, your, who you are in a professional sense? How, because I was going to introduce you, but you're, you're, you're pretty eclectic that I don't even know how to, the proper way to do it.

• 25:44Speaker 00

  Yeah. I mean, bottom line, man, I used to be a software developer and then I didn't want to work for other people. So I started startups. And first it was, I mean, in 2006, it was downloadable software. There really wasn't SaaS. And then it became SaaS, right? That's what you do now if you're in software. So I became a founder, serial entrepreneur, launched a few, acquired a few, and along the way started blogging about it. As you know, as you were saying, I wrote a couple, I've written three books about bootstrapping startups. I bootstrapped everything. I never raised funding. I'm not anti-funding. I'm not, I think. Funding has a time and a place, but I am anti the narrative that in order to start a startup, you have to raise funding because that is just not the case. I think 1% of companies, 1% of tech companies need funding and the other 99% really shouldn't shouldn't do it.

• 26:29Speaker 00

  So around 2011 then started a podcast and then, no, that's 2010 and then 2011 started my events called MicroConf and and then just a couple of years ago, launched an accelerator for SaaS bootstrappers.

• 26:43Sam Parr?

  So you, I wanted to go to MicroConf years ago. I remember that and I didn't have enough money to go. So I'm gonna have to go soon. But how, what were the name of some of your software companies? I know Drip and can you reveal like how big some of these grew to?

• 26:58Speaker 00

  Yeah, Drip grew into, well, I mean, Drip is tens of millions now, but I sold it in in 20, what year was that? 2016. Grew it to a few million bucks before I sold it.

• 27:10Sam Parr?

  You grew to $3 million a year in revenue and then it now does tens of millions of dollars?

• 27:17Speaker 00

  Oh, yeah, absolutely. I mean, this is email, email service providers are really any type of SaaS.

• 27:23Speaker 00

  If you double down on it, like and you stick around for a long time, this stuff just it compiles. It goes up every month if you're doing it right.

• 27:30Sam Parr?

  Do you regret selling it?

• 27:31Speaker 00

  No, never, never a day have I woken up and thought, I really wish I was still working on that. Like I learned, we were a team of 10 when we sold it and I learned what I needed to learn. And it was enough money that I never had to work again. And that had been a goal. I was 41, maybe when I sold it and that was a lifelong goal, you know?

• 27:50Sam Parr?

  To have enough money to not work again?

• 27:51Speaker 00

  Yep. And I knew I would, I knew I would work.

• 27:54Sam Parr?

  Well, what was your number?

• 27:56Speaker 00

  Well, I don't want to tell you how much.

• 27:57Sam Parr?

  No, but like you don't tell me what you sold it for, but like, like when you said my goal is to earn this much, like what was the threshold of not having to work?

• 28:05Speaker 00

  Oh, that's interesting. You know, when I was 25, I just thought it was millions. I never actually calculated it. And then as I got into my 30s, I started saying, well, what's this 4% rule thing that you hear about in personal finance, right? And I actually think the 4% rule is bullshit. I think you need to be, you need to be a little more cautious. So it's about 3, 3.5%. So then the rule is if you need, You want $150,000 a year to live on and you have $5 million in the bank. Then the idea is that if you do the 4% rule, you can take out 200 grand a year and never touch the principal because stocks and bonds and other investments are and inflation are working there. So a 3% rule would give you about 150 grand. So I'm not using my numbers,

• 28:49Speaker 00

  but you get the idea. So it quickly became apparent to me that when I was in my 30s of like, I think somewhere it's somewhere between 5 and 10 million, I think is most people's number. Depends on where you live, depends on how you live. But I think anything north of 10 is like, like it is excess. I'll say that I I'm north of 10 and I and I feel like I my life didn't change. There was some point between 5 and 10 where it was like, yeah, that's enough. You know, I still like having the money and I do things with it, but definitely it's not like I would have had to work again, even with a major stock market downturn or something.

• 29:21Sam Parr?

  That's pretty cool. 3 million with 10 employees is a pretty sick business when it's software.

• 29:26Speaker 00

  It was very efficient. We were also really, I mean, I was bootstrapped. I should have raised a round. I should have raised a seed round because it was way stressful and I was I burned out pretty hard on it. And that was part of there were several factors into selling for me. And I'm curious if you, you know, have talked about why you sold as well. But for me, it was like, number one, if I can never, if I can have enough money that I control my own destiny for the rest of my life, that was a big win. It was the only way I would sell.

• 29:49Sam Parr?

  That was the only reason why I sold.

• 29:51Speaker 00

  Is is just like to take the cash off. And now you can do anything. I mean, I started a damn startup accelerator, right? So I we fund bootstrap SaaS founders. I'm not going to make money from that. And that's a five to 10 year play to make real money, right? To actually get the carryback. I'd take a salary, but it's like a token to what I could be making somewhere else. And so I can now do play long ball with it because I'm not thinking, oh, how am I gonna, you know, how am I gonna do my big score? I never wanted to be worth I never my goal was never I need 100 million or I need a billion. It would be I'd be fine with that. But that's not that wasn't the goal. It was to have that freedom.

• 30:24Sam Parr?

  I sold to have that, but I wish, the thing about my company is that I loved it. I mean, I still, I'm still here and I love it. Like I hate it and I hated, like there was days where I'm like, this sucks. I hate media. I hate dealing with people. Of course I had like those normal things. But like, the thing is, is that like, I started my company because I was just blogging for fun when it didn't make money. And I didn't actually think it was going to make money. And now that I have something, I still do this because I just am a compulsive and I love it. And so I, I love my company. I just wish, I wish I was wealthy that I didn't have to sell it. Do you know what I mean?

• 31:03Speaker 00

  Yep.

• 31:03Sam Parr?

  And so, because now I know I'm gonna have to go and start it again, one day.

• 31:06Speaker 00

  You're gonna have to start something and that one you won't have to sell, right? You'll be in a position where you can decide to do it or not, and you can make bigger bets because if it goes to zero, it's not like you're sitting where I was in 2015 where it's like, I am literally worth millions and millions of dollars on paper. And I have actual liquid net worth, about 400 grand in retirement savings between my wife and I. And I have about $50,000 in the bank and our house, which had no equity because it was, you know, it had gone down or whatever. So that, that was it. So I was like, I felt way overexposed to something tragic happening.

• 31:40Sam Parr?

  When you are doing 3 million in recurring revenue, I'm not sure if you, how you do like, if people pay upfront or what, whatnot. But like, I've seen ConvertKit's numbers, like all the public stuff that they reveal. And they're, they didn't have a significant amount of cash in the bank. Was your, was your thing the same way where?

• 31:56Speaker 00

  Absolutely.

• 31:57Sam Parr?

  With, with, because like 10, you think 10 employees making 10, make it $3 million, like, oh, you should have like plenty of money. But what was the truth?

• 32:06Speaker 00

  The truth is that growth choose, just destroys cash. Like no matter how much cash we made, I've, I was spending on AWS bills. I was spending it with SendGrid. I would hire another contractor. I would hire another employee. The moment we grew by 10 grand in a month, let's say of a monthly recurring. And I'm like, great, now I can hire another engineer because oh my God, we are understaffed. So at 10 people, we were way understaffed.

• 32:34Speaker 00

  And yeah, I'm trying to think, and that's where like my decision at that point was I'm either going to raise an angel round, like a seed round, or we should sell it. And that was, that was the decision of do we double down on this business for another two to four years? Or am I ready to, to, you know, make, make that choice of letting it go?

• 32:53Sam Parr?

  And that, so that was, I was a drip user. Who owns it?

• 32:56Speaker 00

  Um, well, what's interesting, so Leadpages bought it. Leadpages had raised 38 million in venture and they, it's actually a parent company, right? Called Avenue 81 Incorporated that owned Leadpages and then acquired Drip. So there's two products under one umbrella. Well, pretty soon, within the Avenue 81, you know, CEO realized the opportunity here is Drip. Like Drip is a multi-billion dollar opportunity, whereas landing pages are, you know, the whole market at the time was 80 million, maybe 100 million. And that's, that sounds like a lot to us, but they're venture backed. So they need to get to billions in valuation. So they actually sold off Leadpages and the company is now Drip. So Drip owns Drip now. You know what I mean? Like it's, it was a

• 33:41Speaker 00

  turnaround. I don't know if you, I don't know if you've ever heard that this happened with Best Buy, where they acquired Geek Squad. And now like Best Buy would not exist without Geek Squad, because that was like all their net profit through the, you know, last 15 years. That is, that essentially happened with Drip. They just refocused the whole team. They had 170 employees and I got to start handpicking people from the Leadpages team and pulling them over to help grow the team. So when I left, there were 100 and something people working on Drip.

• 34:07Sam Parr?

  Do you feel like, see, remember like when you're a kid and you used to date someone and then you see her with another guy and you like feel just like that, that jealous, you feel like anger and jealousy and you're sad. Do you, do you still have that? Do you have that emotion when you see drip?

• 34:24Speaker 00

  I don't. And, but, but I will say that there have been some things that have happened that have, that I haven't been happy with. So they like raised prices and they didn't do it very well right after I left, like a few months after. And I was like, you guys are better than, like I would have done that so differently. And if I was in the room, I would have said, don't do, they just did it really fast. They didn't grand You know, they just made kind of all the 101 mistakes and that sucked. And I, and then there was a huge backlash against Drip, which is part of my legacy. Like Drip, Drip is, you know, it's like the hustle will always, you will always be the founder of the hustle, right? And I will always be the co-founder of Drip. They, they've messed with the UI, they've reshaped it and stuff. So when I go in now, I'm a little bit like, ugh, I liked it the old way, but, but I don't feel, it's not the ex-girlfriend thing.

• 35:07Speaker 00

  It's more of a, I did have to let it go, you know, and just, and just let it go. I still use it. I, I mean, I'm in it every day. It's such a good tool.

• 35:15Sam Parr?

  That's a good sign. Do you, um, and then MicroConf, was that a big business? Cause I, when, when I started HustleCon, I like researched you guys to steal ideas, but like also like to make sure it's a good business. And I was like, well, Rob's pretty savvy and he's doing it. So like, yeah, I could probably make a profit off this.

• 35:31Speaker 00

  Yeah. Yeah. It was definitely, you know, it was a side project, like a hobby all this time, right? Until about two years ago, where when I left Drip, I had this big decision of like, I have this podcast. At the time I had a co-host with the podcast, I'm solo now, um, had MicroConf.

• 35:49Speaker 00

  Do I sell all of that? I literally thought of just leaving the whole entrepreneur, like blogging, podcasting thing. And going and like, I was going to acquire a tabletop gaming, the second biggest tabletop gaming website, right?

• 36:02Sam Parr?

  What's a tabletop?

• 36:03Speaker 00

  You know, like Settlers of Catan or like Dungeons and Dragons. So it's like not, like a board game is Monopoly, right? But then there's like the levels above that of complexity and stuff. And so

• 36:11Sam Parr?

  Which are booming right now.

• 36:12Speaker 00

  Huge. Well, COVID helped, but also they're just, they're super popular. And so I was like, that's a hobby of mine. And I was like, I really want to do it. And then I started talking to the owner of the site who's great, great dude. And I'm like, what are your numbers? And he started giving me the numbers and I was like, this makes no money. This may, and he's like, yeah, dude, tabletop games make no money. Like that, you know, there's the few, there's the Catan and there's D and D. There's like 10 or 20, everything else kind of is, I mean, I'm overgeneralizing here because certainly there's other, but it's not like startup. Like we are so spoiled with startups where we don't manufacture physical things. And, and you don't have returns and you don't have excess inventory and you don't have a warehousing and all that stuff. And the profit margins are thin and et cetera, et cetera. So that's when I doubled down.

• 36:56Speaker 00

  On all of that. And so, yes, your initial question was, is microchip a good business? Yes. Will we sell? Let's see. We'll sell seven, like low seven figures, like a million, million and a half dollars, I think, in top line this year, maybe somewhere in that range. I need to look at the budget. You can tell that I have someone running it because I should know that. I would know that number if I was actually like into it.

• 37:16Sam Parr?

  Will you be able to, and could, if you do 1.5, I would, I would hope that you probably do like three or 400 in profit.

• 37:23Speaker 00

  I think so. Although here's what we do. See, we are not running it as a profit machine. We are running it almost, it's become like a service to the community. And so we run a bunch of the events at break even or loss, like our local events are where we go to San Jose or Atlanta or Austin, Texas. We do a one day event. Those tend to break even or lose money. And we're doing it to try to just expand, like the mission is to increase the number of independent startups in the world, right? That's what we want to do. Bootstrap startups used to be the term, but it's like, it's not solely bootstrap. Some people raise small amounts of money. And to do that, we got to get the word out. And so we run it at a, you know, 10 to 20% profit,

• 38:05Speaker 00

  net profit margin, and we could make more money. We used to make more money five years ago or whatever, but there's just no need to at this point.

• 38:13Sam Parr?

  That's a pretty sick side, like a good hobby.

• 38:17Speaker 00

  It was good. It wasn't before, when I still had drip, we weren't doing a million because we were, you know, we're going to do 15 events this year. When we were, when I was running drip, we were doing three, but they were big, they were big events. We would have, trying to think of what our top line revenue was even. And I was half, you know, let's say half a million, 600 grand across three events. So it was, it was good, but it's a brand, right, man? It's like the first year we, in 2011, we went to sell tickets and we were like, we're going to sell 200 tickets at $800 a piece or $500 a piece. And we sold like 70 at like 500.

• 38:49Sam Parr?

  Yeah, it's a slog.

• 38:49Speaker 00

  Terrible.

• 38:50Sam Parr?

  And the shitty part, everyone's like, you're going to make money off sponsors. And yes, you will. It's going to take you two or three years, though, for them to trust you.

• 38:58Speaker 00

  Yep.

• 38:58Sam Parr?

  And what I didn't realize with events was they buy like a year in advance. So like our first sponsorships were like 2K a piece. Then we started getting the 50K and 100K, but they booked a year in advance. And I was like, wait, what? So like it's a crazy business.

• 39:16Speaker 00

  Yeah, I personally wouldn't. I kept saying to my, I had a co-founder with that and then our event producer. And I kept saying, I don't want to be in the events business, right? We had one event and then we expanded it to two because we wanted to do one in Europe. And then we expanded to three because we wanted an earlier stage event. And I kept saying, I don't want to be in the events business. And they kept telling me that's the business, this is an events business. You started one, you know? But I did it more as a community. I always thought of it as a community. Because that's like microconf has an online community and YouTube channel and all that stuff.

• 39:45Sam Parr?

  Ben, you look like you're about to say something.

• 39:48Ben?

  No, no, I was.

• 39:49Sam Parr?

  Oh, you're laughing?

• 39:50Ben?

  Yeah, I was just laughing. Who starts a business, an event business and doesn't know it's an event business?

• 39:58Sam Parr?

  But. Dude, I was the same way. I started, when I started, I was like, this is, this is stupid. This is just a means to an end. We're getting out of this immediately. And then it's like, it's, it's kind of like when you see all your friends starting software companies. You're like, dude, events are embarrassing. Why would I want this? Like, this is stupid. It doesn't, it's too hard. But then, once you get a little more confident in yourself and you're like, well, if I accept it for like, for what it is, it's actually pretty neat.

• 40:23Speaker 00

  Yeah. And there's nothing like it, like in this, even let's say pre-COVID from 2011 until, until this year, over the last 10, 11 years. There's a lot of online communities. Anyone can start one. You get a few hundred people together. There are so few people who not only run in-person events, but who do them well. And if you can do that, it is an incredible competitive advantage. And not even that we have that much competition, but it is, it's not just like, I'm going to run a business and make money. It's like the community of microconf is so tightly knit and it's because we meet in person. You know what I mean? You just, you have, I mean, you've experienced this where you go to an event, you meet someone in person. And we, the retention rate was 60 or 70%. So you come back to the next year and everybody kind of knows each other.

• 41:06Speaker 00

  And then you get new blood and you know, so there is, it built a way better community than if we did not have in-person events.

• 41:13Sam Parr?

  So because of your job, because of your career, you see a lot of like crazy software companies, some of which maybe aren't necessarily huge, but they are, could be surprising because you're like, I cannot believe someone's making this work. And you probably are able to spot lots of opportunities. We asked you if you knew of, we asked you ahead of time and I'm curious if you ever think of any, any software companies where you see and you're shocked that this is like a problem that needed to be solved.

• 41:41Speaker 00

  Yeah, I see a bunch. So I have some, I have some both ideas that I haven't seen implemented that maybe we can dig into later.

• 41:48Sam Parr?

  Yeah, we'll do both of those.

• 41:49Speaker 00

  Yep, but there. So I'll talk about a couple. So Tiny Seed is a startup accelerator I run. And so as a result, you know, we've had across what four batches, is that right? Four batches, we've had two or 3,000 applicants. So I've seen a lot of SaaS companies come through.

• 42:08Sam Parr?

  Wow.

• 42:08Speaker 00

  And what I've, I've been surprised by a ton of them. Let me just look at one right here. So CRM or kind of customer interactions applied to any niche and the smallest niche you can imagine. So like home improvement contractors, the founder of Builder Prime is the SaaS. We funded it with Tiny Seed and he had a home improvement project. And he said, the experience dealing with the contractor, contractor was fine, but the communication was like text and then email. And it was anytime there's a bunch of text and email, that can be a product.

• 42:46Sam Parr?

  What was the name? Build a what?

• 42:48Speaker 00

  Builder Prime.

• 42:49Sam Parr?

  Builder Prime.

• 42:50Speaker 00

  Builder Prime. Yep. And so it's in essence, I think he might call it CRM for, yeah, he calls it best CRM. But really it's not only the sales process, but then it's the communication during a home improvement project. And so like, shouldn't you, I would say, well, shouldn't, couldn't you use Basecamp? Isn't like project management or could I use Microsoft Project like online, right? Cause you could, but it's like, no, this is a strongly typed version of that that is completely built for their needs.

• 43:19Sam Parr?

  How's this going?

• 43:20Speaker 00

  It's going really well. I can't disclose revenue, but I'll say anyone who's in batch two, any of those companies are going to be, you know, mid six figures into seven figures, right?

• 43:31Sam Parr?

  The founder of HubSpot, Brian Halligan, came on the pod and he told us that when they, I'm going to paraphrase the story, I might get a little bit wrong. He said that when they first started HubSpot, they were like at a fork in the road and not sure which way they were going to go. And for a minute, I think they even created it and even had some sales, but they were like, well, let's like HubSpot is a CRM, but then let's create like LawSpot. So it's like HubSpot just for lawyers. So instead of like making it one for everyone, we're going to make an individual one for different industries. And so let's create LawSpot and just get lawyers to use it. And that's kind of basically what this company, Builder Prime is, because you would say like, well, why can't you just use HubSpot?

• 44:09Sam Parr?

  Why can't you just use a site, whatever you wanted, whatever it is? I understand. And so, all right, this is a cool company. How big's the team on this? What, Ben?

• 44:20Ben?

  My other question is, like, do you have any companies, Rob, that you work with that are building apps on top of Salesforce or HubSpot that are like building in those ecosystems? Or do you think they should always go the direction of Builder Prime and just build their entire own ecosystem?

• 44:37Speaker 00

  We have

• 44:42Speaker 00

  one who's built on Heroku. We have one who's kind of built, is a WordPress plugin, kind of built on WordPress. They're actually doing really well. It's Castos. It's podcast hosting. They're into seven figures. But there's no, you know, so the thing is, is with building on HubSpot or Salesforce, there's this platform risk, right? Because I had an angel investment that was doing really well, was built on Shopify, was a Shopify app, and they started killing it. And then Shopify came a-knocking and said, you got to start paying us a big chunk of your revenue or we shut you down. I mean, really, you know, I would say it's shady shit, but it is what it is. It's platform risk, right? So that's where we have to be aware. Like, if you go to sell a SaaS company and you're solely built on top of a platform,

• 45:27Speaker 00

  you sell for a lower multiple than if you were on your own. So as a result, what we say when folks come in and apply and say, hey, I'm only on Heroku, or if we see Shopify apps come through, we had to have seen Salesforce apps come through. I don't remember HubSpot one, to be honest. But what we say is, cool, it's not a non-starter, but how are you thinking about this? Are you building for, what other platforms are you building for? How do you escape that? Because by the, you know, when you're 500 grand a year, no one cares. When you're 5 million a year, On a platform, they notice and that there's a danger there.

• 46:04Sam Parr?

  That's, that's pretty cool. That's interesting. I mean, I knew that was true, but I didn't know that Shopify could change the prices that they charge.

• 46:11Speaker 00

  Seen it, seen it happen firsthand. Yeah.

• 46:13Sam Parr?

  What else is just, go ahead.

• 46:14Speaker 00

  Yeah, there's, there's another one. This one's interesting. It's called scraping B. And the cool part about them is they are public with their revenue. So I can actually at least give you an idea. So they crossed a million dollars in annual recurring. Just two, three months ago. And if you look at what it is, is it's, they allow you, if you want to scrape the web, right? If it's like, well, I want to get all, you know, the products off of this particular e-commerce site, you can go in and it's not a GUI. Like you need to write a little bit of code, but then they have all the servers that allow you to get around being blocked by APIs or whatever. And when you think about this idea, it's, it's like, well, that sounds like a nice little five, 10 K a month idea, right?

• 46:59Speaker 00

  They're doing north of a, you know, probably a hundred, a hundred grand a month right now. I haven't looked at their revenue recently, but like.

• 47:04Sam Parr?

  It says they only have two employees.

• 47:06Speaker 00

  Yeah, it's two employees. It's the two founders.

• 47:10Sam Parr?

  What?

• 47:10Speaker 00

  They're doing, it's crazy. We're encouraging them to hire actually, because here's the problem. Let's say they wanted to sell. I'm not saying they do, but if they wanted to, that's a problem. Like they would, they would be worth more if they were a team of five or 10 than if they're only two. Because they're making a bunch of profit, but it's, there's risk there. Right?

• 47:30Sam Parr?

  Do they, is this like one of those public revenue things on like the bare metrics or whatever?

• 47:35Speaker 00

  You know, I think they just disclose it on Twitter. It's Pierre DeWolff's. Yeah. And it's like every couple of months he'll say, when they hit a milestone, he'll be like, we hit this. And the co-founder, I mean, co-founders Pierre and Kevin are really cool and transparent. And they talk a lot about, I mean, it's content and SEO and they have grown crazy fast. I believe, and my memory serves me correctly, that when they joined Tiny Seed, they were at 4K a month. And this was two years ago, tops. 18 months, two years, you know? So it's like to go from 4K to ostensibly what 90K, 100K, they're in that range a month. Pretty cool.

• 48:14Sam Parr?

  These guys should raise money, maybe.

• 48:18Speaker 00

  Yeah, they should. They could if they wanted to. It's up to them, right?

• 48:22Sam Parr?

  But the valuations right now for a company that's growing quick that has a million in revenue is like 50 to 100 million dollars.

• 48:27Speaker 00

  Yeah, it's nuts. I know.

• 48:28Sam Parr?

  So like if you could raise 5 million dollars and just do five, I mean, that's kind of interesting. That'd be, that'd be easy to justify.

• 48:35Speaker 00

  Right. But it depends on the founder, right? It's like, that's one of the things that a lot of bootstrappers, they don't want to get on that. Once you raise that money, now you're on the venture track, right? And it's like, I gotta raise every two months, I'm supposed to burn. Yeah, but we're different. Tiny seeds for bootstrappers. And so with Tiny Seed, folks can run their business and take profits out. We actually fund LLCs. And they can take profits out if they want.

• 48:58Sam Parr?

  So how do you get paid?

• 49:00Speaker 00

  We get paid if they take profits out because we, we, you know, buy a percentage of their equity. So basically, if they take dividends out, we, you know, serve prorata in those. Or if they were to sell the company, again, we own stock. So, or units in LLCs. So we get that percentage when they sell.

• 49:18Sam Parr?

  But is that actually going to be profitable for you, you think, more so than trying to get, trying to do the traditional model where you throw shit at the wall and 10% maybe works?

• 49:28Speaker 00

  Right. Well, we, we are still in the traditional model of we've funded 6, 59, 60 companies to date, and we will fund another 100 and we have enough money right now to fund another 120, 150 in the next three years. So we are still in that model of making a lot of bets. What we're, what we see is that our bets, like, I don't think we will have a billion dollar outcome. I just don't see that being reasonable. I think we have a lot of 10 to 50, 10 to 100 million dollar outcomes. And the number, we've run a bunch of models. And in fact, if you go to tiny seed.com/thesis, you will see my co-founder is a data, was a data scientist, PhD in computer science. And we ran a bunch of backtesting on anonymous SaaS data.

• 50:14Speaker 00

  I think it was several thousand companies and looked at our, our funding approach versus, you know, what it would return. And it will return venture-like returns with, I believe, lower downside risk. Because we invested, we invested at the early stage at low valuations, in essence.

• 50:29Sam Parr?

  Wow. What else is interesting to you?

• 50:33Speaker 00

  Yeah. You want another, another company?

• 50:35Sam Parr?

  No, tell me what ideas you think there's opportunities in.

• 50:38Speaker 00

  Yes. All right. So here's, so I always, when I start with ideas, I'm such a B to B SaaS founder, right? So I start with the problem, right? And so first, anytime I see someone doing something in Excel or a Google Sheet, I think to myself, that could, that's an idea, right? If you take it, or if there's a bunch of email, you know, or text back and forth. Those are, because it's communication or it's just storage. There's a couple of things that I'm pretty fascinated by. So one is podcast apps are doing quite well. Like we're in Riverside now. We've funded, I'm invested in Squadcast, which is a competitor of Riverside.

• 51:17Sam Parr?

  We use both of them. We're using Riverside now. We use Squadcast. We use Zencastr.

• 51:21Speaker 00

  Zencastr. I was with them before, yeah, with Squadcast. And then of course, podcast hosting, right? There's Castos and Libson and others. And

• 51:30Sam Parr?

  We use that, I think.

• 51:31Speaker 00

  Even podcast editing, like Alitu. We use, I use Audacity and then my editor uses Adobe something or other, but like Alitu, A-L-I-T-U, is podcast editing in the browser. So like the stack's starting to get there. We have disparate tools to do things. But when HubSpot launched, so I, so I know Darmesh, right? Darmesh and I were bloggers and speakers. We met at BOS in 2008 or something. So I remember when HubSpot launched and I remember thinking, but all of these things exist. Like in the early days, HubSpot was like, it was like a blog, I think, plus a marketing website, plus Google Analytics, plus, I don't remember what it's something else.

• 52:08Sam Parr?

  Like an email capture form or something.

• 52:10Speaker 00

  Something like that. It was very simple, but I was like, I could, but I remember saying Darmesh, but I could build that, you know, with MailChimp plus WordPress, you know? And he's like, yeah, but business owners don't want to do that. They want a bundle.

• 52:22Sam Parr?

  And he was right.

• 52:23Speaker 00

  I think, and he was right. I said, they're public and you guys are an amazing company. I think of the same thing with podcast production where I, right now, I mean, I've been running a podcast for 11 years and I have, you know, people helping with it and. I literally am in Notion, dragging this thing over here and then sending an that sends an email to my producer to do something that we then log into Castos to upload. You know what I mean? It's like, where's the hub spot for that? Where's the bundling of the podcast stack?

• 52:51Sam Parr?

  I have a strong opinion. I have two strong opinions. The first is I'm almost certain, no, I'm partially certain that for the most part, podcasting software and podcasting tools is a horrible business because of a few reasons. Very few podcasts are successful and most all of them are broke.

• 53:14Speaker 00

  Here's my, here's the counterpoint to this.

• 53:16Sam Parr?

  Great. I would like to be convinced otherwise.

• 53:17Speaker 00

  I am an investor, so I see the numbers. All right.

• 53:21Speaker 00

  Squadcast doing several million a year in revenue and they're not doing it on the fly fishing podcast. Think of the three avatars for a podcast. There, there is the hobbyist, my Dungeons and Dragons podcast, my fly fishing. And they're gonna, they're broke and they're gonna pay nine bucks a month, right? And they're gonna churn like crazy because they're gonna start, it's too much work. All right. Then there's the next tier up, which is startups for the rest of us. I'd say my first million is in that where it's like a single show. But if I go to pay a hundred dollars a month for Squadcast Riverside, a hundred dollars a month for hosting, it's not a big deal to me, right? And I don't think it is to you. There, so it's not nine dollars, but for you, it's like a hundred. I think if I were to say, oh, my first million should pay $500 a month for each of these.

• 54:05Speaker 00

  You start to feel like, I'm not sure that's worth it, but there's a number there. Okay. So there's a, and they, and we don't churn. I mean, I've been doing it for 12 years. You guys have been doing it for several.

• 54:13Sam Parr?

  It's like the, the SMB of podcasts.

• 54:15Speaker 00

  It's the SMB that actually sticks around. There's hobbyist, there's SMB. Then there's one level up. So there's iHeartRadio, there's ESPN's podcasts. There's the Kevin Smith podcasts, podcasts, right? There is, Kara Swisher has a whole network, Gimlet Media, NPR, like once they, especially once they went remote, that's the enterprise.

• 54:36Sam Parr?

  But how many of those are there? Because for example, like Vox, I think Vox was trying to sell their CM, like it's all media companies are like, oh, we built this proprietary. Technology to like get our articles shared better and like things like that and like cool. I would love that technology, but they want to go out like Washington Post is doing this. They want to go out and sell their software. And I'm like, how many fucking media companies could pay a hundred grand a year for software? Most media companies are broke. And so that's my same thing to podcasters. But all right, I agree, those exist. I want to be, I need to be convinced that there's like enough of them.

• 55:09Speaker 00

  Ben was gonna say something, we should let him talk.

• 55:13Ben?

  I was blown away. So we got a pitch from one of these recording companies, one of the ones that Rob mentioned. I won't say which, but I assumed that the pro tier that Rob was talking about would be like 10x. What a normal plan was, and it was like 100x. It was like, it was like plus a month for.

• 55:37Sam Parr?

  A month?

• 55:38Ben?

  A month, a month. For some of these pro features. Yeah. And.

• 55:44Sam Parr?

  The squat.

• 55:45Ben?

  I was blown away. I could not believe it. I was blown away. But anyways, you know, it's worth it for, for a lot of people. So anyway, for that type of company, you don't need that many customers. I think is, is maybe the point.

• 55:57Sam Parr?

  Really? Do you get crazy amounts of features with dollars a month?

• 56:03Ben?

  I mean, they're cool. They are cool features. They're cool features.

• 56:08Sam Parr?

  Wow, that is crazy.

• 56:11Speaker 00

  That does sound high a little bit.

• 56:13Sam Parr?

  That's crazy.

• 56:13Speaker 00

  That's where you don't need that. You don't need that many.

• 56:16Sam Parr?

  Okay, so podcasting is, you're saying it's a good business because there's actually enough customers to make it work, right?

• 56:22Speaker 00

  Yeah, yeah. And podcasting has this other thing that, that is, I think, undervalued or just not talked about enough. It's this concept of a dual funnel or a split funnel where you have, you know, who else has this is.

• 56:37Speaker 00

  Electronic Signature, e-signature has this where you have this super wide funnel. There's either free users or very inexpensive users on the low end. And so a lot of people use it. Thus you build a brand and you just have 5,000, 10,000 customers, whatever. Some are just users, some are customers. You also, if you have any type of viral loop, that's amazing, right? You send the link to Squadcast or Riverside. You send a link to get a document signed. Oh, a little bit of virality. But then on the top end with e-signature, similarly, you have realty mortgage brokers who, I need 8,000 documents a month signed. And suddenly that's at 10, 20, 30 grand a month. That dual funnel is incredible because when, if you're just enterprise, then you're enterprise, right? And it's like Oracle in the old days.

• 57:21Speaker 00

  It's like, all right, so we need to close 500 deals this whole year, but each deal is a million or 2 million bucks, right? I mean, that's, it's like these massive deals. And it's just this grind of enterprise sales. But when you have the low end funnel and the high end funnel, it's, it feeds on itself and it helps you have a more stable business.

• 57:38Sam Parr?

  The companies that are able to charge six figures a year in software, do you think that a lot of times their software is actually better than the $5 a month tools that are in the same category, but for different people? Like, is it, is it, you know, if it's $5 a month versus $500,000 a year, is it actually a thousand times better?

• 57:58Speaker 00

  No, it's not. And I would, it's not. $5 a month, I would say-

• 58:03Sam Parr?

  Or whatever.

• 58:03Speaker 00

  A more accurate one is like, you know, is, if I'm paying 250 a month versus 25,000 a month, let's say that's, it's 100x difference. Those are probably relatively similar. And in fact, a lot of the pricing advice we give to our founders, or I give on the podcast as well, is the moment someone approaches you, a potential customer, and says, Cool. We like your software. We need to redline your terms of service, or we need to invoice with POs, or we need single sign-on, or we need a Salesforce integration, or we need, there's this whole list of things that instantly should trigger, you should pay about 100 times more, that your price should go up. Because the sheer headache of dealing with

• 58:47Speaker 00

  procurement and going through that process, and the maintenance and all the, you know, the interaction, it's not that the software is better, it's that the, the time and the headache and the pain of making that sale and maintaining that customer is, that's where it's at, right? That's where the money's spent.

• 59:03Sam Parr?

  But is it that hard to like, do the single sign-on, or like, isn't there, is there not like an 80/20 thing that you can do, where it's like, it works for most high-end customers?

• 59:14Speaker 00

  Well, there's two things, right? It's are we pricing on value? Because I price on value, right? There's, you can price on cost, you can price on value. What's a third? I forget what the other one is. Anyways, but certainly, I'm not pricing my SaaS on cost, because I would have no margin, right? So I'm going to try to price based on the value, and I could build single sign-on, it's like, hey, let's let everyone have it. But it's a trigger that that company has the ability to pay, and frankly, are going to get a lot more value out of it than a one-person team using it.

• 59:45Sam Parr?

  Right.

• 59:45Speaker 00

  You know, it's like Gimlet Media versus Rob Walling comes to, you know, sign up for your podcast recording. It's like Gimlet Media should pay a lot more than me, not because they, they need that many more features, but they just should. Their whole business is built on it, and they're making millions of dollars.

• 1:00:02Sam Parr?

  It matters more to them.

• 1:00:03Speaker 00

  Yeah.

• 1:00:03Sam Parr?

  Well, any other ideas that interest you at the moment?

• 1:00:05Speaker 00

  Oh, yeah. So I gotta be honest, man. I mean, this is not even a SaaS idea. I'm just gonna throw it out. You know, do you know the website, examine.com?

• 1:00:14Sam Parr?

  My favorite website out there. I would put it in top 10. I'm a paying, I'm a paying member. There's a new one that I'm looking at called Consumer, it's like examine.com, but for brands, for vitamin brands. Anyway.

• 1:00:27Speaker 00

  Yep. And examine is nutrition information you can trust. So I interviewed the founder on my-

• 1:00:33Sam Parr?

  I love Saul.

• 1:00:34Speaker 00

  Saul's, he's great. I interviewed him on the podcast. Sherry, my wife's been friends with him for several years since I met at an event. So had him on the show, and I was fascinated by it, because I'm like, it's nutrition information you can trust, right? And you know that, but I'm saying it for the audience. Where is the examine.com for crypto and NFT like for web three stuff? Because I feel like there's so much crazy info out there and there's so many opinions and religious, you know, not truly religious, but like religious fervor and the Bitcoin maximalist and shit. And it's like, someone can do this, right?

• 1:01:07Sam Parr?

  That business and the business. So let's talk about that. Examine, I've talked about examine on the pod a ton because I think it's one of those sites that I see. I don't think I know how big they are. I mean, like, I would imagine like not big, like two or three million a year in revenue, but I have no idea. That's just a guess, but I know it's not big because they don't hire a ton of people. And I was like, this is one of the most under monetized sites I've I know well. I actually think that their examine could be significantly, examine could be a hundred million dollar a year business, I think.

• 1:01:37Speaker 00

  How, how, how do you think?

• 1:01:38Sam Parr?

  So there's a bunch of, so I would, I think that they, for one, they don't do any affiliates. So something like Wirecutter, you know, Wirecutter?

• 1:01:47Sam Parr?

  So in, in New York Times, you know, they're a publicly traded company. They're the Wirecutter revenue got classified now as like other revenue. So I've been trying to like decipher it and figure it out. And they do something like close to nine figures in sales from affiliate affiliates. Examine doesn't want to do that, but I think they, I think they could. I think they could do it in a tasteful way and it could work wonderfully because what examine doesn't do is they don't tell you which brands to buy, but I think they should because that's what I want. And that's what a lot of people want. Additionally, I think you could sell to doctors. So there's actually another company out there that does like four or $500 million a year in sales. And they sell to doctors. And when you go to the doctor and you have like a rash, they just like, it's like Wikipedia for doctors. They like look it up and like the latest studies are there on that.

• 1:02:33Speaker 00

  Interesting. And examine, you know, I didn't talk to Saul about that, but they don't want to do it because they don't, do they not want it to taint the, they don't want to become a review site? I mean, that's why we don't trust review sites, right?

• 1:02:42Sam Parr?

  But I trust some, I trust Wirecutter.

• 1:02:45Speaker 00

  Yeah.

• 1:02:46Sam Parr?

  I mean, I think there, I think there's a way to solve for that. Like, like, like if Casey Neistat is a YouTuber who I like, if he tells me a cool product and then there's an affiliate link there, I don't care that it's an affiliate link.

• 1:02:57Speaker 00

  Right.

• 1:02:58Sam Parr?

  But anyway, what examine, I also think examine.com could work for injuries.

• 1:03:05Speaker 00

  Oh, like medical, like, hey, my knee, because to get the definitive.

• 1:03:09Sam Parr?

  Yeah.

• 1:03:10Speaker 00

  This is that, or just illnesses in general, right? You Google symptoms.

• 1:03:13Sam Parr?

  And like rehab.

• 1:03:15Speaker 00

  Yeah.

• 1:03:16Ben?

  Are you sick or injured enough to make that a thing that you would pay a monthly subscription for?

• 1:03:21Speaker 00

  Not me.

• 1:03:21Sam Parr?

  Well, I don't know. I don't know if you could make money through subscriptions with that, but I do think that like, when you have like an Achilles injury and you're like, I'm desperate, I'll do anything. I just need to learn like, because I remember when I was researching for my, like, I had a pain in my leg. I was like, I like, I went to all the studies and I just read all the studies. I'm like, I'm just gonna figure this out. I'm not gonna read like a eHow article on how to do this. I'm just gonna go to source and like, what's the, what's the thing that I'm reading about the studies? But how does, uh, Rob, do you know, how does examine.com operate? Like, how does that literally work? Because all they do is they like, pour through all the studies and find the ones that have a good sample size, that have definitive proof, and they make a list of like, these work for sure. And then they have another list that says,

• 1:04:04Sam Parr?

  these seem like they might be able to work, but we can't say for certain. And then these are shit. Don't trust.

• 1:04:10Speaker 00

  Pretty much. Yep. And they, their big hit early on, he said all this on the podcast, it was, it was all SEO, right? It was organic. And then they took a Google dive at some point. I don't know when it was, but, they had already implemented their subscription revenue. I don't even think that they had ads at one point. I don't know that they do anymore. I'm actually on the side looking around. But yeah, that's it. That's how they write the topic. And their, what is their value? It's the brand, it's the trust. You know what I mean? That's why everyone goes to it because they have built that brand that you, you trusted and I trusted.

• 1:04:42Sam Parr?

  But, but how do they do that, though? Do they literally just have one, they go, uh, all right, editorial team, this week, you, Steve, your writer, your writing topic is, um, building muscles. So go and research everything that helps you. Go research creatine, protein.

• 1:05:00Speaker 00

  So if I were them, I would be looking, they've been around for a decade now. All the topics have been covered. I'm only looking for new information, right? I'd be monitoring all the journals, all the whatevers and have subscriptions to all that. I don't know exactly how they do it, but that, that would be it, right? It's having, having a Google alerts essentially for all the new medical stuff to just update. You just want to keep it updated.

• 1:05:23Sam Parr?

  That's crazy.

• 1:05:23Speaker 00

  I can't imagine there's a new topic they haven't already covered and there are thousands of pages.

• 1:05:28Sam Parr?

  And this would actually make way more money in crypto.

• 1:05:31Speaker 00

  Totally. I mean, there's several, there's several niches where this, this would be interesting. The hardest part is there's a bunch of crypto news sites and when I go to them, I just don't know. I don't trust them.

• 1:05:42Sam Parr?

  Yeah. You don't know, like, are these guys like these like hardcore libertarian, the world's gonna end? Fuck money, like fuck cash because it's just stupid. Or are that, you know, like, a great way to explain it is like, basically, do you remember like the Mac versus PC ads? Where there was like, uh, like a cool looking Mac guy versus a nerdy PC guy? And you remember that animosity created between Mac and PC guys? Now, imagine if each person who owned a Mac or a PC had a million dollars of Apple stock. That's like, that's like the, the hate, that's like the vibe that you're gonna get.

• 1:06:17Speaker 00

  That's right. It's religious fervor with money behind it now.

• 1:06:20Sam Parr?

  And so it's very hard for me to hear a crypto guy, even Sean, Sean's one of my best friends and he, but I know he's got a lot of crypto. So I'm like, but is this because you, are you telling me what you want to happen or what you think will happen?

• 1:06:33Speaker 00

  Right.

• 1:06:34Sam Parr?

  So it's actually really interesting. What would you do to build that?

• 1:06:37Speaker 00

  I would start, so first thing you have to do is build credibility. You have to start there. So I'd probably start a podcast so that people could hear my thinking week to week. I would definitely be attending all of the crypto events anywhere to get into the network to build trust. Because if people don't, if you're anonymous, like if you tried to build this anonymously, no one's, no one's gonna believe it. So I would get into the network and then, um, follow the model. I would look at what it examined do. We know anyone who has done this model, what did they do in terms of, of, uh, content? And then obviously just hire writers and look at the white papers and give our opinions.

• 1:07:14Sam Parr?

  And this is actually a cool business because this business could last a hundred years. So like, if you look at like, um, Consumer Reports, Consumer Reports has been around for decade, decades. They still do well into the nine figures of revenue. So Consumer Reports is a, you know, review site that people pay money for. They're a nonprofit, so all of their expenses are public. All their revenue is public and everything, and they're still growing. And so like, if you do a good job of building a brand, like on this topic, and you start reviewing stuff and you do a good job, you could review many other things and last for a very long time. It's kind of a cool company.

• 1:07:50Speaker 00

  Yeah. Yeah, they are still kicking.

• 1:07:52Sam Parr?

  Anything else interest you?

• 1:07:55Speaker 00

  I am interested in, I mean, this, you know, normally I'm boring, boring businesses are my favorite, right? Because it's like B2B SaaS is, is the way to go. I think anytime you can take a concept, like we've said with Builder Prime, you know, where it was just like CRM for customers. We have another company we funded called Client Hub, which is basically project management CRM for accountants. And then we have another one that's called Gym Desk, which is basically run your gym business on it. It's like kind of CRM and communication. So it's like, how many niches are there where that works? Some of these are going to be seven or eight for your businesses. Some of the niches are going to be very, very small. But that's where you just have to pick. It's like, hey, am I a lifestyle bootstrapper? Because I want a $10,000, $20,000 a month

• 1:08:40Speaker 00

  business. But I like these ideas of, you know, it depends on your ambition. But if you want to stay small and just build an incredibly profitable business with two people working on a, you know, a hundred grand a month, I mean, you can enter a less competitive space. If you want to grow big and grow faster, then you enter a space like electronic signature or like calendar scheduling links, which we funded companies in both, like Calendly competitor and, you know, and HelloSign competitor or whatever. There are a lot of competition. You have to move faster, but the market opportunity there is just tremendous.

• 1:09:12Sam Parr?

  Do you, what do you, how do you decide if it's going to be an eight-figure idea or much smaller? Is there a metric that you look for?

• 1:09:22Speaker 00

  Yeah, that's an interesting question. I usually, so with tiny seed companies, when they apply, we say, if your ambition is to build a seven-figure annual recurring revenue company, then you're in the right place. We get some people who say, I really want just a half million dollar business. It's like, great. That's going to be a great business for you, but that's not really fundable for us. It just doesn't make sense. I think a big piece of can it get into the, you know, and we'd love to see mid-seven figures and up, right?

• 1:09:51Speaker 00

  But a big question of can it get there? A lot of it is less about market size because most markets are big enough. There are few markets that are too small. Most of it is. The metrics of the business is where we look at the churn and we look at the pricing. And so if you're, if everybody's too price sensitive, to your point earlier, if everyone's a fly fisherman podcast and everyone's paying you, you know, 10 to 20 bucks a month, and that's kind of where most people are. And then your churn is 10%, like you just can't, you know, almost impossible to build a million, $2 million business. But when you get to the point where, hey, my average revenue per user is 100 or 500 a month, and your churn is 2 or 3%, you would have to own the whole market.

• 1:10:36Speaker 00

  Like there's almost any market is big enough that that can be a $5 million business.

• 1:10:40Sam Parr?

  All right. My last question, how many of these folks building software companies that you see, yourself included, are non-technical?

• 1:10:50Speaker 00

  Well, that's a great question.

• 1:10:51Sam Parr?

  And if they are non-technical, what do they do?

• 1:10:53Speaker 00

  Yep. So I'm a developer or was, I haven't written code in years, but we actually ask, so we do a state of independent SaaS survey and we put out a report and like an industry report. And we asked the question, do you have at least one technical founder, right? Or, you know, and yes or no, right? And the number of SaaS companies, kind of bootstrap-ish SaaS companies with zero, with no technical founders is like 20, I believe it's 20%, 25%.

• 1:11:29Sam Parr?

  Wow. Very possible.

• 1:11:31Speaker 00

  It is. And usually what the expertise they have, they're either the subject matter expert, like, we're going to build software for accountants. I was an accountant for 20 years, right? We're going to build software for UX designers. I was a designer for 10 years. They're either that or they're sales or marketing. That's what they should have. Now we've seen where there's a developer and then there's like the business person, the business guy or gal.

• 1:11:55Sam Parr?

  It just means like anything.

• 1:11:56Speaker 00

  This is, yeah, usually winds up meaning you're not actually that helpful and you probably shouldn't be a co-founder. You know, if you can't sell or market or like have input on the product. Yeah, or or develop it like those are really the four roles. You probably shouldn't be.

• 1:12:11Sam Parr?

  So if I'm if I like, I'm not tech, I'm not technical, but I um, I can like tie stuff together and use Zapier. And I'm super creative. How do I start a start a software company without hiring or I would if maybe hiring zip, but without having a co-founder?

• 1:12:28Speaker 00

  Right. So for you, since you have money, you would either acquire something because there's always stuff for sale that you may want to acquire and then just grow. If you have a content marketing expertise or you would hire, you know, a developer or an agency or something to build it. If you don't have the money, a lot of people, non-technical will work a day job and actually funnel money to the side to basically pay for a developer to do it.

• 1:12:53Speaker 00

  The other two approaches I've seen are exactly what you said, which is I'm going to build my minimum viable product using Zapier and Notion and chewing gum. All right, and I'm just going to cobble it together to the point where, hey, if I get a few grand a month in revenue, this proves it. And now I'm going to use that to get it built. It's a harder way to go, but it's possible. The last one I've seen, which is genius. And this is what the founder of Castos did because he's not, he's a single founder, not a developer. He worked a day job. He started a productized service podcast editing. And he hi, he got it up to, I forget what the number was, 30 or 40 grand a month in productized podcast. He was one of the earlier ones, it was called Podcast Motor. He was working a day job the whole time. So then while he was in that space.

• 1:13:35Sam Parr?

  Was he actually doing the editing or he would, he did it at first and then and then got someone overseas?

• 1:13:40Speaker 00

  Exactly. Yep, yep. Or even even as folks in US and Canada doing it. And there was enough profit margin that he then started reinvesting, you know, and said, well, now I want to build now that I'm doing podcasts. So he actually was in the podcast space. Someone says, I have this WordPress podcast plugin for podcast hosting on WordPress. And I want someone to kind of adopt it type thing. Since he was doing something in public, they approached him, he bought it for not very much money. And then he built the entire, you know, what again is a seven figure business. He's raised, you know, three, aside from us, he's raised three quarters of a million dollars and it's grown fast. So that's the other way to do it is like, I even, I was a developer and I had to do it nights and weekends, too. You know, and I was pulling money away from the day job.

• 1:14:18Sam Parr?

  For the agency and hiring a developer, what what's the best way to do that? Do a lot of these folks like a lot like when I was starting, everyone said like, oh, just go on odesk and hire someone in India to do it. And I'm like, I don't know, man, that doesn't sound like I can like. Like, yeah, so like, what are there any agencies that you like or for hiring devs? Are you hiring someone by the hour in America? What do you typically see?

• 1:14:44Speaker 00

  Yeah, I typically see, I see a lot of people going either through referrals, like you get into a community, MicroConf Connect, or Indie Hackers, or whatever, Dynamite Circle, and you ask, and you say, who has used someone whom you trust? Right? So you try to get that referral. It's not just a flat look, because going to Upwork, which used to be Odesk, is kind of a shit show these days. The other thing is there are now these referral services, aggregators? There's one called Trust Shoring, which is run by a guy who attends MicroConf, but he basically knows a bunch of Eastern European dev agencies. And if you come to him and say, I want to build an iOS app. He'll say, cool, I have these three agencies that I refer to.

• 1:15:27Speaker 00

  He's almost like a broker in a way, but like, he's a good dude and he knows them. You know, and so he, and he's vetted them. And then there's one called clouddevs.com, and they do the similar thing for Latin America. And so the nice part about that-

• 1:15:41Sam Parr?

  Do you like TopTal or anything like that?

• 1:15:43Speaker 00

  TopTal's good, it's expensive, right? Because I think it's 150 an hour, so it depends on budget and all that if you're scraping by. I haven't used TopTal, but I've had friends use it. And I heard quality was really good in the early days. And of course, like anything, it gets, you know, less and less. But that's certainly something you could try to.

• 1:16:01Sam Parr?

  How much would you budget to create an MVP?

• 1:16:04Speaker 00

  It depends on what it is. You're talking like a SaaS app? Here's the other thing, man. If you are non-technical and you've never started a startup before, I would say, don't build a SaaS app. It's too hard. Like, go, I have this thing called the stair-step approach to bootstrapping, which is like, start small with like, a WordPress plugin, a HubSpot add-on, a Salesforce add-on, a Heroku add-on, and go build that. Cut your teeth at it, it's way less expensive, way harder to maintain, way easier to maintain. You get the experience, you get some revenue, then grow it to enough that you can buy out, just buy out your day job, eight grand a month, maybe 10 grand a month. Then, and now you have experience, you can double down and do it.

• 1:16:41Sam Parr?

  This is awesome.

• 1:16:42Speaker 00

  To your question of building an MVP of a SaaS app.

• 1:16:47Speaker 00

  10 to 30 grand, power to throw it out.

• 1:16:50Sam Parr?

  But, and you think a non-technical person could actually maintain that and understand what's going?

• 1:16:55Speaker 00

  Well, no, then you'd need to have that agency sticker. That's where I'm saying if you're non-technical, you either need some money. I mean, this is why folks, you build it and you're, you pre-sell it, you get to the point where there's enough revenue that you can then justify, you know, raising funding, right? If you're, if you're non-technical or you have a side job that's putting money into it.

• 1:17:16Sam Parr?

  Well, thanks for coming and talking about this. I, you have a good view of what's going on in this space. I think it's badass. Ben, what do you think? Yeah, that's great. Thanks so much for coming on, Rob. Appreciate it.

• 1:17:27Speaker 00

  Absolutely. Thank you, guys. I really appreciate it.

• 1:17:28Sam Parr?

  This is so good. This is awesome. Do you want to give a pitch? Where, where do you, people follow you most?

• 1:17:34Speaker 00

  So I'm on Twitter at Rob Walling and frankly, they listen to this podcast. They would probably like startups for the rest of us. It's more focused on, you know, SaaS and startups, but 35 minutes every week for 590 episodes.

• 1:17:47Sam Parr?

  That's badass. I'm a fan. I've been listening to you for a long time. Almost 10 years, it feels like. Thank you. This is awesome. Thanks for coming.

• 1:17:54Speaker 00

  Thanks so much, Sam.

• 1:17:55Sam Parr?

  Boom. That's it.