#11 - Landon from UserFeed breaks down what it takes to get your SaaS off the ground

Speaker A: Welcome to the Lean and Mean SaaS podcast. I'm your host, Amir Bashkin, a tech founder on a mission to build Lean and mean bootstrapped SaaS product. Join me on a journey as we learn how you can make your SaaS products completely bootstrapped, build a lifestyle of your dreams, or create a big company. Everything is possible. We'll show you how you can build a product, create passive income and exit with no developers involved. So let's get started. Hey Landon, thanks for doing. Thanks for taking the time to, to come on the. On the podcast.

Speaker B: Absolutely.

Speaker A: So Landon is a serial entrepreneur. He sold two businesses. He's currently working on three more Bootstrap SaaS companies. He's a non technical founder in sales and he's currently focused on ad reform, which is um, an automation tool for digital advertising. Adriform has done millions of revenue over the year and is used by some of the biggest companies in edtech. So great to have you here, Landon. Um, I think the question that I want to ask is how do you know, and to start with is how do you know when a product has enough traction and kind of earned your attention and you start working on it and give it your focus? What's, what's the moment you say I've found something good?

Speaker B: Yeah, that's a good question. I think it probably means something a little different to, to everyone, you know, depending on, you know, whether you raise money or not, um, whether it's like a free product or not, like all those kind of things. Um, you know, for us just looking back, like, because we bootstrapped all of our businesses, like we look at traction as like money. It's like, are people willing to pay us? Um, and do we have, do we have a, um, some sort of like organic marketing channel? So meaning, like for example, with, with ad reform, um, we started getting customers and those customers, you know, weren't people that I knew or anything like that these people were coming in for, typically for ad reform was vi. Um, uh, via SEO. So there was like some different forums and different things out there where people would ask questions and um, you know, like on Reddit and stuff and they would ask questions that were specific kind of like to what we did. And so people would often like organically just come through that funnel. And it's not, you know, it doesn't have to be like a huge, you know, a huge funnel. Right. But having. You need to, people need to be willing to pay for your service. Um, it needs to be, and it needs to be repeatable and it needs to be, like, you need to have at least one organic, you know, organic funnel where people are coming in. Even if it's just like a little trickle, like a few leads a week or a couple leads a week, like, you still need to have that. Otherwise it's gonna be really hard to make it work. If people aren't interested in looking for your. For your product, like, it's gonna be very difficult to make that work. So I would say that that's kind of what we look for. And I think kind of the standard model of, like, number of customers that are paying is probably, like, if you want to kind of get to 10. If you can't get to 10, it's probably not. It's probably not going to work.

Speaker A: Not worth your time.

Speaker B: Um, yeah. I mean, unless you're charging like a million dollars a year for your product, then you can have a couple customers and it doesn't matter. But most of us aren't. And so, especially in SaaS, so, like, um, you know, if you can't get those 10 that aren't like your friends, it's probably time to move on to something else.

Speaker A: And do you have, like, an. How do you come up with ideas? How do you know what you want to work on is, do you have, like, a framework for deciding which ideas are worth your time, which ideas aren't?

Speaker B: Yeah, I mean, I think. I mean, like any entrepreneur, and I'm sure you go through this too, you have a lot of ideas all the time, right? So, I mean, weekly I'm sending, we have this little, um. Uh, we use notion, and that's often how we communicate, have this, like, forwarded notion that's basically just like, ideas. Um, and so we'll just. If anybody has one, they'll go in there, write it down, kind of give some bullet points on, um, you know, what it is and how you would grow it. Um, and I would say, like, 95% of those are not great ideas. It's really easy, like, really quickly to like, poke a hole in it or to see that there's like a million competitors and there's not really a different. Like, there's. There's a lot of ways. So you want. Try to. It's like you want to constantly be coming up with. With ideas. Um, but you want to quickly poke. Like, you want to try to poke holes on. It's almost like, uh, what's like the scientific theory, right, that people put stuff out there and then, like, the rest, like all these other scientists will go in there and they're just trying to. To tear that idea down or that theory down and find ways that it doesn't work. And that's how you end up finding really good ideas, uh, and good theories that like, that work. Right. That are scientifically proven. It's almost the same thing, right? So I don't know. We, um, when we started ad reform, the first thing we did, we kind of knew, like, an audience we wanted to go after. So I think that's good to, you know, focus on is like, okay, I want to support these, you know, this group of people, right, this role or this industry or something like that, and just dive into it, not even really knowing exactly what you want to build. So, like, the first thing we did when we started the business was kind of had some general, like, ideas of things we might want to start, but we knew it was going to be for the ad tech industry. So what we did was I basically reached out to I don't know how many people, probably hundreds of people in New York City where all the, you know, ad tech companies are in advertising and all that stuff. And we, um. I got, I booked, I think probably like 20 meetings in like a week, uh, without a product, just straight up, like, you know, here's what we're thinking of doing. This is the challenge we're looking at solving is, does this sound interesting to you? Would you want to give us feedback on it, like that sort of thing? And 20 different people at different companies said yes. We went out there and we just got in there and just asked tons of questions about their business. You know, things going on internally, challenges. They have time, you know, that they feel they're wasting, um, all these different things. Once you, like, just get in there and just start. And just start building, you know, building a business and getting like, it becomes a lot easier to come up with ideas. And so, um, but like I said, you kind of, you have to, you really have to like, poke holes in those ideas because you can't be working on all of these different things. You know, you don't have time to work on all these different things. So it's like you have to, um, yeah, you have to run it through the gamut of like, you know, different issues that it has and whether. How long it would take to get something out the door. Um, but yeah, so that's kind of, that's sort of the process that we've taken.

Speaker A: And when you were speaking to those companies, to those ad companies in New York, did they say that what they needed from other form Was like a huge pain for them or how. How did they describe that? How. How does validation looks like you had

Speaker B: an original idea for the business was completely different than what we were. That we're doing now. Um, and so we kind of led with that. Like, we would talk about it, we would ask questions about it, but then we'd always ask it, like, towards the end we'd say, okay, so forget about, you know, what we just talked about. What are the biggest pain? Like, we just straight up ask, like, what are the biggest pain points that you have internally? Where, like, you know, how big is your team? And like, what are they? What are things that they're spending the most time on? Um, and which. Which of those things feels like just complete waste of time? Um, we just wanted to see, like, what are there? You know, maybe there isn't. Maybe they wouldn't have a good answer to that, and some of them didn't have great answers to it or they were more like generalized answers. But when, you know, across like, 20 different companies, when, like, half of them say the exact same thing, that's probably a pretty good sign that, that, that, you know, that that's a challenge. And then, of course, once you realize that, then of course you're going to go do a bunch of research, um, find out what else is in the market that may solve that may be a solution to that problem, if anything. Um, and then you're also gonna, like, you're gonna think about it from a product perspective. How difficult would it be to get something out the door, like that sort of thing? So you run through a bunch of things after you get that feedback from people where you're, you know, like, okay, this might be something, but we're gonna, like, run it through, like, all these other, like, we're trying to kill this idea, basically. We're trying. We're trying to find ways that this won't work. And as you go through those different levels of that and it's still coming out like, well, uh, I think this could work. You know, that's. That's kind of how you come up with, you know, how. How it's, you know, something worth spending some time on. Um, but, you know, on the other side of things, you do have to give it time. Like, once you start, I mean, we didn't. It, you know, it takes time to build out a product, but also, like, it takes. It takes a lot of time to get in front of people and, like, you know, see if this, if that product is something that they'll pay for.

Speaker A: And so 50% of the companies said they're interested. The other 50% said something else. Why didn't this deter you from, um, you know, working on, on the other form idea?

Speaker B: If you can find, I mean, literally in 20 companies, if you just talk to 20 companies and like half of them have that same issue. Like, that's a pretty good hit rate, um, across companies. Right? So, yeah, I, I think the hard part about startups are that, uh, you don't have any data when you're making decisions typically. Right? So like, I mean, you have some, right. You have 10 companies that have told you this, right? Not a lot of data. That's like a very small subset of data. But that's typically what you have as a startup, even when you get, even when you start things and you have customers. So say we had 10 customers and you're trying to figure out what to build next. 10. 10 customers giving you feedback. You know, it's, you know, that's great, but like, that's not a big sample size.

Speaker A: Yeah, I think, I think that's really good point. I think like one dangerous place to be is where you have like five customers or 10 customers and then you can't get anyone else and then you're like, should I shut this down or should I continue like hammering through.

Speaker B: So sometimes it's good to, um, you know, if you, you've tried a bunch of things, uh, or you feel like you've like, okay, I've tried this thing, I've tried this marketing channel. I've tried this and this. And it doesn't seem, you're kind of flatlined, basically. Um, sometimes it's good to just not necessarily kill it, but kind of step away from it. Um, and we've done that before. We've done that with ad reform. There's been times when it's like, okay, we're doing all this stuff and it just, you know, we're not getting the growth that we, that we want or feel like there needs to be. Let's, you know, the, the business is still profitable, like, so let's just, let's just leave it there. Let's take a step back. I've got this other thing. Let's, you know, you, let's mess around for, uh, two to three weeks on this other little idea of this little product. Um, and, you know, because this thing sort of like we built in a way that it, you know, sort of functions on its own and it's profitable so we don't have to, like, we're not like losing money. Um, and we'll step away. We'll focus on this thing. And a lot of times that's helped us, you know, you get burnout and stuff or. Or whatever. And it's helped us kind of like, uh, you know, get rid of that burnout. And then also, like, once you've been able to step away from it for a while, you sort of. You'll find that that often gives you, like, new. You come up with new ideas of different things you could do to address, like, maybe some of the challenges that you had. It's a long road. You know, everyone wants that success in, like, one or two years, and that's just not. That's not a reality. Especially if you bootstrap. Like, you're going to be spending five to ten years on this. On this thing. Hopefully, if it's, you know, if it's successful, it'll be spending, like, five to ten years. Um, sometimes people spend more. So, I mean, it's good to get away from it, actually. I don't know if you heard of Basecamp.

Speaker A: Yeah.

Speaker B: So, yeah, most people, yeah, Basecamp have

Speaker A: been doing these for, like, 30 years or so.

Speaker B: Like, 20 years. Yeah, like, something like that. Um, so they've done the same thing where, like, multiple times, they'll, like, step away from the business and go build another product. That recently they, you know, obviously they've always had Basecamp, but they built another product called Campfire at one point, many years ago, and then re. You know, a few years ago, they built that. Hey. Platform, the email platform. So it's like, yeah, like, they've stepped away and focused the majority of their effort on another thing. And then. Then you'll see them come back to Basecamp and they're all back into it.

Speaker A: If. If, you know, if bootstrapping is, in a sense, limiting you, because you have to. You know, you can't hire a big team to work on it. You can't really, like, walk away and have someone else work while you are not focused on this product. Why aren't you raising VC money? Why did you decide to be a bootstrapped founder?

Speaker B: You know, when we started it, we definitely had the mindset of, like, I want to own all of this. I don't want anybody telling me what I should be doing, how I should be doing it. I don't want a lot of cooks in the kitchen. Like, I just want it to be. You know, Kyle and I were just like, we just want it to be you and me, uh, making those decisions. And you Know, if we want to work on another thing for a little while, we can do that. We don't have anybody to answer to. No one's going to. Because. Because, yeah, like, if you had. If you had investors, they'd be on all over your case telling you, no, what are you doing? You can't work on that other thing. Like, I'm. I invested in this business. Right. Which totally makes sense. And they're, you know, they should say that, um, their money's in there, but. So we just didn't want any of that. And then, um, you know, but I will say. I will say if I were to do it again, I would probably have raised a little bit of money. Um, because the one area where it's not. Not really about not having the resources or anything, because I think in some ways that's actually a good forcing function to like, you know, get to traction all this kind of stuff. I think that's good in a lot of ways. So that's not the reason. The reason was we didn't really pay ourselves for like, the first, I want to say, like, year to a year and a half. And the strip like Kyle was having. They were having their first baby. Um, uh, you know, we're. There's all these different changes things, you know, your. Your personal life and everything. Um, and so, like, there. There was a lot of added anxiety and stress over the. Our personal finances, um, that I would have just rather not had and just been. Because it, you know, it's. It's some. You want to clear your mind of all that stuff and just work on the business. But, like, the reality is that stuff is there and so you can't. And so that stuff would come up in your head. Um, there were certain times that, I don't know, it didn't feel great to not be bringing home money to the family kind of thing. Right. And so if you're kind of thinking it all the time, I'd rather just not. So if I could raise. If I started again, I would probably start with doing a small friends and family round or something like that where you maybe raise like 500k or something. Something that could, you know, support a modest salary for like a few people to. To like, get this thing off the ground and then never raise money again. That would be like the way that. That I would do it just so I could get rid of that initial stage of like, oh, gosh, like, I can't, you know, I don't have any money coming in. Like, I'm always worried about it, that sort of thing. Um, so that's the way I'd probably do it. But I just think I've just seen so many. We've had a lot of bootstrap companies come out of Atlanta and um, just not having all those cooks in the kitchen and all that added stress. And I also think the bar gets lowered a lot, right? You can have an exit that's like a few million dollars, which seems like a tiny company, right? Any venture people or they'd be like that, that's not a success. It's like, wait, I just made multiple million. You know, I just made like, you know, a couple million dollars. That's ma. That's a lot of money for somebody to make. And, and I didn't have to build a big business to make that, right? Like I didn't have to build this massive business with all these employees and all this stuff. So I think, um, it just lowers the bar for success. Whereas if you take money, you just lengthened, you know, the. In America we have football, American football, but you lengthen the football field right now all of a sudden when you could have scored a touchdown, you were 20 weight, 20 yards away from a touchdown. Now you're a hundred yards away from a touchdown. Now you're, you know, it's just, you have to have such a, so much of a bigger success and that's really, it's really difficult to do that. I've seen that go bad many, many times with good businesses, good products, good people, good businesses. And it ends up being, you know, for all intents and purposes, not. It's not a success for any of the founders because they didn't have a billion dollar exit or you know, whatever. And that's just, that's a shame. I think those uh, you know, those businesses could have been bootstrapped. They wouldn't have been as big, but you could have had a really good business where you could have exited for a lot more money than you're going to make, uh, you know, in what you just did. So I just, Yeah, I think that it just makes it a lot easier to have a success if you don't raise a bunch of money. And I think most companies shouldn't raise that much money.

Speaker A: Yeah, I think if you raise above the double digits in the millions, then you probably need to make like a huge exit. I know it's like hundreds of millions or like a billion dollars, but I guess this is where it's going for and ah, you know, if you're not a security company, maybe Then that's a very high bar to clear.

Speaker B: Well, you're also going to like, in order to clear that bar, you're going to have to work so hard to. And it probably, you know, I mean just based on the odds, probably not going to happen. And um, and you're going to just work yourself to death like you. And there's going to be a lot of stress and all this. You know, I've got a family, I've got kids, I want to spend time with my kids. Uh, you know, I don't want to be the type of person that's like working all the time, which is what it would take to go get a billion, you know, to go build a billion dollar business. Like that's what it takes.

Speaker A: So what were some, um, of the biggest personal sacrifices that you had to. Did you have to give up for the comp, for ad reform, for user feed to succeed?

Speaker B: Actually, I'll tell you a story. So, um, so we, early on in the business, probably, I don't know, six to eight months into the business, we had, we started getting some customers. We probably had, let's say we had like, I don't know, five to seven customers at that point. So not enough revenue to support even just two people at that point. Um, and so every customer mattered a lot. We had to keep those customers. Even though our product wasn't that good yet, um, it was still in its infancy, it still had a lot, it had a ton of gaps, it wasn't very good. And so what I would do is I try to fill those gaps with, with me just being like the absolute best support person of all time. You know, I just like, I'm there all the time. Like right when you know there's anything going on, I'll, even before you even ask, I'll like, hey, I noticed this, I noticed you did this and this maybe didn't work right. I fixed it. Here it is blah, blah, like just going up way above and beyond on that side of things because again we had to keep these customers. Um, and obviously we needed to get more customers, but we had to keep the ones we had because otherwise this thing is not going to make it. Ah, at some point because we're going to. I only have so much savings, I'm not paying myself. Um, so one of the things I would do, we had some customers overseas, um, including, we had customers in like Singapore and China. So in Australia, which are like basically the opposite time zone of the east coast in the U.S. um, so what I would do when they would be working. I, I would be asleep. So what I would do is I would put, I, I'd be in bed, I would put my computer on my bedside table. I would get my, uh, my phone would have, you know, had slack on it and it was connected to our, uh, support. I, uh, think we were using intercom at the time. Um, and I would put my phone on as loud as it could be, and I would put it like right under my pillow, right next to my head so that there was no way, if it like went off, I would hear it. Um, even if it was like other notifications that weren't support, I would hear it. Which sucked because I'd been like waking up constantly. But I would wake up and like, often, like, off for months. I would wake up at like to this bing, three o', clock, three o' clock in the morning. Uh, I would look at it, sure enough, they're writing it. You know, there's some sort of support thing. I wake, wake myself up. I'd bring the computer over, I'd get on it and I would answer support. And I would help people do stuff sometimes for like an hour at like 3, you know, 4 o' clock in the morning. Um, I don't know how my wife was sleeping through that or dealing with that, but I did that for months. I did it for months and it sucked. I hated, I hated doing that. Um, and I was like, I don't know if I could do how much longer I can do this, but I did that stuff because I knew, like, I knew that I had to do the, like, I had to do everything I could to get this thing off the ground. Because if we could get it past a certain level, then, you know, we could hire somebody and we wouldn't have to do that anymore.

Speaker A: Yeah, I think that's kind of like the support system that you're, you're building on watch, like the backup you're getting from home, um, to go out and do your thing. I think that's, that's the number one, like, reason I've been able to, to get some success is the backup I, I have at home. So I can completely understand that. And I think it's, it's very rare to find someone that supports you like this and doesn't send you to just go work the 9 to 5 in an office and bring up bringing in like a steady paycheck. So I feel like, I guess you're also feeling, feeling lucky in that sense.

Speaker B: Definitely, Definitely.

Speaker A: And so what's the best piece of Advice you got related to other form User Feed in your startup journey.

Speaker B: I mean to be honest, like uh, one of the things that I do think that has helped us a lot is um, uh, on the support side, right? It's trying to offer the best customer experience. I mean a lot of people talk about customer experience and like how important that is, but it's really important when you're, when you're really early, you're an early stage software company, you're bootstrapped, you don't have a lot of resources, your product isn't very good yet, it's going to have a lot of gaps. You have to be great at something else. You have to, in order to rise above that. And so I think the nice thing about support is that it's all effortless. So um, you know, I think. I don't know who told me that but it's like, but it's like you know, support and really kind of sales too. It's just a lot, it's like 80% effort and 20% you know, skill and that sort of thing or knowledge of you know, the product or the industry or whatever. Um, but 80% of it is just like, it's just effort and most people don't give that. And so you can get a long way by just giving your absolute best effort on like the support side in the beginning, in the beginning of your business and just that can, that can hide a lot of like product gaps and that kind of.

Speaker A: I think that's the best definition of why to do support that I've heard around um, like on startups for, for a long time. So I think that's an amazing advice.

Speaker B: We still do it. I mean I still get in there and answer stuff sometimes and especially when we start with some of our newer products that are really, we don't have a team working on them. We answer all the support, um, we get in there uh, uh, and get after that stuff. And it matters a lot I'll tell you. Uh, with User Feed. So we sold user feed in 2021, um, and the new owner, I won't go too much into detail but they um, uh, it sounds like they had a lot of um, things going on and User Feed was like one of those things. And so I think um, support got sort of neglected uh, over, over time and you can just, I mean you can look at the revenue of that business over time and you can see, you literally can see when we left like it's like it has nothing to do with the really to do with the product at all. You know, um, it literally is just a lack of support can just demoralize a software company. I think it's like one of the most important, one of the most important things, um, within the business. Obviously. It's like keeping the revenue that you have. But again, it's like 80, you know, 80. I think it's like 80 to 90% just effort. If you just, Just give like your, like, really high above, above and beyond effort, like, that just goes so, so far. Um, and it'll really, you know, help your business grow. So I think, uh, yeah, I think that's one of the most important things to focus on.

Speaker A: People are so used to like, bad support experience that when you have good support experience, it's like, oh, your product doesn't work, that's fine. At least you're answering the phone. This, you're speaking with me. At least you're a person.

Speaker B: Yeah, I mean, all these consumer, uh, experiences that you have not, you know, buying B2B software, but just like, you know, uh, I don't know, calling into, um, you know, your, uh, your phone bill or, you know, like, stuff like that. Everybody's so used to these horrible, horrible experiences where it takes forever. Nobody knows. No one has any context of like, your situation. There's no, like, it's just horrible. And, um, so I think that's actually like a. That's like another reason why if you can like, go above and beyond in your little software company, um, you know, it just, it can help a lot, especially if you're going up against these, like, big competitors that are big companies that have like, a lot of. You know, I hate to say this about Intercom, because I like Intercom as a product, but their support is terrible. And it's not because. It's not really because they're, they're. They have bad effort or anything like that. It's just that their scale is so high. I imagine, like, it's just a really difficult challenge that they have to deal with and I don't. I know nothing.

Speaker A: They can't possibly give good support.

Speaker B: They've just struggled over the years and that's why they're building like, AI tools now. Hopefully that will help. But like, um, yeah, imagine you're like an Intercom competitor and, you know, the founder's like, getting on support with you and he's like, going above and beyond and helping with everything. Like, that would be an amazing feeling. You probably would want to work with that as long as the feature set was at least comparable. You probably would use that working. Um, yeah, it's working pretty well. It doesn't have all the bells and whistles, but it's pretty solid. It costs less and the support is incredible. That would actually matter in a deal. And a lot of these big companies, that happens to them where these smaller companies come in and steal their lunch. And a lot of it is because they give great support.

Speaker A: So I wanted to dig deep, a bit deeper into User, uh, Feed and the sale. So I guess first question, if you can tell, because that's something that I've been wondering about, is who was the buyer for User Feed? Obviously not the specific person, but what's their profile, their financial buyer? They're like another startup company that wanted to uh, run the business because obviously you read about Nvidia buying the company and you read about like Salesforce buying a company, but who buys stuff like user.

Speaker B: So, yeah, uh, the buyer. It's interesting. Like I feel like if you have a business that's making like a million dollars or more, uh, or even like 500k or more in revenue, um, that's when you're going to get these like bigger, like either companies are going to buy you or maybe like smaller private equity firms, but anything under that 500k, uh, of revenue, you know, you can sometimes get like, it's just like a person will buy it, just like a, you know, uh, you know, somebody that is, um, either somebody that's wealthy or whatever. And that's what I've noticed. Like when, when we did go to sell the company, those are the types of people we were talking to. Um, so anyways, this person, I can't say who they are because they've always wanted to be anonymous, but basically high level. You know, it was a, it was a, you know, leadership at a, at a big Fortune 500 company. Um, and uh, you know, some. He also was looking at sort of as like real estate. So if you think like, um, uh, you know, you can go buy these houses and do like make them into Airbnbs or rent them out or whatever and you have cash flow from that. Or you could go buy SaaS, businesses that are usually pretty profitable, uh, and that also have a lot higher upside and growth than a house that you would buy like real estate. Um, so people are looking at, there are some people that are looking at it sort of as like higher upside cash flow assets. Um, so anyways, that's the, that's who bought it. Oh.

Speaker A: Next thing I wanted to ask you, what are your best tips for Marketplace Marketing, few different things.

Speaker B: So one is the App Store is essentially like Google for, like, for you as a business. If you're built on, you know, if you're in that marketplace and you're an app on the marketplace, you have to treat that marketplace like Google. And what, what I mean by that is, like, there's SEO and, you know, in terms of, like, what people are searching, chances are in this marketplace, it probably has like, categories. It probably has, you know, um, ones that they just like, feature or whatever. You gotta dig in and find out how do they feature apps, what do you have to do to get featured? Who do you have to talk to, what relationships you need to build inside of the Intercom Team or the Zendesk team or whatever it is. So we would do a lot of that. Like, we built up a bunch of relationships with those people. Um, they, you know, one, uh, thing we would do is try to figure out, okay, when, um, when these category pages load, which apps show up at the top? Why do they show up there? Like, we, we basically try to figure out. We're basically trying to figure out like, the, the algorithm, right? Like, how does this stuff show up? So, um, so, yeah, so you have to dig into the algorithm, how things load, and, and try to get ranked higher. We found that when we were ranked in that top five, we would get a lot more signups coming through just organically. Um, because when they would go to the category, you know, there's a lot of apps and you want to try to show up first. Um, you know, if, if the marketplace has rankings, obviously that's a whole nother thing, or ratings, right? Like, so you want to obviously, um, try to, um, you know, try to work that system. Um, another thing that we, one thing that we started doing that was really working well and that we may do again with, uh, with Docs Fresh, is if you are inside of a marketplace, you want to try to be. You want as much real estate within that marketplace as you possibly can have. And what I mean by that is, um, you know, the only real estate you really can have is by having multiple apps. So like, if you have an app in the Zendesk marketplace, um, you know, some people will find it, but if you have five apps in the Intercom Marketplace, chances are they're going to find one of those apps. And then once they've. Now that you've got them to come into your funnel now, you, you can essentially use, uh, you can essentially remarket all of those other apps to those people who all could be Potential customers. So now, so, like, what we did with User Feed, we built another product called Bump, and it was an app built on Intercom. And so what we would do is, you know, depending on where, you know, somebody would find one of those apps in the, in the App Store, and as soon as that we brought them into our, into our funnel, then we would remarket the other app, whichever one they were on or weren't on, we would remarket that to them. We were getting all kinds of people that would come in for one, they would buy that and then they would buy the other thing. Like that was starting to happen like repeatedly a lot. Um, and so we sort of like built our own little funnel inside of the, the app ecosystem, which I think is actually like, that is the way one of the best, um, approaches that.

Speaker A: I think the, the main thing people don't understand is really what you said in the first point, that those marketplaces are like Google, but their algorithm is not as sophisticated as Google. So yeah, I think if you, if you put like, ah, you know, *1 or something like that, or you just put a number ahead of like the text or like number one and a, something like the number one AI tool, then you become, you really become the number one AI tool because they're working based on the ASCII characters and that's how they're sorting the marketplace.

Speaker B: You know, I totally forgot about that. But, um, that was one of the things we figured out in Intercom was that because, so User Feed, not very good if it's alphabetical. Not a good place to be. Right. You don't want to be you. Yeah, so what we did when we found that out, we actually changed the name of our app to, um, Feedback by User Feed. So, uh, so we could move up the move up. Um, I mean, it still said what it was, but it was much higher up than being, you know, down there, just with User Feed. So that was one of the things that I found as well. So, yeah, you do, you have to like, you got to spend a lot of time trying to figure out the way the algorithm works. Sometimes it's not even an algorithm, it's just people that, like I said, Intercom was just putting, they were just picking and choosing. So, okay, we'll build a really good relationship with the top person that runs the platform and then we'll just be like, hey, so how do we get on this thing? Can we get on that? And then they might say no, but in our case they're like, yeah, sure,

Speaker A: yeah, so What I'm doing right now actually is developing like five or six apps uh, that are complementing like some areas of Zendesk. And I think I've been told, you know, since I know like 2019 when I started working on Zendesk, that Zendesk will do something and kill the business or kill some other add ons or plugins that I was thinking about. And you know, eventually maybe they do that, but it takes them like five years. And in those five years if you could make like 30 or $40,000 every, every year for five years and then they kill your business, it's like, okay, like it's, I had my digital real estate, like I now have to like the building is going, is going to be trashed now. But I, I had a good run.

Speaker B: Yeah.

Speaker A: And, and that's how, that's how I'm looking at it.

Speaker B: Yeah. Yeah. And again like, you know, if you're raising money and stuff, it probably doesn't, it's not a good strategy to go down one of these paths. Right. Because they're probably not going to be like businesses. But also like there is the risk that you know, Zendesk or whoever could build a feature that could kill you off. Um, but if you're bootstrapped then that kind of changes it. Right? Because then um, the nice thing about building in a marketplace is that you have an immediate funnel from that marketplace. Especially if it's something people are like looking for all the time. You don't have to go like spend a bunch of money on like trying to build distribution like it's there. Like from the start I've always been interested about building on Zendesk because uh, it's a much. I'd say Intercom is kind of the up and coming product, I guess you could say. But. And Zendesk has been around a lot longer, has a lot, seems to have a lot larger customers, uh, and more customers. But um, I also think because it's been around a lot longer because now it's like private equity owned, they're probably not like building tons of stuff. It might actually be a good time to build on Zendesk as a third party developer because it's sort of like their products probably kind of clunky like enterprise Y and they're probably not building, they're not shipping super fast. Like Intercom is where they could come in and like ship, you know, kill your, your app like out of nowhere because they're shipping so fast. Um, I see that as like a potentially good place to Build, like, what kind of customer? I mean, are these like, do you have a lot of like, larger customers with Zendesk?

Speaker A: So yes, And I would say to your original question, is this a good time to bid or how. How fast is Zendesk shipping? I would say you're kind of right and wrong at the same time. So Zendesk is shipping like in the last year or so since they got owned by a private equity and made some layoff. They are shipping like a startup with like no qa. So they're shipping, shipping, shipping, shipping, shipping. They are all the time. Like every, every week you get like stuff changing and there are building new features and they're. I think they are. They have shipped more in 2024, which, which, let's say five months, four months actually, then they have shipped in all of 2021 or 2022, I would say even combined. So they are shipping a lot of features.

Speaker B: Interesting.

Speaker A: But it is a great time to be building there because Zendesk had like a decline in 2022 and the people were going to other platforms and they weren't really like in a good, in a good shape. And I feel that now they're really getting back into, into good shape. And I' traction around Zendesk.

Speaker B: I imagine you have a lot of. Do you come up with a lot of ideas for apps? Are you constantly coming up? I feel like you would have to. If you're like talking to people about, uh, you know, working with them on Zendesk or whatever, you probably have tons of ideas. Not enough time.

Speaker A: I've got like, yeah, that's exactly the story. Like I started this thank you GPT like back in 2021. So I built it as like a standalone app and really it's all built on, um, no code. So it's easy to change stuff and modify. And I just added like a UI on top of Babel a few months ago. And what I started doing right now is building like an foundational app. So, um, I'm running like separate Babel application, separate environment that can then extend into different apps. So imagine I'm doing thank yous. But really the what another thing you can get out of those thank you messages is if someone is very excited, you want them to maybe leave a review on Trustpilot or G2 or wherever Google my business, wherever you want to send them. So one thing that we are doing is like building those separate review apps. And so there is this and then there is like Shopify integration that, uh, they want to do and actually Give away for free and gather the affiliate fee from Zendesk on kind of like upselling customers. So there are a few models there that you can play with and get, get apps on the marketplace. I'm kind of leaning towards this free experiment with a few apps that can then upsell customer and then you could potentially make more from the upgrade of an enterprise customer that's you know, going from um, professional to enterprise. Then you could make you in an op for like $100 a month or $200 a month. So that's kind of like one angle. Um, I'm, I'm looking at right now

Speaker B: are you building everything or do you have like any developers or like what, what does your team look like or is it just you?

Speaker A: So it used to be just me M. Now I have someone that's working on Babel and Babel and product so she's doing most of the product work and uh, front end work and then I do the. Right now I'm doing the automations which is like the back end. So that's, that's on make.com and that's, that's something I'm doing right now. Hopefully over time she can, she can take over that and then I can only do strategy and um, you know, point her in the, in the right direction. But generally I'm, I'm planning to like one of my goals this year is to try and create those 10 MVPs so that hopefully one or two of them can turn into a real product company and then I can have a process that I can take. People that want to establish a company, tell them okay, here's like some funding here is go work on an idea for three months, four months, let's see uh, let's see what you come up with. And then when they come back and we see if that's a good idea so. And they work on it and if not then like drop it. So kind of like a product studio. I also noticed that you know some like we invested a lot into the thank you app uh, over the summer so like let's say July, August, September. And then it only started showing up the results around the end of December. So um, it really, there is like a lag between the time that you do stuff and the time it's actually there's the revenue.

Speaker B: That's why you have to give things a little bit more time sometimes or maybe like step take a step back. Other times that uh, with ADD reform especially we experience that where it's like we gave it all this effort, we did all this stuff and then we're just like, what? Nothing's happening, nothing's changing. We're giving it all this effort and then we'll just like, okay, we're going to start working on this other thing. And then out of nowhere, ad reform will start growing organically. And it's like things like SEO, these things that you spend a lot of time, uh, spend a lot of time doing, often have these lagging effects. Like three months, six months later, um, you know, a bunch of effort. On the sales side, you may experience that six months later. Because people like with SEO, it takes a while, right? It takes a while for that to build up. But also, um, if you're having a bunch of meat, like doing a bunch of sales meetings and stuff, like I think I read something one time that said in any given market, only like 10% of the market is actually looking for the thing that you, or selling at that, at a particular time. And so the rest of all those other people you talk to and meet, it's not going to be good timing for them. But you're spending the time to get in front of them and for them to know that you exist so that when they do enter that 10, uh, you know, we're looking for it phase, which might be 3 months, 6 months, 12 months, a year and a half, like at that point they move forward with you. So. Or they at least reach out and want to chat about it.

Speaker A: Yeah, they know about you.

Speaker B: Right? So like all that stuff, it just takes, it takes time. There's definitely a lagging. I think it's like a six month thing. And that's, that's what it's always felt like to me. It's like if you put a bunch of effort into something, you at least need to give it like six months after that to see if what that effort really, what it, you know, really did benefit you. Yeah, exactly. So, um, so yeah, you got to give it some time. Are you starting to see the results

Speaker A: from some of that stuff from this round? Not yet obviously, because we just started like a month ago, but I think back in October, November, we were at around 1400 with this. Thank you up and now it's at uh, 2500. So there has been quite a jump in, in a few weeks. So.

Speaker B: That's awesome.

Speaker A: Yeah, it's, it's getting there.

Speaker B: That's awesome. Well, if you can do, yeah, if you can do 2500, you can do, you know, 5000. If you can do 5000, you can do 10,000. If you can do 10, you can do 20. That's the way I always look at it. Like whatever you get to, you could probably do double that with. And it may, you know, it's going to take some time but like you can double it. Um, so I mean at some point that doesn't make sense. You can't always double it, but at some point it's going to stop doubling. But like in the early stages it usually. You can always double it in some way. Um, so yeah, it's great. 2500 is great. Um, if you start adding some other, some other apps and things to increase the distribution and improve the conversion rates and all that kind of stuff, you'll be at 5,000 before you know it. And you can sell. I mean if you have, if you have a business doing 5,000amonth, you can sell that for what is that like in the fifth? Like 50, 60,000, uh, ARR.

Speaker A: 60,000 a year.

Speaker B: So 60. Anything like above 50,000 ARR, you can sell like on a decent multiple for that. Like if you just wanted to sell right after that, you could sell it for probably like 3 to 5x revenue multiple on that, which pretty significant, especially if you're a solo founder. I mean it's like, yeah, that's a lot of money.

Speaker A: Um, pretty nice exit for a Zendesk up.

Speaker B: Yeah. Yeah. So, yeah, I mean, and then if you can go beyond that, then obviously then you start getting. But I will say there's like what I was telling you earlier about like the different types of buyers. I've been like, I've had conversations about selling all of our products at like different times. So. And they're all different revenue. You know, they're at different revenues. And what I've noticed is like uh, anything below like a hundred thousand dollars in revenue, really easy to sell. You could sell that business for a decent multiple. Um, in a month you could sell that. A lot of buyers for that. Because you can get these individual people

Speaker A: that are rich or like to financial buyers.

Speaker B: Financial buyers. Yeah, exactly. Um, and then. But somewhere between that like a hundred, 100k and a million in ARR. That is like a no Man's land dead zone. The dead zone. There's no. The financial buyers are like, uh, it's a little bit pricey for me to just be spending like a million dollars on something and then the private equity is like, this is way too small for me. It's not enough traction. Private equity, typically they deem traction as like a million dollars. So like if you don't have a million dollars in revenue, then you don't have enough. You're too risky for them, basically. So. And that's like small private equity. That's like micro private equity. You know, bigger private equity is obviously, that's more like 5 to 10 million in revenue. But, um. But yeah, so it's like you almost want to sell. You almost want to sell before you get to like a hundred thousand or you. Or you want to. You know, like, if you're stuck in that middleman area, then it's like, I'll just have a profitable business. And just like that, uh, you know, I'm not gonna sell. Yeah, just have a cash flow business because it's gonna be really. It's very difficult to sell. There aren't a lot of buyers and it's just like, it's super hard. So, yeah, you want to be somewhere in one of those other two sections. Um, unless you have crazy growth. Like, if you've grown in like one year, you've gone from like nothing to 500k in revenue. In that case, you probably could sell it because you have, like, really, really quick growth. But you probably would because you're like, why would I sell this? I'm growing, you know, I grew 500k in one year. You know, like, you wouldn't sell it. So, um, yeah, it's an interesting world. But at least, at least there's ways to sell those smaller businesses now. Because, I mean, you know, making $300,000 is a significant amount of money for most people to just get in one lump sum. You know, like, you can put that, you can invest that for the next decade and that turns into like a million dollars or, you know.

Speaker A: Yeah, you know, whatever.

Speaker B: Right. So it's. It's a lot of money. And, um, I would imagine that's how most of these stories end, with these like Zendesk apps and Intercom apps. But they're all going to be like, no one's going to keep those for, you know, a decade, forever. Yeah, you're going to sell them.

Speaker A: Thank you so much for the time. Yeah, that was amazing. That was, like, really amazing for me. I learned so much just from talking to you.

Speaker B: Yeah, yeah, happy to do it.

Speaker A: Thank you very much for the time and it's been a pleasure having you here and I hope to speak again soon.

Speaker B: Awesome. Yeah, thanks for having me on. And, uh, yeah, we'll chat soon.

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