Maybe you shouldn’t be a solopreneur
I was born in Edmonton, and every once in awhile, I go back for a visit.
When I’m in town, I almost always go for coffee with my buddy Tim. He’s about my age, and he’s just incredible at sales. Over the years, he’s pushed himself to build relationships with big brands. He thinks big, and that’s what I like about him.
I like to meet with Tim because he gets me to think outside my box. In business, we need people like this: folks who are a few steps ahead of us, who push us to get better.
Here’s my situation: I’ve been running this little solopreneur business for two years. I’m doing everything. Whenever I come up with an idea, I design the website, and I write the content. If there’s programming that needs to be done, I’ll try to do it myself.
As I’m meeting Tim, he says: “why are you doing all that work yourself?”
“I’m a solopreneur,” I replied, “we do it all. That’s our mantra.”
“In my business, I’ve learned its best if I’m not doing everything. I’m good at coming up with the vision. But the only way for me to grow is to partner with (or hire) people who can help me do the work.”
“Trying to do it all” is one of my weaknesses. I’m realizing, that by forcing myself to be a solopreneur, I’ve been slowing myself down.
How many successful businesses were genuinely built by solopreneurs?
Walt needed Roy to build Disney. Jason Fried partnered with DHH to build Basecamp. Macklemore collaborated with Ryan Lewis to produce his breakthrough album, The Heist.
Greatness is almost never a solo endeavor.
Maybe, you (and I) shouldn’t be a solopreneurs.
In January, I co-founded Transistor.fm with my friend Jon Buda.
Jon is a talented full-stack web developer. He can he can do all the backend stuff, but he’s also a pretty good web designer too.
Here’s what surprised me since Jon and I teamed up: I can’t believe how fast we can move together.
It’s like I have a superpower because I don’t have to do all the work myself. If I had to build Transistor on my own, it would take me forever. But now, Jon can focus on his strengths, and I can focus on mine. It feels like I’m running at full-speed in my lane, and I look over, and Jon’s right there with me, running in his.
Another benefit? Entrepreneurship is a hard road. It’s emotional work. It’s nice to have someone to help you bear the load when things get tough.
Here’s a summary of the lessons I’ve learned:
- Being a solopreneur doesn’t mean doing 100% of everything yourself. The most successful solo-founders get outside help (contractors, freelancers, partnerships).
- Most of us weren’t meant to be solopreneurs. Entrepreneurship is hard; having the right partner helps.
- To succeed in business: leverage your strengths and partner with/hire folks who fill out your weak spots.
Note: I decided to write about this because this Youtube video got a lot of traction.Published on June 22, 2018
Optimize for usage, not just sales
Do any of these sound familiar?
- “I ordered the book, but never read it.”
- “I bought this app, but I never logged in.”
- “I backed it on Kickstarter, but it just sat in its box.”
- “I got the upgrade, but I kept using the old version.”
As product people, we make things so people will use them.
And yet, we optimize a lot of our marketing around merely getting the sale.
But “getting the sale” isn’t enough.
You can’t build a sustainable business on one sale. You need customers to come back; otherwise, you’re wasting a lot of time, money, and energy on acquisition.
The truth is, most of the magic happens immediately after purchase. When customers buy something and become activated, that’s where our business’ flywheel starts running.
Customer activation leads to:
- positive outcomes for your users
- word of mouth, reviews, and case studies
- repeat purchases, upgrades, and expansion revenue
Activation and usage are what contributes to a business’ longevity. Instead of being in a never-ending cycle of trying to acquire customers, you’re able to focus on retention. This increases the lifetime value of a customer.
For example, my friend Bryce owns the local skateboard shop. It doesn’t help him if he sells someone a board, and they go home and put it in their closet. To have a healthy business long-term, he needs the customer to use the skateboard, and keep using it!
A few weeks ago, two girls bought their first skateboard. Yesterday, Bryce and I were hanging out in his shop, and they rode by down Main street. This is a good sign. They’re out skateboarding. They’re activated!
If they keep skating, they’ll progress. They’ll break boards. They’ll buy new shoes. They’ll want to upgrade to better wheels. Tony Hawk is 50 years old, so it’s possible that these girls will skateboard for another 35 years. These are the long-term customers that will help Bryce build and sustain his business.
How do you increase activation?
Those first moments after the purchase are crucial. Remember, when a customer signs up, they’re highly motivated. They’re eager to see if your product will live up to its hype. They’re asking:
“Alright, I’m in! What’s this going to do for me?”
But, if your product feels too complicated, or they get stuck too fast, they’re going to give up. And if they leave, you might never get them back.
So, when users log in for the first time, you need to give them a quick win.
Rob Walling calls this the “minimum path to awesome:”
“If you have invoicing software, maybe it’s when they send their first invoice, maybe it’s when they get paid. It’s the minimum path from sign-up to something that gives them a dopamine rush.” – Rob Walling (Source)
If your product is new, one way to give customers that feeling is to personally onboard them. Get on the phone! At the beginning of the call, you can determine:
- What’s going on in their world that brought them to your product today?
- What are they hoping to accomplish with your product?
“The biggest mistake I see new SaaS companies making is they try to increase activation by writing lots of onboarding code and emails. Instead, screen share with every new customer. Figure out why they bought your product and what their goals are. Personally help them “activate” what you promised them on your marketing site.” – Brennan Dunn
For my new startup, Transistor.fm, we’ve done dozens of calls with early-access users. What are we seeing? Two accomplishments make our users feel awesome:
- Uploading their first podcast episode
- Being able to share it with a friend
Folks want to be able to tweet out: “HEY! I JUST MADE A PODCAST CHECK IT OUT!”
Started a little podcast with @jmcharnes to talk about #ruby and #rails every week. Let us know what you think! https://t.co/z8KAw2nRvN
— Chris Oliver (@excid3) June 8, 2018
Don’t be satisfied with just taking people’s money. Reach out. Figure out what their goals are, and where they’re getting stuck. Then, help activate them by giving them some initial wins.Published on June 8, 2018
Don’t sell to beginners
Jon Buda and I are getting closer to launching our SaaS, and that means we need to figure out pricing. We realized a lot of pricing depends on who you’re selling to. Should we sell to startups? Should we aim at the enterprise? Hobbyists?
We reached out to Patrick at Price Intelligently to help walk us through the pricing process.
During our chat, Patrick said, “In your early stage two things are essential; if you can nail these two things (even if you get everything else wrong) you’re typically fine.” According to him, the two things to focus on are:
- Your customer focus
- Your value metric (I’ll talk about this in a future post)
Choosing your target customer is incredibly important. “From the beginning, you want to figure out who is going to be a sustainable, profitable customer,” says Patrick “it’s going to determine how you do your marketing, and also how you’re going to structure your pricing.”
Patrick helped me realize something:
If you’re bootstrapping, you shouldn’t sell to beginners, new startups, or hobbyists.
When you’re building a company, there’s an inclination to sell to folks who are “just getting started:” new companies, people building their skill set, beginners. After all, they need the most help, right? But increasingly, I see this as a trap.
“Selling to your startup friends probably won’t be profitable,” comments Patrick. Startups and beginner customers might be easy to attract (they sign up for free newsletters, guides, and free tools), but they have three significant downsides:
- They’ll use free tools and resources if they can.
- They don’t have the same capacity to pay as experts do.
- Most new startups fail, so they don’t make stable, long-term customers.
Simply put, it’s hard to build a sustainable business for beginners. They can’t pay as much, and they don’t stick around as long, which results in a lower lifetime value.
In B2B, it’s the intermediate to advanced companies who need our help and will pay you for a long time.
They’ve proven they can survive the startup stage. But now they’ve exhausted all of their free resources, and they’re starting to plateau. To get to the next level, they’re going to need outside help, and because they have revenue, they can afford to pay for it.
“Targeting beginners requires you to do more work on the periphery of your core skill set. When you get hyper-focused on what you do best + combine it with supporting intermediate/advanced businesses, you love your work and get paid well for it.”
– Val Geisler, valgeisler.com
The best target market is “professionals who are already heading in a specific direction.” They’re in motion towards a specific goal.
For example, my friend Brennan’s company (RightMessage) is almost at $20k in MRR. They’ve proven they have traction. My guess is their first milestone is to reach $5 million a year in revenue.
To accomplish that goal, they’re going to need specific assistance. Things like:
- “Help me increase sales by 30%.”
- “Teach me how to podcast so that I can reach a bigger audience.”
- “Take away my downtime.”
- “Equip me to design better onboarding flows.”
They’re going to hire outside help to assist them with these things; to help them get to their goal.
One way to visualize this is a delivery truck driving towards a destination:
Along the way, a rockslide covers the road:
Who are they going to call?
(If you yelled out ROCKBUSTERS, you and I could be friends)
To me, B2B products and services we build are a lot like that. We’re removing obstacles for businesses, helping them achieve their goals.
But targetting the right customer is critical. For example, the delivery company has already proven a few things:
- They’re investing heavily in their equipment (the delivery truck).
- They’re investing in their personnel (trained truck drivers).
- They have high-value customers who can pay them to haul big loads over long distances.
- They’re committed to building a company for the long-term.
Contrast that with a solo bike courier who is just getting started:
The biker courier is sending signals that show they probably wouldn’t make a great customer for a B2B business:
- They have minimal investment in their equipment (bicycle).
- They’re likely serving low-value customers (short routes, small payments)
- They probably don’t see themselves being a biker courier for 5-10 years.
There are all sorts of services the delivery truck company will pay for:
- Nitrous injections, to give their engines more power.
- Roadside assistance, to get the truck back on the road.
Logistics software, to map the fastest routes.
Here’s the crazy thing: you and I could invest the same amount of energy building products for the truck company as the bike courier.
Sure, we can sell the cyclist PowerBars (for energy), roadside assistance, and a mapping app, but they don’t have the same capacity to pay.
As product people, we need to focus on the right customers. Let’s not invest in customers who might not be around in 6 months. Instead, let’s build things for professionals that help unlock their potential.
Listen to the whole interview
Want to listen to my whole interview with Patrick from Price Intelligently? It’s here:Published on June 2, 2018
What would you do differently?
Adam Clark recently asked me this question on his podcast:
If you woke up tomorrow, and you had to start all over again, what would you do?
It’s a good question. If I didn’t have Transistor.fm or my existing audience, how would I build a business knowing what I know now? What would I change?
Here’s what I said:
First, get a therapist
I struggled with depression this past year. I’ve seen firsthand how mental health affects every part of your life, including your business!
My first step as a new entrepreneur would be to build rapport with a therapist.
Talking with a professional counselor on a regular basis has been incredibly valuable for me. On the one hand, it’s a safe place for me to get my feelings out. On the other, my therapist has helped me avoid knee-jerk reactions, and carefully consider my next steps.
I avoided my mental health for years and inadvertently buried many issues I should have dealt with a long time ago. It’s worth investing in your mental health now!
Someone on Twitter asked me:
Ok, but how did you find your therapist?
If I remember correctly, I started by googling:
[my hometown] therapist
I looked at dozens of websites. I emailed three therapists and ended up booking an initial session with two. The idea was to get to know them, describe what was going on with me, and see who would be a good fit.
My session with one of the counselors went really well; I felt I could trust her. After that, I booked a regular one-hour appointment. Now, I see her at least once a month.
Your mental health is the foundation you’ll build your business on; so take care of it first!
Second, I wouldn’t target beginners
I’ve noticed that beginners often don’t make good customers. (Especially in B2B markets)
There are a few reasons for this:
- Most free resources and tools target beginners.
- Novices don’t have the same capacity to pay as experts do.
- Most new startups fail, so they don’t make stable, long-term customers.
Here’s a better plan: help an intermediate go pro.
Intermediates have proven they can survive the startup stage. However, now they’ve exhausted all of the free resources, and they’re starting to plateau. They’re motivated to get to the next level and are looking for outside help.
My friend Marcus was a freelance videographer. He saw that his peers knew a lot about camera gear and filming technique, but had a hard time closing sales. They were making some money, but he knew they could unlock more revenue by applying a handful of tactics.
So he started offering mentoring and workshops to teach business skills to video professionals.
Third, I would get a job
You can be so much more helpful if you’ve already been in the trenches. There’s no replacement for experiencing a struggle first-hand.
I opened a snowboard shop in my early 20s. I’d never worked in retail before, and that was a huge mistake. If I could have seen the other side of owning a retail store (the endless paperwork, ordering nightmares, handling inventory, managing employees), I would probably have never started it.
If I were going to start again, in a new industry, I would get a job or start consulting. As I worked, I would observe, and take notes about the daily struggles people face.
You’ll build a better business if you’ve felt the pain yourself!
Fourth, I would meet people
Your real unfair advantage in business is your network.
Education, wealth, and skills all help, but it’s “who you know” that makes the difference.
I’ve interviewed hundreds of entrepreneurs. In almost every single case, their success didn’t come from some magical ability or secret life hack. Nope. The big jumps forward came when someone encouraged them to do something, taught them a new skill, or gave them an opportunity.
“It was Hiten Shah who told me to start taking ConvertKit seriously, or shut it down, ” says Nathan Barry, “so I decided to double down. I hired a developer, invested $50k, and shut down my other business.”
That paid off pretty good for Nathan (ConvertKit is currently doing over $1 million per month in revenue)
So if I had to start again, I would focus heavily on building my network.
I’d force myself to get out of the house. I’d go to meetups and conferences. I would fly to different cities for a week at a time and connect with interesting people. I would start an interview podcast.
Relationships are worth investing in; they pay big dividends.
Listen to the whole interview
You can hear the whole conversation between Adam and me here:
Hope this is helpful for you on your journey!
PS: last week, I opened up 20 more spots for the Product Validation Checklist. They sold out fast! If you want to get notified when I open up more spots this week, click here.Published on May 26, 2018
When you’re building a product, whose opinion should you listen to?
It’s hard to make things that people want.
A band might record an album hoping their fans will love it. But when they release it, it doesn’t sell.
A software company releases a new feature thinking it will hockey-stick their growth. But when they deploy it, users complain.
A blogger pours hours of research into a single post. But when he hits publish, he doesn’t get any traffic.
Nobody wants to be out of touch with their audience. But it happens all the time. Even big companies make these mistakes.
A story about unmet expectations
In 2016, developers, video editors, and other pro users were eagerly awaiting Apple’s refresh of the MacBook Pro.
However, when they got their hands on it, it was clear Apple had missed the mark.
@Apple Utterly dissapointed with the new macbook pro. The computer is way too expensive. New model removes USB, SD Card slot, magsafe. ????
— Ivy (@Ivan_Krazy) November 6, 2016
“In all my years of using Apple products, I have never returned one. Until now. Last month I purchased the new MacBook Pro with Touch Bar. What a letdown. It’s the first Apple device that’s actually made me less productive. The company has lost touch with Steve Jobs’ vision for simple, elegant machines.” – Michael Hyatt
I’m actually thinking about returning my 2017 MacBook Pro and getting a used 2015. I’m not a 100% satisfied right now.
— Sniper (GER) (@Sniper_GER) November 1, 2017
Why did Apple lose touch with their customers?
I think they just weren’t listening.
Leading up to the 2016 MacBook Pro reveal event, Sascha Segan, writing for PC Magazine, said:
To me, the most important aspect of the MacBook Pro is the “pro” part. This laptop should be a no-compromise workhorse for getting your business done on the road. I’ve been reading the rumors of what may be coming and going with some trepidation. Like many pro-level MacBook users, my biggest concern isn’t about what Apple is adding—it’s what might be taken away. I chose a Pro because it gives me the power, the ports, and the keyboard to get all of my work done.
Of course, there are many differing perspectives on Apple’s products.
How could they know which voices to listen to, and which to ignore?
People are complicated
When you put anything out into the world, people will have opinions about it. And, to make things more confusing, everybody wants something different.
Why? People value different things depending on their context.
With laptops, different groups want different features:
- Students want a laptop that is affordable, and lightweight (because they’ll be lugging it to class).
- Programmers want a laptop with a high-resolution screen, lots of memory, and a full-size keyboard.
- Gamers want a CPU and GPU with a lot of horsepower. They also don’t mind as much if the laptop is bulky.
Even these examples are too general because a person’s context has multiple dimensions. Some college students are wealthy. Many programmers are assigned computers by their employers and don’t have a say in what they get. Most gamers prefer a desktop machine because it’s easier to upgrade individual components.
So, you could ask a programmer “what’s your dream laptop?” and they might give you a truthful answer. But, if their boss is buying the computer, it might not matter what the programmer thinks. Unless the boss is a good boss, in which case the programmer’s opinion matters quite a bit.
Do you see how this can get complicated?
Who you listen to matters quite a bit.
Who you should listen to (and how you should listen)
I’m going to give some very general advice, and some of you might disagree when you hear it:
When it comes to product feedback, only listen to the people paying for your product. Explore their context; find out what’s important to them.
I know some of you are screaming: “BUT SOME USERS DON’T PAY FOR THE PRODUCT AND THEIR VOICES ARE STILL IMPORTANT.”
I agree with you. I too want to build products that benefit the actual users.
But, look at Facebook and Google. Many of us use them every day, but we don’t pay for them. Advertisers do. Facebook and Google don’t seem to care much about our privacy. They’ll track us, and share our information without our consent. Why? Their allegiance is with advertisers.
Ultimately, a business serves whoever is paying them.
Let’s go back to our laptop example.
Joel Spolsky is the founder of Fogcreek Software and has probably bought hundreds of laptops. If you were trying to sell him your computers, you’d want to read his blog and figure out what he values. In his case, he cares about treating developers well. He wants to give them autonomy. He’ll let them choose their machine and the tools they use.
Ready to put this principle into action? Here are the steps I recommend:
1. Serve a customer you care about
You need founder/market fit with the people you’re serving; product/market fit isn’t enough.
Don’t sell laptops to CTOs who don’t care about their developers! If you don’t respect the person paying you for your service,
“Giving a damn” about your customers is a substantial competitive advantage.
2. Only take product feedback from people paying for your product
The opinion of random people on Twitter’s doesn’t matter. Likewise, don’t listen to folks who keep saying they’ll buy your product, but never do. Their opinion doesn’t matter either.
Famously, Jason Fried said he only listens to feedback from customers who just bought or people who just canceled.
Dan Shipper elaborates:
A customer who just signed up can give good feedback for this reason: they’re only recently removed from the buying process. Because of this, it’s easier to get useful information about why they bought your product, what emotional event caused them to look for it and which part of it is actually useful for them.
Similarly, a customer who just canceled can tell you exactly what you’re missing. They signed up and put their credit card information in because they thought you would be able to do a job for them. If they cancel, your product didn’t deliver what they expected.
Don’t build features for people who aren’t paying you! Don’t try to please folks who haven’t proven that they’re willing to be your customer.
Are you a brand new startup with no customers? Jason advises that you talk to people who are paying for your competitor’s product.
3. Explore your customer’s context
Get close to the customer, and observe how they’re using your product.
I’m one of those people who didn’t upgrade to the new MacBook Pros. Why? Here’s what my computer looks like most days:
If Apple had paid attention to how I, and many other pro customers, use their laptops every day, maybe they would have thought differently about what they offered in the new MacBook Pros.
Recently sold my 2017 13" MBP (for a profit), and went back to my 2013 13" MBP. Keyboard was too shallow, TouchBar was pretty useless, and no noticeable boost in performance. It was a beautiful machine though.
It feels great to have a "normal" keyboard and USB 3 ports again!
— Amir Khella (@amirkhella) June 4, 2018
4. Listen to your customers
Beyond observing your customers, you should also do customer interviews. Ask customers questions: What are they struggling with? In what ways do they want their lives to be better?
Going back to the MacBook Pro example, we saw many Apple customers stating: “This is what I wanted, and I’m disappointed by what I got.”
Users wanted more memory, more power, and a full-size keyboard (“Don’t take away my ESC key!”). Many folks wanted that SD card slot and more ports. But what they got was a thinner, lighter machine with a touch bar. That’s why there was so much disappointment.
The new offering didn’t feel like a step forward. It felt like a step back.
For years, Apple produced a MacBook Pro that users loved. But, in this case, they got it wrong.
Their example shows how difficult product/market fit is.
As entrepreneurs, we need to listen to our customers. What do they care about now? What do they want now?
Customers are a moving target; their context and desires are continually evolving. Our job is to listen.
You can listen to an initial draft on the MegaMaker podcast:
Subscribe to my newsletter and get notified whenever I publish something new:Published on April 21, 2018