Trying to Quit Your Job? Don’t Start This⏐Ep. #221

Check out my newsletter at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://TKOPOD.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and join my new community at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://TKOwners.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

━

I sat down with Rob Walling, who’s built and sold multiple companies without raising a dime of venture capital. Rob created what he calls the stair step method, a framework for everyday people to go from freelancing to building big businesses one step at a time. We got into how to know when something is simple enough to vibe code, when you should bring in no-code tools, and when you actually need a developer.

We also talked about the 75 different app marketplaces that can be incredible launch pads, why most entrepreneurs should start with an agency or productized service before SaaS, and how Rob grew his own companies like Drip. He shared insights from investing in over 220 startups, the traps new founders fall into, and the repeatable playbooks that really work.

If you want to keep up with Rob, check him out here:

YouTube: https://www.youtube.com/microconf
Podcast: https://www.startupsfortherestofus.com/
Twitter/X: https://x.com/robwalling

Enjoy!

---

Watch this on YouTube instead here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tkopod.co/p-yt⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Ask me a question on or off the show here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-ask⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Learn more about me: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-cjk⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Learn about my company: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-cof⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Follow me on Twitter here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-x⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Free weekly business ideas newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-nl⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Share this podcast: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-all⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Scrape small business data: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://tkopod.co/p-os⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠---

Episode Transcript

(00:00):
Don't go build a SAS build something simple first you want
to build something that buys outyour time from your day job and
all you're trying to do is get to I usually say 10 KA month.
Then once you do that you have infinite time all of a sudden
and that's when you can attack something.
The way I did that was freelancing nights and weekends.
I was a construction worker, dida bunch of stuff I didn't want
to do but you know what I neededto pay the bills.

(00:21):
How can you charge $799? What would you need to have to
charge that much? Not $79 a month.
Don't go cheap. Shopify apps can be by coded
right? Wish they have a list of 75 app
marketplaces like that. They're not that complicated.
The marketing you do is learninghow to optimize your listing in
the App Store because almost allyour customers will come from
that App Store as opposed to if you're going to build a full

(00:42):
blown SAS. Do you know how to market?
Do you know how to support? Like it's a lot, man.
Most people think you need money, connections or Silicon
Valley venture capitalists to start a software business.
Also, most people think you needto be a software engineer.
My guest today proved that none of that is true.
How do you know what to vibe code, what to build with no

(01:02):
code, and what to actually hire a software engineer for?
Rob Walling has built and sold multiple big companies without
any outside funding, and he created what he calls a Stair
step method, which is a framework that shows everyday
people how they can go from freelancing to big business one
step at a time. Rob's invested in over 220 small
startup software businesses, so he knows exactly what works and

(01:25):
what doesn't. We also talked about 75
different app marketplaces that you can vibe code or actually
code apps for where you will have more demand than supply.
Did you know that Zoom has an App Store?
Exactly. So if you ever want to launch a
productized service, an agency, or a software as a service
business, you're going to learn a ton from this episode.
Please enjoy. Vibe Coding is fun for I use

(01:47):
this analogy of like, if I invited you over to my house and
said, let's build, let's you andI build an outhouse just a tiny
little shack. We could go to Home Depot, we
could buy some 2 by fours and some plywood and we'd figure it
out and it'd probably be mostly right.
Angle. It's a hole in the ground.
It's a hole in the ground and then you put a thing around it,
right? And if I said, hey, now come
help me build a tool shed in theback, you and I could probably

(02:09):
still figure that out with basically no experience, right?
And this is This Is Us vibe coding things at the moment.
I said, hey, can you help me build A2 car garage or you just
you and I let's build a house like a 2 bedroom house.
It would not go well because it's big, it's more complicated.
It's same thing with vibe coding.
So what types of start up ideas or SAS ideas are vibe codable

(02:29):
versus not vibe codable in your opinion?
Yeah, yeah. I mean, it comes back to that
analogy earlier of like the simpler, the simpler ones, often
the simpler ones that you know, usually don't have to you don't
need that many lines of code. They don't have to be super
maintainable because they are a feature or two and scalability
probably is an issue. Like do they have to can they

(02:51):
work with you know, 50 users or 100 user versus like 50,000,
right? Or a lot of a lot of throughput.
Like the my last SAS app I builtwith a Co founder, it was called
Drip. And you know, by the time we
sold it in 2016, it was doing a,we were sending 100 and 50
million emails a month. And so we had the scale and
that's not, and then that's a drop in the bucket compared to

(03:12):
like mail. MailChimp was sending like half
a billion emails a day a tech time, but still 150 million
emails has to scale. You could not vibe code that it
would not work. You would lose job, right?
It's high throughput. Same thing with no code.
No code is awesome. And we have internal line of
business apps, I believe three of them.
They're full blown SAS apps thatmy non-technical staff have

(03:32):
built using air table and it's and make you know, and it's
amazing, but I would never put those into production with real
customers using them. They won't scale, they're
brittle. The UX is not great.
To me, this kind of the simpler,the better.
Or if it's a small use case, it's like, well, I only have 3
users. I could vibe code this because
it breaks. Or if the UX isn't that great,
you know, doesn't doesn't reallyneed to.

(03:53):
It's not like it has 100, you know, 10s of of thousands of
people using it. If you were forced to build a
simple app right, something thatcould be vibe coded and you had
to choose either like the air table make slash zapier stack or
the like replit clod code stack,you couldn't use both in tandem.
Which would you go with if you're non-technical?

(04:14):
Yeah. Well, that's a really good
question actually. What I like about AIR table, it
can get complicated, but it's pretty simple and it it does
seem pretty maintainable. If you get that, if you do it
right and you get the blocks in,you don't have too many
automations. Like we have full podcast
production system that is a, youknow, it's our source of truth
of every podcast episode. I, I put out 104 episodes per

(04:37):
year across 2 podcasts. Now that's I, we put out more
than that, but whatever. And then we have an entire
similar app that's for YouTube stuff.
And so it's just like crud, right?
It's create, read, update, delete, putting stuff in and out
of the database and it's been really, really solid.
And so I would lean towards thatstack, if I'm honest.
The thing is, but here's what I don't like about it, the

(04:57):
platform risk. What if they 10 XR price
tomorrow, you have to go rebuildthat somewhere versus Claude,
you know, writing AI code, you have so much more flexibility.
But man, it really is the difference between it'd be like
if you said, all right, so now you're going to come up to my
house and we're going to build atool shed.

(05:18):
Now do we want to make our own nails and make our own hammer
and make our own 2 by fours fromthese blocks of wood, you know,
really bare metal, it's tons of control.
Or do we want kind of a prefab thing where it's like, oh, this
whole we just stand the walls upand you just hammer them in.
That's more of no code is how I think about it.
And so you get the analogy, but then the no code is the only

(05:41):
part of that analogy that breaksdown is I don't have platform
risk with it, with the tool shed, you know, the platform
risk of our table like going outof business, getting, you know,
10X in price, having a week longout, It's just whatever.
You have a lot of reliance on a no code provider And and then
you do outgrow it. If you're going to have end
customers, you will eventually outgrow it if you scale and you,
I don't know of a single SAS appdoing millions a year that is

(06:02):
written in no code anyone. There's people that claim they
are. And then when you dig in, it's
not really a SAS, it's like an agency, you know, like, hey,
we're gonna help you with your legal stuff, for example.
But really the service you're paying for is the legal and the
app they built in no code is just a.
It's almost like Google Sheets doing stuff, you know, it's
just, it's just a project management basically.
Yeah. So if someone is listening and

(06:24):
they're non-technical and they want to build something maybe
with Replit or maybe with an automation or maybe a service,
maybe an agency in your opinion,like what are the maybe not a
specific idea, but types of business ideas more broadly
speaking that are the quickest to like 10 KMRR?
Would it be like a tool like a SAS tool that you vibe code or
like an agency where you charge $2000 a month and you need 5

(06:48):
customers? The agency.
What do you Yeah, yeah. Oh, no, I mean, I so I'm a SAS
of SAS because of the recurring nature of it, because of the
exit multiples are insane. They're the best in the world
for any business. You can create vast amounts of
wealth very quick, not very quickly.
Is a is a relative. I know what you're saying.
Yeah, but if you know, if if youcatch it, it, it becomes very

(07:08):
valuable. But no freelancing and agencies
and dollars for hours or dollarsfor services is gonna grow so,
so much faster. It's just that becomes a pain
because you have clients, right?Yeah, revision requests for a
lot of communication. Totally.
But that's the way to get, I mean I know of a number of SaaS
founders. I have this concept called the
OR this framework called the stair step method of

(07:29):
entrepreneurship. And I talk about look, don't go
build a SaaS that's like step three.
That is really hard. It's complicated, especially if
you're non-technical. Just don't jump into that.
Build something simple 1st. And really what you want to do
is you want to build something that buys out your time from
your day job. I'm assuming everyone has to
work a day job because I, you know, most of us do.
I had to when I was younger. The way I did that was

(07:50):
freelancing nights and weekends until I saved up enough money
that I went, then went and acquire.
I didn't have the time to build a SAS but I went and acquired.
It was software product, but it was pre SAS because it was only
one time download. But I bought that.
Then I built that business on the side and then I built a
couple and that got up to like $4000 a month, which was not
enough to live in Los Angeles and.
It wasn't even a SAS, you're just a one time.

(08:11):
Purchase. It's a one time thing.
Yeah, this is 2005. It was 2005 to 2008 or 9.
I remember when I I gave it to my business partner.
But the idea is you, you pick something that's a little simple
and it's a tight niche and may never get to more than 5 or 10
grand a month. You're not.
That's $1,000,000 idea. It's OK because you're off the
radar of, of big competitors. You're less reliant on these

(08:35):
heavy, heavily competitive traffic channels.
Or your job. Over your job and all you're
trying to do is get to, I usually say 10K a month because
that's when most people can quittheir job, their day job.
Then once you do that, you have infinite time all of a sudden
and that's when you can attack something.
You have some experience for having these little products.
Oftentimes these are little add-ons, right?

(08:55):
It's like a Shopify app. So Shopify apps can be vibe
coded, right? Heroku add-ons.
We actually have a list of 75 app marketplaces like that, the
HubSpot app marketplace, the Spotify or Shopify.
You can search this microconf app marketplaces and we have a
list of them. And it's for exactly the
purpose. Yeah, it's for exactly the
Chrome. Extension store.
Right, totally, exactly. It's all of those things that

(09:17):
that are add-ons. The nice part about those is
those are usually kind of one feature.
They're usually, you know, hundreds of lines of code, some
of them become thousands, but they're not that complicated.
And you don't really, the marketing you do is learning how
to optimize your listing in the App Store because almost all
your customers will come from that App Store.
As opposed to if you're gonna build a full blown SaaS, you

(09:40):
need 50,000 lines of code. You're going to build it
yourself or hire a developer. Now you have to learn.
Yeah, you register a domain name.
Great. How do you get people to that?
Do you know how to market? Do you know how to copyright?
Do you know how to support? Do you know how to hold?
Like, it's a lot, man. It's like 10-15 really
complicated things. You eliminate, you know, several
of those by going with this stair step approach.
Now, it doesn't just have to be software though, like the

(10:01):
original stair step method. I talked about step one.
Maybe you could do maybe it's ane-book or a course or maybe it
is freelancing. I don't actually include that,
but you know, it could be a productized service, an agency.
One of our founders, founder of Castos, which is podcast
hosting, he built a productized service called, it's called
Castos Productions now, but it used to be called Podcast Motor

(10:22):
and it is podcast editing and production.
And it was as a service 5 as a service, 515 hundred a month,
depending on how long your podcast is, how many episodes,
if it's video, it's on it, you know, you get it.
So it's not consulting because it's, it's, it's not custom.
You know, it's tiers of pricing and it's, it's basically based
on your needs. And so he was working a day job

(10:45):
as a pharmaceutical. No, not pharmaceutical.
It's like Med Med tech sales andhe built this to like $30,000 a
month over the course of a couple years and it was an all.
Himself. No, he hired people.
He found editors on Upwork. He found, yeah, he had project
managers and editors and he did the sales.
That was his big thing. He did the selling.
And then once you have a podcast, if you keep going, you

(11:06):
just paid him every month. He then parlayed that, bought a
little WordPress plugin. Someone let him, I think, I
don't remember. He paid for it, but you know,
WordPress plugin that was like, oh, podcast hosting because
you're in the same space you're doing.
And then he turned that into ASAP called Castos.
Now it's a 7 figure app And that's how he stair stepped his
way out. The people who either quit their
date. Beautiful example, yeah.
Totally and I have 20 more like it and if you go with Google

(11:30):
stair step method of entrepreneurship and I have
probably like 5 examples similarto that in that article.
It's an old blog essay of mine. The nice part is you do, it
takes longer. It's what I did.
I mean my whole story is just stair stepping one thing to the
next. It's like, oh, it's making 5
grand a month and then I bought a SASAP and made it get it to 30
grand a month. And then I build DRIP, which
went to millions a year. And you know, it's like, but I
didn't just jump into DRIP. I didn't have the money.

(11:52):
I spent $200,000 having Drip built like 20 grand of my own
money. Well, how did I get that money
from the previous business I started?
Well, how did I get the previousbusiness from the previous one I
started? Well, how did I get the compound
from freelancing nights and weekends?
Yeah, I never raised funding because I couldn't because I'm
an outsider and I don't know anyone who has money.
I don't know any other capitalist.
But stairs stepping up, whether you're doing it in software or

(12:15):
anything, I think is if you're abaseball player, you don't go
play in the majors tomorrow. You play Little League and you
play high school and then you play college and then if you
qualify, you go to single A AA, AAA, right.
And that's how I view entrepreneurship.
Don't look at what Jason Cohen, Dharmesh Shaw, Heaton Shaw, you
know, founder of Dropbox, whatever.
Just name any big entrepreneur but Elon Musk and and whoever do

(12:35):
this, Jeff Bezos is like, yeah, are you them?
Are you a billionaire? So don't, don't model yourself
after them. Like, I know I get you want to
get there, but like there's a they all travelled a journey and
you have to think about what they did 30 years ago, you know,
rather than what they're doing now.
Oh man, you just like open the floodgates of the questions I
want to ask you Now. What's funny about like that
podcast agency example is I think people have this bias for

(12:58):
thinking, oh, well, that worked four years ago, but that good.
Like in my experience, like mostideas work for a while, right?
Like they don't get tired for a while.
I bet someone could go start like Podcast Editing Agency
today and find success as long as their outreach was dialed in
and all that, right? Yep.
And they'd have to figure out how they're different because
there's like 20 of them. So it's like, how are you

(13:18):
different? Are you, you know, the value
player? Are you the AI player?
Whatever. But yeah, no, this stuff,
productized services are really interesting.
They're really interesting. You know, I ran a micro agency
and agencies are kind of becauseyou have everything's custom and
it's but like productized services are like SAS, you just
don't have the software product.You have humans doing the work.
Yeah. What other productized services

(13:41):
are you liking right now? Yeah, I mean, you know, there's
a lot of productized services that are leveraging well they're
like the design ones like designPickle and all those right where
it's like you pay 1500 bucks a month and you get designers and
you just need to get stable of of designers.
There are many that create content for you, like SEO
content and I like them. It's just very crowded.

(14:04):
I like the ones that are doing it well and using humans, even
if they're AI augmented because then there's some that are
trying to do it purely AI. And I as some guy was trying to
charge 79 bucks a month. Yeah, 79 bucks a month for eight
blog articles a month. And I'm like, no, don't do that.
Like how can you charge? I, he asked my advice and I
said, how can you charge $799? What would you need to have to

(14:24):
charge that much or 1000 or 2000?
That's how you're going to builda good product.
I service not $79 a month. Don't, don't go cheap.
There's so much stuff that is like kind of custom feels custom
like, oh, it needs to be consulting or needs to be an
agency that if you strip it downand you say no enough, it can be
productized. That's how I think about it is

(14:44):
like what? What are people hiring
freelancers and agencies to do today and how can I possibly
turn that into an assembly line?What other examples of like
people that have done these stair steps do you have?
A good friend of mine, a guy named Dave Rodenbaugh, he stair
stepped up with a did he buy? He either started or bought a

(15:06):
WordPress plugin. So WordPress, same thing.
That's a step one. I call them step one businesses
when they're probably not going to become $1,000,000.
You know, they're very simple and they're kind of hundreds of
lines of code, maybe a few thousand.
But he bought a WordPress pluginand revamped it from doing 500 a
month to 3 or 4000, then bought another WordPress plug in, did
the same thing, then bought a third and did the same thing.

(15:27):
And he just learned WordPress And they were like random. 1 was
like a class like if you wanted to run a classified ad site,
kind of like a Craigslist type thing.
It's a WordPress plug in that allows you to do that. 8 WPCP is
how it was called. And then the other ones were
again like, we're at the job board plug in maybe for
WordPress. And he built up three of them to
20 Rand a month in revenue combined And and it was like,

(15:47):
cool quit. And he was a consultant.
He was a developer during the day and that changed his life.
Quit, quit the day job. And you know, and then that gave
him, so then now he has his WordPress button generating 20
grand a month and he has hired enough.
He's hired the support out, he'shired developers, he's hired
stuff. So he almost then had 3540 hours
a week to now just build a sass and he had an infinite runway,

(16:10):
you know, and to me that's the luxury then now this takes
longer than the the problem is it's the good stories.
The the Cinderella stories are great for podcasts and I'm a
podcast host, so I'm guilty. Those are the ones.
You hear about but that's like survivorship bias 101.
Is and those are the. I won't say don't model yourself
after it but see I believe success is 3 components.
You have hard work, you have luck and you have skill.

(16:31):
Different varying degrees. Some people have no luck and
they just work their up for years and they build skills and
it takes a long time. I've had a friend who got
really, really lucky and he always tells me I didn't really
work that hard. I just got lucky.
You know, he sold his business for like $21 million.
That's the one that I know that did that.
Almost no one else does. So don't don't believe you
cannot control your own luck, right?
But you can control hard work and skill.

(16:51):
And that's what I try to impressupon folks is like, I would
prefer to have a system that's more not even a system, but a
framework that is more repeatable rather than one that
relies on luck. And stair step method will take
you longer than if you go try tobuild assess today, but it's
much higher chance of success. If you start small and you build

(17:14):
those skills over years, you'll learn how to do copywriting.
You build the experience, you build confidence and you you
build a little money and you getbetter at it each time, right?
Versus the person who tries to build the big thing and launch
it. It's like your odds of you just
tanking are pretty high. I think it's so important that
people go into it eyes wide openand saying, all right, this is
not going to make me my first $1,000,000 and I know that and

(17:36):
that's OK. This is step one.
I'm going to learn WordPress. I'm going to learn how to vibe
code. I'm going to learn marketing,
copywriting, whatever with this.And I'm going to get paid to
learn this stuff. It's like going to a college
that pays you, except you enjoy every single subject, right?
And then the other thing you're you're self aware about is this
is going to take longer than I think.
It's going to be harder than I think, and it's going to take
longer than I think because it always does.

(17:58):
Yeah, it does. And and here's the thing it
saves you from is specifically the software.
But I think with a lot of businesses, people want to kind
of play business. They want to act like they're in
business and, and and they think, oh, you know, either
going on to Twitter and talking there or like just sitting in my
basement writing code for six months is like, that means I'm
in business. It's like, no, you're not doing
anything. And the stair step method, or at
least just launching something small and trying to get it to

(18:20):
work, it gets you out of that mindset.
It gets you doing something in public because until you've done
something in public, until someone's paid you, you have,
you don't have a business, you know, And so this, this helps
with that mindset as well of like get out, launch quickly and
see if it sticks versus, you know, being in the basement.
Of the 75 or so marketplaces, I mean you've got the Zoom app

(18:43):
marketplace, you know, Chrome extensions, whatever WordPress,
which ones in your experience have the greatest like supply
and demand imbalance, right? Like the most users but the
fewest number of apps. That changes over time.
It changes quarter to quarter, you know, year to year because
like Shopify used to have that where it's like, oh, there's a

(19:04):
bunch of opportunity here and then everyone realized it and
built a bunch of Shopify apps. So there is, I think it's it's
more crowded. I won't say there's less
opportunity. I think there's always
opportunity. I've entered every space I've
ever launched a business into has been crowded.
Everyone, you know, except for the very early ones that were
super niche. But like I, I bought an SEO
keyword tool in 2011. SEO was competitive and there

(19:24):
were a lot of SAS doing it. And yet I grew it from 1500 a
month to 30 grand a month and itwas just me.
It was life changing business for me.
And DRIP was e-mail service provider and then a marketing
automation that talk about 498 competitors.
You know, it's insane. And yet somehow, how did I
figure it out? I don't know.
I did because I executed, because I put in the hard work
and I built the skills. Right now I run a startup

(19:46):
accelerator that invests in SAS companies.
Do you know how many of those there are?
There's a lot. And yet somehow we are one of
the gold standards, right? So I'm not saying you you want
to seek competition out, but it's certainly, you know, is a
signal. And so that's where if I were to
go to Shopify or to. Heroku or whatever, you know,
what I would look at is how easyis it to rank number one or rank

(20:06):
high for the terms that I want? I would look at the App Store
optimization and, and go to Reddit, go to ChatGPT, go to
whatever because I don't know the and I don't there's 75 of
them. I've been the last time I did
App Store optimization was 2015.It was 10 years ago, you know,
and it was for the WordPress plug in thing and I learned that
if you get the slug that you rank for the block.
You know, my advice on that is outdated, but somewhere
someone's talking about this or trial and error, figure it out.

(20:28):
That's a lot of the big breaks Imade in in my career have not
been that I read on the Internet.
It was stuff that I tried to talk about hard work, something
that if someone had just told me, it would have taken an hour,
took me 40 hours because I just tried all the things.
But at the end of that 40 hours,I knew something that no one
else knew, or at least no one else was talking about.
And that was my edge. 100% like my first, my first real business

(20:53):
was a physical retail iPhone repair store and then I sold
that in two years I had four locations and I launched a
company that sold iPhone parts wholesale to repair stores like
that. And day one I spent I used this
random software to scrape GoogleMaps.
This was 2012 and I got this CSVof every single iPhone repair

(21:13):
store in the country and it was so tedious.
I had multiple monitors. It was like it was not automated
and I would just, I have to remove all these duplicates and
then at the end of it, I just just remember looking and I'm
like, I know something that no one else in the world knows.
This database only exists on my computer.
That is every potential customer.
I know these customers are spending about $2000 on parts.

(21:34):
If I multiply that by 21,000 repair stores in the US, my
total addressable market is X big.
If I call them and my, you know,only 30% pick up and only 5% of
like I just knew I was able to reverse engineer what I needed
to do to build a million or $10 million business.
And we did 30 grand the first month, 150 grand the third
month. And it was very not sexy.

(21:56):
It wasn't SAS. We were just cold calling.
Hey, want to buy iPhone parts? Want to buy iPhone parts?
But I had all these numbers thatno one else had.
And it's because I put in like 3days worth of grinding, you
know, like it wasn't like in thegrand scheme of things, three
days worth of data aggregation to build an 8 figure business is
not bad. But most people, they don't
think to do that. Yeah, they, they either don't

(22:17):
think, 'cause there's, there's creativity involved there, You
know, no one told you to do it. You just thought and you got to
that. Well, how would I, Well, how
would I reach them? Well, where would I find them?
Well, how would I even do that? I'm not a developer.
How would I scrape things, right?
Most people won't follow it. And then the next thing is they
don't believe it's possible because if someone didn't tell
them, because you grew up, a lotof us, especially I speak for
the US education system, but I think a lot of education systems

(22:38):
are like, all right, here you are, you're in kindergarten.
We're going to tell you what to do, tell you what to do.
And then you go to 2nd grade, 5th grade, you know, on and on.
Then you go to high school, thenyou go to college.
And did you remember coming out of college?
And like, all right, who's goingto tell me what to do next?
Like that's what we're trying todo.
And I've had entrepreneurs come and tell me they're trying to
get a business off the ground and they're like, I just don't
know what to do next. I really want someone to tell me
what to do. And I'm like, oh, then don't be
an entrepreneur. You need.

(22:59):
Don't be me too. Yeah, no, you really do.
And I don't, you know, I don't want to be pejorative about it,
but like you have to unlearn that mindset if you're going to
be an entrepreneur because no one's going to tell you the, the
most of the job of being an entrepreneur is making hard
decisions with incomplete information.
That's it. I say this all the time.
Then they don't believe it's possible.
No one took because no one told them to do it or they haven't
seen someone else do it. And it's like, so be the first.

(23:21):
There's a bunch of stuff I've done that was the first, right?
And then they won't put in the hard work.
You put in three days if it's 24hours.
It was fun, yeah, because you were like, oh, this is an edge.
Yeah, I'm. What is Yeah, like, what is the
potential of this? I'm just dreaming, you know?
And I think a lot of people think that this grind has to be
unfun, right? But like, I'm only grinding

(23:41):
because I genuinely, it doesn't feel like grinding, right?
And I think that's a very key thing that people should
understand. Like if it does, like if you're
hating every moment of that might just be a signal that
you're grinding on the wrong thing.
Or you are not finding joy, you were preemptively finding joy
from the result that it was going to achieve.
You're like, if this works, the upside is it's asymmetric

(24:02):
upside. High likelihood that I make a
lot of money and that's going tobe fun.
It's going to be a building grant business is going to be
fun. Get the joy out of that as
you're doing it because grinding.
I mean, I just recorded a podcast episode went live a
couple months ago and it was like it was the 12 biggest
mistakes I think I made over my career that held me back and
then the 10 best decisions. And the reason that I was

(24:23):
successful, it was separate episode 10 reasons.
I think I was successful in spite of all that I did.
And one of the the reasons I think I was successful is, is
the grind that you just talked about is I see folks, especially
it's like Indie Hackers on Twitter today saying hard, I
don't want to do this. I don't want to market.
I don't like SEOI don't like selling out of.
And it's like, then then don't, don't be an entrepreneur.

(24:43):
Like you got to do stuff you don't want to do.
And one of the reasons, so I wasa an athlete as a kid, you do a
bunch of stuff you don't want todo because it's hard.
I was a track athlete. I like compete at the state
level. It was very it was hard work all
the time. Then I was a construction worker
out of college, did a bunch of stuff I didn't want to do.
But you know what? I needed to pay the bills.
So when I became an entrepreneur, I was always like,
I'm just going to have to do stuff I don't want to do.

(25:04):
But as you said, I found joy in knowing that if it worked, oh,
it was going to be fun, right. I was enjoying a little bit of
the process, but more of like the goal.
It was let the goal motivate youalong the way.
Yeah. And I think.
It's there's like a fine balancethere.
I'll continue with your sports analogy.
I like, I used to run ultra marathons and I would do like

(25:25):
long distance cycling and like it.
It objectively was not fun. It's very difficult, right?
I love the feeling of when I completed a race or or did
something hard and it felt good looking back on it.
But like some people love running and they do it because
they love it. I've never been that right.
But lately I've just been working in the yard.
Like I live on a few acres and Ijust do like hard things in 100°

(25:47):
Texas heat with my hands gettingcovered in sweat.
And it's like objectively not fun, but fun at the same time
because I'm comparing it to cycling where it's like I might
get hit by a car. I'm risking my life.
It's hard and like there's nothing to show for it.
Whereas when I go work in the yard, I'm at home, I'm working
with my kids. There's something to show for
it. I can look back on my progress.

(26:08):
I'm burning calories. And so with the contrast of
knowing the types of fun that you don't also enjoy at the same
time or the types of hard work that you don't also enjoy, like
I'm able to just genuinely look forward to that grind, you know,
because of the perspective, because I've tried so many other
different ways of burning calories or trying to stay
healthy. Right.

(26:29):
So on one hand, it's like you should enjoy it.
On the other hand, it's like yougot to be willing to eat crap
for a while. But like the Holy Grail is kind
of both at the same time, you know?
Yeah, I like that. I.
Think you're right? OK, so I.
Just had the idea like imagine how much one could learn, just
like burying themselves in a basement on a MacBook, looking
at these 75 different app marketplaces and just like

(26:51):
learning, like spending 8 hours in the Zoom App Store looking
for keyword optimization, looking for asymmetric bets.
Oh, like 8000 people are lookingfor this type of a Zoom app, but
there's only three apps. But 8000 people are looking for
that type of a Zoom app and theyhave 30 apps Interesting, right?
Like you could build a whole community Twitter account,

(27:12):
newsletter, You could you could build something as you learn
this stuff right? And then you could build a tool
to sell it to all those things that have been following your
progress as you learn to find these asymmetric bets on these
app stores. What do you think about that I.
Like the idea because one of themore common questions I get is
stuff you've asked me, which is like, OK, so you talk about

(27:32):
these app stores as being a nicestep one.
And it doesn't have to be app source.
My early stuff, I had an ebook, I had a course.
You can do non software. But if we do stick to the App
Store thing, it's like, cool, what tool we have hrefs for like
Google SEO. But what's the tool for these
app stores? And there isn't 1 and I don't
know if it'd be the market probably isn't big enough to to

(27:54):
build a tool for each of them. But but what you're saying is
doing more of the knowledge sharing and the kind of guiding
people through because that's the extent, you know, I'm not
going to launch a course on this.
I I've written five books and I I do have a course out on early
stage software entrepreneurship called SAS Launchpad, but I
don't go to that level of detailbecause this stuff changes too
fast. And I do more Evergreen.

(28:14):
And so do I think there's opportunity for folks.
Yeah, who, who, who actually figure this out?
Yeah, I mean, that's that's the kind of stuff content I was
putting out 15 years ago and it was very popular with people
because it was pretty much how to of tactical, how to, you
know, how to do this kind of stuff.
So what tools or? Frameworks do you like to look
at when validating these SAS ideas?
How do you look at that? That's a good question.

(28:36):
So I think of it, there's there's 2 answers to it.
But the historically my answer has been I have a framework
called the Two 2200 framework. So it's the #2/2/20/200.
The idea is, I think there are kind of three steps to
validation or three stages. I might come up with 10 ideas,

(28:57):
whether I'm on Reddit, looking at vertical, you know, like for
gyms are having this problem andno one's solving it, you know,
or construction work or whatever.
Or I'm coming up with my own or whatever, and I'm jotting them
in a notebook. The 2 is these are, these are
hours, 2 hours, 20 hours, 200 hours for three stage
validation. The two hours is pretty much

(29:18):
doing what you and I have talkedabout, which is going to SEO
keyword tools, It's potentially going to Reddit.
It used to be Cora, although I think Cora is most a lot of spam
now, but it's basically online research of is is anyone looking
for this? Is there any need for this?
Is there any demand for this? And you can do 2 hour validation
on 5 or 10 ideas. You know it honestly can take

(29:39):
you a lot less than two hours todo it.
I could probably do it in 20 or 30 minutes now, but a deep
research. Prompt totally now.
That that's where these things change totally.
But yeah, so two hours, 20 hoursis when I take maybe it's my
best or maybe it's the one I like the most, or maybe it's my
top three and I do 20 hour validation.
So that consists of two different things.
One is I always put a landing page up for everything.

(30:00):
I drive traffic to it somehow. I talk about it on podcast, I
talk about it on Twitter. I have run ads to landing pages.
I've done landing and landing page with an e-mail capture is
usually what it is. Or maybe they can go to landing
page. Tool is card CAR.
Rd. is super simple, but I mean,yeah, unbalanced sleep pages.
I mean there's, there's all these old tools that do cards
like 50 bucks a year. For 25 sites.

(30:21):
So like exactly that and we havesome landing.
Pages there. Okay so landing pages dude, I
have validated and you're doing this for validation is like does
anyone care about this thing? You try to write the best
headline you have. I have done landing page
validation for three different books for a conference.
Now it's 15 years in, but the when we launched it, it was a
landing page. That's all it was with a couple

(30:41):
head shots on it. I've done it for a startup
accelerator called Tiny Seed that's invested in 204
companies. That was just a landing page.
Like everything I do is a landing page.
First. The problem is landing pages are
a little, it's like, well, no one signed up.
So I don't know what happened. I don't know.
Is it not a good idea? Do they just not care?
So this the second phase of the the 220 or I'm sorry of the 20

(31:02):
hour is conversations and you either want to be doing some
cold outreach to get into conversations with people on
LinkedIn, for example, Hey, I, Iwill pay your consulting rate if
you will have a one hour conversation with me or if you
are getting people opting into your landing page, then you
reach out to him because you have their e-mail, right?
We chat real quick. Yeah.
Totally. Hey I.
See, you're interested in in this book that I was gonna

(31:24):
launch or this service, I'm gonna launch a product I service
it does X. I want to learn about what
you're looking for and what yourbudget is or whatever, right?
You just have a conversation andyou can and you can even say,
hey, I have nothing to sell you right now.
I'm just a founder and it would be a big help.
So that's the 20 hour. It's kind of that next step,
right? And that again, is it exactly 20
hours? No, it's directionally, you
know, and maybe it's 20 hours over the course of a month.
It's five hours a week for four weeks.

(31:45):
Do this and you know, and then 200 is building an MVP and the
reason the numbers may not work out the way they used to is AI.
Now can I build an MVP in like alot less than 200 hours?
Possibly. So then the second, you know,
when I, when I started talking about two 2200 framework, the
first question I ask is can I just build the MVP of this in

(32:08):
like a few days and just get it live and not do anything I just
said. Now I'd probably still do the 2.
For me, the two hour of the research is just a no brainer.
But if I could get something into the Shopify App Store in
like 3 days, I don't know that Iwould do the other stuff.
So that is where there's a bit of a crossroads that didn't used
to exist. It used to always be like, Nah,

(32:30):
you're gonna have to spend 200 hours to kind of build anything.
But with AI and no code and justsoftware tools getting better,
it's kind of like I think there's a decision point, you
know, So I think what you said about.
AI in that 200 hours is such a key because people think that
Replit or any vibe coding tool is going to solve all their
problems. What they need to realize is
like that 200 hours of like building a minimum viable
product just went to five hours.So why don't I test 20 different

(32:54):
concepts instead of 1, right? Like, I like looking at AI in
that way. Like, how can I, with my limited
resources and time and money, do10X more with AI as opposed to
how can I just go to sleep and let AI agents do all the work
for me? Because that's not realistic
yet, right? And I think that's how like the
best companies that are embracing AI are using it

(33:16):
instead of hiring the 100 peopleover the next year that they had
planned, they're hiring 30 people that are all AI enabled
and they're doing net more than they would have otherwise.
That's what we, you know, I. Run these two companies that are
really kind of one big team, a big team.
I say it's 11 people. We are a multi $1,000,000

(33:36):
community, online community with10s of thousands of of not
paying members, but 10s of thousands of people in the
audience and you know who come to the events and such.
And then we are a venture fund that has deployed 45, that's $45
million invested in 24 companies.
We're 11 people. And one of the reasons is that
we're not 20 people, which we probably should be given how

(33:58):
much we do. We run in person events.
We do a lot of boots on the ground stuff is because AI has,
has allowed us to hire slower and and not only, it's not just
fewer people though, like smaller teams are more
efficient. There's just no way with 20
people you're as efficient per person as you are with 11.
And so we are also embracing that.

(34:19):
Are there any? The trends that you're seeing in
this space that you really like,like types of SaaS products,
types of pricing offerings, likeindustries that are less obvious
than AI, you know, like, yeah, what are you liking right now?
I tell you. If I was with step one
businesses or even just if I wasgoing to launch a small SaaS and

(34:41):
I was doing it on my own, I would pick a lane where I'm
either I'm going to just have a higher churn and I'm OK with
that. And I'm lower priced, let's say
in the 20 to $100 a month range as a starting price.
I could probably get there relatively quickly has on what
I'm building, but I don't need to build something that's so
advanced and complicated that itneeds to, I need to charge $1000

(35:04):
a month for it, right? This is going to be a lifestyle
business. It's not something that's going
to be $1,000,000 business, but that's OK.
Or I would pick the lane of which a lot of tiny C companies
do, is what can I build that is worth at least $1000 a month,
750 a month. The magic part of charging that
much is it allows you to spend money to acquire customers.

(35:25):
The biggest downside to having abusiness where you're charging
$20.00 a month is you can't do, you can't do any marketing, you
can't afford to do anything. So I have 20B to B SAS marketing
purchase. There's only 20 that I know of
that exists in the world and they're in my last book, SAS
Playbook. If you were charging like $20.00
a month, if that's your average revenue per account, there are
like four of those 20 that you can afford to do.

(35:46):
And it's stuff like virality, building virality into your
product. It's content and SEO if you, the
founder, are building that yourself.
So it's your time. It's I forget what the others
are, but and if you charge $1000a month, you can do like 14 of
them out of the 20, you know, And if you're charging 2500 a
month, you can do all 20 of you can afford because you know,
some of them are like in person events, you go to the trade
show. You can't.

(36:06):
If you're selling 20 bucks a month, you can't afford to do
that. Right.
Yeah. And even like ads, like Google
Adwords is really expensive now.So anyways, those are the price
point things. The other trends that I'm seeing
are horizontal plays. So horizontal SAS app is one
that any business can use, right, Whether you're a
construction firm, think of likeNotion or Google Docs,

(36:27):
QuickBooks, right, QuickBooks, right.
Any vertical can use it versus avertical SAS, which is I
designed everything for gyms, you know, for gyms and martial
arts dojos, right? Or everything for podcast hosts.
You know, I guess podcast hosting would be a, horizontal.
What we're seeing is that if youget traction in a vertical,
usually A, there's less competition, but B, we see a lot

(36:50):
of low churn and net negative churn businesses and verticals.
And the third thing, as I invented this term called
orthogonal. So there's horizontal SAS,
there's vertical SAS and there'sorthogonal SAS.
Just a made-up word. What it really is is it's role
based SAS. So let's say you have horizontal
tool, but the person that buys is your director of HR.

(37:13):
That is AI call that orthogonal.It's that you know the title of
the person that makes the purchase decision versus notion
like notion is not orthogonal notion air table.
It's like I don't know, is it, is it ACT?
Is it a like gusto? Gusto is.
Orthogonal and we have a tool called code submit that is tests

(37:36):
for developers to qualify whether they're good or not as
during your hiring process, right?
Any company in the world, targetcould use that, Best Buy could
use that, you know, whatever, whoever could use code submit.
But who buys code submit? It's usually either like the
head of recruiting or it's like your director of engineering.
So you know, the two titles thatare going to, and I think it's
one of those, I don't know the actual title, but you get the

(37:59):
idea. If you're selling to a
particular title, orthogonal is also a really good way to go
because you know your end customers, horizontal SAS, if
you're mostly bootstrapping, bootstrapping or mostly it's
just really hard. There's a lot of headwinds and
they tend to, they tend to plateau and you're just like,
well, how do I grow from here? Now that the big players are in
it, you know, what do you think about building?
Like like something generic, something horizontal, like ACRM

(38:20):
for home service businesses. You market it through whatever
means necessary to any home service business and then you
learn over time, wow. For whatever reason, my
foundation repair customers havelike no charm.
Like they're just loving this orfor whatever reason, you know,
I'm marketing this to 100 different verticals and 20% of
them are foundation repair companies.

(38:42):
Like they just might not have a lot of options.
And then using that data after the first one to three months
rebranding, maybe your name is generic enough to not change the
name because I don't endorse that.
But just changing the branding on your website to say CRM for
foundation repair companies, youknow what I'm saying?
So you start horizontal, go all in and like accidentally finding

(39:02):
the vertical that has the most supply demand imbalance.
Seen that done a bunch I think. It's a great idea.
It's called a zoom in pivot There.
I think there are eleven types of pivots.
Yeah, there's a word, the types of pivots zoom in.
There's a zoom out pivot, which is the opposite of what you just
said, where you start with the foundation and then you start
realizing, oh, but also the Masons and the brick layers
really like it. So you zoom out to the other

(39:23):
adjacent verticals, you start with Realtors and you go to
mortgage brokers and lawyers because they're kind of similar.
Yeah, I think that's a great idea.
The only challenge is if you start horizontal, you'll have
more competition. So it'll be harder to find
people. And oftentimes I say find
people, it'll be harder to get new customers just cuz it's
horizontal. Often times the data is not very

(39:45):
clear either. Usually it's pretty muddy and
you're kind of like kind of havea gut feel that the foundation
people need it. But as long as you're OK with
that uncertainty, I've seen thatover and over and over in both
directions, to be honest. I mean, we have tiny C companies
that add verticals, you know, over the years.
And we have tiny C companies that get rid of verticals and
are like, this is that our worstcustomer type are auto

(40:05):
mechanics. So we just don't serve them
anymore, you know, or we turn them away.
We're like, Nah, it's not a fit for you.
It's not, it's not going to be what you want.
So we see that too. My last question.
You have this framework called customer pain verse competitor
pain. Can you describe like what that
means and how startup founders can embrace that?
Yeah, yeah. It's just all of this stuff that

(40:26):
I say is just from observing 225companies as well as, you know,
my audience and micro conf and and podcast questions over the
years. I've answered 1000 podcast
questions, I think literally in 15 years.
And so this one is when I started observing, especially
these days with SAS, but I thinkmost, a lot of spaces are like
this is that you have to choose customer pain or competitor

(40:49):
pain. Customer pain is when you are
serving an audience that is maybe less technical.
So maybe it is construction workers that are using your
software or maybe it's Realtors or whatever.
And the pain there is like, oh, selling to them is kind of tough
and then getting them to use thesoftware and then training them
and you need to provide a lot ofsupport.
And it's just the customers moreof a pain than if you're selling

(41:11):
to software engineers. Software engineers can be a pain
in their own way, but at least they'll figure your software
out, they'll know how to use it.Competitor pain is entering a
space where there's just a lot of competitors.
That's what I did with Drip, that e-mail service provider
marketing automation. We had competitor pain, not
customer pain. Our customers generally figured
out how to use it. We provided support and stuff,
but it's not the level of support that that the folks I

(41:32):
know who are starting software for Realtors.
Do you know the worst businessesare when you have both.
There are businesses with both where you have a bunch of
competitors and your customers are non-technical and you need
all the support and it's hard tosell to and blah, blah, blah.
That's those are the businesses I try to avoid.
I wouldn't start 1 and I try to avoid investing in them unless
they really have figured this out.
I think these days you're probably going to have one or

(41:53):
the other. That's that that I don't know of
a business that you know, I can't think of a business off
top my head, especially as one like doesn't have one or the
other because just the spaces are are competitive these days.
Would you say if a business? Finds that you know beautiful
spot and they have neither one could that also equal like
product market fit? Could they just tap into
something beautiful in there? Yeah.

(42:14):
I think when AI came about, there was not very much
competitor pain early on, you know, customer pain.
I don't know, applies really, I guess if you were to build AI
for a realtor or something. But yeah, I do think it's when
new paradigms come out, right? So it's like when the iPhone
came out and it was suddenly a bunch of mobile apps, you know,
you could poof, it's a green. What do you call it a blue, blue
ocean? Yeah, you know and you had

(42:35):
mobile and then you had there was kind of the crypto web three
thing was new for a while and then AII think now opens that up
you can potentially find something but like don't expect
that. That's that's what I'm going to
say expect. That I wouldn't seek.
Yeah, it's like seek it, but I don't know of anyone that has
found that. So don't, don't feel that that's
going to don't, don't not start a business because you can't

(42:55):
find that perfect thing. That's the thing I often see
right, is any criteria that I'vegiven ever for like, hey, here's
how I would evaluate business ideas.
There's always someone looking for every one of them.
So I have like the 18 things I would look for in a SAS
business. I want net negative churn.
I want high price point. I want this and that.
I say over and over, you're not going to get all eighteen of
these. No, but I've never run a
business with I don't know of a business that exists all 18.

(43:17):
So the perfectionist or the needfor certainty is a real, it's
anti entrepreneurship, it's antibeing a good founder.
You're just not going to get that.
It is, it is. So that's what if you're
listening to this and you're an aspiring entrepreneur, it's
never going to be as clear as you want it to be.
Never. No decision I ever make is as
clear. And I'm used to it now, but like
20 years ago I was like, but where's the but I'm supposed to,

(43:39):
It's supposed to be, you know, A+ B = C And it's like, no, it's
A + B = a big question mark. And it will be that forever.
The earlier you figure that out,you know, I'm talking to myself
20 years ago. So I don't think I'm, you know,
the earlier you figure that out and become comfortable with
that, like the better off you'regoing to be.
Yeah, man. That was beautiful, Rob.
Thank you. Where do you want us to find
you? Well, if folks are.

(44:00):
Watching this on YouTube, I havemy very own YouTube channel
youtube.com/micro cough. And if you're listening to
listening to this is a podcast I've been podcasting 52 weeks a
year since 2010 on a podcast called Startups for the rest of
us about to hit episode 800. So that'd be the other place
folks can keep up with me. Congratulations.
Well, thanks for. Coming.
Thanks man. Hey guys, if you're still

(44:20):
listening to this, it's probablybecause if you haven't had a
chance to take your Airpods out,you're still mowing the lawn,
you're still driving, what have you.
If you're still here with me, I would really, really love and
appreciate a five star review onSpotify, Apple, or wherever you
get your podcast. It would mean a lot.
If you want to go the extra mile, share this episode with a
friend that might have an interest in starting a business.

(44:41):
It would mean a ton. Hope you have the best day of
your life today.