Startup to Last

The main theme of our discussion was that it's important to understand the objectives of any meeting. Rick helped Tyler narrow the list of objectives down, and now Tyler needs to (1) consider which objectives are most important to him, (2) consider if some of the objectives are being met in other ways so they can be left out of the meeting, and (3) communicate the objectives to employees prior to each meeting so that they can understand what's expected of them.

Here are a few takeaways from this week:

• Identify what your most important work is, and devote most of your time to that. Rick was spending some of his most productive hours on reading and blogging, neither of which are priorities for his business.
• If you have things you have to get done (e.g. client work), try to knock that out early in the week so you can focus on your other work without distractions hanging over you.
• There are two types of work: transactional (meetings, phone calls, routine maintenance, etc.) and creative work (writing, strategy, programming, etc.). Transactional work can be done effectively even when you're not at your most productive, but creative work can't. So try to devote your most productive hours to creative work.
• "Flow state" is when you're in the zone and getting a lot of work done. When working on creative work, one hour in flow state can be more productive than a day of normal productivity. But it's hard to get into flow state, so the key is to protect it once you're in it. To do this, try to structure your days to allow max flexibility to stay focused if you do enter flow state.
• The downside to giving yourself unstructured time for creative work is that it can be hard to manage your mental health. It can lead to stress and burnout because it doesn't follow the "hours worked = productivity" equation of more structured work. Combat this by expecting to go hours or even days without being very productive, and give yourself time to recover if you do end up having a productive streak.

Here are some takeaways from this week's episode:

• Marketing can be broken down into two categories: (1) bringing new people into the top of your funnel and (2) optimizing the conversion rates within your funnel. A lot of technical marketing projects are more about the second than the first. This can be helpful, but there's a ceiling to how effective marketing can be within increasing the top of the funnel.
• Increasing the top of the funnel is all about figuring out where your potential customers are, meeting them there, and telling your story. This can be done via inbound marketing (content creation, SEO, etc.) and outbound marketing (advertising, trade shows, participating in online communities, etc.)
• In order to know where to target your outreach, it's important to understand your existing customers. Where did they come from? What was their buying journey. This can be done by having one-on-one conversations with them, but it can also be automated by having analytics on your website, asking questions when someone signs up, etc.
• Because Tyler is interested in technical projects that help with marketing, a good approach is to build technology to help collect the right information about existing leads/customers so that the non-technical members of his team can understand where to focus their efforts to drive more people into the top of the funnel.

Acquiring customers will be different for every business, but there are a few themes we discussed that should apply to almost any business:

• There are two goals when acquiring early customers: 1) Growing your business, and 2) Learning what works and what doesn't. Some growth channels might work for one or the other, but the best approach is to do both at the same time.
• Identify what type of person you want to sell to. You can use intuition for this, but if you already have a few customers, it's helpful to start by looking at what they have in common and trying to find more people like that.
• Conversations are key to learning. Even if you don't plan on selling your product one-on-one forever, you need to talk to customers (in person, over the phone, over email, whatever) so you can learn from them.
• If you don't already have access to the right people to have conversations, you can try advertising or cold outreach. Every business will be different, but the key is to identify the right people and go where they are.
• It's very difficult to change someone's behavior, so try to find people who are already doing whatever your product is meant for.

It's impossible to cover the entirety of this topic in one episode, but there were some key takeaways that should apply to pretty much any startup:

• A financial model is something that takes inputs (e.g. historic data and assumptions about the future) and gives outputs (e.g. how much money might you make this year). It can be as simple as some notes on a piece of paper, or it can be much more complicated.
• There's no standard model that everyone should follow. The key is to figure out what questions you have, and build a model that will answer them.
• In some cases you'll want more than one model. For example, you might make a specific model to help predict what your customer acquisition could look like in the future, and then use the output of that as an input of a higher-level model predicting what your overall profit might be.
• The complexity of your model probably depends on the complexity of your business. Don't compare yourself with other companies.
• Having said that, you might find the process of building a model helpful as a way to force you to think through your business.
• If you're trying to raise money, your model needs to communicate information to them which you might not otherwise be interested in. Things can get more complicated at that point.
• Understanding all of the above, building a model is just a matter of opening up Excel, entering the inputs, and doing your best to generate reasonable estimates for the outputs. Each model is different, so it's hard to be more specific than that.

We considered having this conversation privately, but since almost every business should have a conversation like this, we decided to record it in the hopes that the discussion is helpful for others. As expected, this ended up being a bigger topic than we could cover in a single episode, but we did start narrowing down on some ideas and constraints around the idea of starting up to last:

• Traditional entrepreneurship is already set up well if your goal is to become as rich as possible. Startup to last companies should probably have some other motivation such as enjoying the work, feeling fulfilled by the impact the company has, etc.
• Despite needing to be motivated by something other than money, sustainability is key to survival, and that means that every business needs to at least make enough money to make it worthwhile for the founders. That's the first priority, and then once that "enough" number has been reached, it's time to start focusing on non-monetary goals.
• It's only possible to run a company this way if all shareholders are on board. It's not hard to get founders, employees, and customers aligned. It's harder, but maybe not impossible, to get investors on the same page (venture capitalists specifically are unlikely to want this approach). This is why bootstrapping is common among these types of companies.
• Because the goals of startup to last companies are different so are the rules. We didn't get too deep into how this might impact how you operate the business, but there's a lot to discuss there.
• It's helpful to think about the company as a place you'll work for the rest of your professional life (even if that's not true). That will help you prioritize sustainability, enjoyment and fulfillment. Companies that expect to exit soon can justify burnout-level work environments because they know it doesn't have to last.

Takeaways from our conversation:

• Starting a new job is stressful, and one of the main goals should be to make the new employee feel safe. One way to do this is to set expectations are that (a) small enough to be achieved over a short time period and (b) not related to actual job performance at first.
  • In the case of LACRM, expectations will be set around trust. The goal of the first month is for the new hire to feel safe and trust the rest of the team and the company. This way they know they don't need to worry about their job performance during training.
• It's valuable to give new hires a lot of context about the business (e.g. the history, who you serve, why, etc.) but this can be hard for employees to retain because they're learning so much at once. One way to help with this is to build everything into the same narrative.
  • In the case of LACRM, because "trust" is the theme of onboarding, it might make sense to center all the other company lessons around that same concept. Instead of teaching new hires about 20 random concepts, explain how each of those concepts leads to trust.
• Most importantly: explain to the new hire why you're doing things the way you are. Just giving them info won't be helpful (and might actually be hurtful) if you don't contextualize it. This should be a topic for the first day, or maybe even before the first day.
  • In the case of LACRM, focusing on trust might actually give new hires a reason to distrust the company if it's not explained why trust is so important (they might wonder what happened in the past to cause trust to be such an emphasis).

This week, we wanted to take some time to reflect on what happened in 2019 and set goals for 2020. We created a series of questions that Rick and Tyler both had to answer. Here are the answers...

• What happened in 2019?
  • In our personal lives
    • Rick: Took 7-8 months of to figure out who he is and what his goals are, especially with his new marriage.
    • Tyler: Figured out a sustainable diet
  • In our professional lives
    • Rick
      • Figured out what he wants to do after leaving his previous job of 11+ years
      • Started LegUp Ventures which is a holding company for his various ventures:
        • GroupCurrent - Outsourced member management
        • Startup to Last - This podcast
        • RickLinquist.com - Rick's personal writing
        • LegUp Health - Reducing healthcare-related anxiety for people without job-based insurance
    • Tyler
      • Started the year working on a new project called Sparse which was abandoned in February
      • The rest of the year was spent on a major redesign of Less Annoying CRM which included two major new features: Custom fields and Outlook Calendar Sync
      • This was the best year for the LACRM product team
  • Biggest accomplishment
    • Tyler: Finally built a real product team at LACRM
    • Rick: GroupCurrent turned around the business model of their first client and got it to sustainability
  • Biggest disappointment
    • Tyler: Sales in the second half of the year were below expectations
    • Rick: Wasn't thoughtful enough about getting his wife's buy-in when starting his new ventures
• Looking forward to 2020
  • Personal goals
    • Rick: Get to a point where he and his wife feel comfortable having kids
    • Tyler: Get a dog
  • High-level professional goals / the theme of 2020
    • Tyler: Continue the product teams momentum and establish a rhythm of regularly shipping updates to LACRM
    • Rick: Calm growth. His life is calm right now, and as his ventures pick up, he doesn't want that to change.
  • Biggest worries / what's keeping you up at night?
    • Rick: Making enough personal income to be able to sustain his ventures
    • Tyler: Growth at LACRM needs to pick up eventually
  • Three specific goals for 2020
    • Tyler
      • Exercise moderately three times per week
      • Write code once per week
      • By the end of the year, average 50 paying users per month joining LACRM through the referral channel
    • Rick
      • Play more sports. He has an exercise routine, but it's boring and doesn't involve games or play
      • Be ready to start trying to having kids
      • Get distribution revenue from LegUp Ventures to $10k/month
    • Shared goal: Get this podcast to 250 subscribers
  • Make a prediction for 2020
    • Tyler: Starting a software business without venture capital will become much more mainstream over the next year
    • Rick: An all-in-one leader will emerge in the no-code industry
  • What do you want to read in 2020?
    • Rick: Too many to name, but wants to read a lot about emotions.
    • Tyler: The unicorn project and Obviously Awesome

Takeaways from our conversation:

• In the early days, a founder can easily offer great customer service just because they're an expert on the topic and are empowered to solve every problem. Rick doesn't need to worry about this at first.
• For a low ARPU (average revenue per user) product, it's best to think of support reps as "coaches" so they can be more proactive and replace other functions such as sales and customer success. It's not viable to have separate teams for each function at a low price point, nor is it desirable.
• Rick's first move should be to do all the coaching himself until he has it systematized. Some of it can be automated with things like tutorial videos, but some of it will need to be manual.
• Once he knows exactly how to manually provide the best coaching and he has enough customers that he can't handle any more, it will be time to start building a team.
• Offering great customer service for a low ARPU product will hurt margins. This might mean that certain investors aren't interested in the business, but it's still possible to be profitable enough to bootstrap.

In this episode, Tyler gets Rick’s advice on how to think about redesigning the Less Annoying CRM marketing website. Here are some of the takeaways:

• There are different types of website redesigns, including:
  • AB testing (iterating pages on the site based on performance).
  • Style update (updating the CSS, or look and feel based on a new brand style guide).
  • Restructuring the site (changing the site navigation and pages to better accomplish objectives).
  • Rebranding the site (changing the brand name and/or positioning of the site).
• You want to do the minimum necessary when you're redesigning a website. 
  • Figure out the smallest thing that you know you need and just go do it.
  • If you can get away with basic iterative AB testing, that's awesome. It means you're in a really good place. 
  • If you need a whole rebrand, figure out how to do it as quickly as possible because when you're going through wholesale changes, it's messing with reporting.
• When doing a redesign consider the following questions:
  • Is my brand name or positioning changing?
    • If your brand name is changing, you may need to consider transitioning a new domain. (Note: This comes with significant search engine optimization challenges.)  
    • If your positioning is changing, you may need to review copy on all of your pages. (Note: This might impact SEO if the copy changes are significant.)
  • What are the main functions of the site and are they changing?
    • Is it for users to login?
    • Is it to generate leads?
    • Is it to convert free trials?
    • If the functions are changing, you may need to restructure the site (Note: This can impact SEO in a big way if you are onsite links or removing pages).  
  • How complex is the site?
    • How many unique pages and designs are there on the site?
    • Can you get away with designing a few templates and applying them across multiple pages?
    • Or, is every page unique?
    • More complex sites taking longer to redesign.
  • Does look and feel (style) need to change?
    • Do colors need to change?
    • Do fonts need to change?
    • Do page layouts need to change?
    • Do UI components need to change?
• It’s OK to prioritize a redesign based on a standards without data proof.
  • At the end of the day, if brand is important to you, it's important to you. 
  • If you're failing on your brand promise or standard, that's going to keep you up at night and that's not healthy. 
  • Just go fix it and don’t waste time trying to justify your brand standards.

What else would you add to this list?

Context

Tyler: So what we're going to talk about is ... I'm actually interested, I'm not entirely sure where this is going to go, but Less Annoying CRM, my company, just did this big redesign that I keep talking about, but that was just the app. So when a customer logs in, the experience they have in the logged in part of it has been redesigned. The other stuff, what I'll call the marketing site here, still looks like it did four or five years ago. And so there's this big mismatch between the, first, impression a customer gets when going to our marketing site versus the actual polished and good design that they get once they log in. So we're basically trying to think about some kind of a redesign of the marketing site. This could be really, really small. It could literally just be like go in and make some CSS tweaks, but leave everything else the same. It could be completely, from the ground up, rethink what this website should even be, think about SEO, switch to a content management system like WordPress or something. It could be as big as we want it to be. So that's basically what we're talking about here. I have a little more context, but maybe what I should say is just what I'm hoping is we can talk through, A, how big of a project should this be and then, B, we're not going to plan the whole thing out in this next 40 minutes or whatever, but where should I start? What should some actions be that I can take to really get moving on this project?

Rick: Yeah. So I'm interested in what problems you need to solve by doing this. It sounds like you're mostly concerned about more of a brand consistency or user experience consistency more so than anything else. I'm not hearing, "Hey, we need to get more leads," or, "Man, people are complaining about the website." It seems like it's more of a personal, "Hey, this website is no longer up to my standard," type thing.

Tyler: Mm-hmm (affirmative). There's definitely part of that. And, yeah. I'll say, I'm really skeptical about a lot of marketing. I think 20% of marketing is super valuable and critical to a company and I think a lot of it is just a bunch of overpaid people in suits being like, "Oh, your font doesn't communicate the trust that you're ..." Nobody cares about the font. Shut up. So, yeah. I don't want it to be what a marketing agency would turn this project into. The way I look at it is, it's kind of like if you're single and you're dating and you go to a bar to meet somebody, you know that the things that matter are personality and trust and all this, but all you can see is their physical appearance when you walk into the bar. And so people naturally tend to overemphasize that when it comes to first impressions. The same thing is true with a company. Just the other day, actually, for my wedding, I had to get insurance for the wedding and our wedding planner sent us two websites. I went to both of them. One of them had not been redesigned in a decade and one of them looked nice and I was just like, "I have no information here. I can't tell which insurance is better, so I'm just going to go with the one that looks like a more professional company." So that's really what I'm going for is, once someone uses our product, they like it, we treat them well, everything goes well, the personality stuff in the dating analogy is good, but we need to put on a little makeup and actually try at the bar if we're going to get these customers in the first place.

Rick: So it sounds like your main concern is what's the first impression people have of Less Annoying CRM when they come to your website.

Tyler: Absolutely.

Why is this a priority right now?

Rick: Okay. So flying up a little higher, just for context, why are we talking about this right now over some other priority? Why do you feel like now is the right time to worry about the first impression?

Tyler: That's a fair question. It's possible that it's not. I would say that, probably two years ago was the right time, but the reality was that the app would've let down that first impression either way. So I think it's just, now that the app looks good, I don't think ... Redesigning the app was a nine-month project. I think redesigning the website could be as little as a one-week project. And so I just feel like it's kind of low-hanging fruit because we've done the hard part already.

Rick: Interesting.

Tyler: But, yeah. If it didn't happen for the next six months, I don't think there would be any real consequences.

Rick: Have you talked to any new users who've gone through the existing marketing site experience with the new interface?

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