Startup to Last

In this episode as part of some research for his next book, Rick interviews Tyler about his experience with emotions in the Less Annoying CRM workplace. Here are some of the takeaways:

• There are frameworks out there for emotional intelligence, self-regulation, but there isn’t much stuff out there about how emotions impact company culture, team performance, and leadership.
  • There aren’t a ton of CEOs talking about their own experiences.
  • Most of the stories out there are from therapists about their anonymous clients.
• There isn't agreement on the definition of emotion.
  • One model is Robert Plutchik’s wheel of emotions (see image below) that defines 8 primary emotions: 
    • joy and sadness
    • anger and fear
    • trust and disgust
    • surprise and anticipation
• A leader who priorities trust may be more likely to create a safer culture where people are free to express their emotions.
  • This makes it so that the emotions that you and other people experience happen in a way that is healthy, and has a mostly positive impact on other people (and  team performance / culture).
  • It also makes it safe for everyone to inquire about clarifying the meaning of each others’ emotions (instead of making assumptions).
  • When you're in a distrusting situation, emotions are probably more violent in a negative way.
• Trust relies on character and authenticity.
  • You might experience trust when you see someone do something that's not in their own best interest, but they do it because they think it's right or some set of values.
  • Competence may also play a part.
• Distrust leads to distrust
  • If you hire and keep people who you don’t trust, it can lead to a negative cycle of distrust.
• One source of potentially negative emotion for leaders is the time between becoming aware of a problem and figuring out what to do about it
  • If you have don’t have a high-trust environment, this can be a risky time period when emotions might be misinterpreted
  • Another source of potentially negative emotion is when an employee leaves

What else would you add to this list?

Source: Wikipedia

Context

Rick: It's my week for the topic. I don't really have a critical problem per se to bring you that I want to brainstorm with you, at least not more important than what I'm bringing to you today. So taking a slightly different approach with the topic I'm bringing, and it could be a total bust, so I'm prepared for bad feedback from this from the audience. But maybe this works. I guess listeners out there, if you listen to this and you don't get value, please tell us so that we don't repeat this. But if you do like it, please tell us because we'll have more confidence covering topics like this in the future. Now that I've got my writing cadence going at RickLindquist.com, I spend two to three hours every morning before 9:00 AM researching and writing about a topic of my choice. My goal is not to just throw out content, it's primarily learning through the process of writing. And so I want to write a book about emotions, leadership, and teams, and I'm starting to outline that book in terms of what would the table of contents be so it can drive my research. Because I'm going to be learning a lot as I go because I'm not an expert on emotions by any means, I know that the specific angle I'm going to take and the specific outline is going to change over time, but I hope that by constantly revising the outline based on what I'm learning, it can drive my short-term and short-form writing on a weekly so that I'm killing two birds with one stone. I'm writing and fulfilling what I want to do at RickLindquist.com in terms of outputting content, but I'm also learning the things necessary as part of research for this larger book. It may take me a whole year to write this thing. It's just a question of putting a couple of hours in a day most days. I started this week researching emotions and building the outline. I'm stunned at how little agreement there is on how emotions work and how they impact people. Most of what I'm reading is research and academic papers. I have not been able to find a ton of CEOs talking publicly about the role of emotions in leadership and in teams. Kind of coming back to listeners out there, I personally think that this is a topic that we all need to talk about more because I hypothesize that we can become better leaders if we're more in touch with our own emotions and others' emotions because it's the basis for how we form trust with our strong relationships. And trust is the ultimate success factor for a highly functioning team. But I'm trying to do research. I'm having trouble finding like layman's explanations of the stuff with consensus. I was hoping today that I could, I don't want to say interrogate, but I kind of have a feeling that I need to ask you some tough questions. I want to ask you some tough questions about your experience with emotions, both from how they happen in your head and within your body, as a leader and CEO. Then also, how you react and observe and handle emotions of team members in the day-to-day stuff. We've talked offline I know you've, we've talked offline and made sure that was okay, but is there anything that's off limits in terms of asking you questions?

Tyler: No, I mean there might be ... I'm happy to share my own experiences and I might be a little more secretive if I feel like I'm exposing something about someone else who hasn't necessarily given permission. But for myself, now I think I'm an open book. We'll see.

Rick: Yeah. Cool. Listeners, I think that the other thing that we want to do here is I want to model talking about this openly, so I'll also jump in with my own insights on emotions. I'm a pretty, in terms of like emotional spectrum, I wear my emotions on my sleeve much more than Tyler does. Not to say that we're both not emotional people, it's just we may have very different experiences with emotions because of our personalities. I'll jump in when I can add a personal take. Would you add any anything?

Tyler: I'm curious here, so I don't hear people maybe using the word emotions a lot, but I hear people talking about m...

In this episode, Tyler seeks Rick’s advice on how to plan the Less Annoying CRM product roadmap for the upcoming year. Here are some of the takeaways:

• Product roadmap planning is easier when you are able to align to clear company goals and constraints. In this context:
  • Goals = what you really want to accomplish during a time frame. E.g.:
    • “Increase signups from word of mouth”
  • Constraints = the things you aren’t willing to ignore / don’t want to drop while you’re pursuing your goals. E.g.:
    • “Spend 10% of development hours paying down technical debt”
• Take time to make sure employees are bought in to the company goals and constraints prior to planning the product roadmap. 
  • One way to do this is to include employees in the prioritization and trade-off process.
    • Company leaders often go through a number of change cycles and trade-off decisions when setting company goals. 
    • If you can allow employees to have a voice in these trade off decisions, they are much more likely to buy in to your prioritization decisions
• When you get to product roadmap planning, allocate resources based on your company goals and constraints. 
  • Once you’ve addressed your constraints, ideally you can put all of your remaining resources toward the company goal(s). 
  • Common (non-outcome-based) allocation buckets include:
    • New feature development
    • Improvement to existing features
    • Bug fixes
    • Paying down technical debt
  • (Note: if you can logically bucket roadmap items into specific business outcomes tied to your company goals and constraints, do it)
• It's nice to think, "What's our top priority? We're only going to work on that." But, even at a one-person company, this is likely unrealistic. 
  • You lose momentum if you ignore parts of the business and this could get you in trouble.
  • Setting constraints on goals is one way to address this problem.

What else would you add to this list?

Context

Tyler: What we're going to talk about is basically the... Like any company, there's a lot of different things I want to work on next. We're finally at the point where we have multiple developers so we can do multiple things at once, which is not really something I've been faced with much in the past, and I'm trying to figure out how to prioritize different categories of things. One category is building totally new features. That's the sexy, fun-to-announce type of thing, like, "Here's something the software can do that it couldn't do before," versus improving existing features in a way that customers care about versus improving features in a way that customers won't even notice, but the idea of paying off technical debt or something like that, so, a bit of context here, we're finishing up this redesign, and, in a couple months, we're going to have all four developers plus myself moving on to other things, and basically, while we've been doing this redesign, which took almost all year, we've cut a lot of corners. The goal is to get it done as quickly as possible. There's a lot of stuff we want to go back and fix. This is normally referred to as technical debt. We have a lot of ideas for just minor tweaks to our current products that our customers would love, little one-week, two-week things, but we could do it for a year and not run out of ideas there, and they're just slam dunks, makes the product better, and then there's the go-out-and-really-do-something-new that our product doesn't currently do and maybe have a bigger splash, but it's a little more risky, so, yeah, I'm interested in basically just, A, figuring out what should I be doing, but, B, coming up with a framework for how I should think about this in the future.

Rick: Yeah. What timeframe are you thinking about? Is it over the full course of 2020 starting in January? Is it next month for a couple of months? What are you thinking?

Tyler: Probably, I think, the next six months. January through June, July would probably be a good... planning the most immediate next things, and then I'd like that the framework I was talking about can inform once... In April or May, when we start planning the next six months, I'd like to be able to apply that framework again.

Rick: Makes sense. How have you gone about this in the past?

Tyler: I just haven't. Partially, I've been very undisciplined about it. It's gone fine. It hasn't been a problem exactly, but, normally, there's just an obvious next thing. Having said that, it's not clear that the obvious next thing is actually the right next thing, but, in the moment, it's like what piece of software, what piece of our product is clearly the worst thing, that's normally what's going to get the most attention.

Rick: It sounds like you want to add some discipline to your planning process and then you also, it sounds like, have some capacity to do more than one thing and in terms of you have more developers that are fully up to speed and capable that you can put on different things and get more done.

Tyler: Yeah, absolutely, and so one of the reasons I say I've never had a system for this, we haven't launched a totally new, little features, but like a new major thing in maybe since 2014 or something like that. The last several big projects we've done, we're just redoing things we already had, so we redid the calendar, we redid custom fields, we did a redesign, so, yeah, it's weird having the resources and say, "Should we actually start adding to the functionality?"

What are the company goals?

Rick: This was a big challenge for me. I went through a similar transition from Zane Benefits to PeopleKeep. At Zane Benefits, it was very much a... I was the dictator of what got done on a monthly to quarterly basis, and there wasn't this engaged planning process that we thought about things over a long period of time. When I got money to fund PeopleKeep and hired a new CTO for that, he brought a whole nother mentality around roadmap planning and thinking through, and the... one thing that was really hard for him to do a good roadmap on... the situation that made it very hard for him to do a roadmap on was a situation in which I hadn't clarified the company goals for the year, so, I guess, what the... where I would start with this is what are the... If we look at the timeframe for a year from a company perspective, at the end of 2020, when you're looking back, what are the things you want to have accomplished and how will you have measured that? That should drive the first six months of the product roadmap.

Tyler: Yeah, so, if I only get to answer one goal, I want 2020 to be the year of the referral. I want it to be word of mouth. We talked about this in a podcast, I don't know, a month ago about how I was thinking, and I had some questions around referrals and word of mouth. From a business standpoint, I want to make that better, but I also think products can have a big role in there. Now, having said that, I've been making a fair number of implicit or explicit promises to the dev team about it's okay to cut this corner, we'll come back and clean that up later, so I have other concerns beyond just this one big goal, but that's the biggest thing.

Rick: Yeah, and are...

In this episode, Rick seeks Tyler’s advice on how to approach consulting on the side to fund LegUp Ventures. Here are some of the takeaways:

• If you need the money, you’ve got to consult or get a job
  • Ain’t no way around it
• Consulting can be preferable as you have way more flexibility
  • It's way easier to bootstrap with consulting as your source of money versus a full time job
  • You hourly rate as a consultant might be higher also
• Be proactive about consulting.(Don’t want until you need the money)
  • View consulting as protection for your business —> it will help you sustain your startup while you’re searching for a repeatable business model
  • Consulting helps avoid putting negative pressure on your startup to generate cash when you should be focused on learning
• Figure out how much you need to make consulting for the year so you can focus on a specific number
  • This number is totally dependent on your personal goals and constraints
• Then, decide how to approach projects 
  • There are two core approaches: 
    • 1) big project chunks, and 
    • 2) smaller, consistent retainer work
• Consider getting a job or consulting project in an area that will help you learn or hone stuff related to your startup(e.g. skills, know-how, etc.) 
  • I.e. Get paid to learn
  • Note that there's probably an inverse correlation between how much you get paid and how much you're learning
    • If you're learning, it means you're not already an expert at it and they're probably not going to be willing to pay you as much

What else would you add to this list?

Context

Rick: Yeah. So, I think this is a question that a lot of people probably face when they're trying to bootstrap. Obviously, if you're ... maybe not obviously, but if you're trying to build a venture backed business, this may not be an issue because you're going to go raise money so that you have runway to deal with things, but when you set a constraint on, hey, I'm not going to raise money or I'm not going to raise ... I'm not going to raise money ever or I'm not going to raise money until a certain milestone is hit, like I've set, which is, I don't want to raise money until after product-market fit is reached, which I consider to be a pretty high revenue base, hundreds of thousands of recurring dollars per month.

Tyler: Per month?

Rick: Per month, yeah. It's a very high bar for me.

Tyler: So, you're saying like where Less Annoying CRM is right now, you want to bootstrap to that point?

Rick: Yeah. I think you have product market fit.

Tyler: We've had product market fit for like nine years.

Rick: Not by my definition.

Tyler: Okay, I got you.

Rick: Yeah. But, maybe like you've had it for a couple of years, maybe not nine years, somewhere in between there. There was some level where you hit it probably and you've been slowly increasing on top of that. You and I are different, I would probably say, somewhere in the last four or five years I probably would've said, hey, let's go raise some money.

Tyler: What's the reason to wait that long? Well, sorry, why don't you intro it and then I'll get to my questions.

Rick: Yeah. This is a whole mentality. So, this is my weirdness. I'll hold off on why that's the case. So, one constraint is, I'm not going to let myself raise money until I reach a pretty high proof of real business threshold. So, that means that in order to fund things, I've got to have cash available. I also have a constraint on my own personal life where I'm not going cash flow negative on this. So, that's a big thing where it's like, I have a pretty nice life style, I'm not going to let that life ... I'm not going to downgrade the lifestyle and I'm not going to allow that lifestyle to be a negative cash flow, personally. Okay? So, this means a couple of things. One, it means LegUp has to pay me money, right? From the get go. Two, it means that leg up has to make money in order for me to pay that. So, it's not like I can go raise money and then start paying myself money. LegUp's actually got to produce revenue. The quickest way for me to produce money is to sell my time. I have some expertise that allows me to sell time at a pretty high ... the metric I talk about in this case is return on time. I have a pretty good return on time invested, but it comes at a cost to me working on some of the early stage ventures I have going on in terms of focus and energy that I have to go after them. So, when I do take on a consulting project, it's generally a larger project and it takes a good bit of my focus and energy which means a lot of my other initiatives slow down. But, they're very lucrative and they give me a lot of runway when they happen. So, context, when I started Leg Up this year in June, May or June, I actually started it for a couple of consulting clients I had and then added a third and basically those consulting clients have been enough to pay my salary that I've been paying myself from Leg Up for this year and I haven't consulted in a few months and it's allowed me to have pure focus on the ventures that I've created. Now, I've gotten spoiled. Okay? So, I've really enjoyed having basically being able to set my week every week on what I want to focus on, but as I plan ahead, I'm realizing every time I put pressure on a venture to make money faster than it will just naturally happening by just continuous improvement processes, it gets less fun and it also leads to, I think, bad long term decision making. So, while I want to focus on these things and maybe move faster, if I do my constraints, it's going to put pressure on these ventures producing cash faster than maybe that is good for them and could lead to worse longer term outcomes and then on the other side, if I go consult, it takes all the pressure off of cash, but slows down progress and if I had to make a decision today just to give you an idea of where I am, I know I should go probably plan on consulting and then it becomes a question of like, okay, I'm going to go consult, how much do I need to consult? Do I front load it for the year and just work my, pardon me, ass off for like three or four months?

Tyler: How offensive.

Rick: Well, I just wrote a pretty sensitive article on the Church of Jesus Christ of Latter-day Saints, ie Mormons.

Tyler: You're trying not to use naughty words? Okay.

Should I consult?

Rick: Yeah. Bad words. So, anyway, summarizing, should I consult? If not, tell me why. I would love to hear your perspective. If so, how much. I'd love to brainstorm I guess. If we decide yes, I should consult, I'd like to just go into how best to structure that, is it small projects that kind of continue throughout the year? Is it a couple big projects front loaded at the beginning? Like I did this year. I'm interested in your thoughts.

Tyler: Yeah. Okay. So, I'll start...

In this episode, we discuss how to think about positioning, packaging, and pricing a second product when you have an existing customer base. Here are some of the takeaways:

• Be clear about the primary reason you want to add a second product.
  • This will impact how you package and price the product. 
  • Is this the right thing for the business and for your customers?
  • Or is this about you and what makes you happy? 
• Is your goal to expand customer acquisition?
  • It might make sense to package the product on a stand-alone basis.
    • If you take a stand-alone product approach, recognize that it may be more work.
    • Positioning will be harder.
    • You may have to build additional infrastructure.
  • It also might make sense to give it away for free.
• Is your goal is to retain more customers?
  • It might make sense to include the second product with current pricing.
• Is you goal is to increase revenue per customer?
  • It might make sense to offer the second product as an add-on.
    • If you decide to take an add-on approach, recognize that it may be harder to maximize the price. 
      • An add-on probably shouldn’t be 100%+ of the base price.
      • You’re probably looking more like a 50% up-sell opportunity.
  • Or it might make sense to package the second product as part of a second, higher tier of pricing.
• Are you just bored and wanting to build something to satisfy a personal craving?
  • It might make more sense to do the product as a side thing.

What else would you add to this list?

Context

Tyler: To the deep dive topic here. So this is an issue I'm thinking about right now and it's basically pricing a second product. I have a first product... Let me get a little context on what we've got right now. So like I said, we're 10 years old about. Our product has always been $10 per user per month. I know a lot of people would say that's too low or whatever, but we're pretty entrenched in the lower tier of the market at this point. And we've grown to 22 thousand paying users. So we've got a pretty big customer base, at least relative to what we used to. The plan from day one was build a suite of products. Our name is actually Less Annoying Software, not Less Annoying CRM. That's just the first thing. But we expected probably a year or two in launch that second thing and a year turns into 10.

Ben: Turns out every 10 years you get a new something.

Tyler: Yeah, exactly.

Ben: Something less annoying.

Tyler: By the time I retire we'll have four products.

Ben: Okay.

Tyler: But yeah, I think we're finally at a point where our dev team's big enough. We can peel a few people, maybe two people off and launch something new. When I say a new product, I think the idea is it would be within the same app. So one login, one billing system. But it's like, do you want the CRM or do you want both of these things? Or maybe the other thing standalone, depending. Most likely, we surveyed our customers, did a little customer research. I think the thing that's low hanging fruit to get our current customers to buy something else is an appointment scheduler. So a Calendly type of thing. And then we could grow... We have a lot of ideas beyond just appointment scheduling, but kind of starting there and building it out. So what I'm interested in talking about is A, general structures for, it's one thing to price one product, but when you have this idea that I want to sell two things to the same group of people, the right structure for that. I'm less interested in the number but more the, is it a bundle thing, is it a la carte? What if we had a third product? Kind of general structure stuff to this. And then a few things that have kind of been on my mind to consider here is should we be prioritizing getting our current customer base to upgrade versus treating this as a channel for getting new customers? Should people be able to buy this new product on its own? Obviously all else being equal, it'd be nice, but is it worth the effort versus just upselling our current people? And then should we be thinking about a third product or should we basically just say, it took us 10 years to get to our second one, it would be stupid to base any decisions we make right now around the idea of a third one coming out. So, that's a lot. But those are some different things to chew on here.

Ben: Is this product done, like you're already committed to this decision? This is a thing that's happening?

Tyler: No it's not. We've done a fair amount of validating it with customers. We have not built anything yet. I should say, one thing, that not all CRMs have this, we have a fully functional calendar with all of the functionality you get from Google or Outlook or something. So we're in a good position to build calendar related tools, but we haven't actually started this second product, no.

Ben: What's the motivation behind adding another product?

Why are you building a second product?

Tyler: A couple. One is the unit economics of the business could get better. You could say just raise the price on the existing product. That would certainly work from a... If a private equity firm bought us, that's what they would do and it would work. We have certain other interests and I take a lot of pride in serving the low tier of the market that a lot of other SaaS companies don't care about. So I want to be able to improve our margins without raising prices and that's one way to do it I think. Another thing is I do think that our customers... I don't know, I feel like software goes in cycles between everything being bundled together and then everything unbundling and being a bunch of different tools that integrate together. And we're in a very unbundled phase right now and I think a lot of value could be provided by going back to bundling here for our customers who are not tech savvy and really just want one clean experience. But that's a fair question. Do you think that maybe we should back up even more?

Ben: Oh, I mean, I don't know. Maybe. You did say you don't want to raise the prices, but if you roll out a new feature and say this new feature costs extra money, you haven't exactly raised the price, but you kind of have. You're... Yeah.

Tyler: Yeah. The standard I was hoping to hold myself to here is basically, if there are standalone products that sell just this thing, I can call it a different product, but if it's like this is clearly dependent on the CRM, that would be included in what we already offer. So for example, if we add our... Yeah, go ahead. Sorry.

Rick: Oh sorry. I interrupted you.

Tyler: I was just going to say if we add a little more reporting to how our pipeline reports work, I wouldn't charge more for that. But if we say, "Well, now there's an email client built in," I think it's pretty justifiable to say that's a different thing.

Rick: Do you have a way you're leaning right now in terms of, without us talking about today. If you had to make a decision today, what would you roll ou...

In this episode, we discuss how to identify, invite and recruit beta users for your product. Rick uses one of his ventures as an example, and Tyler helps him work through structuring a beta program for his software-enabled service idea. While we worked through a specific situation, the general concept applies often. Here’s the framework that emerged:

• Decide if you are ready for a beta program. 
  • Here’s how you’ll know:
    • The minute you feel you can offer users something of value, you’re ready. 
    • If you aren’t there, you may need to do more customer interviews to validate your idea(s).
• Design your beta program. 
  • Ask yourself the following questions:
    • What are you trying to learn / test?
    • Is a closed or open beta more appropriate?
    • What the profile of your ideal beta user?
    • How can you position the program to these beta users?
      • What is your differentiating theme?
      • What is your offer / value proposition?
    • Should you / do you need to incentivize participation?
• Launch the program and recruit beta users.
  • Ask yourself the following questions:
    • Where do the ideal beta users hang out?
    • Can I find enough ideal beta users via my network?
    • If not, how can I leverage other marketing channels?
• Execute the program.
  • Ask yourself the following questions:
    • How can I make my beta users feel like they are part of the journey?
    • What incentives can I offer to reward users?
    • How can I build a one-to-one relationship with each beta user? 
    • How can I improve the offering?

Takeaways:

• Don’t add too much structure to start. 
  • Start out with as little structure as possible and then iterate your way to more structure when it adds value or scalability based on learnings.
• Launch a beta as soon as you can add value. 
  • As soon as you can offer anything to anybody, get it out there and start testing it with real users.
  • The productized service approach to MVPs allows a lot more room for error in the software because you can lean on the service component for immediate value.
• When looking for beta users, tap your network first.
  • If you can't do it with networking, you're probably not networking enough or you’re not good at it. 
    • Alternatively, you can go out and use traditional marketing channels to find people who might be beta testers, but you have to go into it expecting a high investment, whether it's in time, or money, or whatever, because your pitch isn't refined yet, your product isn't refined yet, you don't even know who to target. 
    • Traditional marketing works, it's just you have to bring in a ton of people at the top of the funnel to get one good early adopter.
• How to get the most out of beta users
  • Invite your beta users to be part of the journey. 
    • The people who do beta tests, a lot of times they do it because they see some big potential. 
    • Start with the why, and really get people on board with the mission and the reason you're doing it. 
    • The more you can let them in and not just tell them why you're doing it, but make them feel like they're contributing to it, the more engaged they'll be.
  • Offer unexpected incentives like swag and gift cards.
  • Spend time one-on-one with your early users to build real trust-based relationships.
    • Do it in person if you can.
  • Avoid offering incentives that could become the primary motivator for a user joining your beta program.

Context

Rick: So specifically with my health insurance app, I actually didn't expect to be where I am today, I'm ahead of schedule. I now have everything I need to actually launch a beta product. So I was anticipating having this be more of a hypothetical conversation, but I will actually have ... I can guarantee a product in the next couple of weeks that people can sign up for as beta users. So what I want to get out of this conversation is I want to brainstorm some ways to gain beta users for this product. I don't just want anyone on the internet to sign up. Because this is a health insurance thing, they need to be in Utah, because that's where I'm licensed. They need to be consumers of individual health insurance. So it's a very narrow focus. So anyway, it's not like I can just go post this on Google Ads or go invite all my best friends, because most of my best friends don't live in Utah. So it's difficult. So I want to brainstorm some ways to identify, invite, and recruit them. Recruit would mean them actually agreeing to the beta program. The second is once they've agreed to participate in the beta program, keeping them active and engaged, whether that's with incentives or with just guilt. That's what I want to talk about. I can add some context ... I guess any clarifying questions about what I want to get out of this?

Tyler: Yeah, well, it sounds ... I mean, getting a beta user, a beta tester is probably not radically different from getting a customer, but the goals are a little different. The goal is to learn instead of to make money, and the type of person you're looking for is someone on the very, very cutting edge of the adoption curve. But like a lot of concepts, this is going to be a specific type of marketing we're talking about here, I guess.

Rick: Exactly. I envision these people ... I want these people to be evangelists of the community. I want them to care about the problem I'm solving as much as I do. And they will get free access. I don't know exactly what the value of that is yet, but hopefully they'll help me figure it out. But I think that the right beta user for this particular product, which I'll go into, is someone who cares deeply about the problem that exists today that the app promises to solve eventually.

Tyler: Cool. So let's dive into ... we can talk generally about how to get beta users, but I think it's helpful to know what product we're actually trying to get. You said earlier there's three things you're doing. One is a thing with Sable, your wife. One is a GroupCurrent thing. But that's not what we're talking about here. You have a specific healthcare, health insurance type of product. Can you talk about what that is?

Rick: Yeah. So on the last episode, I was a little bit hesitant to talk about it because it is in the same realm of health insurance as my previous company, PeopleKeep. I do have a restriction on where I can play. I was kind of put on the spot on the podcast and I didn't feel comfortable talking about it without thinking about it more. So having thought about it, there is no issue. This is non-competitive. Not even close. I feel comfortable talking about it. So I'll kind of give you the general premise. Maybe I can work from the problem that I'm focused on and then work down to how I think the MVP will attempt to solve that. Does that work?

Tyler: Yeah, yeah.

The problem to solve

Rick: Okay, so there's a huge problem out there in that people who buy individual health insurance largely don't get any service in exchange for the commission that they get taken out of their premium. So every time you pay a health insurance premium, whether it's a group policy through y...

This episode ended up being a brainstorming exercise on how Tyler can increase the acceptance rate of his job offers at Less Annoying CRM. 

Takeaways include:

• Survey candidates after they either accept or reject to learn more
  • When someone says no, ask why they're saying no. 
  • That might lead to some really quick problems you could solve.
  • Look at this from two lenses:
    • Controllable rejections - there’s a way you could’ve changed this outcome. 
    • Uncontrollable rejections - there's no way you could've changed it. 
  • Even if it's uncontrollable, that doesn't mean there's no action you could've taken.
    • You probably could have figured this out earlier in the interview process, and just stopped interviewing them because they were never going to accept anyway. 
• Understand why people accept your offer
  • This can lead to some of the best insights on the value propositions that you need to focus on more with future candidates.
• Highlight your differentiation throughout the interview process
  • Make sure your candidates understand why your workplace is unique and special
  • You can do this at every touchpoint
• When you make an offer, show them your excited
  • Make a personal call or send a personal note
  • Have other people at the company reach out after we give an offer to encourage them to accept
  • Don’t be afraid to share your excitement with emotion
• Try making the offer in-person
  • You could have them come into the office for a final meeting
  • Or you could go to them
• Invite questions and concerns before a final decision
  • Offer to go out and meet them and talk about stuff after the offer.
• Consider whether your acceptance rate is good enough
  • Maybe it would be better to focus on more applicants instead of increase the conversion rate
• Make the written offer special 
  • Make the offer letter personal
  • Sell the role and company instead of just explaining what the offer is. 
  • Answer the key questions about total compensation and benefits
• Before you make an offer, find out where the candidates stands
  • Before you stop the final interview and move to offer mode, spend some time with the candidate and try to pull concerns out, pull anxieties out, pull out what might make them say no. Then address the issues before you make an offer.
  • Question examples:
    • “If you're not working here five years from now, what's the most likely reason why?”
    • “If you were to decline our offer, what would be the most likely reason
• When you are the employer, there’s a power imbalance
  • Keep this power imbalance in mind to avoid false signals and to make sure your candidate is comfortable

Introduction

Tyler: The topic for today is basically flipping interview advice on its head, and saying normally it's assuming that the company is in the driver's seat and has all the power. What I want to talk about today is after you get to the point where you know you want someone, well or before that point, but what can you do to really maximize the odds of someone actually accepting one of these offers. We have a coding fellow, which is where we teach people to code, we have two different internships, and we have a full time position we're recruiting for right now. It really, really sucks when you find the perfect person, you give them the offer, and they decline. I just want to avoid that if I can.

Rick: Yeah. Well, before the show I asked you I think what your acceptance rate was currently, can you share that?

Tyler: Yeah, this is kind of back of the napkin because we don't have a real applicant tracking system for this, but I would guess it's about 75% probably say yes, and 25% decline, would be my guess. More people decline earlier, but I'd say if we give an offer, some people bow out of the process before this, but if we give an offer, I'd say we have about 75%.

Rick: Cool. It sounds like what you want to focus on is how to increase that 75% up to a higher rate.

Tyler: Yeah. Absolutely. And I think there's other benefits to this too. It's sort of like the way a good sales process for a company is going to lead to better customer retention also. This is the first impression for a recruit, and we want to build momentum that carries all the way through to after they start.

Rick: Okay. All right. Well, I guess, what would be success for this conversation?

Tyler: Yeah, I mean, what I'm looking for, I think, I mean ultimately the vague version of this is I just want to get people to actually say yes when I give them job offers. Specifically, I think I'd love a couple tangible takeaways or, not even... just ideas. I feel this is like a brainstorming thing where it's like maybe we can come up with five or ten things I can try, and maybe I'll actually actually try three of them, and one of them will work. But things I can actually do to just do more than whatever I'm doing now, which might be, in some ways, the bare minimum to get people to say yes.

How the interview and offer process works currently

Rick: Well can you talk about what you're doing now?

Tyler: Yeah. I'm inclined to break this into two categories. One is what's the whole interview process? Because that's leaving an impression on the person, and then there's the actual offer itself. I'm probably really bad at the offer itself. That's probably like the low hanging fruit here. But I'm happy to start at the beginning if you think that'd be helpful.

Rick: Totally up to you. We can dive in right to the offer, how you're positioning that, or you could add context about how you're going about this.

Tyler: Okay. Let me add a little context, but let's start by talking about the offer just because I think there's the most opportunity to improve there. We go and recruit mostly at schools, but sometimes through LinkedIn, or whatever other channel. The general process, it depends on the job, but it's something like a phone screen followed by, well sorry, they apply with a writing sample and a resume, we do a phone screen, then we bring them in for an in-person. The in-person interview is pretty long. And one of the reasons for that is it's like half us interviewing them, but half us trying to show them they would like it here. Which is easy for college students. With an adult, it's a little harder. Everyone wants different things. College students don't have a very refined idea of what they want. We play a board game with them, and give them free food, and they're like, "Oh great." But it's about a four-ish hour in-person with about half of that being us trying to make them think it's a cool place to work. Normally there's maybe let's say a week, or two, or three where we're finishing all those in-person interviews and we give the offer. What we do for that right now is I call them up. One thing I'm interested in your thoughts on is should it be me, should it be the person's direct manager calling them, but I call them up. No one ever picks up their phone, so the options are leave a voicemail, a vague voicemail that's like call me back or just give them the offer in the voicemail. I've dabbled with both. Right now I'm of the opinio...

This episode ended up being a brainstorming exercise on how Rick can set high-confidence MVP requirements for his ventures at LegUp. We identified several approaches to scoping an initial MVP:

• The productized service approach. This is where you start with a service business and iterate your service into a product with automation tools and software. 
• The skateboard approach. This is where you start with a simple product that solves a very tiny piece of your big problem (e.g. the skateboard solves the big transportation in much simpler way than a car).
• The learning approach. This is where you scope MVPs to test specific, prioritized hypotheses about your business.

Takeaways include:

• MVPs are a tool designed to help validate ideas and learn.
  • It's up to each person to figure out how to apply it in a way that works for them.
  • Don’t lose sight of this and overcomplicate it.
• Consider a minimum viable product verses minimum sellable product.
  • Viable could mean learning in exchange for delivering value.
  • Sellable means receiving cash in exchange for delivering value.
• Don’t worry so much about having the perfect industry-accepted definition for what you're trying to do.
  • When you're new to entrepreneurship, you hear these terms, and sometimes you just need to talk to someone about what you're trying to accomplish and just validate it, and make sure that you just check your sanity on these things. 
• The situation drives everything.
  • There are also constraints that are brought by the situation, such as whether you fund yourself or raise capital, whether you have partners, what skill sets you have around the table, those kinds of things.
• Consider whether you're building a process problem solver or a productivity tool. 
  • The type of problem you are solving drives a lot of difference in how you approach building MVPs.
• First time founders should consider identifying problems that can be started as a service business and productized later. 
  • It's much, much easier to support yourself and generate some revenue with services, consulting, contracting, than it is with a product. Start with the easy money and then evolve towards that product.
• Don't be afraid to build a product that's, to the user, providing a lot of value. But behind the scenes it's cobbled together with spreadsheets. 
  • What matters is that you're delivering value.

Introduction

Tyler: Okay, let's dive into the topic here. We're going to talk about, basically, out of an MVP, a minimum viable product, how do you know when you're at a V, the viable part? Do you want to intro this a little bit?

Rick: Yeah, I thought about some context right before this, so I want to share this with you. I don't know exactly how this topic conversation's going to go. I'm perfectly fine with just having some confidence to move forward with what I'm thinking already, that would be a great outcome. But I feel a lack of confidence with my plan moving forward, and I'm hoping that, whether it changes or not, whenever we do takeaways, I'm moving forward after this. Additional context is that, I can't remember exactly what you said in a previous episode, but one contributing factor to this is, I'm new to coding. Outside of computer science classes, I've actually never built by myself a product and released it to the world. I've always had a partner or coworkers working with me on that. This is new to me. Here's what you said, I think I just remembered it. You said that, compared with where we were when we worked together at Zane Benefits back 2007, 2008, 2009, it's 2019 going into 2020 now, and you said that the minimally viable product threshold for an internet-based software business has increased significantly over the last 10 years. I guess that's one thing that is holding me back is, how do I know when I've met that threshold is a question. But, what I'd like to do is add some more context. Does that make sense?

Tyler: Yeah. I mean, I think anyone who ever starts a business has this question of, "How good does it have to be?" Like everyone says, you want to go out and validate and test stuff, so you make something, you go sell it. But what if it's so crappy? It would have worked if it was better, but it doesn't work at its current version. How do you know when it's actually ready to go sell it? Right?

Rick: Yup. Yup. Exactly. I'm starting to scope a few no-code minimally viable products to work on for the rest of the year. Just to give you some specifics around the industries, they're all software businesses, internet-based. One is in the financial services space, specifically I would say health insurance, one is GroupCurrent's member management software, so a community management platform. Arguably we already have an MVP there, we're just interesting to talk about. Then the third is... One problem I have, this is a personal problem, when you taught me, you said, "Teach yourself how to code." You said, "Find a personal problem to solve and learn to code around that." I'm actually probably going to do that coding-wise versus no-code. But I read a lot of books and I listen to a lot of podcasts. I consume a lot of content, and I want to talk to Sable about those things, Sable's my wife. I can't oftentimes get her to... she doesn't have time to read the books that I read, nor does she really want to. I want to build a Sable notes app, which allows me to basically summarize the takeaways and the topics and give enough context to her from these books and these podcasts I'm listening to so that we can talk about it.

Tyler: But that's a personal project to learn to code. That's not an MVP type of thing, right?

Rick: Well, I guess in this case if Sable uses it, that would be the measure of success. But, I could apply the principles to this, but the threshold is much lower. Anyway, those are some of the things I'm thinking about. One thing I need to do that's actually probably unique to no-code in this space is, I need to identify the right stack of tools. Stack meaning, what different tools do I need to stack on top of each other to make this work with no-code, make the product work. In order to identify the right stack I need to be pretty clear about the minimum viability requirements because with no-code there are some pretty specific use cases for each stack. Getting the right stack setup, you may have to change all the tools if you get the minimally viable requirements wrong.

Tyler: Yeah. Do you want to... I mean we could have this conversation like, "Yes, you're going to build it with no-code, but maybe that's a separate thing. How do you take what we say, or do you want to say, let's frame this around the constraints of what no-code tools give you.

What is an MVP and where does it fit?

Rick: I'd rather fly above no-code because I think that that's just a way to get it done. At the end of the day, I need a framework to give myself confidence that I can move to the next step in the entrepreneurial journey. What I would like to start with is, I'd like to tell you how I'm thinking about it, and my definition of MVP, and then I have no doubt that you're going to have a different philosophy than me. Here's how I think abou...

This episode ended up being a brainstorming exercise on how Tyler can increase usage of  Less Annoying CRM’s customer referral program. Tyler may focus in the following areas: 

1. Trying to increase usage of the existing referral program by driving more awareness
2. Trying to capture more information from signups to determine if they were referred
3. Trying to repackage the referral program to make it more transactional.

Takeaways include:

• It’s important to have a remarkable product experience (that people want to talk about) before you focus on referrals
• Decide what the objective of your customer referral program is upfront
  • For example, is it to create leads or paid signups?
• It’s hard to create a customer referral program for products with long sales cycles
  • If you have a long sales cycle, consider creating or packaging a mini-product that is more transactional in nature to make it easier for your customers to refer (e.g. Hubspot’s website grader)
• It’s hard to incentivize referrals on a low-ACV product
  • This is especially hard if there is also a long sales cycle
  • Considering gamifying and /or tieing referrals into product features
• Think of your customers referral program as a product that requires its own product / market fit.
  • Consider the size of your market (customers and their potential referrals) and how to build the right product for both parties
• Once you think you have a solid referral program product, make sure your customers are aware of it
  • Be careful, you don’t want to be annoying or spammy
  • Considering marketing it passively as part of larger “join the movement” community building
    • With thoughtful design, you can do this in passive sections of your newsletters, emails, website pages and app pages. (But, don’t be too annoying)
• Morning Brew, a daily newsletter, provides a good example of an awesome referral program.
  • They've actually written a blog post about it.

Introduction

Tyler: We're framing it as, how to structure a referral program. But let me dive into why I'm thinking about this.Less Annoying CRM, my business, is currently at about two and a half million dollars in annual recurring revenue. We're growing about 20% per year. I'm happy with both of those numbers, but every company obviously wants to grow, at the very least continue growing and maybe even increase growth. We have not had a lot of success with a lot of marketing things we've tried. One of the reasons for this is totally my fault that I refuse to do certain things. I don't want to do retargeting advertising because I think it's a privacy violation. Anything that's not permission marketing, I'm pretty much opposed to. Also, it's just not one of our core competencies, and because our price point is so low, we don't have the type of budget to compete with other companies on marketing. As a result of that, the way we grow is almost entirely through word of mouth, which is awesome because it's free, it aligns what we're doing with customers. I really like word of mouth growth, but the downside is we have no control over it. I think that's... Would you agree that's true with most companies, that you just cross your fingers and hope word of mouth happens?

Rick: Yeah, I would say so. It's definitely one of those voodoo marketing tricks versus a systematic levered sales approach.

Tyler: Right? Word of mouth is a big topic. Making the product better, for example, maybe is one way to help with it. That's not what I want to talk about today. What I want to specifically do is say, in as much as we can control word of mouth growth, well, A, we have to be able to track it in order to do anything with it, and B, a referral program is one of potentially many ways to increase word of mouth growth. That's what I want to talk about. Historically, what we've done as a company is, we've offered a deal. It's basically the Dropbox deal, which is, anyone of our customers who refers someone else, that other person gets an extra free month of their free trial, and the person who did the referring gets a $10 credit. A free month themselves.

Rick: Give one get one.

Tyler: Give one get one. A pretty classic approach, it's worked plenty of times before. Unfortunately, not many people actually use this. Anecdotally, we have quite a bit of reason to believe that lots of people... almost all our growth comes from word of mouth, but the vast majority of that, I would estimate it at about five to 10%, actually uses the referral program. Which is not great because it means we can't track it, we can't tell what's working, we can't experiment very easily. Basically what I would like to talk about today is, how do we offer some kind of referral program that gets our users, when they refer someone, when they do the word of mouth thing, the person who's signing up actually uses a link that tracks back to... Or maybe that's not even the way to do it, but that one way or another we can track it back to the person who did the referral. This might involve giving incentives, it might be restructuring how the technology for the link tracking works. I don't know, but that's the basic problem I'm interested in talking about.

Rick: Yeah. Recapping, I want to make sure I got this. You've got a couple of challenges. Well, you've got a great product that people want to talk about, that's the good thing.

Tyler: Yeah, that's the good thing.

The challenge of low ACVs

Rick: You know that that's happening, you just don't have control over it. One constraint you have is that you have a low ACV, which means you can't spend a whole lot of money on this. I think the bigger constraint though is your philosophical constraints that you're placing on yourself that don't allow you to engage in some of the marketing activities that actually do give you control over this in terms of data collection.

Tyler: Fair. Maybe we should talk about this because it's a case by case basis I guess.

Rick: Yeah. I think it's hard enough to control marketing on a low ACV by itself. Then when you add, "Oh I'm not going to do that-"

Tyler: Sorry, ACV is annual contract value, right?

Rick: Correct. Thank you. Annual contract value, which is... Let's just talk in, it's $10 per user per month. With that amount of money, you don't have a whole lot of money to spend on advertising or anything like that. Then on top of that you're saying, but I wouldn't even be willing to do that if I did have the money because I don't believe in it.

Tyler: That's one of the reasons I'm trying to constrain to say, there is a whole range of topics about marketing that we could be talking about. But just to keep this constrained I'm saying, people are already doing word of mouth like referrals. I want to be able to track it and consider ways to specifically enable them. One of the things I love about word of mouth is that the customer wants to refer people to us. Everyone is aligned here. I just want to empower them to do it and...

In this episode, we discuss how to reset expectations with stakeholders when things change. Rick shares a challenge he is facing at one of his companies. While we worked through a specific situation, the general concept applies often. Here’s the general framework that emerged:

• Clarify what needs to change and why
  • Frame the problem(s) thoughtfully
• Identify the stakeholders and where do they stand
  • Identify who has decision-making authority and who can be an ally
• Decide who to talk to first and iterate from there as a team
  • Be open to feedback
• Get everyone aligned and move forward together
  • Be aware of fundamental differences; these may require you or someone else to leave

Takeaways include: 

• Change happens all the time and resetting expectations is critical when it happens
• Some companies die because they never change their expectations
• When you're going through change, the minimum time investment isn't enough. You have to talk a lot more
• Start with the problems, but be thoughtful about how you frame them so that they're generalized problems that don't cause defensiveness
• As a leader, people don't see the world like you do. Your job is to get them to see it like you do, and that takes communication and it takes patience
• It is critical to get everyone to see the problems and talk about the problems
• When you can talk about the problems because they're emotional, you can't talk about the solutions and get on the same page
• When there is a fundamental disagreement you can’t get over, someone has to go (and it may be you). Get aligned on fundamental values and expectations before forming new partnerships

The problem

Rick: In life, change happens all the time. That's especially true in the workplace. Once you've been in business for more than a couple of years... even in the first year... lots of things that you thought were true are no longer true, and you have to change your mindset around what the truth is and what's going to happen next as a result of that. When you're on your own as a solo entrepreneur or you're an early founder, you just have a couple people that are all working pretty well together. It can be pretty easy to make those changes happen because the people in charge are able to make the decisions necessary to change their expectations. When you grow and you have multiple hands in the pot at different levels and it's been a longer period of time investment, you get to this place where resetting expectations is critical when a change happens, but it gets a lot harder. It gets a lot more emotionally complex. It gets a lot more complex just from sheer volume.

Tyler: Different stakeholders who all want different things and they think they know what you're doing and things change.

Rick: Multidimensional complexity increases over time. This applies to employees, partners, board members, investors. Even at home, when I was thinking about how to frame this problem I was thinking, "Well, this a Sable and Rick..." Sable is my wife. We deal with this constantly, especially in our first year of marriage where we're trying to talk about when do we have kids, what's our budget for certain things? I got fired a week before our marriage from my CEO job. It's one of those things that's like that had to go through a lot of expectation changes. Mostly, what I want to talk to you about is dealing with this at work with the stakeholders that you deal with, specifically at a nonprofit. At GroupCurrent, we focus on helping member-based groups reach sustainability. Most of these groups are nonprofits. By design, most of our customers or nonprofit customers come to us because they've not been successful sustaining themselves. I don't want to say it's a shit show, but it's not a good situation.

Tyler: To clarify sustaining themselves, you're saying they start out where they're getting donations from various places but it's a one-time donation. They can operate for a while, but what they want is an actual business model that they can count on, and that's where they come to you to help with.

Rick: Yeah, and donations can be sustainable if you have a way of predicting them and continuing to receive them. When we starting GroupCurrent and deciding whether or not we wanted to be in this business, the thing that got me really excited is I discovered this problem that nonprofits often face, and it's not too different from a lot of founders... serial entrepreneurs, in my opinion. The situation is called the organizational starvation cycle. Some people call it the nonprofit starvation cycle, but I like organizational because I think it applies to more than just nonprofits. It starts with some unrealistic expectations from founders. In the nonprofit world, founders are called funders because generally the founders just provide the money and some guidance at the board level. They don't do the work. A lot of times, what they do is they hire a managing director or bring on some fellow board members to help run it, and they have super high expectations, unrealistic expectations. Those people that they hired feel a significant amount of pressure to conform to those expectations, which leads to either overworking, which leads to burnout, or it leads to fudging certain accuracy of things, whether it's maybe omitting when it should be said or rounding up when it should be rounded down. I speak to this stuff sensitively, because it is sensitive, but it leads to bad behavior to meet those expectations, which in turn leads to more unrealistic expectations because you're not dealing with the problem, which is unrealistic expectations. This cycle typically continues from the early days until it reaches a breaking point, which one of two things happen. Either there's no money and management gets fired and the nonprofit gets into this zombie land of, "What do we do next?" Maybe they shut down. Most of them just kind of live without doing much. Or the management goes, "Screw you guys. I can't do this anymore. I quit." There's some actual good things going on, but no one there to do the things anymore. To be successful at GroupCurrent, our clients are going to come to us because they've been in this situation, which is extremely complex emotionally. You've got founders who put a lot of money into it. You've got former people who have worked at the company who probably didn't feel like they were treated the right way. It's extremely complex. In order for us to be successful, we've got to be really good at coming in and resetting those expectations and getting all the stakeholders... the founders, the board members, and the employees that are currently working there, any current donors or community partners, any customers... on the same page with what to expect going forward. Those expectations could be mission, vision, values. It could be business model. It could be, "Hey, board members, you've got to start doing work now. You can't just sit." Roles are changing. We're dealing with this with one of our clients. We're very happy with our customer. This isn't a talk about how much the situation sucks, it's just there's a reality of the situation where the organization has gone through different renditions and it hasn't gotten yet to that place of sustainability. And it's not there yet, even with the work that we've done so far. I guess... go ahead.

Tyler: I was just going to say I like this topic because we're going to talk about it specifically in your case. But this applies very much to the topic of...

Here’s what you should know about Rick:

• Born in Raleigh, NC and grew up in Morganton and Charlotte, NC
• Went to college at Duke University
• Majored in Economics and Computer Science
• Wrestled at Duke
• Moved to Park City to Ski bum in after graduation
• Met Tyler at a startup called Zane Benefits (which is now part of PeopleKeep) in 2007
• Became the President of Zane Benefits after a mass layoff in 2008
• Bootstrapped Zane Benefits to $4+ million in annual revenue in 2013/2014
• After a regulatory threat in 2013, launched a new business called PeopleKeep
  • Raised ~$3M in venture capital to finance this
• Wrote a book in 2014 which was published by Wiley
• Merged Zane Benefits with PeopleKeep after confirming the legality of PeopleKeep’s approach and reaching product market fit in 2018. Milestones included:
  • $120K in monthly recurring revenue (MRR)
  • Profitable unit economics
  • 50+ user NPS
  • Low churn for very small business segment
  • Numerous customer growth and product expansion opportunities
• Was fired by the board in October 2018 when unable to align on long term compensation
• Founded LegUp Ventures in May 2019, which owns and operates companies that empower underdogs. Current ventures include:
  • GroupCurrent, which helps member-based groups reach sustainability
  • RickLindquist.com, where Rick writes and consults on various topics
  • Startup to Last, this podcast
• Likes:
  • Physical fitness
  • Continuous improvement
  • Sustainability (i.e. balance)
• Dislikes:
  • Bullies
  • Victim playing
  • Intellectual laziness

Entrepreneurial beginnings

Tyler: Can you just kind of give a little background on how you got into the startup space, entrepreneurship in general?

Rick: Well, I guess I do kind of have that story of always being a little entrepreneurial. I had lemonade stands.

Tyler: You did? At what age was your very first venture?

Rick: Four or five. Yeah, I did the lemonade stands. I took it very seriously. I mowed grass. I tried a lot of different things. I always thought about it. I read business books when I was in high school, entrepreneurial books. I always knew that was what I wanted to do, but I didn't know what my path was. I thought it was something that ... The story I like to tell is, my dad is a lawyer, which is kind of a sole proprietorship in a way. You're a partner in a law firm and you do actually have to produce for yourself. And then my grandfather owned an ACE Hardware store, True Value Hardware store. So I witnessed a lot of entrepreneurship growing up, but my dad always hated his job. He's a litigator and he always had to fight with people for a living. So I was really scared to go to start working because I thought I'd hate my life. I thought that's what everyone did. So I was born in North Carolina. My parents got a divorce at a young age. So I moved all around North Carolina. I think I lived in, like, 17 different houses. I never had that one house. In fact, living in Utah, the Park City area, that's the longest time I've ever lived anywhere. 

College and major

Rick: And so anyway, I ended up going to Duke for college. I graduated in 2007 and had no idea what I wanted to do.

Tyler: Well, let me stop you for a second. So what did you major in?

Rick: Economics and computer science.

Tyler: So you had an entrepreneurial spirit before college. Did that inform what you majored in or anything like that?

Rick: Yeah. One thing that I think you'll learn about me is, I'm generally open to anything but, once I form an opinion about it, I form a pretty strong opinion about it. So I actually did not declare a major until the end of sophomore year. I took just about every 101 course at Duke, including political science and I dropped that class midway through and had a really big blowup with the professor. I hate political science classes. They're too political.

Tyler: Who would've thought?

Rick: Yeah. Who would've thought? So I knew that I was interested in economics. I knew that I was interested in computer science. So those were my first two if I had declared freshman year, but I wanted to see what was out there. And then they were the most practical. One was learning about how money works and the other ... and people work and markets work, and the other was how to build things, I thought. And then I realized, computer science is actually a bunch of theory and bullshit. And I think I had two programming classes and they were my favorite classes at Duke.

Tyler: Yeah. I mean, all college professors are theorists, right? So in a sense, every major is theory.

Rick: Yeah.

Tyler: Anyway.

Rick: Yeah. So I did a lot in college. I wrestled. I was in a frat. It was an atypical frat, but still a frat. I did student government. I did a lot of different stuff. By the time I graduated, I was pretty burnt out and so I remember everyone just doing investment banking interviews and I went through a couple of those and I was like, "I cannot do this. I could not move to New York and work with these guys. I need a break." So I decided to move out to Park City to ski bum. Called my dad. He basically said, "That's cool, as long as you're off the payroll." I think he gave me until July to move out and I basically just came out here expecting to ski bum. Unlike you, who came for a job.

Ski bumming to startup

Tyler: A job. I never heard of Park City, nor had I ever skied before. But you knew what you wanted to do here.

Rick: Yeah. So my grandfather bought a condo out of bankruptcy in the '80s with an ownership group. So we always came out here for a week to ski. So I was very familiar with the area and I always heard my dad and my grandfather and people talking, like, "I wish I had taken a year off to go ski bumming." So I called them out on that and I took advantage of it. But I got out here, I'd carpet clean in the mornings for a carpet cleaning company locally and then I was a bellman at a hotel called Park City Hotel. And then sometime in November ... I got here in July, and sometime maybe in November that year, I met a headhunter who was recruiting for this startup called Zane Benefits. They had just raised a $3 million series A. And I was driving this person around or it was something like, "What are you doing? You have a Duke degree and you're carpet cleaning and driving people around?" I said, "Yeah. I'm serious about ski bumming." So anyway, I ended up taking a job there because I got really interested in the problem. And I came on as an entry level sales rep and that was my first professional, what I would call my first professional job.

Tyler: Because you didn't do internships or anything like that, right?

Rick: My internship ... So one summer,...