How to Build Your Team & Scale Your SaaS with Josh Ho of Referral Rock

Josh Ho Transcript

Josh: If you have five people that you have to train, essentially you are just the bottleneck for all of them and you're training all of them, and then it's across multiple disciplines and you're trying to context switch between marketing, and development, and product, and sales, and customer success. Without having someone that you can delegate training to, and delegate some management to, it becomes a much harder hurdle to jump over to get to the next step. Voiceover: Welcome to SaaS Origin Stories. Tune in to hear authentic conversations with founders as they share stories from the earlier days of their SaaS startups. We'll cover painful challenges, early wins, and actionable takeaways. You'll hear firsthand the dos and don'ts of building and growing a SaaS, as well as inspirational stories to fuel you on your own SaaS journey. Here is your host, Phil Alves. Phil Alves: Today I have Josh Ho from Referral Rock. Welcome to the show, Josh. Josh Ho: Thanks for having me. Phil: So the first question I like to ask every guest is, what problem does your SaaS product solve? Josh: That's one of those ones when you ask a founder, it's like they have a thousand iterations in their head, but the easiest way for me to describe it to most people is we run referral programs. We help businesses run word-of-mouth referral programs, like how everyone knows the Dropbox, the Uber, those types of referral programs that are built into those apps. Basically, we have a platform that enables businesses to be able to run those types of programs without having to code them all, worry about incentives, and they can do more fancy gifting like gift cards and swag or all kinds of other things that they feel like that their brand advocates would value. Phil: Nice. Do you guys specialize in vertical or is there a vertical that you guys are bigger in? Josh: There's probably some niches we're stronger in. I would say our biggest strength is with-- It's going to sound lame, but it's more about any business, and only because most people will define themselves as like a D2C or eCommerce or a SaaS business. We're pretty horizontal across all of those. The area that we're strongest in that I think most of our competitors aren't is with CRM integrations and things like that. Where you could have a B2B type of business that has sales teams and whatnot and has a CRM, so they need the integrations to credit the right referrals to the right people that referred. Also, you have an eCommerce company that might have other types of service offerings, other things integrated with CRMs that aren't just Shopify and things like that. Largely our space is horizontal. Phil: Horizontal. You're trying to give those B2B companies some of the tools that they need so that they can use your product more and they can integrate your SaaS. How big are you guys right now? Josh: We're about 20 people. Phil: Nice. You guys been in business for about three years, right? Josh: Longer than that. I believe if I look back, we had our first dollar of revenue in 2015. Been around for a while, but since it was bootstrapped and just I'm a single founder, we're not funded all of those types of things, a lot of it was nights and weekends and slowly ramping up to working a few hours a week to half time to full time over the course as revenue came in to be able to support myself in adding other people. Phil: Nice. Let's talk more about that because that's the whole theme of this show, the origin stories. What we were doing back then, it looks like you started as a side hustle. Walk me through what you used to do and how did you come up with the idea, and how was those early days? Josh: Sure. The early days at the time I started Referral Rock, I had a previous SaaS business that was in the-- I would say it's more in the consumer space. It was called Uber Note. It was a notes platform. It was the whole idea of personal productivity and notes like you see Notion today. That was our vision then, but we started that one in 2005. This was a good long period ago and mobile apps weren't even a thing yet. It was very early in SaaS and consumers essentially didn't want to pay for apps at that point in time. We went through that for a number of years. Then probably around 2012 timeframe is when I decided to shut that one down. It went through other iterations. We did an accelerator and all kinds of other stuff, but the biggest takeaways for me there were learning how to do marketing because we did some SEO at that point in time, and I understood and learned how to market and do the power of SEO as a distribution channel. The other one was, I wanted to sell to businesses because consumers didn't want to pay. Those were my two seven-year long takeaways from my first SaaS business. In that period before I started Referral Rock, I was doing some software consulting for other companies and just doing other odds and ends. At that point in time, that's actually when I was married, started having kids and things like that. It was actually a good time in the early days of having young children. I always wanted to get back into SaaS, basically with those two things. Like, "Hey, how could I use SEO as a distribution channel in addition to how can I do a SaaS that is selling to businesses instead?" I was sitting in a car dealership and I was watching a salesperson sit at their desk and a customer walks in and says, "Oh hey so and so referred me to you to help me buy a Honda Accord." The salesperson had this blank look in their face. Had no idea who the person was, what they were talking about. I'm just sitting there getting coffee because I was getting some car service done. I saw this flash in the salesperson's eyes. All of a sudden he was like, "Oh." he just snapped into sales mode and was like, "Oh yes. Oh, Karen, yes. Yes, I'd love to show you this. Oh yes, you know so and so? Yes, sure. Hey, we'll get to it." I was looking and I was like, "I don't think he really even knew what was going on. He just was like, "Okay, sales mode on." I was sitting there and I had my computer and I'm like, "How do a referral program work for a car dealership? How does it work for like a yoga studio? How does it work for all of these other businesses that are not pure online, pure eCommerce, that type of thing?" I did a quick Google search, tried to look for competitors who was doing this. I found all the players that were doing e-commerce and all these other things. I was like, "Oh, but no one's doing it for these service-type businesses." That was the impetus to even get started. Even as we talked about at the top of the show about who we specialize in, it has gave us strong differentiation early on and a strong thesis and direction for how we wanted to build the product. Phil: Nice. Let me say with my own words to see if understood. You build a B2C SaaS, and you realized that's super hard to scale. Now you're like, "I want to do a B2B. What am I going to do?" You didn't know exactly what to do yet. Just going around with your life, you realize that the business have this need to track referrals and there wasn't anything there. I feel like that B2B versus B2C is such a big thing. At my own consulting firm, we actually build SaaS products, but we have one rule. We don't build B2C products because they're very, very hard to be successful. We actually broke that rule when we work with public companies. We build a B2C SaaS for ADP because they have all this money, but if you don't have a lot of money, it's very hard to build a B2C product. I would like to go a little bit in there because I feel like that's something that you learn that we can teach for other founders that are listening to this show. You say your new product now is bootstrap. In my opinion, and I want to hear your opinion, with a B2B product, you can bootstrap very easily. We only need 100 customers and you're profitable. In the B2C space, you need thousands and thousands of customers. $5, it's too much money for people. I wanted to hear your side, what's your view and how was your experience B2B versus B2C? Josh: It was definitely my opinion to get a business off the ground was definitely-- I agree with you on the B2B, just because there are so many other-- One, like you mentioned, you only need potentially 100 customers, and you can tie money directly to value there. I think that's the biggest thing. When we did productivity software, yes, the market seems bigger, like, oh, millions and millions of people could use this, but you have to sift through a lot of that. Even from a scaling perspective, you have to build infrastructure support millions of users or hundreds of thousands of users. No one's really willing to try something because the value proposition is so low and harder to describe. Now this is like on an e-commerce front and some other things for consumers. That's easier, it's a different play there. There's definitely like a lot to be gained from the B2C. I think also a lot of people default to B2C first because a lot of people are consumers first. Then when they talk to their friends there's other factors when they start a business, they want their friends to think it's cool. They want their parents and family to think it's cool. If you come home and tell your spouse that's like, "Hey, I'm going to build this really weird software that only helps these specific types of banks." They're going to be like, "Okay, I don't know what that is. Like, I don't know what you're talking about and that doesn't sound cool. I don't want to talk, tell my friends about that 'Hey, my spouse is building this, this really weird business'." I think there's a lot of layering factors that people get used to and get caught into when they hear of entrepreneurs. Mostly they hear about Elon Musk, and basically, most people know entrepreneurs from a fame perspective, from a B2C perspective. I think a lot outside of maybe people like you and me, most people don't know who Mark Benioff is, or like Dharma Shaw or all these like B2B legends that are building these things, but they're not really in the public eye. I think that's also a way that makes B2C more pervasive, at least initially for customers or for business entrepreneurs that want to start those. There are a lot of reasons, there's a lot of pull, but you're totally right. There's the B2B side. You can find a small number of people and give them a huge value metric, and they don't really blink an eye on spending hundreds of dollars on software. You talk to someone when they flip modes and they're in their home life and you're like, "Oh, would you pay $500 a month through this?" It's like, "Ooh. Like that's a lot of money." They start comparing it to other personal things like food budgets and car budgets and other things like that. Phil: Yes, for sure. I love what you say about like, sometimes we got caught in trying to be cool and there's also that thing of having to learn about space. Because like you say, you were in the car dealership, you had to go deep. You have to learn about that space, learn the competition because it's not natural. Unless you are an industry expert, like that English very well, like, but then maybe you're not a tech person, so you have to go and you have to learn. I think one thing that comes to mind too like it's why I'm building this business. Am I building this to have like the best job of my life and be financially stable will have money to travel and stuff, or am I building this to be like the next Mark Zuckerberg? I feel like most of us, we don't want to be the next Mark Zuckerberg. It would be a nice step stone still to build something that's just like the best job you ever had, that you love doing and that you make money with. A guy that I really like it's Andrew from [unintelligible 00:13:09]. His first company was a B2B SaaS building mobile apps for other people. Now he went and he raised money and he's trying to build this thing huge, but he's sold that company. He's in a better place financially with his family. I feel like that's a better place for us as founders to start. Tell me about building version 1 of your product. Looks like you're a soft engineer yourself. How was building version 1 of your product? Josh: Version 1? Well I would say maybe first I'll start with like our MVP first. I went very, very minimal on it. It was to the point where, yes, I built other software before and what I did to test this because I didn't know how much this idea had legs. We all want it to have legs. We all talk about it with high confidence, try to interview people, and try to get as much interest as possible, but you really ask, it's like, "What chances of success do you think this is?" Because at that point in time, I probably tried many other smaller ideas that I haven't even brought up today. The minimum I went to was I essentially took other code I had. For other little projects, because everyone has little pockets of code and scaffolding and all kinds of little things. I had an HTML template that I put together and I think I bought it off of TeamForce and put it together. Essentially that was the referral program interface. What a person joining the referral program would see. Very simplistic. Then I didn't even have a database to start with, even though I could have done one. I actually what I did for an admin interface was I used I think was Wufoo at the time, a forms software, asking people to put the name of your business, upload your logo, like the basic information that a business would need. "Hey, what are you offering on your referral program?" Just the text, all of that. Basically, here's your program designer. Then what I did is I just took the CSV file and did a conversion and turned it into some resource files and just mapped those to like a URL so that everyone had a program without building an editor, without a database essentially used the Wufoo form as a minimum viable like admin interface. That was, I would say our very first version to get people using it, get businesses to tinker with it. This was well before we ever asked anyone to pay for it. This was super early getting probably maybe 10 or 20 of these people up and running so that they could send it to their customers and see if people were actually going to use it. Phil: Nice. Because like as being a developer, like so many times we as developers, we went to go and build this huge thing and we went to overengineer, you build something super scrappy, like I just want to test that idea. Enables that thing like they have built so many things before you're like, I'm going to just test this something, build it quick use Wufoo as the back end. Those 20 people we start using, they validate your idea and then you move into building version 1.How did that go? Like what feedback did you get that got you excited to keep going? Josh: The biggest feedback was probably the fact that it was being used, right? It wasn't tracking a whole lot, it was just like the attribution was pretty lame in terms of actually tracking the results. My first thing was okay, first one is this interesting enough for someone to fill out a form. Two, are they actually going to go ahead and share it out with their customers to get them more referrals? When I saw a bit of that, it also helps to narrow in on who was interested in this type of thing. I did get to talk to people and figure out more about what could be interesting for them. That is where I got into what I'll consider, like really the Version 1 after that. After my MVP type of thing I was able to talk to those customers and really understand like, "Oh, well how often are you going to want to change?" "Oh you want to add an image here?" At that point I think people were more invested in it and were willing to give feedback from, I would say two or three steps in versus just "Hey, I have this idea, what do you want it to be?" No one, someone will mouth off and guess, "Oh, I want an image, I want them, Oh no, wait, no I don't want that." Or once I see it, "No, no, no, not that, not this." As you as a developer, you've probably seen that plenty of times on what someone thinks it is in their head and then once they see it on screen or on paper, then it's like, "Oh wait, no, no, no, that's not what I want." I was able to get past those earlier hurdles and get people to talk a little bit more. That's what became more of the impetus for the real first version, which then I did add a database and I knew what do they want to actually add more images than just their logo? It at least gave me an initial stronger set of requirements for what people were looking at would be interested in and also what could bring them value. Phil: Did build version 1 all by yourself? Were you starting to build your team at this point? How are things going? Josh: This is all still me. This was probably all within the first couple years of the idea. I think I originally registered the Referral Rock domain in-- I think it was the end of 2013. It was one of these like ideas that's just sitting around and you tinker with it. I probably was working on other ideas at the time too and just, it's one of the ones, ones I just kept coming back to, did that push to get some interest, get some people using it. Over the course of probably about a year before I had a version that I was basically willing to ask people to pay for. I did get nudged because it was one of those things where you always don't think it's good enough because you're still in this very minimum phase. A friend actually challenged to me one weekend. He's just like, so you say like, people are using this, like why not charge them for it? I'm like, "Well then in your mind you're like, like, well then they may go away and then I would have nothing." It's like, "No, no, no. Do you provide value is put your money where your mouth is?" If it's really providing value, they'll pay something for it. I did take a quick weekend set up Stripe and all of that. Then like this again, this was the summer of 2015 and I went through and set it up, and actually, within two days, I had a first paying customer. What I did do is a little hack to not make me feel bad if those beta users went away, I didn't charge the beta users on day one. I had the beta users and it was just that for the next people that were trying to enroll for it, there was like a you have to pay for it and I got someone random that I didn't know, paid for it within the first two days of that. The beta users were still there and what I ended up doing is later that summer, I notified them, we're going to paid, gave them a discount coupon to say, "Hey, you get basically 50% off for your lifetime." I kind of slow rolled it and I cherry-picked which ones I sent that communication to over time as I felt more comfortable. I didn't want to end up with like a bare cupboard like once I flipped that on, now I went from 20 beta users to two paid users and now I'm only talking to two people, so I kind of tried to hedge my bets a bit over that summer. Phil: That's smart, and that's also cool to think that it only took you two days to get another customer that was not already using the product, you were doing some marketing behind the scenes as you were building the product. Tell me where did that little first customer come from? Because most people, they will get their first customer from their beta users, that's not what you did, and understand why you did that, you want to make sure you still have people give you feedback but where did the user come from? Josh: I'm not exactly sure but I was doing some marketing aspects out there. Along the way, I also did a beta list launch, beta list is still out there. I don't think it's as big, I think in the days now Product Hunt and things like that, but back when I launched this, in that timeframe, I launched on beta list and had a trickle of customers. I think I was active on Twitter, I was probably in there looking for anyone mentioning the word referral marketing or refer a friend. I was tweeting at them and just doing a lot of, I would say, non-scalable things that were just enough that things would trickle as people would come by, people would notice, and that type of thing. It was very slow, it wasn't like getting tons and tons of signups a week or anything like that but it was a slow roll. I would say when you mentioned the two-day thing, what's interesting, I went back and thought about it, I'm like, I wonder how long I would have held on if that user didn't come in those first two days? Once you hit that button, and you're sitting there, and you're just watching and you're waiting. If that happened within two days for me, the next person that I'd get probably was another two or three weeks. What would have been interesting is what if it went a month? What if it went two months, would I have thrown in the towel, and we wouldn't be recording this podcast today? I don't know. Phil: That's cool. I think business is a lot about that, there's a lot of luck involved too, and another insight here, it's like so many times, it's not your first idea. I actually myself I wrote down, I tried to build nine SaaS products and I took two to market. [laughs] It is like what it is you'd be able to like, okay, this didn't work, it is a try and error thing and I think that's what people have to think about too and it takes time. Let's go over the timeline, you're moving your beta users to paid users, you're starting to grow, how long did it take until you start making your first hire? Talk to me about building your team to 20 people and creating your core team, how did that go? Josh: Sure. I would say probably speeding up a few months, we ended up making it probably up to a few thousand dollars a month by that fall. It was still me, and at that point in time, I started to think about where I could use additional help because I was still doing the development, I was still doing any support and talking to customers. The biggest thing I thought I needed at that point in time was helping with knowledge base documentation, maybe some blog posts, and things like that. I did hire someone part-time that fall to just help me with odd and ends that I knew I just didn't have direct time for and could always put off but wasn't necessarily mission-critical types of things. Obviously at that point in time for me, hiring another developer would have been a huge chunk and taken away from-- Also trying to just bring them up to speed on all of these other things. At that point in time, it was still much faster for me to do the main things like working directly with the customers and developing the software but taking some of those other areas like the blog posts and the knowledge base, and then eventually that person can help potentially on my chat support and things like that. That's where I started in the fall and as revenue increased, as I learned that I needed to do demos and learn how to do sales and start talking to people versus hoping they would just upgrade and chat support through the app. It was interesting during that part of this time because it was probably only within that six months before within launching the first paid version that I did discover through talking to people more often and getting more organic people just come into the website, and asking about the software, I realized that had a much higher value proposition than I thought in terms of what it was worth to people. We ran into some also B2C businesses but that was very expensive, like a car dealership, or we had a water filtration company, it was one of the first ones. They were willing to pay a lot more, because once I did the math, I'm like, oh, yes, if I send them one or two referrals, and they charge $10,000 for one of these water filtration installations, that's a pretty good ROI, it's a pretty good return on their investment. They're willing to give maybe a $200 gift card to the person that referred them which, for the consumer is a great deal as well. It got me thinking about pricing and salespeople and those things. As that grew, I started to backfill positions I was doing. I eventually had enough revenue and my time was being sucked up enough by half my days being spent on demos, that I needed someone else to help me with demos. Then I looked to hire a salesperson, and so on and so forth with that, it still took me a little while before I hired another developer, but I kind of modeled in my head as I would nail the job and then I would scale up by finding other people and train them behind me. It's still something I'm doing to this day, I'm at this point 20 people in, I'm out of the code base, I'm out of anything that I'm really truly an individual contributor on and most of this stuff is more of leadership stuff, it is more strategy, it is more tactical types of things but I did that across all the different teams and to date, we now have a product team, we have a customer success and support team, we have a marketing team, and we have a sales team. Those are the main areas; I still do finance and do other things that are not like a full-time job type of stuff and some of those tasks are also distributed among other team players as well. Phil: That's a great strategy, nail it, and then hire, like you learn the position, you learn what you need, and I would imagine that at that point, you're not hiring senior people, you're hiring people that you can train because you know the job is that, is that how you did? Josh: I think there's a mix in there. Those first ones I didn't have time to manage, and it depends on the types of tasks. When I started to fledge out those new areas, like the sales area or the customer success, I actually ended up-- the most successful ones I got were more of a finding a player-coach type of person, a person that had experience doing it and since I had some experience, I was able to vet them and know if they knew what they were talking about. I brought in I would say mid-level people, the type of person that might have been on a team that still hadn't got their shot at managing, or a person that's early on in management, but still doesn't mind doing the individual contributor work, that's what I looked for and those are the players that I love to both be the first salesperson, be the first customer success person, be the first contributor, but also looking so that they are going to want to train someone else once you build a team around them. They knew that they've already mastered the individual contributor type of role. Those were the ones that were most successful because it allowed me to not have to continue to-- If you have five people that you have to train, essentially, you're just the bottleneck for all of them and you're training all of them and then it's across multiple disciplines and you're trying to context switch between marketing and development and product and sales and customer success and it's without having someone that you can delegate training to and delegate some management to, it becomes a much harder hurdle to jump over to get to the next step. I was trying to look a little forward and do that and it worked out pretty well for a couple of the roles. Phil: Got it. The strategy wasn't to learn and train, it was to learn enough so I know if the person I'm going to hire is actually know what they're talking about, so I know the person is good, and then hire someone that's up-and-coming person, mid-level. Most senior that eventually is going to be a manager, but it's still the video contributor level because at the early days you need people to do their work, not to manage their work. That's a good strategy. Josh: That person's also going to make the playbook. They're the person that are going to make the playbook. Basically, I might be able to be like, "Hey, this is the thing, I'm doing the thing." They're going to be able to take that, put it into an operation manual, learn it themselves, and then train other people and then also expand on it and iterate and own it. Definitely on the learning the job. You know what you're talking about because I think one of the biggest mistakes I've seen people make is they go, Oh, and I made this too. My first sales hire was horrible. [laughter] Josh: It was like, I just want to-- Someone else is an expert, I'm just going to bring someone else and give them toss in the ball and run, but without knowing enough about those things, it's hard to know a marketer that says, "I can do these 50 things," but it's like, can you really? Is that actually what we need? You do need some level to know is this actually what I want, actually what I need for my business. Phil: That makes sense. I really like the hiring strategy and I think other SaaS founders, bootstraps owners can learn from you, and how you've done. The developer was the first that you were by trade. That's why it took longer to hire someone for development. How it was when you like brought other developers on board? Being a developer yourself, was it hard to let it go? How did they treat your code? What stack you guys were using too? Just say, out of curiosity. Josh: We're a dotnet-stack, and that's mostly because that all of my development was that early on. It was one of those ones where, again, like I mentioned about doing DMVP, I had code stuffed in corners that can do like, Oh, here's how I do database connections, here's how I do this, here's my own software development playbooks and templates and different things. That's where we started. The first developer I hired-- I know I mentioned finding a leader. He was probably more of a-- He was interested in leading, but was a reasonably seasoned software developer. He's still with us today. He's awesome. It wasn't too challenging. I think I was able to just break out certain areas of the code. I think with software it's a little easier because you can, you see the check-ins, you can easily brief over the stuff. It's easy to-- There's some natural forcing functions that are going to make sure it has a level of quality. Does it compile? [laughter] Josh: Things like that. Does it work? All of a sudden is it-- Some other roles are harder to tell. With a sales one, you're just like, I don't know if it, they sound like they're doing it, but is it getting through to the customer? I don't know. You have to wait longer feedback cycles to really get an idea. I'd been a developer before, obviously finding developers, interviewing developers, all of that was far easier than trying to figure out these newer roles. It did take a few years before I think it was-- We had the first developer and it was probably at least two years after that before I hired a tech lead. That's when I really started getting away from the code base. I was still like the pseudo-tech lead for a while with the first developer. I'm also doing product design and all of that. That was probably one of the most impactful hires, which was probably about like three years in, was bringing in the tech lead to where I was really able to get out of the code base. It was great because he was a more senior, more seasoned developer than I was. With my other startup, I went off into entrepreneur land and was less in corporate dev and more standardized structures and whatnot. I was not using git, I was not using other stuff. I knew of it. I think I was using-- What's the other-- Subversion? I was using Tortoise and Subversions. It's just like, "Oh, no, that was, people were using that 10 years ago." Even my first versions of everything that we're still getting away from, I think is all in asp.net web forms. Again, going with the code base that you know to get the stuff up fast for MVP, for first versions for that stuff. Now the team is fully moving. We're more, we moved to Azure, we're getting some other little microservices types of things. We're doing all other more modern things now, but my first versions. My code's still there for a lot of the base, a lot of the business logic, things like that. Phil: You follow this strategy that I feel like every founder should find follow. When you hire people, hire people that better than you if you can afford them. They can come and they can do what you were doing better than you were doing. It feels so good to learn and to like, okay, that's awesome. It sometimes is hard to do, but that's the ideal scenario where you as a founder can find someone that's better than you to do that job because you have so many hats. When you do a marketing hiring, hopefully, they know more of marketing than you. When you do a tech lead that you have the role, hopefully, he's a better tech lead than you. Then eventually you say, have a product person now, hopefully is a better product person than you because that's the specialization. As the founders, we just are like the generalist. We do okay in a bunch of stuff. [laughs] What's the first "Oh shit" moment that comes to mind about your company, how the years they have been in business? Josh: I don't know, on a "Oh shit" moment. Like a bad "Oh shit" moment or a good "Oh shit" moment? Phil: You can choose. [laughs] Josh: I would say, we'll start with the good, I said with the good. It was one of these things where, for a long time in those early days when you're starting to get revenue, you're just waiting for the other shoe to drop. You're waiting for like, "Yes, easy come, easy to go." When is this dream going to be over? When is this-- Maybe it's imposter syndrome, maybe it's other just doubt or just like, "Hey, really understanding SaaS." You're like, "Okay, all these people are paying but only 60% of them are actually logging in every week. Am I really providing value?" Sometimes that goes up, sometimes that goes down. I wouldn't say it was one moment, but it was like as the bricks were stacking and all of a sudden there was, I guess there was a certain point where you're like, all of a sudden I looked back and it was like, Oh, I have a lot more confidence now. That doubt somehow disappeared. I don't know when exactly on the road it was. There was a point I did recognize it and that's one of the biggest things I hear from other founders in those early on days. It's just like, this is working, but will it continue working and should it work? I don't know, everyone has their own doubts and that moment of realizing like those doubts were all gone. I think I would mostly attribute it to the reps, because over time you start to go. You're doing it for a month, your confidence isn't high, you do it for two years, all of a sudden you're like, those same users that are logging in 60% of the time that's still the same. By having those reps that the confidence in or doubts go away because you now have a longer track record of those things. Hey, I thought the shoe could drop, but it hasn't dropped in two years. It hasn't dropped in three years, it hasn't dropped in five years. Maybe this is going to be okay. Type of thing. That's the one I'd probably point to right now. Phil: Nice. For sure. Basically having that confidence that buildup confidence and only realize, whoa, this is real. It's employing a bunch of people. It's people are using, it's going to be here to stay. That was your "Oh shit" moment. If you could go back in time and meet yourself from 2015 and talk with yourself about the business, what would you tell yourself? Josh: I want to say after that first as we talked about that "Oh shit" one, it would be like, it'll be okay. Here's where you'll be. I won't say that one cause that one's cheating at this point in time. I would say what I would tell myself now is also that I should realize that I am in a-- The business isn't as mature as I think it's going to be. It's on the flip side of that, it was like from a-- I really thought I had a lot of things together in terms of business metrics and I would say there was a period over the past year or so, I'm like, I think we need to be a lot more scrappier than I realized. I feel like I started to go towards thinking too much about-- I would say like we started to think about doing performance improvement plans, not in the bad ones, but just like annual reviews and all of these bigger company types of things. I just felt like it was time and the realization was more of, that we should have more generalists doing multiple things. There was a point we started because we thought we were more mature, started hiring more junior people and thinking to train more people instead. There was definitely some things where I think I thought I was in a certain area and really there was a lot more meet down in like level two versus me trying to jump to level three or jump to level four if that makes sense. Mostly on people management and that types of things. I think I took a lot of cycles trying to be a more mature business than we actually needed to be at that point in time. Phil: Yes, it makes sense. I see that everywhere. When you start learning how to code, when you are actually, before you were a senior, when you're a middle level, you feel like, a lot. You feel like you're an amazing developer. When you start being successful as an entrepreneur, you feel like, "Oh, I'm mature. Like now I can do all this big company stuff." Then actually when you get mature, you're like, "Oh yes, I wasn't there yet." It is just that when you start to have success and things start going well, you usually think that you're better than you are and then you look back and you're like, "Oh, I still had a lot to do." It's just because you were being so successful, you never got that before. That's definitely great advice to give yourself and to give people too, like when your company starts growing, like maybe you have to be like, happy, but like, maybe you're not as mature as you think you are. Right? Josh: I think a big part that what got weird there too is like the, it was not as much. It was like you see other people, you see other leaders and you're like, "Oh, I'm supposed to be this, I'm supposed to act like this." Those were some of the things where you didn't know cause it was brand-new territory. That's what I'd say is like, "Slow down, Do you really need to move forward? Is that really necessary that you're doing, leadership development for managers and things like that? Or should you just spend more time with them or like get more in the trenches with, with certain, certain projects?" It's like how to find that balance between maturing and building the business and also like knowing what it really needs at that point in time. I think there was a period where I got away from both. Phil: That makes sense. I think it happens to all of us, [laughs] like having to find the balance. What book do you recommend for every SaaS founder? Josh: The book I like to recommend lately that I've enjoyed is, one of the ones I keep coming back to is it's called Extreme Revenue Growth, I believe. Hold on, it's called Extreme Revenue Growth. It's by Victor Chang. It's actually an older book. I think it was first published in 2007 and he might have had a revised version in 2010. It's a great read because for me, it just keeps centralizing around a few main things. It's like how are you, how is your, I think one of their one lines is like, "You need to make, make a compelling, credible promise about your product." It's like how do you stand out? How do you actually deliver what you're saying you're doing it, and how do you keep it true throughout the whole process? It goes from both a marketing and a product standpoint and I see it as this way that goes through both gaps. The other one it also emphasized a lot is distribution channels, which I think is the first folly of most of us as founders is we want to build the product, we want develop the product, but we'll like, "Oh yes, I'll just hire someone to do marketing." They just feel like or hire someone to do sales and they just feel like it's something that they can just punt on later where that common trope which is like second-time or first-time founders focus on product and second-time founders focus on distribution. That's definitely one of those, those truths. I think that book helps illustrate a lot of that, whether founders will listen or not it's a different story. Phil: [laughs] That's a great point. Could you share with us a little bit about your own distribution strategy? What works for you guys and for your own product? Josh: For us, SEO has been probably the biggest one. I've had a, my general thesis with like the business has been, we just want to be in that conversation because as we started talked about like we think that there was an underserved need in the referral marketing space. I felt like if we were to at least get in front of the right people that know that this is a type of solution that's available. At that point in time, everyone was just looking for most of the referral program software out there that was tied to e-commerce. I even one of our first taglines was like referral software for any business in parentheses. Like not just e-commerce, just trying to call out. It was trying to say both everyone and really not just e-commerce because that's what everyone says. [chuckles] That was like our first differentiation and product pieces that we talked about. My whole strategy was to what I'll call be in the conversation. It was making sure we were on all the listing pages, making sure that we had blog articles talking about those. Because I would say it's not necessarily a massive space but it is a pretty decent space that is enough that there are a lot of queries for people are looking for software. I felt like if we could at least get in the conversation we could show our differentiation within those. SEO was a great channel for that. We've been doing very well there for inbound. Phil: That's awesome. Do you guys like are we in SEO or do you have other channels in place? Josh: It's pretty much all SEO. I think any business, once you get to a certain level or number of customers, you're going to have word of mouth. You're going to hopefully have an organic word of mouth and hopefully maybe a referral program to add onto it on the back end. That's our primary channel. We tinkered with a little bit of outbound emails and some different things, but you really have to look back and realize if you have a channel that's working just to continue to double down on it. I know people talk about platform risk and different things and people are worried about Google, taking up all their search results. In SaaS I don't think that's much true. I know a lot of people will say, "Oh yes, Google's taking all these clicks away because they're putting in like the lyric quotes." It's like, well that was easy to get anyway. If that's just as easy for you to scrape and build, you're not really building yourself a moat. Google's not going to take my referral marketing tactics and tips. They might put a little, some things in the little auto thing, but the reality is someone that is really interested is still going to want to read the article, is still going to want to get to the details. I don't see them as a big potential threat in the SEO thing for B2B. Maybe if you're just doing like programmatic stuff that is very easy to find the information and for them to put up front. I know that's a contrary point versus what a lot of other marketers are saying these days. Phil: Yes. I think like as a founder, we have to think about what people are saying and what are the motivation, because when you're listening to marketers, they want to sell all those tactics. In my experience like there's always one channel, especially for bootstrap founders that they pick and they dominate that channel. If you get big enough you're going to have to open other channels. It's just so hard to get good at three things. Pick one that you have the know-how, and that you can like-- I almost believe in the channel. Josh: Yes. Definitely. Phil: What's the channel that's going to work perfect for your product and go out in. How does the future of referral rock looks like in your future? What's kinda like the plan where guys are going from here. Josh: From a development standpoint and a product standpoint, it's interesting because if you probably asked me this question four years ago probably in those early days, I think I've even said, "Oh yes, I feel like we'd be featured complete in like a year or two." It's like you have a laundry list of all the features and all the things. Now I was like even if you were just like to look in my Asana board and think about what some of the things we have planned and whatnot, I'd be like, "Yes it's probably a 10-year roadmap in here." There's a lot that, that we want to do. I think I view it in two steps. One is can we continue to further referral marketing and make it just show more data, show more actually what's going on in with referrals and word of mouth. How do people refer? Why do they refer? How do we give different incentives that are other than just cash? I think there's a whole litany of areas that I want to explore in there. I do think there's more in our niche but I also think there's a broader conversation to happen that whether I can make that happen or maybe it requires other things, but there's other forcing functions in that, like social media and ads effectiveness, all of those other things, which I think could point to what we're doing for with referral marketing as a more sustainable way to have some steady growth channels. I think there's a bigger conversation to have there, and I also think there's like narrowing and sharpening what we already known to do. Both of those fronts are areas that I'm looking at that, that I think will see maybe I'll come back on in a couple of years and some of these stories might have played out or maybe we're still here and just doing more of the same thing. Phil: I like to say software is never done. Sometimes they go like, "When is it going to be done?" and I'm like, "Never. Do you want to ask when it's going to be making money? We can discuss that. [laughs ] Done? It's not going to happen." You actually have your own podcast where you're sharing the journey as you're building your product. Tell us a little bit about your podcast and where people can keep following your journey. Josh: Yes, sure. If you do want to follow I'm pretty active on Twitter, so my handle is JLogic on Twitter. I do a podcast that is kind of a founder one. I'll be honest, I don't talk as much about my journey on there. I'm talking with another SaaS founder. We're talking every other week. Mostly I've been working with him on trying to help him get more off the ground, because he's in an earlier stage than me, but it's fun conversation week-to-week where we're trying to figure out stuff and do talk about different SaaS topics at hand. I am however also launching another one. I think you asked at the beginning, we were talking about podcasting before we started recording, but I am starting another one called Marketing Retro. Which is more of a conversations about marketing, conversations about growth, but also across for founders for bigger companies for marketers in different spaces. Obviously, with our software being in the referral marketing space, I spent a lot of my time in marketing, and thinking about things in the marketing area. Phil: That's awesome. Okay, Josh thanks for coming. Thanks for sharing your origin story in this show. We're going to keep watching you grow. Thank you very much for your time today. Josh: Thanks a lot for inviting me. [music] Voiceover: SaaS Origin Stories is brought to you by Dev Squad. To find out more about how we help entrepreneurs launch new products and help larger businesses plug in a ready to go development team, visit devsquad.com. Add us to your rotation by searching for SaaS Origin Stories in Apple Podcasts, Google Podcasts, Spotify, or anywhere else podcasts are found. Make sure to click follow so you don't miss any future episodes. Thanks for listening. Remember, every SaaS hero has an origin story.